Good morning, ladies and gentlemen, and thank you for standing by, and welcome to VolitionRx Limited Third Quarter 2017 Earnings Conference Call. During today’s presentation, all parties will be on a listen-only mode. Following the presentation, the conference call will be opened for questions. [Operator Instructions] This conference is being recorded today, Friday, November 10, 2017. I’d now like to turn the conference call over to Mr. Scott Powell, Executive Vice President of VolitionRx Limited. 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 third quarter of 2017, which ended September 30, 2017, along with a discussion of our recent activities and key upcoming 2017 and 2018 milestones. Following our prepared remarks, we will open the conference call to a question-and-answer session. Also on our call today are Mr. Cameron Reynolds, President and Chief Executive Officer; and Mr. David Vanston, Chief Financial Officer. Before we begin, I’d like to remind everyone that some of the information discussed on this conference call will include forward-looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our beliefs, as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual future results may vary significantly based on a number of factors that may cause the actual results or events to be materially different from future results, performance or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We do not undertake an obligation to update any forward-looking statements made during the course of this call. I’d now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds, who will discuss our third quarter 2017 financial results and our clinical and operational objectives for the remainder of 2017 and 2018. Cameron?

Thank you, Scott, and thank you, everyone, for joining Volition’s third quarter 2017 earnings conference call. I’d like to thank you all again for taking an interest in Volition as this is extremely an exciting time for us. I’m delighted with the progress we are making on many fronts, which has been made possible with our growing expert team at our large new 20,000 square foot purpose group facility that opened in the second quarter of this year. Furthermore, all our achievements in so many areas have been carried out well within our targeted expenditures and we have been very careful to limit our cash burn rate. The pathway design study in Demark, which is in the final stages of reviewing the very practical issues of launching our Nu.Q Colorectal Screening Triage Test into the current pathway in Denmark is expected to be completed by the end of this month. We look forward to announcing the signings from their report upon publications. We view the triage test as a good way to enter a market by fitting into the established fecal screening program in Europe and Asia. But we believe that by far the biggest market opportunity for Volition is to be the frontline asymptomatic screening test for colorectal cancer. I’m very happy to share that during the last quarter, we have made significant steps forward with the frontline test for colorectal cancer. As many of you know, cancer diagnostics is the first step to cancer management. And yet, according to the Journal of National Cancer Institute while colorectal cancer is the most preventable cancer, it remains the least preventive form of cancer. That is so, this is mainly due to the low compliance rights for the existing screening test. Also many people just refuse to take a colonoscopy or…

Thank you. We’ll now be conducting a question-and-answer session [Operator Instructions] Our first question comes from the line of Bruce Jackson with Lake Street Capital Markets. Please proceed with your question.

Hi, good morning and thanks for taking my question.

Thanks Bruce.

So if we could just talk a little bit about the triage test real fast. You had to do a little bit of a, what I would call, a reconfiguration on that. Can you just give us an update on the launch readiness of that product?

Yes, we’re getting close to that. We expect it to be ready around the same time as the design study is finished. But we’ll definitely make the announcement about where the triage is and what expect launch wise and country wise.

And then in terms of the logistic study in Denmark what are the – what’s the sequel [ph] after that study is completed in terms of like getting to the first potential order?

Yes, we’ve got to go through that, they’re coming soon and obviously we’re not expecting any show stoppage from the logistic point of view. But we have to just see and go through at all. And then we need to take it to the screening board there for them to adapt. I do know that the program with follow-up to be as strong as ever. I think there’s definitely need for the product, but this has to takes longer than that we thought. So and as you’ve seen the frontline test is coming up very strongly behind it, but we’ll be pushing very strongly to get it adopted in Denmark and other countries as soon as we’re ready.

Okay.

And they’re ready with it in a specific time.

And then last question the research kits, you’ve got that one pharmaceutical company that that you’re working with, have any other pharmaceutical company has shown any interest in the product?

