VolitionRx Limited (VNRX) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to VolitionRx Limited's Third Quarter 2020 Earnings Conference Call. [Operator Instructions] This conference call is being recorded today, November 13, 2020. I'd now like to turn the conference call over to Scott Powell, Executive President of Investor Relations. Please go ahead.

Thank you, and welcome, everyone, to today's earnings conference call for VolitionRx Limited. This call will cover Volition's financial and operating results for the third quarter of 2020, along with a discussion of our recent activities and key upcoming milestones. Following our prepared remarks, we will open the conference call to a question-and-answer session. Also on our call today are Mr. Cameron Reynolds, President and Chief Executive Officer; Mr. David Vanston, Chief Financial Officer; and Dr. Jason Terrell, Chief Medical Officer. Before we begin, I'd like to remind everyone that some of the information discussed on this conference call will include forward-looking statements covered under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our beliefs as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual future results may vary significantly based on a number of factors that may cause the actual results or events to be materially different from future results, performance or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent annual report on Form 10-K, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. We do not undertake an obligation to update any forward-looking statements made during the course of this call. I'd now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds. Cameron?

Thank you, everyone, for joining Volition's conference call today. I especially appreciate it as always, given the busy earnings call season begins and the ongoing pandemic and lockdowns. I would like yet again to recognize the amazing commitment and hard work shown by our team over the past quarter during these difficult times, allowing so much progress in so many areas. Thanks also to those that attended our recent virtual Capital Markets event. After such a great reception, we'll be shortly hosting other events in the new year. I will start today by covering our financials and then get straight down to discussing the upcoming launch of our first product, the Nu.Q Vet Cancer Screening Test that we're targeting for the 30th of November. Exciting times. We have strengthened our cash position this year, providing a great runway to achieve our many milestones and give us flexibility during the continuing pandemic. We closed out the third quarter with approximately $21 million in cash and cash equivalents compared with approximately $17 million at the end of last year. We continue to manage our expenditures carefully. And as we approach commercialization, our burn rate is approximately $1.6 million to $1.7 million per month, which we expect to continue as we make additional investments towards our product launches and the expansion of our platform. Regarding product launches, I am delighted to announce that the target date of Monday, November 30, the launch of the Nu.Q Vet Cancer Screening Test in the U.S. This is an extremely important milestone for the company as this first launch, that we expect to be the first of many, shows that our platform has reached a level of reliability and reusability to be launched in a completely independent lab. This test will be positioned for use in the animal health check of older dogs, those at about 7 years and older; and for cases where there is a high suspicion of cancer. It may also be a complementary test for younger dogs at high risk for developing cancer in their lifetimes, such as Bernese Mountain dogs, Golden Retrievers, Rottweilers, Beagles, Boxers, West Highland White Terriers and Shetland Sheepdogs. The test will initially be available from the GI Lab at Texas A&M University, to potentially thousands of vets across Texas and the rest of the U.S. Further details will be released at launch, but in brief, vet will draw the blood as per the collection instructions and then ship it for processing to the GI Lab at Texas A&M. Results will be available within 3 to 5 business days of receipt. We expect the cost of the test from the GI Lab to be around $122, of which Volition receives approximately $45 per test at a greater than 85% margin. We anticipate vets to charge between $160 and $200 for the test. Cancer in dogs is widespread. It is the leading cause of death for dogs over the age of 10, and there are over 6 million new dog cancer deaths each year. As cancer screening is not commonplace in animal health as it is in human health, we believe blood tests like Nu.Q Vet Cancer Screening Test could completely transform how vets manage cancer in companion animals. It really is a simple, low cost easy-to-utilize screening blood test, which we believe will help streamline the screening process for up to 1/3 of malignancies in dogs, including common malignancies such as lymphoma and hemangiosarcoma. As in humans, early diagnosis of cancer has the potential to improve the treatment and quality of life as well as providing valuable additional information to inform the clinical decision-making process. If you've not had the opportunity to see it yet, I would recommend watching Professor Heather Wilson-Robles' presentations from the recent Capital Markets Day that is available on our