Good morning, ladies and gentlemen. Thank you for standing by. Welcome to VolitionRx Limited First Quarter 2021 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference call will be opened for questions. [Operator Instructions] This conference is being recorded today, May 12, 2021. I would now like to turn the conference call over to Mr. Scott Powell, Executive Vice President of Investor Relations. Please go ahead.

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 first quarter of 2021, along with a discussion of our recent activities and key upcoming milestones. Following our prepared remarks, we will open the conference call to a question-and-answer session. On our call today are Mr. Cameron Reynolds, President and Chief Executive Officer; Mr. Terig Hughes, our Chief Financial Officer. Before we begin, I would 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, quarterly reports on Form 10-Q, and other filings with the Securities and Exchange Commission. We do not undertake any obligation to update any forward-looking statements made during the course of this call. I would now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds. Cameron.

Thank you, everyone, for joining Volition’s conference call today. I especially appreciate it, given the busy earnings call season and speaking of busy wow, we have had quite a start to the year and made excellent progress in developing a range of products based on our proprietary Nu.Q platform. I expect that we will have a lot of news throughout the remainder of this year on additional product developments worldwide. I will be updating you today on our products, people, patents, publications and most importantly, progress within all four key pillars, Nu.Q cancer, Nu.Q vet, Nu.Q nets and Nu.Q capture. But to start off, I will quickly hand over to Terig for the financial report.

Thanks very much, Cameron, and thank you everyone for joining our call today. I will now provide a summary of the key financial results for the quarter ended March 31, 2021. During the 2021 quarter, we reported a net loss of $6.1 million as compared to a net loss of $5.9 million in the same period last year. This result reflected research and development expenditure of $3.9 million, which was in line with last year. General and administrative expenses of $1.8 million, approximately $100,000 higher than last year and sales and marketing expenditures of $0.4 million approximately $150,000 higher than last year. The slight increase in operating expenses during the first quarter of 2021 was primarily driven by our ongoing transition to a commercial organization. During the first quarter of 2021, we significantly strengthened our balance sheet by adding aggregate net proceeds of approximately $20.3 million in cash, through an underwritten public offering of our common stock in February as well as through our at the market or ATM equity distribution program, with the last sale during the quarter under the ATM occurring on February 10th. We were also delighted to announce in January the award of approximately $4 million in non diluted funding from the Walloon region and the more invest. We have a long history of support from agencies of the Walloon region, who to-date have awarded volition approximately $13 million in non diluted funding, including this most recent award. This additional funding consisted of a cash grant of $1.3 million and $2.7 million in loans. And so we closed out the first quarter of 2021 with cash and cash equivalents of approximately $33.1 million, compared with approximately $19.4 million at the end of 2020. With continued work on commercialization, and the expected national rollout of Nu.Q Vet…

Thanks, Terig. I’m delighted to have the strongest balance sheet we have ever had combined with the expectation of significant revenue growth throughout 2021. It is great to have you on board. In fact, while we are talking about new team members, I will kick off with a people update, which as of late has mainly been focused on broadening the team with top talent to assist with commercialization of our Nu.Q platform. To be clear, we also remain committed to and aim to keep our exceptional R&D team in place to continue to drive world class innovation. In the first quarter of 2021 alongside Terig joining us as our new Chief Financial Officer, we also welcome Gael Forterre, our Chief Commercial Officer to our executive management team to help manage the broadening range of products, including potential products. In addition to the promotion of Gaetan Michel to the role of Chief Operating Officer and Dr. Mark Eccleston, one of our founding scientists to the newly created role of Chief Technology Officer. We also announced the appointment of two independent directors to our main Board. Kim Nguyen, an HR executive with global expertise at Google, and Richard Brudnick, a pharmaceutical business executive with extensive commercial know-how. And more recently as of May 1st, Dr. Tom Butera has joined the team as Chief Executive Officer of Veterinary subsidiary. Given our belief that Nu.Q vet has enormous potential, we felt we needed a world class leader for our Veterinary products launches. Tom, a seasoned Veterinary Executive with a fantastic track record joined us directly from the Veterinary Centers of America, VCA, part of the mass and Veterinary Group, where he served as business development director. We are truly humbled to have someone of Tom’s caliber and experience join us on a full…

[Operator Instructions] Your first question comes from the line of Kyle Mikson with Cantor Fitzgerald.

