VNRX: Highlights of Capital Markets Day (Nu.Q NETs & Nu.Q Vet); Heska being acquired by Mars (increases Nu.Q Vet distribution footprint); 13 MM share offering completed
NYSE:VNRX
READ THE FULL VNRX RESEARCH REPORT
Highlights of Annual Capital Markets Day
On May 11, 2023, VolitionRx (NYSE:VNRX) conducted the company’s Annual Capital Markets Day. The presentations included the current status and prospects of Nu.Q NETs and Nu.Q Vet, the two pillars of the company that are entering the commercialization phase. Volition’s blood tests (assays) are low cost (less than $100), routine (adaptable to many platforms) and accessible (multiple agreements for product distribution). One of management’s utmost commercialization efforts involves expanding the distribution channels for the company’s blood assays. During the Capital Markets Day, the company provided the slide below showcasing the platforms specifically targeted for processing the company’s assays, along with the time required to process a blood sample. In addition, the can be processed at regional laboratories, which require longer periods of time.
Nu.Q NETs
The Nu.Q NETs presentation focused on sepsis, a disease that accounts for over 50 million cases and over 11 million deaths worldwide. There are more cases of sepsis per 100,000 population (377 cases) in the U.S. and Europe than cancer (332), stroke (223) or heart attacks (208).
There is an excellent presentation discussing NETs in the Capital Markets Day webinar (between 13:34 and 18:30) that is still posted on the company’s website at https://ir.volition.com/news-events/ir-calendar.
Early diagnosis of sepsis is key to patient outcomes and reduces long-term morbidity. Specifically, the risk of death increases 7.6% for each hour the appropriate antibiotic therapy is delayed. Current assessment tests, SOFA (Sequential Organ Failure Assessment used in Europe) and APACHE II (used in the U.S.), are complex and require time to process. It appears that Volition’s Nu.Q NETs test correlates well with the SOFA score, according to an observational study by Morimont et al published in July 2022.i
The Nu.Q NETs assay was granted the CE Mark (Conformitè Europëenne) certification process in Europe in late May 2022. Volition registered the Nu.Q NETs assay (H3.1 nucleosome) with a broad claim for detecting and monitoring diseases with a NETs component (e.g. sepsis, COVID-19, influenza, autoimmune diseases and cancer) and across multiple platforms (ELISA plate, automated beads etc.). The CE Mark enables the clinical use of the NETs assay test in more than 27 countries across Europe.
The road map to commercialization was discussed. In 2022, Volition became a member of the International Sepsis Forum, an important organization in the sepsis field. To date, two clinical papers and six posters have been published providing clinical evidence of the efficacy of the Nu.Q NETs assay for the detection of sepsis.
Volition is pursuing Breakthrough Device Designation (BDD) the U.S. The company’s Carlsbad laboratory facility is helping spearhead the sepsis development program in the U.S. Management expects to submit a request for the BDD designation during the second quarter of 2023.
Clinical studies are underway with Diagnostic Oncology CRO (aka DXOCRO, a contract research organization) which specializes in the commercialization of diagnostic biomarkers. VolitionRx appointed DXOCRO to develop and conduct large-scale clinical validation studies for Nu.Q NETs in August 2022. Furthermore, DXOCRO is helping lead Volition’s regulatory program in the U.S. with the goal of gaining clearance, authorization or approval from the FDA. Management believes that the mandatory FDA regulatory trials could be completed by the end of 2025.
Nu.Q Vet - Distribution
IDEXX Laboratories
In mid-October 2022, Volition signed a Global Supply Agreement for the Nu.Q Vet Cancer Test with IDEXX Laboratories, Inc. (NASDAQ:IDXX), a market leader in pet healthcare with 80 laboratories servicing over 50,000 veterinary practices. Through the Agreement, Volition’s Nu.Q Vet Cancer Test will be offered by IDEXX as the IDEXX Nu.Q Canine Cancer Screening Test and the test will be processed through reference laboratories.
IDEXX Labs introduced the IDEXX Nu.Q Canine Cancer Screening Test at the Orlando Conference on January 12, 2023. IDEXX’s product launch is expected in the second half of 2023.
Heska Corporation
On March 29, 2022, VolitionRx announced the signing of an exclusive Global License and Supply Agreement with Heska Corporation (NASDAQ:HSKA) for the distribution of the Nu.Q Vet Cancer Screening Test at the point-of-care for companion animals. Heska is a growing veterinary health laboratory diagnostic systems company specializing in point-of-care tests, analyzers and specialty products for canines and felines in North America (62.6% of revenues) and 9 international markets.
VolitionRx received a $10 million upfront payment on signing (in late-March 2022) and will receive up to an additional $18 million based upon the achievement of certain milestones, namely $6.5 million on the commercial launch of the point-of-care as a screening test, $6.5 million at the first commercial sale of a monitoring test and $5 million when the work on the feline test is finalized. The Feline test is currently in the pre-analytics stage.
Initially, the licensing agreement grants exclusive rights to commercialize Nu.Q Vet for canine cancer screening and monitoring at the point of care. Heska will offer the Nu.Q Vet test on its proprietary Element i+ Immunodiagnostic Analyzer point-of-care platform, which was launched in 2020. Element i+ is designed to deliver test results in minutes.
