VolitionRx Limited (VNRX) Earnings Call Transcript & Summary

Hello. I'm Soo Romanoff. I'm here with the Volition team, and we're excited to share some of their developments in early cancer detection screening. The Volition team has prepared a video presentation, and we'll share that with you shortly. They'll be followed up with Q&A with Louise Batchelor, Group Chief Marketing and Communications Officer; Jake Micallef, Chief Scientific Officer; and Dr. Andrew Retter, a leading U.K.-based hematologist and medical consultant to Volition. If you have any questions during the presentation, please feel free to submit them through the Q&A tab at the bottom of your Zoom panel. We'll try to address them all. Without further ado, let's get started.

Well, Good morning and good afternoon. I'm Gael Forterre, the Chief Commercial Officer of Volition. It's a pleasure to welcome you to this webinar today, and to introduce you to Dr. Jake Micallef, our Chief Scientific Officer, and Dr. Andrew Retter for the presentations on the breakthrough cancer detection method. Before the detailed science, a few words. Our mission is to save lives and improve outcomes for millions of people and [indiscernible] worldwide. To do so, we are focused on developing a simple, easy-to-use, cost-effective blood test to help diagnose and monitor a range of life-altering disease, including cancer, our original focus. Finding cancer and especially finding it early has often been described as looking for a needle in a haystack. And indeed, as Jake will explain, it is a needle in the haystack when the needle is also made of hay. The new method presented at ESMO earlier this week demonstrates we have a way to find the needle. This is an incredible breakthrough and I know that you will be interested in the presentation from both Jake and Andy. The market opportunity is big. It is very big, in the billions. It is bigger than us, which lead us to our commercial strategy. We will license this technology early and seek upfront payments, milestone payments, royalties, and sales of key components. While the data presented is literally of the price, we are already in discussions with interested parties. With that said, I will keep it there for the commercial part. I will now pass over to Jake and Andy to share more details. Thank you.