So I was wondering if you could talk about how the first nematocysts products can be launched and what the go-to-market strategy is. Specifically was wondering what the most likely use for the first assays are going to be I get? I understand that it is probably from monitoring, but just like which disease I was kind of thinking. And when you say launching the product on multiple platforms, do you mean allies or beads when you say that or do you mean like, the actual amino assays analyzer like the [indiscernible]? And then on the go-to-market plan, is there going to be like a beta launch in Europe and then like a broader launch later? Or how should we think about that? Thank you.

Thank you, Kyle, and thanks for your questions. I will answer them more than make sure if I forget one of them, please return. So which disease so a couple of quarters ago, we thought perhaps under NETosis/influenza, sorry, for COVID in an influenza might be the way to go. But I think given the waxing and waning of NETosis from COVID, I think perhaps sepsis might be the one which is easiest to get the traction in. Certainly the easiest way to get large numbers in a trial because obviously, as I’m sure everyone’s aware, it is even during the pandemic, there is the biggest killer in hospitals. So it is obviously a very, very big problem and therefore much smoother ride to get the numbers needed for trial. When we say multiple platforms that is a good question. So we launched the vet on plates, and initially where we are now. As you can hear, we have been working a lot on getting it on the machines. We are using IDSs as machine but we have also explored different machines, we can use it on the larger auto analyzer machines. And we are also producing the beads at large scale now so we can absolutely launch things depending on what machines are available but on bead based machines, and adapting to a new machine seems to have taken just a few months ago. There is obviously new regulatory work but the actual adaptation is quite easy. But we have also mentioned we have also working a lot on a point of care both lateral flow small machine. We have actually, Dr. Eccleston, who is in his new role, as technology has been looking at a lot of different options for just simple yes, no lateral flows, quantitative point…

Thanks Cam. That was perfect. I threw a lot at you. But you did a great job answering. Thanks again. And I just want to take the Nu.Q Capture great publication with mass spec data, but when you think about like commercialization looks like a product could be out by 2022, which is positive. But, when you when you think about, like submitting for regulatory approval, how quickly could that FDA or see more kind of occurred? And if it is going down the pathway, would that be a PMA IBD, because it is a screening test, it seems. And then I’m also wondering, like longer term, would partnerships with companies that are offered that instrumentation like mass spec or next gen sequencers. Would those partnerships makes sense to kind of couple the assets with?

Yes, absolutely. So we are obviously not in the sequencing nor mass spectrometry space. So I think the Nu.Q capture from and thank you, yes, the paper was fantastic. Nice, great to be in nature scientific reports, it was a real breakthrough shows that it is reproducible and robust to like the rest of our platform. So commercialization, of course anything which is going to be next year would not be an FDA study, it would be sold as a service for others to help them I think there is a lot of different ways by capturing and concentrating the crumbs and fragments, we can help a range of different groups. And I will my team can go through that with greater detail. But anything which is sorry, obviously, selection of monitoring as part of a trial would take many years. That is certainly not going to be next year. But I think given what we are doing, like with Nu.Q discovery, it is looking very good in a range of different areas for capture, and it would be selling and as a service. And would we work with big companies? Absolutely. So I guess there is one very well known, big sequencing company, and there is quite a few big companies in the liquid biopsy space. And I think, like everything, we would look to launch our own products to show it works to really get the ball rolling, like we have invested. But we are very, very interested in licensing, particularly in capture, because it would be something we believe if it all works well could be incredibly useful to them. So it is not something we have to commercialize ourselves. So I think once we have got the very good proof of concept from the next level, if that happens, we would quite aggressively look to license it out.

That makes sense. It doesn’t have to be an approved assay. And then just thinking about the body’s natural studies looks like the collections have been played a bit, which makes sense due to COVID. And I know there is going to be an updated timeline provided when it is ready. But is there any detail that you could share to help us understand why the studies were delayed? And I’m sure you know, mostly it was due to COVID? How significantly could that delay the first 510(k) submission for DLBC, because we talked about the timelines in the past and just wondering how far was there now pushed out to 10-Q?

Yes, that is a very good question. And I don’t have the firm timelines, and I don’t know, updates and have to re update, but it is tough updating in the moment with COVID going. That is the primary reason was what you said. And as I’m sure you were, it is been a tough 15-months to be collecting trials in the U.S. for cancer. So an EDRN study is still paused. I don’t want to half answer that question. Because we are not I don’t think anyone really knows exactly what is happening at the moment with collections. And so we are doing as much as we can to really work out the new timescale and how much it is delayed. But I would strongly expect it is going to be at least a quarter or two, given everything. So that is just speculative at the moment, and we are looking at ways perhaps we can get things back on track time wise. But as I said, yes, it is just been a really tough time. The last 15-months with the pandemic to keep collections on track in the U.S., but we will have a full update as soon as we know and I strongly expect that is going to be before at the next cue.

