Full Press Release Details
VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
CORPORATE PARTICIPANTS
Scott Powell, Director of Investor Relations
Cameron Reynolds, President and Chief Executive Officer
CONFERENCE CALL PARTICIPANTS
Brian Marckx, Zacks Investment Research
Jan Wald, Benchmark Company
Bruce Jackson, Lake Street Capital Markets
Jack Lasday, Morgan Stanley
Menachem Kranz, Ahava Investment Partners
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ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.
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VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
Good day and welcome to the VolitionRx Limited First Quarter 2015 Earnings and Business Update Conference Call. Today s conference is being recorded.
At this time, I would like to turn the conference over to Scott Powell, Director of Investor Relations. Please go ahead, sir.
Thank you, and welcome everyone to today s earnings conference call for VolitionRx Limited. This call will cover Volition s financial and operating results for the three months ended March 31, 2015, along with a discussion of our key 2015 milestones to date. Following our prepared remarks, we will open up the conference call to a question-and-answer session.
On our call today are Mr. Cameron Reynolds, Chief Executive Officer of VolitionRx; and Scott Powell, Director of Investor Relations.
Before we begin our formal remarks, I d like to remind everyone that some of the statements on this conference call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934 as amended, that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements. Words such as expects, anticipates, intends, plans, believes, speaks, estimates, optimizing, potential, goal, suggests, and similar expressions identify forward-looking statements. These forward-looking statements relate to the effectiveness of the Company s bodily fluid based diagnostic tests, as well as the Company s ability to develop and successfully commercialize such test platforms for early detection of cancer. The Company s actual results may differ materially from those indicated in these forward-looking statements, due to numerous risks and uncertainties. For instance, if we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. Other risks and uncertainties include the Company s failure to obtain necessary regulatory clearances or approvals to distribute and market future products in the clinical IVD market, a failure by the marketplace to accept the products in the Company s development pipeline, or any other diagnostic products the Company might develop. The Company will face fierce competition, and the Company s intended products may become obsolete, due to the highly competitive nature of the diagnostics market and its rapid technological change, and other risks identified on the Company s most recent annual report on form 10-K, and quarterly report on form 10-Q, as well as other documents that the Company files with the Securities and Exchange Commission. These statements are based on current expectations, estimates, and projections about the Company s business, based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties, and assumptions that are difficult to predict. Forward-looking statements are made as of the date of this conference call and, except as required by law, the Company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.
I d now like to turn the call over to our Chief Executive Officer, Mr. Cameron Reynolds, who will discuss the first quarter of 2015 and our clinical and operational objectives for the remainder of the year. Cameron?
Thank you, Scott, and thank you everyone for joining VolitionRx s first earnings conference call. I d like to thank you all for taking an interest in Volition at this very exciting time for us, and I really appreciate you taking an interest in our Company.
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ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.
1-888-562-0262 1-604-929-1352 www.viavid.com
VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
The first quarter of 2015 was very significant for the Company. On the capital market side, we listed our shares on the New York Stock Exchange MKT market on February 6, simultaneously closing a $10.6 million financing and a fully registered offering of our common shares, through which we added many new retail shareholders and several key institutional investors.
VolitionRx now has sufficient cash to take us well into the second half of 2016, by which time we should have released substantial amounts of clinical data from several several of our ongoing clinical trials, and have European regulatory approval CE marks. We ended the quarter Q1 with about $11 million in the bank.
Being listed on a senior US exchange also broadens the universe of investors able to purchase our shares, and further increases our visibility and credibility in the capital markets. This listing also provides us with a stronger platform through which to access the capital markets and should continue to increase the liquidity of our shares in the marketplace.
Turning to our clinical developments in Q1, it was an extremely important one for us. In January, we announced a pilot study in collaboration with the Singapore General Hospital to provide initial evidence of our nucleosome assays ability to detect early stage ovarian cancer. (Inaudible), we released results from our pilot study in pancreatic cancer. In this 60-patient study, conducted in collaboration with the Lund University in Sweden, which comprised 25 early-stage, treatable IIA and IIB stage pancreatic cancer subjects, 25 healthy subjects, and 10 subjects with competing conditions of the pancreas, our nucleosome blood assay-based diagnostic platform accurately detected 84% of these early stage pancreatic cancers, with only a low, 8% false positive rate. These are extremely exciting results, as there is currently no commonly used, accurate screen available to detect early stage pancreatic cancer.