Yes, there’s a lot of interest that was different kit for a very large company in treatment selection. But I think once we launched the off the show case, this was despite the total one early next year, sometime in Q1 probably end of Q1 and then a range of different histones and variants. We’d expect to see – we’ve had a lot of interest and we’re looking for the kind of level that you’re expecting. I think it’s certainly going to – we expect it to be in the hundreds of kits per year perhaps by year two or three and thousands of kits per year not a huge amount of revenue typically lease situations what you really looking for is for them to develop a very important drug or getting drug up to go some other process using your kits, and what they have initially is just the research license. But I think, it’s very important for us to get out there and we’re never going to be doing all these trials ourselves, although lot of us using these kits is our own intellectual property. We obviously have no capacity to do all of these different things. So it’s something, which really occurs to us just to go back into a couple of quarters ago. We look to this early. But there were – we had – where is solid with our intellectual property and our understanding to nucleosomes. But now that it’s – I think, we’re very ready for the research kits. And the market for nucleosome research has gone up markedly. I think, if you look in what we talk about, our thought is to go into quite a few companies lightly with a huge interest in nucleosomes. And the fact that cell-free DNA appears to be largely nucleosome balance, really puts us at the [indiscernible] Broadway on a lot of research project. And because we’ve been alone in this field for long time, we have a very, very broad – much of a project IP in this area. So we will be the – we have very nuseosome company in many, many ways. So the research kit is a start and it’s not huge revenue, but it’s certainly well where they are in. And we intend to get third parties to manufacture and distribute it worldwide, because we want to sell this broadly as possible and just get a revenue from that point of view. But the real upside to that all is getting our kits use and hopefully that becomes important part of our product then you can be talking millions and dollars in revenue per license accordingly.

All right. That’s it for me. Congratulations on all the progress.

Thank you. Yes, it’s been a greater quarter. Thank you.

Thank you. Our next question comes from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

Hi there. This is Mitch [ph] on for Yi. Thank you for taking our question. Can you talk a little bit about your…

Thank you.

Thank you. Can you talk a little bit about your expectations for revenue from sales of RUO kit in 2018?

Yes, it is – I mean, we expect it to be selling a quite a few, but because they sell usually just a bit below $500-ish in that kind of product, we don’t want to be manufacturing and exporting them around the world. We probably end up getting $100 or $200 per kits in that kind of range. So if you’re looking hundreds or variably thousands of kits, you’re not talking huge amount of money. But it’s just – it’s done some platform validation. And also, if you expect – if you have hundreds of groups or even thousands of groups in a few years using our kits publishing on them, there’s a very good share to one of them or several or even more will use our kits and something is very important. And then it becomes the key part of the drug you can be talking $5 million or even $10 million is a licensing fee. So it’s no work to work for us, it’s the same kits, same platform, but it just helps us drive a little bit of revenue, but get a lot more credibility in the space. And as we’ve discussed, I think, nucleosomes, becoming a huge part of lot of different research projects and therefore products in the future. And as we’ve talked about, this also pertains a little bit to the work, all those new work on the nucleosomes, which really took us into this space. I think, we could become a very important part of the cell-free DNA around the world because of what we are looking for. So we expect to – that could be if that does prove successful, that could also provide us revenue in the – probably next year, but more 2019, 2020, but it would be considerable because I think if we can develop something which does help to concentrate cell-free, particularly in cell-free DNA, it would be very, very useful for a lot of different groups.

Thank you, that makes sense. And my second question is, if you obtain CE marking for the front line screen test in 3Q 2018, and then you start selling it in the EU, how will it compete with the triage test?