Alright, that is understandable, and it is very fair. I just had one last question. I think it is going to be quick. On the biomedical distribution, I just want to confirm are those for the [indiscernible] or my is overwhelming. So just want to make sure I’m thinking about that correctly?

I don’t know that is where the Nu.Q first, which was, we got this kit CE mark, for the blood cancers in Europe. As you are seeing the dogs, it works very well on the blood cancers, and they are looking to see if they can get some traction in Eastern Europe. And as that is not one of our key markets, I don’t quite a large companies as you know. This is both sides just kind of feeling each other out, if you will see, what if they can find a market in Eastern Europe and if we like working with them, so they have gotten to the end of the year to see if they think they can make a go of it in Eastern Europe, given the data they have or collect more data. So we are getting a lot of interest from different groups just kind of trying to work out how they can be involved is Nu.Q going to be, I think and as they are a very good company, and quite an established company. And it is a footprint where we didn’t really have any traction in Eastern Europe, we thought it was a good thing to do. And there is a lot of these smaller deals bubbling as well as the bigger deals we talked about. As we sort of work out ourselves, and they work out how the patchwork is going to work in all our different products. So it was good to get this first one, the first run on the board, if you will. And we will see how that goes between now and the end of the year and see if we want to continue the relationship and they do but it is a good start.

Your next question comes from the line of Bruce Jackson with Benchmark Company.

Hi, I would like to ask you a couple of questions about the NETosis assays. So you have got the one COVID-19 study where you have been collecting these material samples? Have you submitted that data yet for a pre-conference? And if so, which conference, would it be presented at?

Yes. So we have gotten a couple of different paths, we tried to do a big sort of study. And that is been very tough to get off the ground, because everyone quite naturally is concerned with getting their sick well, in the emergency wards. So collecting serial samples and not a complicated trial. But it is obviously something which takes a lot of attention away from, a lot of them have been obviously extremely busy, especially in London in the last few months. So we have been working with, through a few different networks, they have been incredibly good people in the COVID. And so space. I guess the hospitals, we talked about a bit, but very, very large hospitals, the best ones in London and some of the best in the world for COVID work. They have submitted to conferences, I believe the next one, they tend to be two or three months ahead. That is the only problem with when you do it like this. They do it through publication, which is good. I mean, it means they are very happy with the data. And they are very comfortable, but just takes a little more time to conferences don’t happen the next week from when the data comes out. But the next one is July. And we have, as I said a bunch more out there. So I would see a steady stream of them coming through the rest of this year, both in the pig animal model for sepsis therapy and the human model also in sepsis, also in COVID. And I can’t give you the details now. But there is several other areas of NETosis where we have been very active in supporting groups who have research going in that field with providing our assays…

Yes, if I could follow-up the sepsis application. So do you also have data in-house for that, for that use of the assay? And has it been submitted for presentation?

Yes. And lots more to come. So it is a bit of a presentation. So the data we have, we have a lot, we haven’t published, we are working on through now with them. And things have been published, as well as don’t forget, it was published in the pig model on the therapy. And I think from, as you can see from the poster RFA was an extremely good marker for the disease progression also, and worked incredibly robustly and stabling. And we are also that this was all on a plate system, obviously, you probably want more things faster, and in a very situation than just every six hours. So that is quite fast. So we are also working, putting the sepsis platform on beads, so it can be done in 45 minutes. And also potentially point of care. So theoretically, you could have almost instantaneous measurement of the next level. And if you think for those who wondering how that is useful, I think, you know, Bruce, if you are in a hospital, sepsis is a big killer, it creeps up on you. And it kills you for two main reasons. One it is very early to diagnose early and really get ahead of, and two the treatments aren’t actually that great for, and there is often a lot of tritton, there aren’t many. So there is no good diagnostic for it really certainly nothing in real time. And there is no real legal therapy, but that is partly because there is not a good diagnostic. So I think this could be really, really something very, very helpful to a lot of people.

And then with regard to the contract research business from silver one you have been talking to some large companies. Do you have any contracts in hand yet? And [indiscernible] this give us a little bit of a flavor for the types of studies that they are, they are contemplating. So are they looking at the Nucleosome IQ testing as something where they are trying to get a handle on it? Or do they have an actual application in mind, for example, is the companion diagnostic?

