VolitionRx (VNRX): Review of 2Q 2023; Distribution Footprint of Nu.Q Vet Cancer Test is expanding. Prolific Schedule of Clinical Papers & Posters.
NYSE:VNRX
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Second Quarter Highlights
Nu.Q Vet
Product sales of the Nu. Q Vet Canine Cancer Screening Test grew 459% YOY and 15.0% sequentially (off a low base) driven primarily by sales of reference kits through IDEXX, which launched the test in the U.S. during January. Domestically, IDEXX has 20 affiliated reference laboratories in which to process assays, and it is anticipated that IDEXX will expand internationally to its other 60 reference labs in 2024. Heska’s roll-out of the Nu.Q Canine Cancer Screening Test has been slower than expected due to Heska’s desire to fully perfect the testing process on its point-of-sale platform (Element i+) prior to product’s launch.
Volition’s tests are transferable to multiple conventional high-volume, laboratory-based assay platforms, including ELISA (enzyme-linked immunosorbent assay) 96 well plates and bead-based chemiluminescent assays. The company is currently working on transferring the testing process to several small-sample-volume platforms, including the one using the HIA (homogeneous immunoassay) technique.
Management continues to strive toward broadening the distribution of the Nu. Q Vet Cancer Screening Test. Internationally, several prospects are being pursued with the anticipation that later in 2023 a licensing and supply agreement will be signed addressing at least one significant non-U.S. market (such as the U.K., Germany and/or another Asian country).
Nu.Q Vet Canine Cancer Monitoring Test: On May 10, 2023, a peer-reviewed paper entitled “Monitoring plasma nucleosome concentrations to measure disease response and progression in dogs with hematopoietic malignancies” was published in PLOS ONE. The paper concludes that plasma nucleosome concentrations can be a useful tool for monitoring the treatment of dogs with hematopoietic malignancies, particularly lymphoma. The open access article is available here.
Management expects to expand the Nu.Q Vet Cancer Screening Test to a monitoring application through an awareness & education campaign starting in late 2023 and going into 2024.
Service revenues (generated by the sales of H.3 kits via Nu.Q Discover) grew 399% YOY and 837% sequentially (also off a low base).Thus far, Volition has 10 contracts signed under Nu.Q Discover, eight (8) of which are generating revenues. The company announced that one of its oncology pharmaceutical contracts has progressed to Phase Ib, which should generate a higher level of revenues than the pilot stage contracts in its current base.
Nu.Q NETs
According to a study published in The Lancet during 2020, globally, one in every five deaths is associated with sepsis. In addition, according to the CDC, in a typical year, over 350,000 adults die in the U.S. after developing sepsis with the death occurring either during a hospital stay or subsequently after being discharged to a hospice. Volition’s Nu.Q NETs test is proving to be a diagnostic aid that can help clinicians better detect the sepsis.
In June, Volition submitted a Designation Request for Breakthrough Device with the FDA. The process represents the first time Volition is actively interacting with the FDA. Through the Breakthrough Devices Program, the FDA will consider whether the Nu.Q NETs test meets the requirements of a breakthrough device, thereby qualifying for prioritized review on future regulatory submissions. Also, the FDA should provide guidance whether the Nu.Q NETs test is eligible for the 510(k) clearance process (aka a Premarket Notification or PMN). During a 510(k) review, the FDA does not typically evaluate clinical study data, and therefore, clearance is granted usually within three months under the 510(k) review process.
Volition works with Centers of Excellence where clinicians and researchers have access to Nu.Q products. In Europe, the first clinical paper on Nu.Q NETs from one Center has been submitted for peer review. Furthermore, two (2) abstracts from other Centers will be presented at ESICM (European Society of Intensive Care Medicine) Congress LIVES in Milan, Italy during October (See Recap of Both Recent & Scheduled Abstracts, Papers & Posters section below). A clinical paper was written on the results and has been accepted for publication.
During September, Volition will host a Key Opinion Leader Roundtable Event focused on sepsis. A physician paper is expected to be published following the event.