website. Heather did a great job at bringing our first vet product and its clinical relevance to life. As part of our prelaunch marketing, you might have seen the release earlier this week of a report entitled, A Look to the Future of Cancer Diagnostics, which has compiled contributions from some of the key opinion leaders in the vet oncology space. It's an interesting read and is also available for download on our website. It was fantastic to connect with these thought leaders who continue to support us either through ongoing studies or upcoming launch activities, so watch this space. To leverage our global team, I'm also delighted to say that we have begun prelaunch work in Asia, led by Dr. Jasmine Kway and supported by our vet team, and I'm looking forward to updating you on the progress in the coming months. Certainly, we will announce further details at the time of launch, but I wanted to spend a couple of minutes discussing the commercial opportunity that this initial vet product represents. The obvious big question is, what is the size of the potential addressable market? As I said earlier, there's high unmet need in the vet market, with few simple noninvasive tests currently available. Cancer is the leading cause of death in dogs over the age of 2 and up to 50% of all dogs over the age of 10 develop cancer in their lifetime. There are approximately 77 million dogs in the U.S. And according to the 2019 AVMA U.S. pet study, which is completed every 5 years, 83% of all dogs visit the vet at least once per year, with 75% being classified as routine preventative visits. So we believe the market is both a large and accessible. Clearly building a market takes time. But just to give you an idea of the potential market, of the 77 million dogs in the U.S., approximately 20 million dogs are over the age of 7, and therefore, at a high risk of cancer. For every 1.2 million dogs of the 77 million dogs in the U.S. tested using the current platforms of plates, we would generate approximately $54 million in sales revenue and over $45 million in gross margin; or looking at it a second way, with just 10% of these older dogs in the U.S. each year, that's 2 million dogs, we would generate approximately $90 million in revenue and approximately $76 million in gross margins. And that's only 10% of the potential older dog market, not to mention the additional dogs that we test for future suspicion of cancer or out of an abundance of caution for higher-risk breeds and a wide range of potential new tests in dogs and other animals such as cats. In short, we whichever we way look at this, we believe that this is a huge commercial opportunity. Our current expectations are based only on our initial canine cancer diagnostic test in the U.S. market. However, we plan to launch additional veterinary tests and generate revenue outside the U.S. in the future as well and in other species. We're hopeful, given the demonstrated strong accuracy of our tests, the market for our initial products will end up numbering in the millions of tests per year. While recognizing desire to receive revenue guidance, we're unable to provide such guidance at this time as we don't know how quickly ramp up nor the total demand for the tests. What we do know at this date is that we have received our first request for a quote from the GI Lab for approximately $370,000. This brings capacity for the first technicians in the first year in the lab. We aim to announce the launch in further labs in the U.S. and across the world once we've reviewed this [ initial ] launch in the first quarter of next year. This is just the beginning but a fantastic opportunity, and we are truly excited to start commercial operations. As discussed at the Capital Markets Day, our plan is to initially drive awareness of the Nu.Q Vet Test with specialist oncologists at the top institutions and have an extreme focus in Texas, training all of the -- hospital specialists and have an outreach program with general practice veterinarians. And I am really proud of how hard the whole team has worked to prepare the launch of our first clinical products. It's an incredible milestone for the company, and we have an exciting few months ahead for us for sure. Moving from the vet business to human cancers, where in parallel, we continue to make great progress. As was discussed at the Capital Markets Day, during the pandemic, we have focused on simplicity, and in particular, on our CE-marked H3.1 assay in blood cancers. You might ask why. This is a product we can launch with a simple assay during the pandemic given the very similar results we have obtained in both human and dog cancers with exactly the same assay. I think this makes a lot of sense during the pandemic to launch the same assay for the same cancers in humans and dogs, again showing the main versatility of our platform. To that end, I'm delighted to announce today that we have Diagnostics Oncology LLC, otherwise known as, DXO, as a contract research organization, CRO, conduct a U.S. clinical trial for non-Hodgkin's lymphoma, NHL. The trial is designed to obtain multiple FDA-approved adjunct tests to aid in the diagnosis of the 5 most common and aggressive forms of NHL. DXO is the largest U.S. CRO specializing in oncology purpose in vitro diagnostic clinical trials. We are delighted to have them on board. NHL accounts for approximately 4% of all cancers, with approximately 77,000 cases diagnosed per year