A lot of both, but mainly where they have a purpose in mind. A lot of monitoring of efficacy of their therapies in development in cancer in the toeses. Also in the animal space, we have actually worked with a few groups looking to use our assays, obviously, in the dog space as well. But so far as so yes, we have a handful have actually only been quite recently we even started so we have been very happy with the response. We have one sales member manual who has been chasing the tree. And there is turns out looks like there is a steady demand for epigenetic profiling. So yes, it is four particular uses. So as we talked about the revenue, it can be very small, it can be very large depends on where you sit in that continuum typically starts out to be more in the sort of small tens of thousands of dollars. A big quote, over a sort of six month period, could get into seven figures. But so that is the kind of the ballpark you are looking at. But of course, if it becomes part of the 510(k) or FDA study, then you are looking at a much larger amount. But obviously, most things don’t progress to that level. But it is a very good way of getting known, very good way to get more publications, very good way to get to. So it is, yes, I would expect to see, you never know, the contracts, I suppose the discussions might go nowhere. But there is certainly a lot of interest. Some of them are quite well advanced. So I would be surprised if we didn’t close a few of them in the sort of short to medium term. And it is just a good way to get things moving. And I think it is very encouraging to see silver one is now I think there is 12 or 13 different recombinantly presents were producing. We could offer service for I think about 15 different new custom assays. So and potentially, you could capture as a service as well, which could be the revenue next year. So it is and I believe, as far as I know what that service is quite unique in the breadth and abilities of what we can do. And as I’m sure you are well, wherever epigenetics is really taking off, so it could be it could be a very good process for us.

Your next question comes from line of Jason McCarthy with Maxim Group.

It is [indiscernible] on the line for Jason. So I would like to see if you can kind of give us just a bit of a deeper status update. And walk us through the steps that you need to take for the human diagnostic platforms. We know that the big study in blood cancer has kind of on pause, but what about the other programs like lung cancer and colorectal? Especially now that you have the same like, you got full enrollment on the National Taiwan studies?

Yes. So I guess the human studies, the London said that the reason we did the blood cancer first is just one assay, or maybe two assays got fantastic results. I mean, look in the bed space, we are high 80s or 90s AUC’s accuracies, which is quite remarkable for a very low cost, easy-to-use blood test. But obviously, in the lung and colorectal space, it is more work, because we have always needed to do a panel. And so you have to get a broader range of assays ready. And also, on a platform, that is not something you would use four or five different plates for. So it would have been very hard to do a beta launch in [indiscernible] CRC, just on plates, because you need a wide range of essays. So that is actually we haven’t focused a lot of efforts on the back end of finalizing all because, we only have a relatively small team. The fantastic thing is our optionality now that we can pivot to the Vet space, where again, a very simple essay has got spectacular results, NETosis were very simple couple of assays, which we can launch very quickly and easily. I think if it hadn’t been for the pandemic, we would have spent a lot of time finalizing the platform for a broader range of assays, because to bring each assay to a product stage, obviously takes a lot of background work. It is not incredibly detailed work with a lot of detail. So you have to use, it can take six-months to 12-months per assay. I mean, you can do them concurrently but each one you can take a lot of work to just making sure they are fully robust and reproducible, which of course we have done in…

Thank you very much. And then I would like to ask also about the H2 A1 or three histone that you discovered to the capture program. Is that something that you could add to kind of the main line Nu.Q colorectal cancer assay especially while the U.S. EDR and studies on pause?

Absolutely. So actually, and that is it is not necessarily a bad thing. We have been big on polls, gives us more time to adapt the platform. I mean, getting a colorectal panel is a lot of work. And we can add those assets to it. Absolutely. And we are actually looking for it is been proven very helpful in biomarker discovery. So that one, and that we are certainly looking at others as well. I have never been described as being different. And from the mass spectrometry, it certainly appears they are, so we can 100% add any assay theoretically, and because what we have is a bit of a process now where we can make the recombinant nucleosomes the antibody in-house and make the assay. So the short answer is absolutely. And that is one of the many reasons we are doing the Nu.Q capture program is to also add new biomarkers that have not previously been described.

Thank you. And then just one more, I would like to ask as it is been around seven months since you have started the beta launch, for Nu.Q Vet, can I talk see if you could talk a bit about, what you have learned so far in the Vet space and how you can take that and kind of apply it to more of the national launch later this year?

