VolitionRx Talks With MicroCapClub About Revolutionizing Cancer Diagnostics

| About: VolitionRX Ltd (VNRX)

Summary

VNRX's cancer diagnostic platform could be the first accurate, cheap, and easy to use diagnostic of its kind addressing multiple cancers and worldwide screening populations.

Promising results detecting early-stage Colorectal, Lung, and Pancreatic Cancers.

VNRX will have several key milestones in 2016 that could significantly increase the value of the company.

VNRX recently completed a public offering and is now funded through H2 2017.

On April 5th 2016, Cameron Reynolds, CEO of VolitionRx (NYSEMKT:VNRX), delivered a presentation and answered questions with MicroCapClub's community. VolitionRx is a life sciences company focused on developing inexpensive, accurate, blood-based diagnostic tests for different types of cancer. The NuQ® tests are based on the science of Nucleosomics® which is the practice of identifying and measuring nucleosomes in the bloodstream - an indication that cancer is present. The company has shown promising results in Colorectal, Pancreatic, Lung, Idiopathic Pulmonary Fibrosis, and is about to announce its first results in Prostate Cancer.

We have posted the transcript below of the presentation and question and answer session. You can download the slide presentation [HERE].

Cameron Reynolds, CEO of VolitionRx: Thank you for the opportunity to present VolitionRx to MicroCapClub. You should all have the presentation in front of you so I'll get started. Please review page two with our forward looking statements disclaimer. Now moving onto page three.

I've got to say the team is the most important thing with any company. I think you hear that a lot when your starting out, and you don't necessarily accept that as a fact; but I think the more you work on companies, the more you realize the team really has to be strong or there is no project. I could not be happier or prouder of the team that we have at Volition, who've worked tirelessly for six years now, often in difficult circumstances, on a brand new technology which no one else is working on. They had to have a very strong self belief, and a very strong commitment to what we do. I couldn't have been happier or prouder of what we've done, and how the team has really stuck together and done an amazing amount of work.

I guess some of them you probably have met or heard in different presentations, including our chief scientist Dr. Micallef who has a tremendous experience in these type of blood-based tests, with the World Health Organization and with the National Healthcare System in England, as well as the rest of the team.

Also, as you probably might aware, they are not only committed in time and effort, there's a very large amount of money come from the board and management. We funded the company, to a large extent for the first several years, and put in a lot of the money; so we have a very strong committed team.

Page four is an overview of the company. I think just take a step back at the stage. This is basically what we do. I think everyone knows the damage and dangers to life and the healthcare systems that cancer actually is because it's obviously a terrible disease, and all too common; but it really doesn't have to be a deadly disease. If you are screened early and found early in the cancer, typically depending on the cancer, it's very survivable. For example, in colorectal cancer, survival rates are close to 90% in stage 1; but the inverse of that, 10 or 15% in stage 4. If you find it early and remove it, you're normally in very good shape.

There are lots of different cancer tests currently out there. I don't think any clinician we've ever met thinks the current test they have is ideal, for a whole lot of reasons; either they are expensive, invasive, interpretive or just not very accurate; or suffer from compliance, which means people don't take the test, which is a very big problem because he accuracy of the test, however good it is, in the people who don't take it is obviously zero.

Everyone believes a blood test is the answer. The problem is there has not been a good blood test ever really launched. The only blood test commonly used in screening is the PSA for prostate. That was launched in the 1980s, and there's been absolutely nothing widely used in screening since. That's because none of them have actually got to working. I'll go through what makes us different from all the other blood tests under development and our platform technology.

Who we are. We have a lab in Belgium. That's actually the team photograph on page four, in the actual town we're in, Namur. We moved because of our limited resources early on. We had a lot of local support from the government, and a fantastic team we put together there of scientists who've done a tremendous amount of work in the laboratory there. We've also managed to list the company on the New York Stock Exchange, just over a year ago. We're up-scaling pretty much everything we do at the moment, and have done for the past year, which includes automation of our actual tests; ISO certification of our whole quality system, which doesn't sound like a big thing, but it's a tremendous effort from the whole team because having been certified for a quality system dictates everything we do in the lab to make sure it's all of the highest quality, and it's all properly recorded.

Usually we start next on page five with a review of the technology. I think we have something incredibly unique, incredibly useful, and therefore potentially extremely valuable if we can deliver on our business model. I'll go through what it is. If you look on page five, there's a photograph of the chromosome; even the non-science minded have probably seen a chromosome. If you unravel the chromosome, it's very tightly wound up, every approximately 180 base pairs of DNA, there is a nucleosome, which is what we are after.