This is now the fourth cancer in which our blood based screening technology has accurately detected early stage cancer and provides (inaudible) conducting larger trials in the pancreas pancreatic cancer to further prove out our technology, similar to what we ve done in colorectal cancer. We expect to announce one or more large clinical trials in pancreatic cancer in the near future, which we hope will confirm these promising early initial results.
In addition, we are pleased with the (inaudible) acquisition of the only non-core patent family that VolitionRx did not own outright, but which we did have exclusive worldwide rights to. The patent family WO 2005/019826 was acquired from UK based Chroma Therapeutics. This further strengthens our IP position in the detection of cancer, which is based on the detection and measurement of chemically altered nucleosome structures in circulation. This acquisition brings our portfolio of pending and granted patents to 10, and further increases shareholder value by bringing in-house royalty-free access to this patent, and it s the only key patent related to our nucleosome technology that we did not own outright.
In April, we also announced a new 800-subject clinical trial with the Hvidovre Hospital in Copenhagen, Denmark, to establish whether our nucleosome test can detect precancerous colorectal polyps, which are also known as adenoma. We have shown in one of our colorectal studies that we were able to detect up to 60% of precancerous polyps, but this will be our first trial specifically looking at precancers by themselves. These will also be processed on one of our new Tecan robots.
Finally, using a portion of the proceeds from our offering and the February financing, we announced the purchase of three further Tecan machines, or laboratory automated systems, which will significantly expediate the rate at which we process samples for from our ongoing clinical trials. Once these three Tecan machines are fully operational, by the end of May, and in conjunction with our existing Tecan machine, which is hard at work at the moment, our processing capacity is expected to reach 30,000 samples per month, which for order of magnitude, is approximately the total number of samples that VolitionRx has processed in the entire five-year history of our Company manually. The rapid processing of samples should ensure that we release a significant amount of capital data in the second half of this year, 2015, in several of our ongoing trials, and should allow us to more quickly move our products through the regulatory process and into commercialization, which is of course our ultimate gain goal.
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ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.
1-888-562-0262 1-604-929-1352 www.viavid.com
VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
Looking ahead to the remainder of 2015, we have many important clinical and commercial milestones, including the release of results from our large studies in colorectal cancer, in collaboration with Hvidovre Hospital, which we discussed earlier. We expect to release the 4,800-patient retrospective colorectal trial data in the third quarter of this year, utilizing our Tecan robots, using the same assays we used on the smaller sample set (inaudible) manually, to give us as good initial which gave us the good initial results.
It is important to note that we re now producing our own antibodies analyzing these samples via our Tecan machines. We expect to achieve detection rates and false positive rates at least as good as that under the previous (inaudible) method, but that will be determined by the trials ongoing. Importantly, we continue to optimize our panel, improve quality controls, and now have a streamlined analysis process in place to maximize accuracy. We also expect to release the first results from 2,500 of our 14,000 prospective patient screening study that have now been collected. Having data from a prospective screening population will be another key milestone achieved for Volition.
As a reminder, we released initial results in September of last year, which included a 938-patient sample set as a representative subset of the 4,800 patients, which we are completing now on the Tecan machine. In addition to the detection rate of 84% with cancers, we detected early and late stage cancer, as well as each other, as well as about 60% of polyps, as I discussed before. These results alone, we believe, would be sufficient for us to not only apply for a CE mark, but also begin commercialization in Europe if repeated on a larger sample set, the sample set we re completing now. The 14,000-patient prospective study that we are currently running is being undertaken, as it is large enough to convince insurers to reimburse the nucleosome tests in Europe, once we begin commercial sales based on our early results.