in the U.S. and around 700,000 worldwide. As Dr. Terrell discussed at Capital Markets Day, rapid diagnosis is essential as death can result in weeks, whereas early treatment is often curative. Diagnosis is often delayed as symptoms for NHL mimic those of common everyday conditions such as tiredness. Existing data suggests that Nu.Q will greatly aid physicians in distinguishing NHL from common conditions, fulfilling what we feel is a critical unmet clinical need, which represents a major market opportunity. The trial will enroll up to 1,500 subjects across 10 major U.S. health care institutions over a total of 22 months. It's an extensive program, will cost approximately $2.9 million over the 2 years, assuming the completion of numerous projects and includes not only the clinical studies but also data analysis and regulatory and reimbursement submission and preparation. We anticipate that diffuse large B-cell lymphoma, DLBCL, which accounts for approximately 35% of the NHL cases, will accrue study subjects more rapidly than less prevalent subtypes. To that end, we expect a DLBCL FDA 510(k) submission will be possible at approximately 10 to 12 months into the trial. At that time, we would like to submit a DLBCL 510(k) while petitioning the FDA to accept some 510(k) as sufficient NHL subtypes numbers accrue. The FDA approval for Nu.Q DLBCL, the subsequent 510(k), can be filed utilizing post-market data of an FDA-approved test. This strategy will streamline both FDA regulatory approval and CMS reimbursement approval to minimize our time to market and hopefully time to revenue. We're delighted to be working with Diagnostic Oncology LLC, DXO, and to get started on this clinical study in the U.S. Dr. Terrell joins us on the call today to answer any questions on this exciting trial and the potential product launch in our usual Q&A session at the end of the management summary. In addition to all of this, we have also made great progress on the research programs for the use of Nu.Q technology in NETosis and particularly monitoring disease progression of COVID-19, and we're looking forward to broaden this into influenza and potentially other diseases such as sepsis. Currently, we have several studies that have either been selected or are being negotiated in Europe, and we anticipate the next results will be reported before the end of this year. As announced on the last call, we are also negotiating a large FDA trial for the use of our assays in NET COVID-19 and influenza in the U.S., and we'll announce the full details once they have been finalized. Early identification and triaging with patients testing positive for COVID-19 who are the most likely to deteriorate and need critical care will enable both improved outcomes for patients and a more efficient use of critical care resources to health care providers. We believe this is still very much an unmet need worldwide in fighting the impact of the pandemic and given the information on the vaccine, many other conditions driven by NETosis such as influenza and sepsis. If we continue to see positive results in the longitudinal studies, where we have our CE-marked products available on multiple platforms in the first half of 2021 and look to launch a low-cost product that could be used in any laboratory worldwide as soon as possible after that. We are yet again, proud of the versatility of the Nu.Q platform and the range of applications for which these product can be leveraged. So while the process is still a relatively new sales proposition, given the positive value results, we have formed a Nu.Q NET team to provide focus and drive to the product development program. To that end, we hope to announce an additional study in overall NET and NETosis before the end of this year, and are looking to use the Nu.Q technology in many ways in NET through diagnostics, disease monitoring and as a companion diagnostic to monitor basic response. This once again underlines the strong breadth of the Nu.Q platform technology supported by our broad intellectual property portfolio. We plan to host another capital markets event focused on our Nu.Q NET program early next year. From the large cancer clinical trial perspective, our Marquee trials, I think it is fair to say that in various ways, these have now been affected by the continued pandemic, either by slower or poorer collections or by a host of other supply chain or travel and communication issues. We believe we have successfully managed those areas under our control, such as assay development and running samples, both on track with our milestones. But many issues are obviously beyond our control. Of particular note is the EDRN study in the U.S., where in summary, the EDRN expects lower collections in 2020 than originally planned, and we expect this trial may be further extended as it is currently paused. As always, I will update with further details once available. On a better note, the collection of both large-scale studies at the National Taiwan University continues with the aim of to complete collection by the middle of next year. With regards to those studies, we have now completed 12 discovery grades of Nu.Q assays and 5 more orthogonal biomarkers on a subset of both our 2 National Taiwan University studies, colorectal and lung, and are working with our collaborators on data analysis. As per our more rigorous process of presenting data where we can, either peer-reviewed papers or at our