These have been known to be quite different in cancer. What they do, for about 10 to 15 years, they control what can be read from your DNA; a protein comes along to a nucleosome, and, for example, it can be given a message not to reproduce, and go away, and come back later.

It's a very complicated switching mechanism of probably well into the thousands of different physical structures on the nucleosome. These are causative cancer, meaning small errors in the switching role of these nucleosomes start cells to be reproducing, and reproducing. How does that help us in the blood? This is obviously all in the tissue, which means the cells where the cancer's growing in your body.

You probably are all familiar that cancer is a very dynamic disease, a lot of births and deaths of cells going on. As a cell dies in the cancer cell, as in every other cell, the body cuts up the chromosome DNA to re-process it, typically in nucleosome-sized chunks of DNA, 180 base pairs with these nucleosomes in it. Because of the very high turnover, even in the very early-stage cancers, which we detect extremely well, there's a turnover of cells, a lot in cancer, which causes more of them to be put into the blood. These nucleosomes are floating around in the blood of everybody, but a higher number of them in the blood of cancer patients, and this is the debris of the nucleosome we're after.

The secret sauce is not, if you turn to page 6, just that there are more in the blood, but that are all these different switches on them are different in cancer. We have a very large IP portfolio, which I'll get to later, but they target all the different types of structures on the nucleosomes, and so our IPs consist of all the methods of detection, as well as all the physical structures, depending on the country of where the patent is applied for. I'll get to the IP later.

These nucleosomes are circling around in your blood, and if you look at the diagram on page 6, the method of detection we use is called ELISA (pronounced el-eye-zuh). What we're looking for in these nucleosomes is extremely unique, no one else has done it, and we have a very broad protection; but the method of detection, you can use a very simple method of detection, called ELISA, E-L-I-S-A, it's an acronym, which is at the simplest level just two antibodies; one which captures what you're after, the nucleosome, which is in this diagram green, and the second, a profiling or labeling antibody, which can only grab hold of the structure you're after, which is more or less common in cancer. If you label the structure a color, this diagram has yellow, that's in the diagram on the HRP Reporter; we actually use green; the sample you have turns a shade of green, and then you use an optical density machine, a very simple machine, to tell you how green, and it tells you how much of that structure is in the sample.

It's an extremely simple platform of detection, and you can only do that because our changes are very common in the blood of cancer patients. The changes we're after are genome-wide, meaning lots of different nucleosomes on the same chromosome have these changes, not just one particular gene.

If you look onto page 7, there's a more anatomically correct picture of a nucleosome, and as you can see more by that it's a very complicated switching mechanism. If you look, basically the company's technology is very well described in Volition Rx Advantages, the box in the left-hand center bottom of this page. The structures are thought to be causative in cancer; why is that important? It means that very early on it causes the cancer, and therefore it's right at the start of the cancer, the genesis of the cancer.

We only need a small volume of blood; which doesn't sound very important, but it's really critical in compliance and the cost of the trials. We optimize the test around 10 microliters of blood, which means one drop of blood you can do at least half a dozen different biomarkers; so that can be part of your normal blood work. There's no need for a separate draw, and it also means our trials cost a lot less money because we only need a tiny bit of the blood already collected. The vast majority of blood tests out there need 5 or 10 mils of blood because you're looking for something very rare, you need a lot of blood, so that makes it a much more expensive trial, and it makes it very difficult to be part of your normal blood work; which all fits into the low cost.

This is on a very simple platform of detection, and low cost is becoming very important. Expensive tests are slowly strangling the healthcare systems the world over because every healthcare system in the world is really in need of some cost savings because we're all getting older, and the tests are getting more and more expensive, and the treatments are getting more and more expensive; so the cost is also extremely important, and cutting edge, the science, using the ELISA. That was the word I mentioned before, E-L-I-S-A; this is the platform we use to detection. It's in every single lab on the planet, it's all standard equipment, nothing extra needed, and it's a simple way to measure these biomarkers.

On page 8 is a page about the ELISA-based test, what makes it easy and inexpensive. If you look at the platform we've actually developed up to now, it's just a manual plate, which is on page 8, which has basically 96 very small test tubes, and each one of these test tubes can run one of our biomarkers. Roughly in costs about $1 per well in this plate to manufacture, so a very low-cost platform. You can also then shift to these large auto-analyzer machines, on page 8, which basically do the same thing as the manual platform, but in a very much faster, automated way. These machines are made by the very large companies like Siemens, Roche, Abbott, those kind of companies. This one here is actually the Abbott Architect, and there's one of these in probably every major hospital pathology lab in the world, of one brand or the other, and they can run a lot of different types of tests on these machines; so then we become like an app on this machine.