Yes, that’s a very good question and I think we expected the triage to be on the market by now and obviously it’s not, so the frontline test is – the triage test is only on the percentage of the FIT-positives, which is only the screening program and the screening programs is typically, because they are fecal-based mix about half the population, so obviously the frontline test can be 10, 20, 30, 40, 50 times bigger than market size. So we’ll have to think carefully – of course there will be a year between them, but this frontline test is speeding up through the path that was big and triage test is taking longer than we expected and the frontline test is a much, much, much bigger opportunity. So I think you’d probably not want to enter the same market with two different tests in the same year, but from a confusion point of view, so we’ll have to look at each market very carefully as to which one works, try and work for the current screening program to patch it up a bit or try and replace the current screening program with a frontline test or work with the current screening program on the non-compliant market. But we’ve done quite a bit of work on thinking that through. And we’ve been in quite a few conferences and speaking to some key opinion leaders about how that worked, and that obviously is also the case in Asia. As we listed out the fantastic trial in Taiwan with the National Taiwan University, which is I think the most premium university in Taiwan, we’ll have the same issue there, because we’ve had some recently good interest in the triage test, a culture from the Asian markets. But if we are launching the frontline test very soon afterwards, we’ll have decide what’s in our best interest, but I think it’s something we will give a lot of thought to and we’ll make right decisions in the coming quarters as we see. It’s the C market, is in that – I think we can do it by Q3 of next year. I think it’s very achievable target, then we’ll have to think which markets we used, which testing, but a very good problem to have is to test on the market on the same time, we expect to make the best decisions if those become clear.

Okay, great thank you Cameron.

Thank you.

Thank you, our next question comes from the line of Raymond Myers with The Benchmark Company. Please proceed with your question.

Good morning Cameron, I want to ask you first about 2,000 patient symptomatic study that you are planning to conduct now in Asia, do you anticipate evaluating markers which could be related to distinguishing other cancers from colorectal cancer, I’m thinking specifically stomach and esophageal cancers, which tend to be more common in that geography.

Yes, absolutely. So [indiscernible] who we are working with is the best person you could possibly hope to work within Asia, his specialty and what he works is in colorectal cancer, he has also worked closely with lot of screening programs in Japan, Korea, Singapore. So with him the first test is obviously in this space, but he and a lot of people we work with also as you very well point out stomach and esophageal cancer and a lot of those are much more common in Asia than in Europe. So we’ve been in some stuff and it’s not public, but we can press them out for some material, let me point there is nothing decided on what we are doing, but we can say we had a lot of key opinion leader interest in working on trails in stomach and esophageal, and I think with some fantastic partners in Asia, but this is a first stepping stone, we are going to make sure, basically once we have the test chosen where like a screen ready to go, we have these very large trial lined up in Europe, very large trial lined up in U.S. with the fantastic institutions, costing us very, very little. And now we have the same thing in Asia, so we’re – I think there’s no company as ever, while this is the biggest trial in U.S. where we are – this is the biggest trials in Asia, where we are and this is now the biggest trails in Europe, the biggest as well, so we’re currently strong and ready to go with very good key opinion leaders and the benefit of working with good opinion leaders need to the country is if they work with you on the process then of course a very much trusting of the data and understand what you are doing and why you are doing it. So I think a lot is companies do not bothered to do large trials when they enter these markets. We can do that, because we have great people we are working with who really believe in early detections through blood tests and because our trial cost so little this kind of money. But I think what’s important to note is, these trials don’t have to be achieved for regulatory purposes, you don’t need the size of trials to get through. We can get regulatory approval before this with smaller retrospective trials in Asia and Europe, but we’re doing it, because it really ties in some great key opinion leaders to our beliefs and it’s not costing us much, so I think it’s absolutely right way to go.

Great, how long do you expect these two trails totaling 7,000 patient samples to take to get to data readout?

That will be fully – the agreement being negotiated now and that’s part of the agreement, so we get ahead of the agreement, where we became public in Q1, but this is not necessary for regulatory approval, this is just to have a group study, which – but group study take a little of time, because you are collection properly with great institutions, but those will be held, I will announce that once we have the time of the agreement which we expect third quarter one.

Okay very good, next I want to ask you about the revenue opportunity that you see in the Nucleosomics kit that you are announcing today, what’s the revenue opportunity you see there long-term and then specifically for 2018?