Yes, it is actually we have learned a huge amount. I’m really happy and glad that we did it the way we did. I’m very and learning also comes from the people. Dr. Tom Butera coming on board. He is a very well renowned executive in this space, and leaving Mars which is the biggest Vet company in the world and coming to ours, which I’m guessing we are probably one of the smallest really shows his faith in what we are doing. And he has been tremendously helpful in guiding us in some of these issues. But I can put to give some flavor, there is a huge amount of things to learn. Obviously, one very important factor is pricing. Obviously, we want to maximize the revenue. And so we, I think, on the national launch, we will be adjusting the price and you will see all of that, to really maximize the level. Packaging has been very important, the need to be on ice. Obviously, is a big difference in the amount of work required, if it is frozen, or at two degrees. Also, we have learned it is very good to ship a box to the vet, so they don’t have to limit the amount of work they have to do. Also, a lot of that, also just want to package it up and send it off to a centralized lab, there is two big companies or around the world, several big companies, which do that, if you are doing six other tests, it is sometimes users take an extra box. So I think that will be a big part of it. So we have looked at every single aspect, not the test itself, that is worked incredibly well. But just all those nuances are incredibly important…

Your next question comes from line of at Nathan Weinstein with Agesi Capital.

I suppose just to start on Nu.Q Vet and Nu.Q Discover kind of as we think about the next few quarters on those programs, should we be sort of thinking about a sequential revenue ramp?

Well I will do one at a time. So Nu.Q Vet, so the sales, debit ordering, as we talked about each order is enough to do not quite a couple of hundred dogs, but in $46 each. Now 25,000 revenue can work out roughly how many it is in the hundreds. We are not putting a lot more on very much at all marketing in at the moment, because we are answering all these questions. So I don’t expect that to market to go up in the next sort of few months, because we are putting all the effort into the negotiations for our own national launch and also of course, have licensing and the other processes. So there has been good interest, but we are using this much there is no point spending huge marketing budget now. When I think we are going to look nationally launch with all the tweaks that we have been using. Yes, I would expect it to rise but I think the big change will be after the national launch. And I think if we can get a licensing deal that would absolutely supercharge. Because as I said to Michael, the big companies have hundreds and hundreds of sales people worldwide. So it is obviously a whole different potential to be quick. In wrapping up, if that is, that is if that is done as a deal. You can discover, yes, it is going to be a bit lumpy, because I said, some deals can mean as low as $10,000, some couldn’t be over $100,000, or euro. So in one quarter, you might get a couple in the next quarter, you might not but I think through the year, I would expect to see a few. And I would expect that to pick up strongly through next year as well. So and it is, we will provide guidance, as soon as it becomes clear the mixture, how discovers going how Vet going, and potentially licensing deals, we have a potential licensing deal being discussed also in the human space. In Asia, that may or may not happen, but that would also change how things look as well. So the package should become a lot clearer through the year, but I would expect to see a slow steady gains with a Vet and then the big movements would be either on the national or international launches and or on a licensing deal. And discover will pick up I think quite strongly through the next few quarters, but could be lumpy, some quarters could be quite good. And some could be smaller, just because the nature of how it looks in deals. Does that make sense?

Yes, thank you, Cameron. That is very helpful on the revenue front. And then maybe just thinking about margins, I have always thought of Nu.Q as having a particularly attractive cost of goods. So I just wanted to get your thoughts on those costs, and maybe compare contrast to other testing modalities that are out there and the costs attractive, and then how silver one plays into that in the long-term?

Yes, it is very interesting, it is in some ways as follows. I obviously have an MBA to study a few of these things. It follows in some ways a kind of a software model in terms of our whole idea in all this is not just to offer a license, but still the key components so that we can maintain quality, also have a good idea of actually how many they are selling. And particularly in developing countries in countries where you might not see a royalty get revenue early on. So at the moment, on the plate based format, it costs around $4 each $5 per test. But sometimes you have to do repeats. So you might have to it might be a few a few of those to get it. Once you on beads, there is no need for a very few repeats. And the cost goes down a lot, maybe even half or less than that. And we are in the process of changing over to beads now for the different platforms. So silver one, so I think it is sort of moving forward, we are seeing in Vet space, obviously, we have a very good margin, and so does everyone in the chain. And I think we are looking to make it a mass market product. I think it is something which particularly is part of the world of screening tests, could easily be something which we target to having several hundreds of thousands or millions of tests per year. And I think perhaps we need to be a slightly lower price point. But given the fact that our cost of goods are going to be dropping a lot, it is probably a very similar margin, we have just a lot more throughput in on…

Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would like to turn the call back to Mr. Cameron Reynolds for closing remarks.

Thank you, everyone. I understand you are all very busy. And I really appreciate your time. And please keep an eye on us over the next few months and quarters and all the way through next year. We have a very strong team I believe, we have a strong balance sheet we have ever had, fantastic platform. But now we absolutely realize it is about making products and getting revenue. So now we have a good commercialization team in place and the first products we are going to be taking that very seriously. So thank you for your time.

This concludes today’s conference. You may disconnect your lines at this time. Thank you all for your participation.