conferences, an abstract has been accepted by the IASLC meeting in January, where we look forward to present our lung cancer detection results. The APDW meeting originally planned for December 2020 has been delayed to later next year. So we'll provide updates regarding colorectal cancer data in due course. From an expansion point of view, we are in the final paperwork stages for Silver One, a production hub for our products and components close to our lab in Belgium. We will soon be introducing several key components and plan to achieve full asset certification next year. We anticipate that as with our previous real estate transactions, at least some of these costs will be supported through non-dilutive grants and/or loans from the Namur region. Our plan is to produce at large scale, raw materials such as recombinant nucleosomes, which act as a calibrant to our Nu.Q assay in addition to antibodies that are key elements to our branded products. And indeed, we'll manufacture our full diagnostic kits once finalized. We expect to offer all elements for both commercial sales and for clinical trial purposes and CE-marked products for sale in Europe and beyond. We also intend to install a service lab in the new facility, which would undertake sample processing for external parties. The opening of the new facility will not only bring manufacturer of key components in-house, thereby securing our supply chain, it should also significantly reduce the cost of many of these elements and, in turn, should reduce the cost of assay development. It's an exciting time, and I could not be happier that we could find a suitable site so closely situated to our current lab plus another great step forward on our road to a diverse revenue stream. To that end, I'm also delighted to announce the appointment of our first sales manager, Emmanuel Demillecamps. He starts with the business in December. Emmanuel brings over 25 years of sales experience in the diagnostic field, having worked for companies such as Roche, Sanofi and, most recently, Vela. We believe he'll be an excellent addition to our team with his focus to help drive revenue from our Silver One facility. I'm equally delighted to also announce on the call today that we have opened a small shared laboratory at California State University in San Marcos, California. This lab, initially, with a team of just 2, will be led by Dr. Terry Kelly, our Chief Scientific Officer of Volition America. They will focus on blue-sky innovation and discovery research, which we hope will help us leapfrog forward on some of our more cutting-edge research projects as Nu.Q Capture, which I think has been very active on over the past few months as well, so watch this space. I'm sure they will agree that we have an incredible amount of existing annual activities underway and especially support the runway needed for the new NHL clinical study, NET study, including COVID-19, opening the Silver One laboratory expansion and, of course, launch of our initial Nu.Q vet products. We filed the takedown of our existing self-registration statement to conduct an aftermarket equity offering, ATM, of an up to an aggregate of $25 million in shares of common stock to be sold periodically in the future. Oppenheimer and Cantor Fitzgerald will access as our sales agents under the ATM. The object of this new ATM in contrast to our existing ATM is to include more institutional investments over the life of the offering. As you may be aware from our filings with the SEC, our existing ATM has been in existence since September 2018, and we plan to utilize the available balance under the offerings prior to the new ATM and so to the future. I'd like to reiterate our vision and what makes us so excited with our progress and our space. Volition is an epigenetics company focused on advancing -- of epigenetics and is exploiting the advances in human and animal health. This has been our mission since our founding and is coming to fruition with our Nu.Q platform at the very heart of epigenetics. We believe strongly, the last decade of work at Volition with our ever-expanding team in epigenetics puts us in an extremely strong position with our expansive IP portfolio to be a significant player in this very key field. Overall, on so many fronts, with our ever-growing team and IP, I'm delighted with the progress we are making, and I'm excited by the momentum we have developed in the epigenetics field. Indeed, our whole team is incredibly excited about the company's future opportunities. We aim to report through the end of this year and beyond into next year, several key milestones, including, most excitingly, the launch of our Nu.Q Vet Screening Test. We will focus on driving revenue in the coming quarters where possible during the pandemic in 4 key areas: vet products; disease monitoring tests, for NETosis, for example, COVID-19; using our new production facility to drive reagent sales; and licensing of our technology for others to commercialize. I, along with the rest of the Board and indeed the whole company, look forward to sharing the results of case studies over the coming months and years with our optimized platform. Despite the pandemic, 2020 is proving to be our most exciting year yet, thanks to our fantastic hard-working and team. Thanks for joining the call today. I very much appreciate this, given the busy earnings call season and the pandemic. We're happy now to take your questions. Operator?