What we're aiming to do is license to all of the big companies, and then we get a royalty fee every time they run the test on their machines; but we can also sell, and we will also sell, and we are in the process of developing our own manual format so that we can have direct sales, ourselves.

The last one, on point 4 of page 8, is point of care. You can also optimize around whole blood. You can use a pin prick; it's a probably smaller market than the typical blood work. There is a market for point of care, but it's probably not a mass-market product because you don't probably want to find out you have cancer in your own laundry room. For people like relapse patients, it's probably a very viable market, but the main markets are the platforms, which are the manual and the automated ELISAs.

On page 9, we have a very strong product pipeline in a range of different cancers, as we have in the past. Those of you who have been following us, we have very large amounts of milestones we reach, and we have been reaching, and we will continue to reach in a variety of cancers, ongoing. As you can see here, we have 9 ongoing clinical trials, which is extremely rare; I think we're about the only company in the world who can run this many trials with such small a budget, for all the reasons I mentioned. It's a very low-cost test, and we only need a tiny amount of blood, and the people we're working with are all desperate for a blood test, as other new companies call it the Holy Grail, or the Grail, because developing a blood test is an incredibly big, unmet need. We can run these trials concurrently on a very small budget, given all the reasons I said.

Page 10, what are the results we've got so far? There's no point being a low-cost and easy platform if it doesn't detect very well. We've had excellent results. The 4800-patient study from Denmark, we run 10 assays through that now, and we're detecting about 81% of cancers, and we're in the process now of running a range of new biomarkers through the same population. We have enough sample left for about half-a-dozen more assays before we finish this trial. We're hopeful that as we do more assays, more biomarkers, we call biomarkers assays, those different structures on the nucleosome will continue to improve these results.

At the moment we're 81%. We've completed a prospective trial with the hospital in CHU Dinant Godinne, and as you can see we got about 91% of colorectal, which was excellent; and we run different biomarkers all the time in different trials, so now we're putting all the markers that have worked through this 4800 population, and we'll have data on that later this year. To be getting 91% at 90% specificity was superb, and 67% of the high-risk adenoma. Adenomas are polyps, or growths, which may or may not become cancer. The best way of looking at it is basically most adenoma polyps do not become cancers, but every single cancer started as a polyp; so if you can find them and remove them, you're ahead of the curve. They're an excellent way, and obviously survival rates on polyps are close to 100% if you find it even before it becomes cancer.

The next study, when we did the study with markers just looking at pre-cancers, we got up to 3/4s of high-risk adenoma, which is a spectacular result, and 86% of early-stage cancers. Some of those markers were not used in the original study, so we're doing them in the bigger stud now, and we'll have data on that later this year.

Page 13, colorectal, currently the space, unlike all the other cancers, it is quite a crowded space in colorectal cancer; there are a lot of different tests. The only ones currently used are the colonoscopy, which I'm sure you're all aware of its positives and negatives; it's a very good test, it's very accurate. The two prohibitive things with a colonoscopy are the cost, it runs several thousand dollars, typically, in the United States, and therefore it's only ever really used in the United States as a screening test; it's just too expensive, and the other big issue it has is compliance, an awful lot of people refuse to have it. When you add up all the fecal tests and the colonoscopy, there are about 30 million Americans of screening age who still are not compliant. No one thinks this overall is the answer, as a general issue.

The FOBT and FIT, which are the cheapest fecal tests used elsewhere in the world, obviously the issues there are accuracy and compliance; again, an awful lot of people will not do a poop in the box. There are big problems with those tests.

There are other tests under development, from Epigenomics which perhaps are close to FDA approval, but again the accuracy isn't great, particularly with early-stage cancer and polyps; and it's a reasonably complicated test which again needs a lot of blood. We hope they get FDA approval, they're supposedly close to it, because that would be a very good pathfinder for us. Exact Sciences, you're probably familiar with; it's a reasonably good test, it's accurate, but it suffers from the same issues as the colonoscopy so far as the cost and compliance. There's a huge number of people who refuse to take the test, and cost is a very big issue.