Now you've heard from Gael about the commercial opportunities. I'm going to tell you a little bit about the science behind our breakthrough in cancer detection. First of all, a little bit of background. On this slide, you can see the structure of chromatin, and we've shown this picture many times before. It's a string of nucleosomes held together by a straight DNA. But what we've added to it in this picture is a complex called CTCF. And CTCF is a transcription factor that also binds to DNA like a nuclear zone, but has completely different functions. CTCF is actually a very important protein that regulates what proteins are made in the cell and actually regulates the structure of chromosomes within the nucleus. There are many big hospitals and quite a few companies that are involved in performing liquid biopsy, ctDNA assays for circulating tumor DNA. The challenge that these companies and the hospitals face is that most of the DNA circulating in a person's blood, even if they have cancer, is normal especially at early stage cancer. In Stage I cancer, for example, it's likely that only 1 part in 1,000 or 1 part in 10,000 of the DNA that's circulating comes from the tumor. The rest is normal. This really is a needle in a haystack problem. And what makes the problem even more difficult is that the needle is really made of hay because the tumor DNA is not chemically any different from any of the normal DNA. And of course, because it's in the same person, it has a near identical sequence. So how do current ctDNA assays work? They've all really got the same mechanism and the same method, and it hasn't actually changed since the inception of liquid biopsy 10 or 15 years ago. What happens is that you take a blood sample, you extract all the DNA from that blood sample. That is the normal DNA and the cancer DNA if there is any. You then amplify that DNA to make more and you do what's called a library preparation, which is basically getting the DNA ready for next-generation sequencing. You then do the next-generation sequencing. That's a very expensive part. But even when you've got all the sequence data for all of the DNA that was present in that blood sample, it's still mixed up. It's still only 1 part in 1,000 or 1 part in a 10,000 from the cancer. The problem is very difficult. And so it solved by putting the whole sequence data into a big computer program, which has very sophisticated bioinformatic algorithms to decide whether or not any of that DNA actually did come from a tumor or not. And over the years, the results for liquid biopsy have improved, they have improved a lot. And the reason for that is that each of those stages has actually improved. So the bioinformatics is better, the sequencing is better, the library preparations are better and so on. But the basic method is unchanged in a decade or more. The reason the basic method for liquid biopsy is unchanged is because there isn't really anything you can do with DNA other than sequence it. The real answer would be to physically separate the DNA that comes from the cancer and then detecting it would be as simple as a COVID test. A COVID is a PCR test and this would be a PCR test. That would make for a very simple ctDNA test as the acronym says, let's keep it simple, stupid. Having said that, it would be good to separate tumor-derived DNA from normal background DNA. Of course, it's impossible to do that chemically. However, DNA per se is not what circulates in the bloodstream. What circulates is pieces of chromosomes. So the DNA circulates as protein DNA complexes. Mostly, those are nucleosomes, but there are many others as well. One of the others, as you can see on this slide, is CTCF. What we have found is that there are combinations of DNA sequences that occur on CTCF proteins only in cancer. So if you separate out all of the CTCF DNA fragments and then do a PCR, you will detect whether or not any of the cancer combination involving both CTCF and a particular sequence is present. And that will tell you if a person has cancer. What this technology allows us to do is a completely new method for the analysis of ctDNA. For the first time ever, the sequence of events is not simply to extract all the DNA, amplify, library prep, sequencing, and bioinformatics. Instead, we will pull out all of the CTCF molecules and their associated DNA fragments, and do a simple PCR test to identify whether or not any of them come from cancer. Scientifically, what makes that possible is really quite simple. CTCF binds to something like 60,000, 70,000 or even 100,000 places in the human genome, and it binds to different places when you have cancer. So when you get -- when a cell becomes cancerous, CTCF binding is lost in some places, but it's also gained in many places. And so where there is a gain of occupancy in cancer, those sequences will not occur on CTCF in a healthy person, but they will occur in a person with cancer. And in a healthy person, instead, but all those sequences will occur on nucleosomes. So what does that look like in practice? On this slide, we've got nucleosomes and CTCF molecules, and they are covered by DNA molecules, and most of those are healthy. We have some that are covered by the yellow DNA molecules, which contain the CTCF binding sequence. A lot of those will be on nucleosomes. But in cancer, some of them will also be on CTCF molecules, and you can see that in this picture. Using the occupancy properties of CTCF, we can select sequences that only occur on CTCF in cancer patients. And in this slide, you can see that in a healthy person, the yellow DNA sequence, which represents the cancer-associated sequence of interest, occurs on nucleosomes, the green circle. In a person with cancer, they also have nucleosomes with yellow cancer-associated DNA attached. But in addition, they have the yellow sequence attached to CTCF, and that does not occur in the healthy persons. But if we can remove all of the nucleosomes by separating out the CTCF, then we're left with this picture. So now we have a mixture of CTCF proteins bound through DNA sequences, some of which are yellow and come from the cancer and some of which are still healthy. Now, we can extract the DNA, so we're left with just these pieces of DNA and the CTCF is gone. If you have cancer, you would have the yellow sequences. If you're healthy, you would have no yellow sequences because they would only have recurred on nucleosomes, and they would wash away. So the presence of the yellow DNA sequence is an indicator that you have cancer. And we can test for this by a simple PCR, which is like a COVID test. What this means is that for the first time ever, we can physically isolate ctDNA cancer-associated fragments from the normal DNA sequences that contain the same sequence. There's an overall picture here of the method. We take a plasma sample, and we add an anti-CTCF, antibody to that. That's the purple Y-shape thing. It pulls the CTCF out of the plasma. We then wash all of the nucleosomes away, and we're left with an antibody bound to CTCF. We then extract the DNA from that CTCF antibody, and we do a simple PCR test to see whether or not the yellow cancer-associated DNA fragment is present. In fact, one of the beauties of this technology is that biomarker discovery is rapid and very straightforward. So what we did was to take some healthy blood samples and some samples from people with other diseases like inflammatory diseases and some blood samples from people with cancer. We then did the same procedure as before. We pulled out the CTCF-associated DNA fragments. But this time, we did sequence them for biomarker discovery. So what we did was to see what sequences were present in the cancer samples that were not present in the other samples. And we found 29 sequences that met our criteria. We completed it fairly recently, and then we ran a very preliminary clinical proof of concept. As I said before, we found 29 biomarkers that were interesting. We actually developed PCR tests for 10 of those. And now I'm going to show you just how well those 10 tests performed in reality. Some biomarkers were quite specific for leukemia, but most of the biomarkers were also effective for the identification of a variety of common solid cancers, and different biomarkers were effective for the detection of different combinations of solid cancers, including at early stage cancer. This means it's possible that we will be able to produce assays that can detect particular cancers. For example, a breast cancer test or prostate cancer test and so on. And we're currently developing biomarkers for the common solid cancers, including breast, prostate, colorectal cancer, lung, and liver cancer. As I said earlier, biomarker discovery is rapid and low cost. So this won't take us a great deal of time. One point I would like to reiterate is that CTCF has something up to 100,000 or so binding site loci in the human genome. And this represents a potential whole new class of hitherto unappreciated biomarkers that we can use for the detection of cancer. How does it work in practice with real patient samples? First of all, just using one single PCR test. So now it really is like a COVID test, we were able to detect 61% of leukemia cases with 98% specificity, so really quite high specificity. And you can see that in the ROC curve here, and you can see it pictured with the actual results on the right where pink is a positive. So we've got one false positive amongst the healthy samples on the left, but lots of pink true positives amongst the leukemia samples on the right. The thing I do want to emphasize is that this is exactly the same as a glucose or a urea or a cholesterol test. There's a simple cutoff. If you're below the cutoff, you're negative. And if you're above the cutoff, you're positive. You don't need a computer. If we now add a second PCR, so we've got a panel of 2 PCR tests, then the sensitivity goes up to 74% of leukemia cases detected with a very slightly lower specificity at 96%. Some -- most of the PCR tests also detected different solid cancers. And there were 2 or 3 of the assays that were particularly good for detection of colorectal cancer. And in fact, if you put those 2 assays together, we can make a 2 PCR panel that detected 77% of colorectal cancer cases at 92% specificity. And that represents the black dot on this diagram. So what we've achieved here is a blood test that gives nearly as good results as a fecal test. But of course, it's much easier to use. And that wasn't even developed on CRC. It was developed for leukemia. We are now developing individual biomarkers that are specific for CRC, and we expect to get results that exceed those that you can get with FIT. And of course, we're developing other tests for lung, prostate, breast and so on. There's a lot of talk in the liquid biopsy field about multi-cancer early detection test. So we put another panel together of 2 PCRs that were not specific for any particular cancer or specific for different ones so that we could combine detection of multiple cancers. And we looked at colorectal, breast, prostate, and liver cancer. We've got a patient for 10 of each, except for CRC we had 13. And we've got positive results of between 50% and 70% for the different cancers. However, what I really want to highlight is cancer stages, of course, because detection of a Stage IV cancer doesn't really help the patient a great deal. What would really make the difference is telling a person that detecting a person's cancer when it's at Stage I and Stage II and something can be really done to help them. So we did detect a lot of Stage IV cancers, 75% of them, but the really astonishing thing is that we can detect between 1/3 and 1/2 of Stage I and II cancers. And that really is something, I think, that nobody has achieved before to detect early-stage cancer in a simple blood test that is quick and low cost. Finally, I'd like to reiterate the advantages of physically separating tumor DNA from normal DNA because it leads to a much simpler, lower cost, better test. First of all, the cost of traditional NGS assays are $1,000 or more whereas this is going to cost much less, probably in the region of $100 or so. The traditional assays are very complex. They're not automated whereas this can be automated. I think the big IVD firms can make a machine that will do this at the press of a button. Traditional NGS is really suitable for high-tech labs. The NHS in England, for example, has 7 labs that perform all of the tests for the whole country, whereas this assay can be done in any central hospital lab, especially if it's automated. It's a lot faster. It takes less than a day even if it's manual, whereas traditional assays take days or weeks. And of course, there's no library preparation, there's no sequencing, there's no computer involved. And the answer is a simple plus minus answer like a COVID test. You don't need a computer to analyze the result. What's coming next? Well, first of all, we will be publishing a paper on this method, including all the details of how to do it and so on. And then, we will be next developing particular tests for breast cancer, prostate cancer, lung, colorectal and so on. And details of those will be coming out over the next few months. As Gael said at the beginning, the mission of our company is to produce life-saving diagnostic tests, and that's also my personal passion, especially if they can be low cost and accessible to everybody, not just accessible in rich developed countries. Having said that, I'd like to pass you over to somebody that actually understands medicine, and that's Dr. Andrew Retter.