[Operator Instructions] Our first question today is coming from Jason McCarthy from Maxim Group.

I'd like to know about the NTU studies. You mentioned that you completed 12 discovery-grade assays on the NTU subjects in both colorectal and lung cancer. So my question is how will you use these data sets? And should we expect to see any of that data in the near future? And also, are these on the plate or the beads format?

Yes. Yes, you can expect to see them in the short term. They're eager to present them at conferences. So that's in a few months in January for the lung. And then when the conference comes around -- and these are just subsets of the original population. So it's not the final trial. But it's fantastic to get some progress during the pandemic on them, unlike the trial in the U.S. So yes, they're on the plates. So there's an -- originally in the placement now on the magnetic beads. We started with one and we've switched over to the both. So a little bit on the plates initially and then everything else on the beads. And yes, we'll be presenting that as soon as we can. They're eager to present them at the conferences. So it will be the lung in January, as soon as we can on the colorectal side as well.

And then I wanted to ask about the kind of the data in the canines. Since the nucleosomes are essentially the same as it's been in the test, would you expect to see a similar result that you saw in dogs in the large-scale human trial?

Actually, yes.

And also how many of the [ results ] can be the same, using it for the first lung test in at-risk patients who may not want a biopsy?

Yes. So the short answer is, it's been remarkable, the preanalytics. The process has been almost exactly the same in the dogs. Actually, the kids we sent over were the human kids, the same kids with the CE Mark for the blood cancers. So yes, it's been remarkably similar. As you saw, superb results in the animal space, 97 and 87 AUCs for the 2 cancers. We're in the high -- it's in the high 80s for the blood cancers. And Jason is on the line. Perhaps he could go through the use of what they would be used for that -- yes, I think it is something we'd be giving to a lot of people, not just those. Jason, do you want to give a quick description of who would -- who would you see market being for the NHL blood test?

Yes. This is Jason. Yes, absolutely. So Cameron talked a little bit about the prevalence of NHL just in general in the U.S. He mentioned that there's approximately 77,000 new diagnoses made every year. But the tricky thing about making the diagnosis of lymphoma is that the symptoms often mimic those symptoms, the very common everyday illnesses: routine infections and autoimmune disease and things of that nature. So the symptoms the patients present with are very common everyday patients seen by primary care physicians. One of the most common list of chief complaints that you'll see, fever, fatigue, things of that nature. So even though there was 77,000 cases diagnosed in the U.S. every year, the market for patients who present with those symptoms that could be NHL is much, much larger. One of the most common chief complaints of medicine, obviously.