Ours is very flexible on the cost side because it costs us very little to manufacture the products themselves. We've got additional large clinical trials underway in colorectal, both of which we expect to have big data on this year. The 4800 population, which we released some results on, and the first big chunk of the prospective screening population, the fit-positive, fit-negative trial. Those should be very big milestones for us later this year.

The question is what's the market for the colorectal test, starting with Europe. Obviously, we're not competing with the colonoscopy in Europe because it's not used as a screening test very widely, at all; so we're competing with the cheaper fecal tests, which as we discussed before have very big accuracy and compliance issues, although they're very cheap. It's a massive market in Europe, and all Europeans are supposed to be screened, but the majority are not because of the compliance issues, and countries not particularly wanting to roll out a fecal program because they're not ideal.

We've done work in other cancers, as you probably all know. The first one is on slide 16, in pancreatic, where we did a trial which is now being published with Lund University in Sweden, and a panel of our assays plus a traditional biomarker which is not approved for a screening, but is moderately accurate, CA-19-9; we've got to 92% of cancers with 100% of specificity, which is extremely encouraging in pancreatic cancer; so we're now organizing some larger trials, prospectively and retrospectively, we hope to announce soon. I think these results were excellent.

People say "What's the market for pancreatic cancer, given the low incidence?" We probably won't generally screen everybody in the population, but there are very big high-risk groups in pancreatic cancer, most notably late-onset diabetics, who are 8-times more likely to have pancreatic cancer, and also people with family history, etc.

I'll very quickly move through the rest of the presentation so we're on time. Lung cancer, we also had excellent results, and we're working through some very large trials now. Again, you would not screen everyone, even at 90% and 90%, because of the low incidence of cancer; but the high-risk groups are quite obvious in lung cancer, being smokers who are over 55 years of age. Again, it's a very large market, given that.

Page 19, we're doing a lot of other trials. The most exciting, I think, there is the 27-cancer trial. We're doing the biomarkers we have through all 27 major cancers to see which ones we can pick up, and if we can do a single panel to develop more than one cancer. As you can see, there's a lot of prostate work we're doing now, which we're quite hopeful for, and will be released in the short term, the first of them, and would be probably the simplest product to get through the FDA, given there is currently a blood test used in prostate cancer, the PSA; which is on the same format as our test, the ELISA format, although it's a completely different test, of course, and it's a long time off its own intellectual property; but we would estimate it would actually be the simplest one to roll out because there's a very strong predicate.

Intellectual property, as I mentioned before, we have a very strong application, and granted family patents. No one else has worked in this field; no one else has done trials in nucleosomes, so I think we've got an extremely strong position. The patents we've filed, and some of those were granted, are good into the late '20s, and into 2035 and '36, of this century; so very long runway, and we think extremely well-covered.

As I said before, many milestones coming up in the short term, including these largo colorectal trials; including the first FDA work on the CRC for the 510-k; and we expect next year to have the first CE Marks in lung and pancreatic cancer. Of course I mentioned the prostate work, which we'll be releasing soon. It's been an exceptionally exciting year since we went public, and five years since we formed. We've done a tremendous amount of work, and I think we're truly moving towards what our aim has always been, which is to revolutionize cancer diagnostics by making these very low-cost, very easy tests to run, in common use, right around the world, in a range of different cancers. That's Volition Rx.

QUESTION 1: The blood based cancer diagnostic space is starting to get a lot of attention. Jeff Bezos, Bill Gates, and Memorial Sloan Kettering Cancer society recently invested $100 million into a diagnostic company called Grail, formed by Illumina (NASDAQ:ILMN), who predicts they will have a pan-cancer test by 2019? How do you view these well-funded blood based diagnostic competitors and how should investors differentiate them from VolitionRx?

That's a very good question, and I guess I'll start with the plus side. As mentioned in the question, they're very well-funded, obviously when you've got Bill Gates and Bezos as investors. I believe, I'm not 100% certain on this, but I've actually seen figures as high as $500 million which they have raised; so obviously they have a tremendously strong kitty of money, and that really shows; and the name Grail is also true, they're looking for the Holy Grail, which is the blood test.

We very much run our own game, from the start, because we do something very different from anybody else. What Grail are doing through cell-free DNA is done by a lot of different people, therefore they're all trying to carve out their own small bit of the intellectual property area. I have no doubt, given that much money and tremendous work, and we actually have one of our advisory board members works at MSK, they will find something of value, and something useful; but we don't particularly concern ourselves with anybody else in the competition because nobody else has a low-cost blood test, nobody else has all the advantages we have in the nucleosome.