Yes, for long-term, I think research kits, if they are used in the way we think they will be used, it’s I think I mentioned in the call they can be interested in oncology infectious diseases, client rejection and everything in cell-free DNA, so it’s a huge area and if it does, it does appear Nucleosomics are becoming more and more important in a very wide range of area, so talking to team that expect in the short-term 2018, 2019 to be selling hundreds of kits, in the hundreds and then possibly to the thousands. Now the revenue, as I discussed, is not a large revenue source. We will make probably $1 to $200 depending if we sell directly or through that organization kind of number per kit, but the huge revenue opportunity is – if it becomes a very important part of the drug program with one of the large pharmaceutical companies which is very, very possible, if it does – if we do those kind of sales, but each one of those sales can amount to a licensing revenue in the millions or even if it’s a blockbuster driver, you could be above $10 million, so – and this also just helps us in many ways to really guess what we are doing out there and I think these kind of things you don’t quite know where it can lead you, because it’s in certainly different research areas, but I think it’s very satisfied, out teams have been quite overwhelmed with the huge amount of work that’s been done in Nucleosomics. And the fact that cell-free – particularly to cell-free DNA in the blood is always shown as a double helix in the blood, it’s known that most or a lot of it certainly is Nucleosomics balance which is in the sense where they measure from the cell-free DNA, so that means we could become a very important part of lot of cell-free DNA company’s work as well. So it’s something we’re really, really, focused on in the last couple of quarters, but we’re becoming, it’s quite energizing for us.

That sounds exciting. I just wanted to lastly ask you to describe how the Nucleosomics assay is competitive differentiated from others and how is it scientifically differentiated from other approaches?

That’s a very good question, but I would refer to my CFO who is not here. We are doing a lot of work in the last – we’ve got the big new facilities have added to a lot of background, each of the kits that we launch will be very robust in evidence of – in how it measures Nucleosomics, that’s possible now because we have absolute controls with synthetic Nucleosomics and other ways. I’ll leave those very scientific questions for you to go into detail, where I’m not a PhD in this areas. But I’m sure, I think we’re very happy to speak to you offline and get sort of all that around, particularly don’t direct question who is leading this work for us is very, very energized by the opportunities and we’re looking very much forward to selling these kits for as many groups as we can to get our platform used as wide as possible, but he can answer those very specific questions office.

Okay, it sounds good, thank you.

Thank you Raymond.

Thank you. Our next question comes from the line of Brian Marckx with Zacks Investment Research. Please proceed with your question.

Good morning Cameron, wanted to talk about the European CRC asymptomatic screen and in terms of development have you kind of lockdown what you want to see in terms of sensitivity and specificity it would seem that perhaps for regulatory purposes in Europe it may not need to be quite as robust as you might need to be in the U.S., but certainly for commercialization and marketing purposes you’d want to certainly be competitive to what’s out there today. So if you can just kind of talk about that?

Yes, absolutely. So I think, it’s fair to say, in Europe, they’re very concerned about specificity, because they do not like giving lots of color to people. So I think, two – there are two different markets. In the noncompliant market, you can be a little lower in ages to really complete to people throughout either asymptomatic or noncompliant. But I think the specificity in Europe really to replace specificity need to be over 90% in specificity. If you look at the screening programs, the FIT programs where the sensitivity runs at that high as specificity you’re looking anywhere in very bad countries with still use inferior FOBT kits that are 30% or 40% and you’re looking at the very best in countries like Denmark at around 70%. And so it depends on the country in which you want to replace. But to be better and now we’re obviouslymuch better compliance and much easy to use than the fecal test, but that’s the kind of to replace the fecal testing program, and that’s what you need to be in Europe. In the U.S., obviously, above the question is that, you’re not trying to replace the colonoscopy, You’re looking at the noncompliant market. So the FDA has approved product, which I guess, some analysts think has issues, but that was done in the 68, 78 range. So we’d expect to be a lot high for that obviously. And to really replace colonoscopy, which we don’t want to do in the first instance, you’d have to be similar to that. But our aim is, it’s absolutely not to replace the colonoscopy as a frontline screening test until we have reached accuracy to that level, which I expect not to be in this first generation. But don’t forget, because we signed up with…

Cameron, can you talk about the regulatory process in parts of Asia that you expect to target initially? And I think you talked about that CE Mark can facilitate regulatory approval in those Asian countries. Is there another step pass CE Mark that the Asian countries want to see in terms of – for regulatory approval?