Okay. Thanks, Jason. So Basically, that was actually one of the real important things which we drove while we're driving NHL through now. So because of -- we can do it through a 510(k) because it's not a screening test, it's not going to be given to everybody. And NHL can be actually quite young when you get to the cancer. So it's coming between -- it is symptomatic people but it's much more broadly symptomatic, as Jason said, things which could be pretty much anybody. So we don't know what the market sizes are going to be. And that's something we'll work on during the trial and work it out. But I think very much like the vet space, if we show good data, I think it's something which a lot of doctors will end up using in those quite nonspecific symptoms. And then the market could easily be in the millions of tests per year. And I think we'll charge a very similar amount to what we do in the vet space on a very similar margin. So the addressable market is certainly in the hundreds of millions or billions of dollars a year. What we get of it will depend, of course, obviously on the results in the trial and the rollout and everything else but it's by no means, the micro market. And it's in a very good space for the company because you don't have to do a large PMA study like in colorectal, but it's still a very, very large addressable market. So I think if we can show good data, it could be an excellent product and really put us on the map in the U.S. And timing-wise, obviously, the first readout, we hope to be the end of next year. So it could well be a 2022 story when we have an FDA-approved product that we could expect to be a very large addressable market. So time will tell, but we're very encouraged with what we can see so far.

And then I have one more, if you don't mind, on the NETosis product. Now the pandemic aside, because even after the COVID pandemic, COVID is likely to remain with us for some time, probably at a smaller scale. But how will this product be applied in patients who do get it or for other diseases like influenza? Would it be largely patients who have severe cases and you're trying to determine whether they're progressing critical? Could you go into a bit more detail on that?

Yes. Very good question. So obviously, we got into this market and the NETs have been sort of on the cutting edge in the last few years, and they're much better understood now. Obviously, with the pandemic, there's been a huge amount of focus back on them. So during the COVID pandemic, the main use would be, for a NETosis test, would be to, say, monitoring disease progression in coming to hospital. We've shown from the data we've presented that people with severe COVID have very, very high levels of NETs in the blood measured by assay. People who are sick but not very sick have medium levels and people with low level COVID or asymptomatic have low levels of it. So it can monitor disease progression. We're seeing how good it is as a prognostic in longitudinal samples, which we'll have data on very soon. And I think, yes, I think it is going to progress probably for at least a few more years while we work this through. But the body's immune response, the NETosis, is the driver in sepsis as well. And sepsis is the biggest killer in hospitals, and it's something which is really tricky for physicians because it's very hard to know that it's actually underway, if you will. So we're working on trials now for COVID in influenza. And I think, obviously, influenza has been with us for a millennia. So I think that's, obviously, going to continue. COVID, I think, will continue for a bit longer. But the validity of NETosis tests stretches way beyond even just COVID and influenza into things like sepsis. We've spoken to a lot of groups that have therapies underway for sepsis -- for NETosis from sepsis, COVID, influenza. And they all say the same thing. There's absolutely no good companion diagnostic for the treatments. It's very hard to treat someone if you don't know if it's working or not beyond sort of observations. There are some markets that they don't work well. So we've had a lot of interest from groups to see if we can be companion diagnostics. So all of those would be multiple tests on the same person. So the potential market is absolutely huge. And I think if we can improve any validity in influenza as with COVID, it's a massive ongoing market. And of course, sepsis would just be huge because there is nothing out there which can really monitor the progression or really tell you that it is building up and happening. And we expect to have a lot of data on that in the next 6 months. Because we have this platform now, it's very, very similar to the assays we have in the different things we've developed. So it's something which we're up and ready, if you will. We can launch things very quick now. It's taken a lot of time to perfect the platform, but now we couldn't be happier that it looks very useful in animals, a range of animals, humans, cancers and things as wide as NETosis. So a very good year ahead of us, I think. And I think NETosis will be a big part of us going forward, and we'll have a lot more data in the short term. We've created a new small division within the company to focus on NETosis, on the trials and the marketing side. And expect to see a lot more data soon. And we have a very big expectation what it is going to look like.

The question today is coming from Kyle Mikson from Cantor Fitzgerald.

Congrats on all the great progress here. I just want to jump just right into the cancer screening personal market. Cameron, that was a great overview of the substantial market here, the $20 million, I think you said. But what potential penetration are you expecting to kind of see like early on, maybe a year or 2, post launch? If you kind of get to that 1 year, kind of your thoughts here. And ultimately, like what...