When you're looking for cell-free DNA, you're looking for a needle in the haystack; and one needle is not going to do it, you're going to need several needles. They often do panels of up to a dozen or dozens of markers. When you have all of that, you need to do an awful lot of sequencing; which is why it makes very good sense for Illumina, they sell sequencing machines, so if I was the CEO of Illumina, I would be very much in favor of this, as well; but it's never going to be a low-cost test. I think they're looking to be below $1000, if they're lucky. That would make it a test really for a very small part of the developed world.

I think a pan-cancer test is problematic with the FDA. They say "pan-cancer" not just because they can detect a lot of cancers, but my understanding is they cannot differentiate between the cancers; so you could say if I have one of a very large number of cancers, you have to do a lot of followup tests. When we look for a pan-cancer test with the trial in Bunn, where the aim of our trial is to tell between the cancers, so not only could you say you have one of these five cancers, but which one it is, that's certainly what we're trying to do; where I think they are trying to just tell you any of the cancers because they cannot differentiate between the cancers.

I think they're an obviously well-funded company, they've done a good job of raising that much money, and full credit to them, but I don't lose a second of sleep over these tests because they're fundamentally different to ours, and they're going to always be expensive and complicated.

QUESTION 2: Accuracy is very important but Cost is likely a close second. A $1,000 blood based test really limits its worldwide use. The test needs to be inexpensive for screening populations. I'm sure it varies given the amount of markers used etc but what would you expect the actual cost of your tests to be?

We've done quite a bit of work on marketing, and we're actually looking to retain an overall strategy for branding and products, in the near term, but we certainly aim to be below $100 in the US, and probably below $50 in the rest of Europe, and perhaps quite a lot cheaper in the developing world, because, as we talked about, cost is everything.

Our strong bias is to make it still very profitable, given our low price point of cost of goods, but make it a mass market as quickly as possible, which will also mean it's very hard to develop a very expensive, complicated test when there's a mass-market, cost-effective test out there.

QUESTION 3: What do you view as the top three milestones for the company over the next 12 months?

I covered that a little bit, but just to review, the C-Marks on the first panel in colorectal, and the launch of that first product this year; the larger trials we have in colorectal, and then lung and pancreatic; and the start of the US regulatory work with the 510-K, would be the big milestones in the next 12 months; all of which would be massive for us.

QUESTION 4: Can you talk about our IP position?

I think I covered that in the presentation. I think it's very strong, and there's a lot granted, and we have complete freedom to operate, and we believe the ability to stop anyone else doing what we do.

I guess one of the questions, if we are successful as we expect to be, is why no one else ever looked at nucleosomes as a diagnostic. I guess that's for someone else to work out, but it is quite surprising, given they have been known to be in the cells for a long, long time, no one ever made the connection there in the blood.

QUESTION 5: Do you plan to investigate how serial measurement affects the statistics. If people are tested annually does it improve pick-up or precancerous polyps, for instance, without wrecking specificity / validity? This could be easily incorporated into an annual wellness program, where blood would likely be drawn.

Very good question, and absolutely, we're in the process of negotiating some large longitudinal studies, which means you collect the blood from the same patient over a long period of time to see how it goes, and that will be key to seeing ... that actually was one of the criticisms of Exact Sciences (NASDAQ:EXAS) by the Preventative Services Task Force, is they'd only ever done one trial, in one sort of snap shot. Expect to see some very attractive trials in that space, and very large trials, in the next 12 months, as well.

QUESTION 6: More of a comment..Per your November 2015 results of the Lung Cancer Results, I would like to see more detailed presentation of data stratifying who the groups were, etc. And what happened to the two false (+) normals in the lung cancer study - has follow-up cancer screening been performed? If it turned out they had developed cancer that was undiagnosable at the time of NuQ measurement that would be very powerful - NuQ saw it first.

Yes, absolutely, we've been working on a range of different lung cancer trials. Sometimes with the retrospective trials, the data you have is the data you have; so you don't necessarily follow up people from those; but we're in the process of working on prospective ones, where you can collect all the information. As we have now published the first prostate paper, we're now in the process of writing the first colorectal and the first lung. That will all be presented.

We were mindful of not giving our entire process away in the early trials because we realized no one else was patenting what we were doing. The great thing with being published is you're published, and it's all public; the bad thing is it's all public, and we wanted to make sure we've fully protected ourselves on the intellectual property front before we gave the whole process away; but now we have granted patents, and a very broad portfolio of IP, we're very keen to publish; so all of that kind of information will be obviously in the publications.