Yes, Dr. Grattan, we’ve taken on this year. He has done an amazing job. Actually he’s becoming an expert in all these areas. I’ll give a brief summary, which I’m aware off. I’m planning on spending quite a bit of time in Asia in March of next year to really get up to speed with all the work. Around the time, we’re expecting to really be ready to start talking to the governments there. If you come down to each markets, the difference – China has a very strong regulatory process, they’re likely to be made in country and that will take a lot longer. At the moment there in India market, there’s a private market, which is lot easier and CE Mark would qualify to the public market, which is so much larger, but much low value. Singapore has currently CE Mark greatly helps and you have to register, but it takes 6 to 12 months once you got us to register in those countries. Japan, I believe, had a different system as South Korea. But I think, we are doing a very, very broad and in-depth view of which countries we should target and why and that will overcome part of what we do. So it’s something which I don’t want to speak too much about, because I’m not an expert and currently I intend to be one in the next six months. And I can tell you exactly what we’re doing, what’s the – we’re going to go through Dr. Kway, but she has done an amazing job so far. As you can see with this National Taiwan University is the preemptive institution, that’s a great Chinese population. Taiwan is a great place to do trials and the best in dealing with, but she has done a great job and she is doing a lot of work in the other countries as well.

Cameron, on the 7,000 patient study that you just announced in Taiwan that the 2,000 is asymptomatic.

Yes.

So was that population? Can you run that study as soon as you lock down the remainder of the work that you’re doing on triage to button that up, or does that study wait until you run the asymptomatic as well?

Yes, I’m not – the European studies are ready to go. The 4,500 in operation and the other one has been collected to 10,000. You can – we are in the process of nailing down smaller legislative samples in Europe populations, which can be used for regulatory purposes, which we could do very quickly. But like anywhere, I probably run large perspective trial with great key opinion leaders, they’re very careful in what they do and they take sometime. But you don’t need those to get regulatory approvals. So the basic plan is to where we can use legislative samples, which is a lot of countries we will do smaller trials to get regulator approval. But we also have key opinion leaders in the low cost scope led trials to really get some big numbers in, so that there could be no question, because there shouldn’t be a – actually different, but you never know you try that. So the best way to make sure we have the very best products in the very best way to work with key opinion leaders to make it happen. But you certainly doesn’t have to wait for these trials to finish before you can launch product in those countries, but it’s very, very good to start the collection. And that’s why we’re starting to rally, so we can be ready as quickly as we can.

Great. Thanks, Cameron.

Thank you.

Thank you. Our next question comes from the line of Nathaniel Calloway with Edison Group. Please proceed with your question.

Hi, guys. I have a couple of questions about the European development strategy and the two trials that you guys recently announced?

Yes, absolutely.

[Multiple Speakers] So these trials will be using bank samples and not people presenting at the hospital with symptoms or any other reason, correct?