Yes. That's...

I just -- I wanted to get one more piece in here for the question. Because, ultimately, like how long do you think it will take you to get to maybe mid-single-digit penetration? About 10% or so would be really incredible. But you mentioned like merely the test per year. And so I wanted to understand how the -- what the road looks like to get there. And obviously, it's super early. But if you could answer any of these questions, just comment on the different variables out in the season, it would be super helpful.

Yes, that's the million-dollar, maybe billion-dollar question. We don't really know what that curve looks like because this is really something, I mean, very unique, very new. Cancer screening in the U.S. is not really common in dogs purely because there isn't a test. A very high percentage of dogs go to the vet every year in the U.S., 70% to 80%. So the obvious addressable early market is the 20-odd million dogs who are geriatric, meaning over 7 years old. So -- and then you probably add a few million more dogs who are higher risk. Also, you probably looked at the presentation and, yes, therapy monitoring is also a part of the solution, I think, going forward. So we're at 0 today. I think that the general market is at least, I think, 10% to 20% of the addressable market, which would be 2 million to 3 million dogs. Now what does the curve look like? Is that going to take 2 years or 3 or 5? It's very hard to tell. We are doing a lot of aggressive marketing on the -- the good news in this population, unlike the cancer market in humans, is there's only about just over 1,000 veterinary oncologists in the U.S. So I think a large percentage of those will know who we are in the next 6 months. We're starting with Texas because it's a very good, discrete market of about 5,000 vets. Weirdly enough, the majority have been trained at Texas A&M. So there's quite a good old side network, if you will, between all of those people. So I think we can get a very large number of vets in Texas who know who we are. So we're attacking the top veterinary oncologists through the lunch-and-learns, the key opinion leaders, and they are all very positive. And then we're going in vets in Texas, the first 5,000. And we're doing a beta launch. So we're making the product available and then going through the marketing process now, which has obviously begun. But then don't forget that's just one lab. We intend to roll out a wide range of labs who will then do their own marketing. We already started to work in Asia. Dr. Kway has contacted some groups there. So we would expect to get some sales in the first half of the year in Asia as well. And then, of course, we've got a sales person starting in December 1 in Europe. We could also start the European process. So the short answer is, it's really hard to gauge what that curve looks like. But I think we have a fantastic test. We have fantastic partners. There's 100% of need out there for a test. This is a very, very common cancer in dogs. The prime point we're at seems to be very -- something which isn't going to be a big problem in the United States. And there's always a temptation to try to charge a really large amount, but our ethos has always been to keep it affordable. But given our accuracy, I think where we are is very achievable, and we're on very good margins anyway. So I think it works for everyone. So we have the first order from Texas A&M and they asked for an indicative quote for the first $370,000 worth of kits. So that's to start. I'm not sure how I'm just going to take them to go through that, but yes, it's kicking it off, but it's really hard to say exactly what that's going to look like, but we're very bullish.

Got it. That was really helpful. I appreciate the color on the sales and marketing strategy as well. I guess just turning to the blood test, the NHL test. Can you just kind of walk through the clinical regulatory pathway forward? I know you mentioned the trials. And if you take 22 months, you're working with the CRO. But first of all, has the trial done enrollment? Yes, I wasn't quite clear on that. Or when should that start, I guess? And then what milestones, end points, benchmarks are you looking for before you submit that first 510(k) for DLBCL? And I guess someone with the medical background here on the line, maybe that could be helpful.

Yes, Jason. Good idea. Jason, do you want to answer those questions, please?