Hello, everybody. I'm Dr. Retter. I am a consultant to Volition, and I'm very excited to take you through this talk on cancer today. And thank you to Jake for talking just now. Just to be clear, I'm a consultant to Volition. I do work in the National Health Service. But for clarity, the views expressed here are on my own and don't represent those at the NHS Trust where I work. Cancer is the second leading cause of death worldwide. Over the next 20 years, we expect the rates of cancer to go up by about 1.5x, giving a huge burden of disease in the population. 5-year survival rates are improving for cancer, which is a brilliant thing and there's a huge amount of research and the field is rapidly growing and changing. But about 45% of cancers in the U.K. are still diagnosed in the late stage, in Stage III and Stage IV, where treatment options are more limited, the treatments tend to be much more invasive, much more prolonged, and indeed perhaps even more severe and more difficult for patients to tolerate. And many patients will be older and just too frail to tolerate the intensity of those therapies. So as a key critical need to improve the diagnosis of cancer and the stages at which we can diagnose cancer. So we can -- everyone understands that the early you treat something, the easier it is to treat, to interdict, to change its course, and hopefully cheer more people. How might the new technology from Volition help? It's aligned with Volition's key principles of diagnostic enrichment. This is using and leveraging modern pioneering biotechnology to improve early-stage diagnosis, to monitor our diseases and to review their progression going forward. If we can diagnose patients earlier and monitor their treatment more efficiently, perhaps reducing the need for expensive costly CT scans and MRI scans or even positron emission scans too, hopefully we can lead to faster, more rapid diagnosis and identification of problems or progression when they occur. What's coming next in this area? Well, we're already in the advanced stages of finishing our first paper discussing transcription factors and the applicability in a large number of cancers. We're starting to develop specific biomarkers for lung, colorectal cancer, prostate cancer, breast cancer and liver cancers. And together, those are the most common malignancies. Abstracts and more posters are going to be presented at a number of specific or cancer-specific conferences throughout 2024. We have ongoing work with a number of key opinion leaders from centers of excellence to accelerate and progress that research further. So in summary, we're extremely excited to announce this novel breakthrough technology, and we're extremely excited by the transformative effect it could bring to so many patients. It has huge potential of significant clinical and commercial benefit, and it contains a number of truly world-firsts. Thank you very much for listening. And I'm delighted to hand you back to Soo. Thank you.