QUESTION 7: I thought the PR in March describing the Fibrosis results was very light on details which is likely why the market didn't react. I'm just wondering why you didn't give a better analysis. Are there plans for doing so? or just going to address this after a bigger trial?

Good question. We do think whether we never mention fibrosis in any of our information because how it came to us, just as some background, Liege University, who we do the lung work with, their scientists are big into fibrosis research; so as kind of a favor to them for them helping us with the lung cancer, they said "We have some fibrosis samples; can you have a look at it?" We ran some assays, and as you can see the results were superb in differentiating. They're extremely excited.

We never thought it was a big market issue. It's just we like to be very compliant with what we say is what we tell everyone, the same thing. We wanted to talk about the fact that it worked in different diseases because it's interesting scientifically, and also business-wise, and it worked very well, and our partners in Liege were very keen to talk about it with their people. Trying to be as fully in the regulatory, and make sure we're public with everything that could be important, we decided to release that. We haven't made a big deal about it; we're not doing large followup trials now. The cancers we have are obviously keeping us very busy, and each one of them is potentially a massive blockbuster product.

The fibrosis was extremely encouraging, it was something we hadn't even thought of, and for it to work so well just with some of the markers we had developed was far beyond our expectations. We will end up doing more work, we'll end up doing a larger trial, but just not quite yet. It's very important that we focus.

We thought it was important just to inform everyone that it actually worked extremely well in another disease, and so then we could also talk about it, and also they could talk about it at conferences, and other issues to make sure we were fully compliant.

QUESTION 8: You've talked about various NuQ markers used in various studies, have you determined which eventually will be in the kits? Will kits be for cancer in general or specific cancers (CRC, lung, etc.) or is it all still in flux pending larger exploratory studies?

We have talked about a lot of markers; we've developed 28, now, and as I said we've done about 10 through the large 4800 prostate retrospective trial, and the colorectal. We haven't determined which ones, when we say launch in Europe, that means we'll have picked the first panel to launch in Europe, which would be used, we think, in the US for the 510-K. We could just use what we have now; we're getting more and more markers all the time, some of which work better. Like an company you've got to at some stage draw a line in the sand and say what we have is what we're launching. Given the very large menu of markers we have, they could continue probably for the couple of decades, making it better and better; but obviously that's not what a company is; when you've got something good enough to sell a product, you've got to start selling. That's why we're launching this year.

There are a lot of markers we'll be continuing to work out, and because of the small amount of blood needed in the trials we can do a lot of different markers on the same samples. It's not huge separate trials, given the markers we have.

Some markers do work in different cancers, and some are different between the cancers. I'd expect to see some of the same markers in different cancers, and some different ones in different cancers. I hope that answers that.

QUESTION 9: Europe seems to have a high threshold for sensitivity for screening test. Is there an equivalent approach to presenting the test as an adjunct / high-risk population in Europe?

Absolutely. People go to the doctor in Europe, same as the US, with symptoms. For colorectal, that's sore stomach, loss of weight, blood in your feces; so there's a need for tests for that. Actually, the question perhaps right in intent, but just specifically the higher threshold in Europe is not the sensitivity, which is detection of cancer, but specificity, meaning you're not detecting something else. Why is that? The American healthcare system cares most about finding every cancer; the European system because it's paid for by the government is most interested in giving the best value for the dollar, or the Euro, and false-positives cause a lot of expense in the system, so they typically reduce the cancers they find for more specificity, and not finding false positives. It's a slightly different answer to that question, but yes, there is something in the symptomatic population.

QUESTION 10: How are you going to structure the European sales team? All outsourced?

We're quite agnostic on how we'll launch the product. Given the platform, we have almost an embarrassment of options, given the manual format, all the different automations, multiplexing, the large machines. Each screening program in Europe is governed slightly differently. Some are government run, some are contracted out, some are run by the states. I think we don't want a one-size-fits-all adoption rate in Europe. We're targeting the countries where we have a home advantage first, most notably the United Kingdom, which is where most of our founders are from, and worked for the system here; obviously Belgium, particularly the French part. France has one national contractor for the screening system. Obviously Denmark, where we're working with the national screening program, and each one is slightly different system.

I think we'll actually do the whole gamut, from making the kits and selling to the government ourselves, to contracting to the company in France who actually have the contract for running the program. A bit of everything.

QUESTION 11: Update on CLIA in the US. Has been in the work for some time, what are the main "road blocks", if any?