Nu.Q Cancer
In April 2023, Professor Léa Payen-Gay, a collaborator on validating nucleosome technology (from Les Hospices Civils de Lyon - the second-largest hospital in France), helped present two (2) posters at the American Association of Cancer Research (AACR) Annual Meeting in Orlando. These 2 posters demonstrated that Nu. Q H.3 assays, along with molecular profiling of circulating DNA, can improve both a diagnosis of lung cancer and the subsequent treatment monitoring plan. (See Recap of Both Recent & Scheduled Abstracts, Papers & Posters section below).
In the latter part of October 2023, Professor Chen of the National University of Taiwan will be giving an oral presentation at the European Society for Medical Oncology (ESMO) in Madrid. Professor Chen will discuss the results of a 1,200-subject, large-scale lung cancer study that used Nu.Q in conjunction with low-dose CT. The study is expected to provide statistically-powered evidence of the potential utility of Nu.Q diagnostics as a screen for lung cancer or as an adjunct/triage test for low-dose CT. As a result, the number of unnecessary biopsies could be reduced. LDCT, currently the only recommended screening test for lung cancer, has drawbacks including its relatively high cost, patient exposure to radiation, over-diagnosis and a potential for meaningful rates of false-positives. As such, an adjunct or triage test that could improve accuracy of lung cancer screening and/or reduce the need for LDCT (without compromise to diagnosis) could have massive appeal, in our opinion.
In addition, two (2) abstracts involving Nu.Q have been accepted for publication at ESMO. One will involve Nu.Q Capture. The agenda for the ESMO Congress has not yet been posted.
Financial Highlights
On August 14, 2023, VolitionRx reported financial results for the second quarter ending June 30, 2023. Total revenues were $216,310, which was composed of $166,147 from product revenue from sales of the Nu.Q Vet cancer screening & H3.1 kits, primarily to IDEXX, and $50,163 from services revenue from Nu.Q Discover.
Operating expenses increased 20.0% from $8.14 million to $9.77 million as the company experienced higher clinical trial and personnel costs. The number of full-time employees (FTE) increased from 57 to 69 in R&D and from 19 to 21 in sales & marketing while FTE declined from 23 to 21 in G&A division. Overall, higher personnel expenses were partially offset by stock-based compensation; R&D expenses increased primarily due to DXOCRO’s regulatory efforts in the U.S., which added approximately $1.2 million. DXOCRO (Diagnostic Oncology CRO, LLC) is developing and will conduct large-scale clinical validation studies for Volition’s Nu.Q NETs and Nu.Q Cancer tests in order to demonstrate significantly improved patient outcomes with the goal of gaining clearance, authorization or approval from the FDA.
For the second quarter, VolitionRx reported a net loss of $9.47 million attributable to stockholders (or $0.14 per diluted share) versus a net loss of approximately $7.65 million (or $0.14 per diluted share) in the comparable quarter last year.
As of June 30, 2023, working capital was approximately $2.7 million, a significant improvement due to the $17.45 million in net proceeds received from the equity offering that closed during the second quarter. During the first half, shares outstanding increased by 9.1% to 63,111,766 shares from 57,873,379 shares on December 31, 2022.
Near- and Intermediate-Term Expected Milestones
2H/2023 Heska’s roll-out of Nu.Q Vet Cancer Test in the U.S.
2H/2023-2024 Roll-out of Nu.Q Canine Cancer Test for monitoring application
2024 IDEXX’s international roll-out of Nu.Q Vet Cancer Test
2024 Nu.Q Vet Cancer Test expanding to felines
Recap of Both Recent & Scheduled Abstracts, Papers & Posters
Nu. Q Vet Canine Cancer Monitoring Test
Canine Cancer Monitoring Test: On May 10, 2023, a peer-reviewed paper entitled “Monitoring plasma nucleosome concentrations to measure disease response and progression in dogs with hematopoietic malignancies” was published in PLOS ONE (Volume 10, article 1371). Dr. Heather Wilson-Robles et al concluded that plasma nucleosome concentrations can be a useful tool for monitoring the treatment of dogs with hematopoietic malignancies, particularly lymphoma. Elevated H3.1 nucleosome levels detected by the Nu.Q Vet Cancer Test correctly differentiated the status of the disease at a significantly higher rate than the other two biomarkers. The article is available on Volition’s website.