With regard to the FDA approval of our nucleosome tests for colorectal cancer in the United States, we expect to engage in a dialogue with the FDA this year in order to determine what additional trials that will be required by the FDA to complete in order to get their approval. We expect to announce a framework plan and strategy, including potential partners, for commercializing and commencing the FDA trials in the US by the end of this year or early next.
We re also very actively exploring the possibility of partnering with one or more CLIA labs in the United States, whereby nucleosome colorectal tests could be available in the US prior to FDA approval via a CLIA lab waiver. This strategy, if successful, would allow us to commence some sales of the nucleosome test in the United States, generate initial revenue for VolitionRx, and achieving some early market penetration and acceptance, while we simultaneously pursue an FDA approval route for our tests.
With regards to our clinical trials in other cancers, we are pleased to be working very closely with Dr. Stefan Holdenrieder, who has published extensively in the field of nucleosomes and has run two of our clinical trials at the University Hospital Bonn in Germany. Our studies include a 600-patient retrospective trial in lung cancer with him, which follows on from the very promising pilot study data released late last year in lung cancer, and recently announced the upgrading of a 4,200-subject patient study in the 27 most prevalent cancers.
We should also have initial data from our endometriosis study with Oxford University, and our prostate study with MD Anderson in the coming quarters. Furthermore, we expect to announce one or more large clinical trials in pancreatic cancer, following the stellar results of our 60-patient study, which was released in January which was released in January, which I discussed earlier.
We ve always believed our Nucleosomics technology platform has very good potential, and we are very pleased to be working with some of the leading research institutions in the world on a variety of clinical trials, including Oxford University here in the United Kingdom, University of Bonn in Germany, Lund University in Sweden, and MD Anderson Cancer Center in Texas, to name a few. We continue to believe that blood is the best platform through which to screen for cancer because it is convenient and has a high compliance, versus other complicated, unpleasant, or invasive tests, which often require separate doctor visits and/or advanced preparatory work, such as the colonoscopy, x-ray, or biopsy. Blood tests also tend to be quick, and ours require just a fraction of a drop of blood, which would allow our nucleosome test to be administered during regularly scheduled blood draws and tested on the commonly used ELISA platform.
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ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.
1-888-562-0262 1-604-929-1352 www.viavid.com
VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
Our blood tests for a variety of cancers are proving to be accurate, cost effective, convenient, and rapid, with the ability to detect early stage cancers which are still operable, thereby greatly improving patient outcomes. We are extremely excited about Volition s current status, clinically, commercially, and financially, and we look forward to delivering on these numerous milestones throughout the remainder of 2015 and 2016. We also have a very active upcoming investor relations and market awareness calendar. We are presenting at the Marcum Conference in New York at the end of May and the LD Micro Conference in Los Angeles in early June, and also have a non-deal road show planned throughout road shows planned throughout May and June in New York, Boston, Philadelphia, San Diego, Los Angeles, and San Francisco, as well as several other European countries, as we continue to build investor awareness of Volition in the United States and Europe. We are also hosting two webinars in May and June, one investor focused and the other scientifically focused.
Lastly, I d also like to note that we plan to consistently host quarterly earnings conference calls going forward, so that we may regularly update our shareholders and analysts on the progress, and answer any questions you may have.
Thank you all very much for your interest in Volition and for joining our first earnings conference call today, and I d be very happy to take any questions from you about any of this or anything else you may have questions on. Kayla, are you there?
If you would like to ask a question, please signal by pressing star, one on your telephone keypad. If you re using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, it s star, one to ask a question at this time, and we ll pause for just a moment.
We ll take our first question from Brian Marckx with Zacks Investment Research.
Hey, good morning, Cameron, and congratulations on all the progress and all of the studies that you have ongoing.
Thank you very much.
The Q3 announcement that you expect, just for clarity, is that do you expect all the 4,800-patient data to be included in that from the retrospective study?