Thank you to the Volition team for that informative presentation and your effort on early cancer detection. Just as a reminder, if you have any questions, please submit them via your Q&A tab at the bottom of your Zoom menu. I'll read them as they come across. Here -- for the first question here. Thank you for taking my question and for a lot of the interesting presentation. I wanted to ask what was the reaction at ESMO?

Yes, we were at ESMO last week. We spoke to a lot of people from different institutions and from a lot of companies. And the response was very good, very high degree of interest. And for most of these people, it was the first time they had ever seen anything to do with this technology and yes a very, very -- I was very, very happy with the response. It couldn't have been much better really.

[indiscernible]. It's very exciting as you've seen from the video just now. It has huge potential.

Great. How about the second one. It says, how does the accuracy of this compared to NGS-based test?

I think it's early to give a very detailed answer to that. What I would say about that is that in this first sort of embodiment of what we've been doing. But that was developed on a leukemia model and still it gave very good results in all of the solid cancers we looked at, including a very good result at early stage. So I'm confident that the products when we get that far will be sensitive to early-stage detection. And that the biomarkers that we can develop for each of the individual cancers will be significantly better than the biomarkers that we have by translating what we could find in leukemia into solid cancers. So I think giving you an exact number now, it is very difficult. We're confident that the final numbers will be good and better than we can do now.

Okay. So we have this other one from Bruce Jackson of Benchmark. Here it says, the CTCF associated with DNA methylome, are you using the standard DNA extraction methods or what is the blood sample size of each patient? How does this compare to liquid biopsies?

So at the moment, we are as I said, we're at an early stage. It's only earlier this year that we've really obtained proof of concept. Currently, we use 1 ml blood. So it's not a big sample size. It's perfectly manageable. The event, we will be optimizing that. So it might be a bit more or a bit less, but it's going to be around that mark. The DNA extraction is a completely standard extraction kit. There's nothing fancy or difficult about it.

Here's another one. I think this is a follow-up to a prior question. How does this technology differ from NGS tests that are currently available and in development?

I think it's different at a very fundamental level. So the way I see it is that most people involved in liquid biopsy where it relates to ctDNA are really focused or have always been focused on DNA. We as a company have never focused on DNA. We have always focused on the fact that what circulates is fragments of chromosomes. And over if [indiscernible] in developing immunochemical, immunoassay and others, techniques around relating and analyzing chromosomal fragments. And really, it's that expertise with the immunochemistry of chromosome fragments that has allowed us to make this advance because I think it's a fundamentally different perspective to think about DNA. So if what you do is you get a blood sample and you extract all the DNA, in effect you're throwing away the protein component of chromatin as packaging. This is an interesting, this is packaging. The DNA is interesting that we're going to sequence it. But as a company, we've always focused on the fact that the protein component of chromatin also contains a huge amount of information predominantly epigenetic. And that can be used if you can get the chemistry of chromatin right. And that's what we've been doing for 15 years now, and that's, I think, what we've managed to achieve here.

So we have a few on the same about how do you protect the IP here?