Lung Cancer
Lung Cancer: On April 4, 2023, a poster presentation entitled “Circulating H3K27 methylated nucleosome concentration in lung cancer improves the contributive value of ctDNA molecular profiling result at diagnosis” was presented at the American Association of Cancer Research (AACR) Annual Meeting in Orlando. Using Volition’s chemiluminescent Nu.Q immunoassays, a study of 298 samples indicated that high levels of Nu.Q H3K27Me3 accompanied with the absence of somatic alterations “strongly support” the presence of non-mutated ctDNA, which “greatly improves the confidence” in the negative molecular results in cfDNA in Lung Cancer, which may reduce unnecessary invasive tissue biopsies. The poster is available on Volition’s website.
Lung Cancer: On April 4, 2023, a poster presentation entitled “Circulating H3K27 methylated nucleosome concentration in lung cancer improves the contributive value of ctDNA molecular profiling result at diagnosis Abstract 2163: Circulating H3K27 nucleosomes to monitor lung cancer patients during treatment, a universal biomarker quantifying the molecular residual disease (MRD) in plasma samples” was presented at the American Association of Cancer Research (AACR) Annual Meeting in Orlando. Using Volition’s chemiluminescent Nu.Q immunoassays, a study of 300 samples indicated that high levels of Nu.Q H3K27Me3 indicated that monitoring testing, along with imaging, could allow physicians to better identify specific treatments. The poster is available on Volition’s website.
Lung Cancer: On August 16, 2023, a paper entitled “Circulating H3K27 Methylated Nucleosome Plasma Concentration: Synergistic Information with Circulating Tumor DNA Molecular Profiling” was published in Biomolecules (Volume 13, article 1255). The paper out of Lyon, France, puts forth that detecting high levels of circulating tumor DNA (ctDNA) nucleosomes improves the ability to diagnose lung cancer over molecular profiling alone. In addition, high H3K27 nucleosome levels may be a biomarker for monitoring lung cancer patients during and/or after treatment. The paper was presented at the AACR (American Association for Cancer Research) 2023 Annual Meeting in Orlando, FL during April. The open access article is available here. The article is also available on Volition’s website.
Sepsis
Sepsis: On October 24, 2023, a paper entitled “Therapeutic Removal of cfDNA/NETs using NucleoCapture Apheresis in a Porcine Intensive Care Sepsis Model: A blinded randomized controlled trial” will be presented at ESICM (European Society of Intensive Care Medicine) Congress LIVES in Milan, Italy. In this blinded randomized controlled study, NucleoCapture safely and effectively removed cfDNA/NETs from the circulation of septic pigs, which resulted in improved organ function and survival.
Sepsis: On October 24, 2023, a paper entitled “Association of Significant Elevation of NETosis and Nucleosome Biomarkers measured by Volition Nu.Q® NETs assay with Mortality in Patients with Septic Shock” will be presented at ESICM (European Society of Intensive Care Medicine) Congress LIVES in Milan, Italy. The paper concluded that level of nucleosomes measured by Nu.Q NETs had a significantly positive correlation with organ failure and severity scores, and that the level of nucleosomes seems to be a promising biomarker upon a patient's admission.
Recent Financings
During June 2023, VolitionRx closed a public offering consisting of 14,950,000 shares (priced at $1.27 per share) that provided approximately $17.45 million in net proceeds. The underwritten offering was pursuant to a shelf registration statement initially filed in September 2021. 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.
Earlier this year in February, an underwritten public offering consisting of 4,945,000 shares, also pursuant to the same shelf registration statement, was priced at $1.75 per share. Net proceeds were approximately $7.8 million.
As of June 30, 2023, cash and cash equivalents totaled approximately $19.74 million versus $10.01 million at the end of the first quarter of 2023. Later this year, management expects additional expect to receive a funding from several Belgian agencies as well as $6.5 million in a milestone payment from Heska Corporation on the commercial launch of the point-of-care Nu.Q Vet screening test.
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