For those of you who don't know, CLIA is a CLIA Waiver; you can sell a test as a service before FDA approval. Think Lab Core, Quest, you set up a lab, get it approved, and you can run tests before, or if you never aim to get FDA approval.

We have been talking about it for some time. There are no real roadblocks. The FDA are in the process of perhaps regulating CLIA Labs, but the issue, typically, the market tends to just appear once you're FDA approved because you end up selling the actual product, not licensing to a Clear Lab; so we've shifted the focus. We still are discussing with CLIA Labs, but we're shifting the focus to a much-earlier-than-we-thought FDA approval, through a 510-k. If that is successful, there probably will not be much of a window, or a space, for a Clear Lab to develop the test, and launch, themselves. Given the vagaries of the FDA, and the time it could take, we're still running that course just to see how it goes; but the main effort now will be with the FDA, which doesn't preclude a CLIA Lab licensing, but makes it much less interesting for a Clear Lab, if you're launching an FDA product to license to them to develop their own test.

QUESTION 12: With very solid results in lung, and pancreatic, are you internally shifting strategy to push those new ones faster?

Absolutely. We're very happy with the lung and pancreatic, and also as we've discussed in the prostate work, and it's reasonably simple for us to run trials in them, concurrently with everything else. Lung and pancreatic really are much more of an open field, so far as other tests being nowhere near as good as a colonoscopy or even the fecal test. Yes, we're very serious about them. I think they'll be hopefully very close behind colorectal. You'll see a lot more news on that in the next year.

QUESTION 13: How do we plan to structure your US operations?

That's a very good question. As you know, on the financing, we're working with a company called Cosmo Pharmaceuticals, who will have a right to negotiate a distribution agreement in the US, as well as we can distribute ourselves and with other groups, non-exclusively. Also, Doctor Terrell, who we've taken on full time this year, is working as our chief medical officer and head of operations in the US, the US trials for the FDA. Like Europe, we aim to do it in quite a few different ways, selling and licensing to lots of different groups. Think more Google Android than Apple, if you will; we think our test is very adaptable on a lot of different platforms, and as long as Volition is getting a reasonable revenue stream we want the test as widely adopted and commonly used as quickly as possible. That's not something any company of any size could really do in all the different platforms.

We'll be manufacturing, we'll be licensing, we'll be doing a whole lot of different things at the same time.

QUESTION 14: What is the strategy in Asia? Recently heard you mentioning India (with private sector access possible with CE mark) and China

Yes, given the very low price point of our product, I think there's a very big market in the developing world. I'm actually off to Asia in a couple of weeks to discuss distribution agreements in India, dd China distribution; but also we're looking to do very large lung-cancer trials, and China is probably the best place for that, given the all-too-tragic air pollution, and the very high rates of lung cancer there. I think it's a very large opportunity; not as profitable as in the United States. When you're in the mass markets in Asia, you don't tend to make the same margins; but still, given the very low price point, and the very large number of people, it's still potentially extremely lucrative. We'll have some more news on that in the next 12 months, as well.

QUESTION 15: When is the timing of meetings with FDA on 510(k)?

That's actually in the presentation, on the milestones. We aim to have the first meeting with the FDA in the next quarter, and begin the trials this year and early next year in the 510-K and the PMA, and also for the other cancers we're looking at.

QUESTION 16: Can you comment on the marketing of the tests in the US? Are they going to use the "intel inside" model? (with NuQ inside, improving existing tests?) Or as stand-alone?

Again, I think a bit of everything. You cannot fully develop the ELISA market because some of the platforms are proprietary, like Roche's machines, Abbott's machines, Siemens' machines; you can sell the manual plates. You can make your own machines, which don't cost very much, but you can do the manual plates much faster.

We're actually in the process of looking for a branding specialist who will come on, and then group wide will help us with the branding process, and the communication of our products. That will be part of the marketing, but, like I said before, it's about getting them very widely used as quickly as possible; and so I'd say in some respects the Intel Inside model would be good one to be a strong part of it.

QUESTION 17: Can you explain why test results are improving with new cancers? What are the drivers behind those improvements?

Yes, it's a good question. I just think we're getting better at what we do, picking the markers. There are, as I said, well over thousands of markers on the nucleosome, and early on it was pretty much what we could see in the literature, and what we could buy antibodies from. Now we're manufacturing a lot of our own antibodies; we have a much more efficient team, lab, space, automation; and there's also been a lot more work done on the different markers in tissue, showing which ones have been effective since we started 5 or 6 years ago, and so we're standing on the shoulders of all of that research, as well. I think this is much more-known space, and we're getting much better at what we do, and I think that's why it's got better and better; and we hope to continue to get better and better.