Yes. I think what we mentioned here is, these types of trials not typically run in Europe. The FDA makes you, as you say, prospective is what we’re doing with the National Cancer Institute in the U.S., about 13,500 people who I think presents and then you give a blood test for colonoscopy. The key difference in Europe is, I believe, actually not done, but also illegal to scope negative people, and these trails are done on people who’ve been part of the screening programs, so they FIT-negative, FIT-positive. There are not same programs of scoping everybody. So if you’re coming into a natural screening program, which is the only way of doing it anywhere near cost effectively. You have FIT-positives and FIT-negatives, and it is not possible to scope give colonoscopies to the FIT-negatives. So the trials we have at the very best we can and the very best that we’ve ever been tried. This is the best we can do in Europe and most people don’t even try to do the method what we’re doing is to mix FIT-positives and FIT-negatives from the screening programs to best moving to population as you can. So the way that works, the screening populations in Europe are about 93% fecal negative. They don’t know – do not have blood in their stool at about 7% positive, and that’s the ratio that we’ve been working with after consulting with our – with our experts. So the both trials were moving. The population is as much as they can just making sure we have enough cancers to – make sure we have to put list on cancers in, but the ratio of FIT-negatives and FIT-positives will be ideal. Now, of course, if you’re not giving colonoscopies to the FIT-negatives, the only issue is, you don’t know some of those is probably a handful in that 10,000 we do have cancer. But that will only – that will – hurt our overall sensitivity, but only by a small percentage. It’s – obviously, getting some of those is falls negative then it will mainly we should have a slightly high results than we have, but that’s something which is the only possible way of doing it in the European population. So this is absolutely the best way you can do in Europe, and no one will work. We never come across anyone who is attempted to do these larger trials in the European population for colorectal blood test.

And the 4,300-person trial, would that be similar and that will be a sort of constructed data set for an asymptomatic population, or are the patients in that part of the trial going to be different?

No, they’re both asymptomatic and representing it as close as we can, I mean, it is close. The right ratio of FIT-negatives and FIT-positives are right percentage of everything else. Yes, both we’ve done asymptomatic. 4,300 is open and the 10,000 will be double blinded and we’ll probably use a couple of different sentences to make sure we have all that data as well – datas for analysis and samples.

And will there be any efforts to include, say, other GI disorders or other cancers in general in this to our population or this is going to be to look at result.

We do know in these trials what – because it’s a Danish system. We know – do know which ones have cancers and which are not, but that’s not one of the endpoints. The endpoints are purely colorectal. As I have discussed, I believe it was Raymond’s question, we’re looking to do some very good trials in Asia in stomach and Geo cancer, which I think could work as well or better than colorectal, because it’s a very high prevalence there. But where we are today with this is the large trials off of colorectal. If you think back, we’ve also collected and we’re planning one that. Once we go through all these, we also have a 27 cancer study collected with a very eminence gentlemen on our advisory board Dr. Holdenrieder from Munich. I just met him yesterday, again. There he has collected 27 cancer study, which will – as soon as attention to see the differences between cancers. But the purpose of this study, the European study, the NCI study and the Asian study purely colorectal. And that’s certainly given the large screening market, if you look at – if you have – we’re also looking at 450 million people screening age in the three regions where we’re launching it certainly enough to get done with.

All right. My last question is, have you talked to any European regulators about this development strategy?

Yes, I’m in constant contact with – we have a very strong advisory board and other groups. So it’s comes then Europe is a little more divert. We have some regulatory advisors from the CE marking and also the there’s a launch countries and Louise Day our Marketing Officer spent a lot of time talking with all the different groups. So it comes down to getting the CE Mark, which we’ve become provision in as we’ve shown before, and then going through government by government. Basically, in Europe, our breakdown is the CE Mark is reasonably easy to get. But the CE Mark means you can lead yourself does not mean people who buy it. What – so you can get a CE Mark in a product, but you need to do these large studies, we’re going to get – to get people to it to accept them. So, I think, we’re very confident on CE marking front, and we’ve done quite a bit of work on key opinion leaders who work with the government programs to implement that.

All right. That’s it for me. Thanks, guys.

Thank you. Thank you for your time.

Thank you. This concludes our question-and-answer session. I would like to turn the call back over to Mr. Reynolds for any closing remarks.

Thanks, everyone, and thanks, Michelle for the 2017 Q3 earnings call. I think, it’s been a tremendously busy and exciting quarter for us. And I think it’s going to be another one this quarter and we’re very much looking forward to all the developments in 2018, as we continue to develop our platform. Thank you all for taking your interest in us.

Ladies and gentlemen, this concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.