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VNRX: VolitionRx Launched Nu.Q Vet Cancer Screening Test; Silver One Manufacturing Opened; Equity Offering & Cash Grant Provide Over $20 million


By Steven Ralston, CFA



VolitionRx (NYSE:VNRX) is engaged in multiple epigenetic projects coupled with several corporate initiatives. The company is involved with developing numerous blood-based clinical assays, primarily focused on detecting certain cancers (CRC, lung, haematological), along with one targeting canine cancer. Management also saw an opportunity to utilize the company’s proprietary Nu.QTM platform to develop a clinical assay to aid in the treatment regimen of COVID-19 patients.

Management’s front-burner commercialization projects are the Nu.Q Vet assay for cancer detection in canines and the Nu.Q COVID-19 triage test. The Nu.Q Vet assay was launched on November 30, 2020, and the Nu.Q COVID-19 triage test is expected to start generating revenues in 2021, the latter being contingent on successfully completing a longitudinal study with European CE Mark having been obtained in January 2021.

The Nu.Q Vet Cancer Screening Test is Volition Rx’s first commercial product

• Nu.Q Vet Cancer Screening Test was launched on November 30, 2020

◦ launch supported by brochures, leaflets, etc. (available on VolitionRx website)

• Clinical studies on two canine cancers (Hemangiosarcoma and Lymphoma) were completed by Texas A&M College of Veterinary Medicine. Abstracts of the studies were presented at the virtual Veterinary Cancer Society Meeting in October 2020. PowerPoint presentations and the abstracts are available on the company’s website.

◦ Hemangiosarcoma (n=207, AUC of 97.6%)

◦ Lymphoma (n=261, AUC of 87.3%)

Acquired and opened 10,000 square-foot building (dubbed Silver One)

◦ Situated in close proximity to the company’s R&D center in Isnes, Belgium

Production facility

▪ expect to produce components (recombinant nucleosomes, reagents etc.) and supply kits in house (to secure company’s supply chain and simultaneously lower costs)

▪ produce reagents commercially in order to generate incremental revenues

◦ Service laboratory

▪ generate revenues by processing samples for external parties

◦ Contract research facility

Blood Cancer Assay (utilizes the same assay as the Nu.Q Vet assay)

◦ Engaged Diagnostic Oncology CRO, LLC (a contract research organization) to conduct a clinical trial for Non-Hodgkin's Lymphoma and follow-up 510(k) submissions

◦ Awarded European CE Mark certification in January 2021

• Expanded research program for the use of Nu.Q™ technology for NETosis

◦ a novel patent has been filed for the application of the company’s Nu.Q H3.1 assay for NETosis

◦ management plans on initiating studies for influenza and sepsis

• Funding

◦ Awarded a $1.3 million cash grant and $2.7 million in loans in January 2021 from Walloon Region and Namur Invest in Belgium

◦ Completed equity offering of 3,809,524 shares in February 2021. Net proceeds are estimated to be approximately $18.87 million

• Due to VolitionRx’s inclusion into two Russell Microcap Indexes in June, the iShares Russell 2000 ETF and the iShares Russell Growth ETF now own 786,313 shares of VNRX or 1.5% of the shares outstanding

Due to the number and intricacy of ongoing projects, an outline of projects, initiatives and milestones for 2021 (both achieved and expected) follows in order to better communicate the company’s fundamental attributes and prospects.

Management's expectations for 2021

Nu.Q Vet Cancer Screening Test for canines - first non-human application of Nu.Q epigenetic platform

• launched Nu.Q Vet Cancer Screening Test for canines on November 30, 2020

• prospects of licensing agreements in 2021- 2022 for national distribution

Nu.Q COVID-19 triage test

• longitudinal clinical study is expected to be completed in the first half of 2021, along with release of clinical data

Silver One

• expected to achieve full ISO certification in 2H 2021 and FDA compliance in 2022

• potential for commercial reagent sales and test kits in 2021

◦ Licensing efforts

• progress on project with Shanghai Fosun Long March Medical Science Co., Ltd to adapt and transfer VolitionRx’s assays for use on Fosun’s open-access LUMIART-II Automated Chemiluminescence Immunoassay platform in China

• the agreement further allows for the negotiation of an exclusive licensing agreement for Fosun to distribute Volition’s Nu.Q tests on the LUMIART-II System in China

◦ Ongoing large-scale "Marquee” studies for colorectal cancer and lung cancer in Asia & U.S.

An abstract on Nu.Q performance in lung cancer has been accepted for presentation at the International Association for the Study of Lung Cancer (IASLC) conference in January 2021

Nu.QTM Capture platform – sample enrichment tool

• initiate studies on Nu.Q Capture’s enriched samples with mass spectrometry and by sequencing for the purpose of identifying tumors and other mutations

• plans to advance the development of Nu.QTM Capture using mass-spectrometry and/or sequencing in order to identify new biomarker targets

➢ During the COVID-19 pandemic, VolitionRx has been able to keep the company’s lab fully operational by maintaining social distancing in its 20,000 sq. ft. R&D facility in Belgium. Non-laboratory staff members are working remotely.