QUESTION 18: Over the next 3-5 years, do you believe VolitionRx has the technology, people, and ability to create and prove out a cheap blood based test(s) that can consistently achieve 90/90 (sensitivity/specificity) across several cancers?

Before I answer that, I'd just like to calibrate, I guess. We get asked often now how good can we go, and it's very hard to predict that; but when we met with one of the biggest diagnostic firms in the world we asked them what the threshold for launching a blood test was, and they said 70-70, 70% specificity and sensitivity, was their bar; which I and everyone on the team said that's kind of low, and they pointed out no one has made it, no test has made it, and launched. Even the PSA is only barely that, if that; probably under 70-70.

When we're talking where we are, in the 80s and 90s, it's spectacular. The team and I are quite confident they'll get very good results, and perhaps even that high. That remains to be seen with what we do in the future. To calibrate, the PSA is at 70 or below, and it's a multi-billion dollar product. CA19-9 is at or below 70-70, which we mentioned in pancreatic cancer, and there are 46 million tests sold, estimate, every year in the top markets. We certainly hope so, and that's what we're planning to do; but if we don't get there, we'd still have an incredibly successful product and company, and do something that nobody else has done. One group tested the PSA, and that was 35 years ago; which is a far-from-ideal test, I'm sure you know. We're hopeful. We'll see.

QUESTION 19: Do you eventually intend to offer a "chip" based test which tests maybe hundreds or thousands of markers at once, looking for any unfavorable pattern that may be revealed?

Short answer is probably not. We found the results top out really at 3 to 5 markers, are enough, with our tests. You tend to get into hundreds or thousands on the gene-based ones, which are very complicated, expensive tests. There are hundreds or thousands of markers, so it's not impossible, but we're getting to where we need to deal with an awful lot less work than that, and so I would guess not. If we do what we think, and launch what we're doing, I don't think anybody is going to be doing that because if you can do it on an ELISA platform with our assays there's absolutely no need for doing that many, at all.

QUESTION 20: Have you given much thought to using nucleosomics in a therapeutic manner - aiming drugs, antibodies, etc. at cells with bad nucleosomes? And what IP specifically covers therapeutic use?

Yes. Jake saw that, and put some of that in the patents; there is potential there, especially as a companion diagnostic; but given everything else we're doing, I think one of the important jobs of Volition as CEO is to really focus us on getting one or a couple of products out. As I said, if we do that, we've done something no one else has managed to do, and it would be a tremendous, successful company, in itself.

Good question. That is a potential, and certainly the nucleosomes do regulate a lot of that; so particularly as a companion diagnostic, meaning you take the test to see if it works with a drug, or see if the drug is working; it could be very lucrative, but not right now, given everything else we're doing.

QUESTION 21: One of the risks in any successful small company is Key Man Risk. So much of the vision, direction, strategy is driven by the founder. What if you get hit by a bread truck tomorrow? Can you talk about your team you have in place.

That's always a risk with any small company, absolutely, and I think I'd include probably our chairman and our chief scientist in that; but as we get bigger and bigger I think the company can survive, and I think we're at that stage now, we've got funded for quite awhile, and we've got a lot of things going. Our new chief executive in Belgium has done an amazing job at bringing the lab up to production of kits, and then the ISO system. Absolutely a risk, and that would probably be up there in the risks for the company for the key people; but the bigger you get, the less risky that gets, as we develop systems and processes for everyone involved.

QUESTION 22: Last question is what is the fundraising strategy going forward; is it correct to say you have enough until mid-2017?

Yes, we have enough money now on the current budget to last through next year, so we don't need to raise money, which is an amazing position to be in. We always have said, though, opportunistically, if the stock price really has a very strong gain, we'd be crazy not to fill the coffers with a bit more money; but we certainly don't need to, and we don't certainly have a vision to do that for quite awhile, now; but we'd always take on any good data, which we expect a lot of data this year and next, if there was a big strategic investor, or one of the big funds wanted to be involved at a favorable stock price, we'd look at it; but at the moment we have absolutely no plans, and we're not working on fundraising in any way, shape, or form, given the very successful fund raise we've just done. We're completely focused as a team on delivering huge milestones, which should really drive shareholder value if they're successful, and anywhere near as successful as the milestones we've had over the last 12 months.

Disclosure: I am/we are long VNRX.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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