Yes, the first Tecan we have commissioned now for two months has been doing roughly an assay per month through the entire sample set. So, if it continues at that pace, we ll have the whole every one we did on the 938 finished in the July/August timeframe. So, you know, Q3 is July, August, September, so sometime probably near the end of the quarter, we ll be able to release the data on all the assays which we did on the 938, but in the 4,800. So yes, it s we re not doing all eight assays, and a little bit, then a little bit more. We re doing assay by assay, because the roboticized machine works slightly better when you re just doing a single assay through a large number, so it s slightly quicker. So yes, the Tecan, the first one is fully operational and is doing one assay per month, so we aim to have all that done before the end of the quarter and announce it before the end of the quarter.
______________________________
ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.
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VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
Okay, and in terms of CE mark filling and support for that, would that include the full data set, then? I think you initially expected that it might just be with about the first 1,000 patients.
Yes, very good question, Brian. You actually need a lot smaller number than we re doing to get a CE mark, so but we re doing confirmatory trials at the University of Bonn. Dr. Holdenrieder is at a clinical setting in a hospital, so it s ideal for that. It will be a smaller number of patients. The actual number we need is about 400 or 450, so now he ll be doing confirmatory trials in his laboratory on those number. We have in place the things which we needed to be in place included a manufacturer that was CE and FDA compliant, which we now have. We ve contracted and those the first big batch of kits compliant to (inaudible) are being manufactured as we speak. The second thing was to have a quality system throughout our laboratory and in Belgium. That is now complete and operational. The final stage is the final antibodies, which are now being produced. So, once the final antibodies are produced, the final commercial ones, we will ship kits to Dr. Holdenrieder, and he ll perform on these 450 patients. So, it s the only step we haven t finished is that final step of the confirmatory numbers.
Now, that s not to say obviously 450 patients gets you a CE mark. It doesn t mean people rush out and buy the tests, because people like to see very large trials. So, that s why we re doing all 18,800 patients in the two Hvidovre Hospital trials in Denmark, so we have very large numbers for reimbursement. But it s a little different, as you may probably know, but in Europe it s a two stage process. Getting the CE mark allows you to sell them, and having very large trials really helps you with reimbursement. So but we re getting quite advanced on the CE marks, and as you can see from the trials, they re really progressing very smoothly now, so both of those are progressing very, very well.
Okay, great. In terms of the precancerous polyp study, how rapidly do you think that that moves along, and when do you think you might have data? Do you think that that data may be available to support the initial commercialization, I guess, in Europe?
Yes, absolutely. We re trying a very wide range of assays. It s not just for adenoma. There s also 100 early stage cancers, so it s a bit of both. It s predominantly focused on adenoma, but we think we may get some new markers at early stage, as well, so although ours does very well early stage already.
It doesn t take very long, but that will also be done on the Tecan machines. The second one in Bonn will be up and running next month, so we ll be doing the 4,800, the 2,500 prospective, and the adenoma study, so I d be very surprised if we didn t have a large amount of data by Q1, so certainly ready for commercialization with planning to do 30 assays through all of them. But, it only takes a couple of days. Once you have the antibodies and have prepared them, it s only a couple of days to do 800, so it can be sort of fit in between all the other things we re doing. But I but we are prioritizing number one, the 4,800, number two, the 2,500 prospectives to get out in Q3, and Q4 perhaps for the prospective 2,500. So, probably look more to Q1 for the 800 adenoma study, but it s certainly in process.
______________________________
ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.
1-888-562-0262 1-604-929-1352 www.viavid.com
VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
Okay. One last one on modeling OPEX. What should we think in terms of R&D and SG&A through the remainder of 2015? Do you think it looks like similar to what we were what you had in Q1?
Yes, we ve gone through we ve all I m just actually in the process now of re-optimizing all of that because it is a little lumpy this the last this quarter and the next one. We ve obviously bought three Tecans. Although they were leased, there are still upfront payments, and I mean, it s not a hell of a lot of money, but it s it makes saves us a lot of time, so it s extremely worth it. But, it s a little lumpy this quarter and next, but I broadly think we re going to meet our targets, and so as capital burn goes, I ll get a very good idea of that by the end of next quarter to see how we re progressing. But as of March 31, we still had $11 million left, so we ve got a lot certainly an awful lot more than we ever have. But we re being extremely careful to keep very tight control on expenses, and the only expenses we do involve speeding things up so the trials happen quicker, so we can get to revenue quicker. But currently, I believe our expectations are very much along the lines of what they were before. We have sped some things up, but none of that is very expensive, but there may be some slight adjustments. But at the moment, we re on target.