We've protected the fundamental method in a previous patent 2 or 3 years ago now. And we've also protected these exact methods more distinctly in a more recent filing. So that we have a -- obviously, we have a huge experience in IP and we have very good IP people in the company. So I'm very confident that it's well protected. We've also protected it from the perspective of biomarkers. So one of the things as well is the method. I think mentioned briefly in the video, that this really does open up a whole new arena of biomarkers that nobody has looked at before. Essentially any differentially occupied as any genome locus that's differentially occupied in cancer by CTCF is a novel biomarker through this technique and we're protecting that aspect as well.

So we have another question here from Ross from Cantor. As you mentioned, in developing individual biomarkers specific to CRC expected in the first quarter of '24, what is the timing referring to at the beginning of the development of the test or start of the study? When can we expect details on the clinical trial? And how many patients do you think you need to enroll to support regulatory approval?

So for the -- for Q1, what we're really talking about here is proof of concept for each of the individual cancers. So it won't be a huge number of patients. It will be sufficient to get a very good idea, a lot bigger than the cohort that we've had to date. But it's going to be 50 to 200 size. It's not going to be 1,000 size and it won't be sufficient for regulatory approval. What we will achieve by Q1 next year is that we will demonstrate the actual results using biomarkers developed for each of those cancers, what is the sort of result that we're going to get in those cancers in your patient samples, but it won't be regulatory at that stage.

We've got proof of concept, and we are refining that, and we're expanding the number of cancers we can use it in. And going back to video as Gael and Jake said, we're going -- we're sharing this early because we think it's got so much potential. And really by showing this proof of concept and developing that further, we really hope to work with others to take it forward and bring it to a huge audience. There are literally millions, if not hundreds of millions of patients. This is potentially applicable technology for. And really to pick up Jake's comment from the video as well, this is -- the key here is the separation of tumor DNA and the chemistry that enables that. And that is a game changer and will bring this test available to a huge number of patients whereas in many real-world settings, next-generation sequencing is just not affordable. $1,000, $1,500 test is normal and then you just exclude a huge number of people whereas a $100 test or something around $100 the market is much, much, much broader. And the other thing we haven't picked up on is if you're picking up Stage I, Stage II disease, so potentially your treatments are less expensive and less invasive at that time as well. One of the reasons we're sharing early, it completely aligns with our blood Volition philosophy as a company. I mean, this thing is tremendously exciting.

Yes, that's a good transition here, Andy. I have another one for you. From Michael Okunewitch. Sorry, apologies for screwing up your name here, from Maxim. How does this fit strategically compared to the nucleosome-based human cancer program? This -- is this an evolution of those or a separate program that could be advanced in parallel?

So I'll go first and then Jake and Andy. To be honest, I think Jake has already spoken to this and it comes from Volition's expertise in understanding how or what cell-free DNA actually means. The literatures are a little confusing when people use the term, but it probably isn't cell-free DNA. You've got DNA attached to chromatin, to nucleosomes, et cetera, and that's how it's executing. And really it's our expertise in that area and the expertise we've developed with Nu.Q that's enabled us to do that. This -- as we see it at the moment, this is very much a diagnostic test, which is extremely interesting. Potentially, Nu.Q will be more of a monitoring test later. But it's our understanding and experience with nucleosomes is enabled us to make this next step forward, so to speak. So I see it very much as sort of an assistant branch moving forward. But Jake has been doing this longer than I have. [indiscernible] thoughts are.

Yes. It's certainly not a replacement, and we are absolutely continuing with Nu.Q. Incidentally, at ESMO, we had 3 presentations, not 1. One of the other 2 presentations was about a Nu.Q test that we've been using for the investigation of modules discovered on low-dose CT lung cancer screening. And one of the big issues in low-dose CT lung cancer screening is that if you find a small module in somebody's lung, essentially you're taking a photograph. Because there's a very small lump in your lung doesn't mean it's cancer any more than a lump that you can feel in your breast may or may not be a cancer. And so we've been working with National University in Taiwan to use Nu.Q as a method of differentiating between modules which are malignant and benign, and that research has been going very, very well. We have another program in lung cancer with the University of [ Leon ] that's looking at finding minimal residual disease after surgery by a Nu.Q. That's also going very well. So Nu.Q is also progressing really, really well. It's just that in this particular women, we're talking about CTCF.

Great. So we have another one here from the Freedom analyst. Congrats on the encouraging results. The question is related to early-stage cancer samples. Could you comment on the sensitivity rate in this group of patients? Do you see a way of improving it?