Commercial Launch of Nu.Q Vet Cancer Screening Test for Canines

The Nu.Q Vet Cancer Screening Test for canines was launched on November 30, 2020 through Texas A&M College of Veterinary Medicine. The test is being recommended for the early detection of cancer in older dogs (seven years and older) during their annual health checkup, especially for at-risk breeds that are particularly susceptible to cancer (neoplasia) such as Bernese Mountain Dogs, Golden Retrievers, Scottish Terriers, Bouvier des Flandres and Boxers. The test is also being positioned for dogs that have developed clinical signs of cancer. The tests will be processed at the GI Lab at Texas A&M University.

The launch is being marketed to general practice veterinarians in Texas and specialist canine oncologists. A report entitled A Look to the Future of Cancer Diagnostics, which relays insights from four veterinary oncologists, along with supporting clinical data of the Nu.Q Vet test, is being used to support the launch, along with brochures and leaflets (which can be viewed on the company’s website under the PRESS ROOM tab in Presentations and Posters).

The Nu.Q Vet Cancer Screening Test is a non-invasive, ELISA-based blood test that was developed to screen for certain canine cancers, namely Lymphoma (a cancer of lymphocytes and lymphoid tissues) and Hemangiosarcoma (a cancer of blood vessel walls, particularly in the heart and spleen). Lymphoma and Hemangiosarcoma account for approximately 33% of canine cancers, which is the most common cause of death in dogs that are three years or older. Golden Retrievers, Labrador Retrievers and German Shepherds are the most commonly affected breeds by Hemangiosarcoma in the spleen and heart. Almost 50% of all dogs over 10 years old develop cancer. According the American Veterinary Medical Association’s 2017-2018 U.S. Pet Ownership & Demographics Sourcebook, there are 76.8 million canine companion animals in the U.S, and according to the National Cancer Institute, more than 6 million dogs are diagnosed with cancer every year. This represents a potentially significant market opportunity for millions of annual cancer tests. VolitionRx expects to price each test at $45 (85% gross margin) in anticipation that veterinarians will charge between $160 and $200 at the point of service. Interestingly, canine lymphoma is similar to human non-Hodgkin’s lymphoma.

First Data from Lung Cancer Study Presented at World Conference on Lung Cancer

On January 28, 2021, VolitionRx had an abstract presented at the World Conference on Lung Cancer on a 220-subject subset of the on-going 1,200-subject, large-scale lung cancer study. The abstract entitled Circulating Nucleosomes in Lung Cancer Diagnosis following Low-Dose Computed Tomography was virtually presented by Dr. Tung-Ming Tsai of the National Taiwan University Hospital.

The data suggests that Nu.Q™ assays could help identify non-cancerous nodules following a Low-Dose Computed tomography (LDCT) scan. LDCTs have limitations including poor specificity (i.e. a high percentage of false positives). The study’s results suggest that Nu.Q assay for nucleosome detection may be able to discriminate well between non-cancerous benign nodules versus early-stage lung cancer. This ability could reduce the number of unnecessary biopsies by as much as 32%.

Nu.Q COVID-19 Triage Test Expanded into Research Program Targeting NETosis

In the process of advancing the company’s Nu.Q COVID-19 Triage Test, management has expanded the research program to encompass NETosis, the activation and release of neutrophil extracellular traps (NETs) for the purpose of binding pathogens as an immune response to infections. The pandemic has brought the study of NETosis to the forefront due to the human body’s over-response to COVID-19.

VolitionRx is negotiating for a large clinical trial using the company’s assays for diagnostic tests and disease monitoring (particularly for monitoring the response to therapeutic treatments) of NETs-related diseases, including COVID-19, influenza and sepsis. Management will announce details of this initiative once the specifics have been finalized. VolitionRx has filed a novel patent for the application of the company’s assays for NETosis.

Production Facility in Belgium (Silver One)

VolitionRx acquired a 10,000 square-foot building (dubbed Silver One) that is situated in close proximity to the company’s R&D center. The manufacturing facility opened on January 25, 2021. Silver One is expected to produce the recombinant nucleosomes and antibodies required for the company’s Nu. Q assay product line. The new facility not only brings the manufacture of components in-house, but also will significantly reduce production costs of the company’s assay products.

Management plans to manufacture the Nu.Q™ Vet Cancer Screening Test at Silver One. The facility also has a service laboratory, which can provide sample processing services for third parties.

The cost of the building and its fit-out was slightly over $1 million. VolitionRx borrowed €830,000 ($973,000) from Preface S.A in order to finance the acquisition of Silver One and the renovations required to convert the building into an operative production facility. The 10-year loan carries an interest rate of 4%. After being refurbished, the building will serve as a production facility for components and supply kits, a service laboratory and contract research facility.

Cash Grant and Loans

In early January 2021, VolitionRx was awarded a cash grant of $1.3 million and $2.7 million in loans from the Walloon Region and Namur Invest, Belgium. This non-dilutive funding brings the total amount awarded from agencies from the Walloon Region to approximately $13 million.

Equity Offering

On February 12, 2021, VolitionRx closed a public offering of 3,809,524 shares priced at $5.25 per share. Net proceeds are estimated to be approximately $18.87 million, which will be used for continued product development, clinical studies, product commercialization, working capital and general corporate purposes, including potential strategic acquisitions. The offering was pursuant to a shelf registration statement, and Cantor Fitzgerald & Co. was the sole book running manager.

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