All right. All right, great. Thanks, Cameron.
Thank you very much for your time, Mark Brian.
We ll take our next question from Jan Wald with Benchmark Company.
Good morning, guys, and congratulations on the quarter. I guess I have a couple of questions. In terms of the pancreatic cancer trial, what s what do you think the timeline for commercializing that that
Yes, that s a very good question, something which I can t give an exact answer for because there s a few different opinions. Like a lot of things, clinically, everyone has a different opinion of what s needed to get there. But I can say with some certainty, it would not need to be anywhere near the same size a trial as colorectal, for a couple of reasons. Ultimately, we have to show that we re the best out there, and at the moment, CA19-9 is the standard, and it s not great, as you know. So and it s very difficult to get the very large patient studies that you could in colorectal, because pancreatic is diagnosed so late, currently. It s not easy to get 10,000 for the cohort. So, we re looking now as we ve discussed, we re looking now, as I discussed in the presentation, for a larger trial. The next trial, we ll be looking at a few hundred patients, and I think we re talking to other groups for larger ones, but it will not get into the 5,000 or 10,000 certainly not cancer patient sizes. I think the next step is a few hundred cancer patients 100 to a few hundred cancer patients to really show that it works very well. Then that would be a sufficient for a CE mark, because and it s very similar to the numbers we re doing in colorectal now for the CE mark.
______________________________
ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.
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VolitionRx Limited First Quarter 2015 Financial Earnings
and Business Update Conference Call Transcript
We haven t taken a view on what the FDA would like for that. We ve only just obviously got the results earlier this year. But the study we have in the process of attempting to line up, we think would get us to the CE mark stage, but we have not yet taken a view on what the FDA would like to see, because it s it hasn t really been a (inaudible). The colorectal space has been a good one because there s been a very well-worn path from a few different people, so it s quite definitive what s needed, much more so than in pancreatic.
So, I think the answer for us, we ve done the pilot study, which was 60 patients. We re now in the process of getting one which is three times the size, four times the size, and we may have to get one in the 500 to 1,000 range, patient study wise. But, that s what we re attempting to do now. Then we ll see what happens after that.
So (inaudible). Yes, if you were put a crystal ball out there, would you think you would have CE mark sometime in 2016?
It s hard to say. I don t think it s going to take as long as it did in colorectal, for a couple of reasons. We now have a quality system. We now have the same plates, the same well, similar antibodies and some new ones, but a very similar process, so we don t have to recreate a lot of the work we did. I wouldn t want to put a guess on that. Optimistically, perhaps by the end, but I wouldn t want to make too many predictions.
I do think it s going to be if it continues if we continue to get anywhere near the results we ve got, I think we will get CE mark from the numbers we re looking at. But timing wise, I wouldn t want to put an estimate out right now.
Okay, and I guess one last question. You mentioned optimizing the assays during your prepared remarks. Could you talk a little bit about what that means, how you go about it, and what you think you re going to get from it?
Yes, absolutely. The early work we did, we chose 938 patients as a representative sample from the 4,800 for a couple of reasons. It gave a statistically significant number of cancers, but also, it was about the maximum we could do with the pipetting. So, when we re optimizing, we re doing several things. Everything we do in the lab we re trying to do better. We now manufacture the plates externally from a they used to be made on a table in our downstairs area. We now manufacture the we re in the process of manufacturing large batches of our own antibodies, so it s much more consistent, especially between different antibodies in different areas. We now have access to our own capturing antibody, which we use in everything consistently. It s about little things of being better at everything we do through experience, through bigger batches, through using much better external suppliers to do things. We re very lucky that almost everything we do is done by can be done by external sources, because it s a very standard system, as we talked about. You know, what we do is very unique, but the methods are 30 years old, so a lot of things we can get other people to do better than we did initially.
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ViaVid and VolitionRx have made considerable efforts to provide an accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the conference call. This transcript is being made available for information purposes only.