Yes. Yes, sure. So the trial has not begun enrollment. The -- we're still in the start-up phases with IRB approvals and protocol drafting and things like that. So it's not begun enrollment. That should begin sometime in the following quarters, hopefully sooner rather than later. But the strategy -- the very first strategy for the trial is to begin the trial. And after it's enrolled about 20% of the total patients, that should probably be in the 35% to 40% of the total of diffuse large B-cell lymphomas that need to be enrolled to complete the study. And once we have about 1/3 of the diffuse large B-cells, we will go to the FDA at a presubmission meeting. And at that time, we'll present the interim data from this trial. We'll present all the supporting evidence we have from all of our outside-the-U.S. trials and all the retrospective studies that we've done. And we'll ask the FDA to grant us the approval for the 510(k) once sufficient numbers of the diffuse large B-cell have been met. So -- and our hope is that we get the diffuse large B-cell 510(k) first. And then at that point, we'll use the same test in the same trial to get approval of the subsequent less prevalent subtypes as they accrue statistically significant numbers and presubmission meetings accordingly as the trial progresses and gets nearer to the end.

Excellent. Are those your questions, Kyle?

Yes. That's great. Thanks. Cameron -- so actually, Cameron, assuming you guys do close this Silver One acquisition in the near term here, can you just help us think about the ramp in reagent revenue next year in 2022, I guess? I know it's tough but just would appreciate any color there. And just given the size of the facility, like what do you estimate is like the, I guess, run rate of reagent revenue opportunity associated with Silver One. Again, I know it's tough, but you must know like based on the size what the capacity kind of is. Just anything there would be helpful.

Yes. Yes, we're looking through -- working through that now as well, and it's 10,000 square feet. And actually, a very small footprint can actually make a huge amount of product because the 2 key components, the antibodies and the controls, sell retail about 3 -- 2 million, 3 million a gram, and you can make a lot of grams in a small room. So it's not a capacity issue. It just comes down to what the market is. So of course, the first news for it all will be for our own products. Now we bought OPTIMA, now bullish in Germany, we have the ability to make the controls as well as bring in-house the making of the antibodies. And again, that goes down about 95% from the retail cost, barring those components. So that's a huge saver for us for more than just the revenue. It's obviously bringing down the cost of goods. We're already on a very good margin. That will hopefully increase the margin. So there's a lot of things going on there. Number one, make our products cheaper so that we can make a very good margin. That's something which we'll be doing by about the middle of next year once it's certified. We're also going to have a contract research organization. Now we have over a dozen different nucleosome assays on the beads. We expect to get incoming people. That one revenue we had last year was from [ names ], where we had about EUR 17,000 from running a small number of samples. So it can be -- if people don't want to set up a lab and set up machines to run a profile of nucleosome assays. So it can be a good revenue from that point of view. And then the ranges themselves, if we're making them at wholesale and selling at retail, nucleosomes and antibodies become very profitable as well. And we think -- as you probably know, there's a huge amount of activity in the space. Grail got bought for $8.1 billion and [indiscernible] for multiple billions. And there's a real shift to the epigenetics side now, even with the pharma companies. We think the demand for good antibodies, antigenic profiling and nucleosomes and also our Nu.Q capture program, which we didn't talk about today, it's very much underway, is going to be quite considerable. But I don't think it's going to be a lot in the first half of next year. We'll focus on making our own. Obviously, for our own launches, we want to make sure that we can make the kits ourselves and bring down the price for our products. I'd expect the first half of next year for us to be sort of -- getting certifications. The second half of the year, we will start to release guidance on what we think with the CRO market, the nucleosome market could be. But we're not -- we're trying to be conservative and really know what that answer is before we give anything. But I think it is going to be something which could become very, very meaningful as epigenetics become very important. And I think that the huge amount of work we've now done to make our platform really robust, great ingredients will really pay off in reagent sales as well as our own products. But also don't forget when we licensed to where we've been speaking to groups in China and [ folks ] and others, we don't expect just to license, we also want to sell the key reagents to -- to supply the Chinese market with nucleosomes and controls for people running our tests there as well. Could be a massive market as well. But yes, no guidance there, but we will certainly be in a position to that once the labs' fully up and operational and we've done the numbers ourselves and are comfortable. But that's going to be -- anything meaningful, not going to be until about over next year given the ramp-up needed in the facility.