Also, Heska was granted non-exclusive rights to sell the Nu.Q Vet test kits through its reference laboratory network. The payment for the kits and key components will be at pre-agreed prices, which should provide another revenue stream for VolitionRx. Through Heska, Scil Lab launched Nu.Q Vet test kits in Europe during November 2022.
The acquisition of Heska by Mars Inc. (announced in early-May 2023 for $1.3 billion) is expected to be a net positive since it adds Mars Petcare with an international network of over 2,500 pet hospitals (including Banfield, BluePearl, Mount Pleasant and VCA) to the network under the Global License and Supply Agreement, which should generate additional revenues for VolitionRx. The acquisition is expected to close in the second half of 2023.
SAGE Healthcare
In mid-December 2021, Volition signed a Global Supply Agreement for the Nu.Q Vet Cancer Test with a market leader in pet healthcare. In April 2022, the Nu.Q Vet test was launched in Singapore through SAGE Healthcare, which expanded the Nu.Q Vet test’s geographic footprint to Asia.
Through the Agreement, Volition provides its Nu.Q Vet Cancer Test through SAGE Healthcare and makes its reference laboratory network available for the screening test of the blood samples drawn by veterinarians.
DNAtech
DNAtech launched the Nu.Q Vet Cancer in Portugal during late-November 2022. DNAtech has three laboratories located in the Lisbon, Porto and Algarve regions of Portugal and services over 2,300 customers.
Nu.Q Vet – Clinical Paper for Monitoring
On May 10, 2023, a clinical paper on utilizing nucleosome concentrations as a tool for monitoring treatment response and remission status of canines with hematopoietic cancers. Entitled “Monitoring plasma nucleosome concentrations to measure of disease response and progression in dogs with hematopoietic malignancies”, the study was led by Dr. Heather Wilson-Robles, Chief Medical Officer at Volition Veterinary. The paper can be read at https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0281796.
The study evaluated 40 dogs with lymphoma, acute myelogenous leukemia and multiple myeloma. The study “found that plasma nucleosome concentrations were significantly higher at diagnosis and progressive disease than they were when dogs were in remission. The study also showed that nucleosome concentrations nearly always returned to the low range during treatment and are associated with clinical remission.”
As a result of this paper, the Nu.Q Vet Cancer Detection Test has a new indication for monitoring and now can be used as a Nu.Q Vet Cancer Monitoring Test for canine lymphoma management. Dr. Wilson-Robles recommends that the Nu.Q Vet Cancer Test be used at diagnosis, once per cycle during treatment (at least four times), at remission and every following check-up (normally every 4-to-6 weeks).
Nu.Q Vet Cancer Detection Test
Key opinion leader, Dr. Sue Ettinger, recommended that all dogs should be tested with the Nu.Q Vet Cancer Test over age of seven (7) at their annual wellness check-up, while high-risk breeds (shown in the slide below) should be tested around the age three or four. The test should be administered on healthy, fasted canines.
Management has presented an opportunity simulation for the Nu.Q Vet Test to illustrate the revenue potential at certain levels of tests being administered. Based on the simulation, between 3.7 million and 4.0 million tests annually would cover the company’s level of cash burn.
IP Portfolio
VolitionRx has a substantial worldwide IP portfolio with 96 patents and 120 patent applications pending as of May 11, 2023.
Recent Financing
On June 5, 2023, VolitionRx announced the details of another underwritten public offering pursuant to a shelf registration statement initially filed in September 2021. The offering of 13,000,000 shares was priced at $1.75 per share. Gross proceeds were approximately $16.5 million. The net proceeds will be used for R&D, clinical studies and product commercialization as well as for working capital purposes, including potential strategic acquisitions. Freedom Capital Markets acted as the book-running manager and Bancroft Capital acted as co-manager.
VolitionRx is a multi-national epigenetics company with a focus on developing diagnostic blood tests (assays) that can help detect a range of cancers and other diseases so that appropriate treatment may be prescribed. Blood tests are a diagnostic tool that is relatively simple to administer, convenient and cost-effective. Also, as a front line screening modality, blood tests would be the optimal approach for the diagnosis of life-threatening diseases (especially cancer), where early diagnosis is the key factor for survivability.
Management’s commercial strategy involves targeting several specific markets. The most advanced commercialization effort is with the Nu.Q Vet blood assay as a cancer detection test for canines. The company just expanded the test’s indication to cancer monitoring for canines. Furthermore, research has begun to expand those indications to felines.
SUBSCRIBE TO ZACKS SMALL CAP RESEARCH to receive our articles and reports emailed directly to you each morning. Please visit our website for additional information on Zacks SCR.
DISCLOSURE: Zacks SCR has received compensation from the issuer directly, from an investment manager, or from an investor relations consulting firm, engaged by the issuer, for providing research coverage for a period of no less than one year. Research articles, as seen here, are part of the service Zacks SCR provides and Zacks SCR receives quarterly payments totaling a maximum fee of up to $40,000 annually for these services provided to or regarding the issuer. Full Disclaimer HERE.
________________________
i. NETosis and Nucleosome Biomarkers in Septic Shock and Critical COVID-19 Patients: An Observational Study, Laure Morimont et al, Biomolecules, July 27, 2022, 12, 1038. https://doi.org/ 10.3390/biom12081038
