Good morning, ladies and gentlemen. Thank you for standing by. Welcome to VolitionRx Limited's Third 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 open for questions. [Operator Instructions] This conference call is being recorded today, November 11, 2021. I'd now like to turn the conference over to 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 third 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. Also on our call today are Mr. Cameron Reynolds, President and Chief Executive Officer; Mr. Terig Hughes, our Chief Financial Officer; and Dr. Tom Butera, Chief Executive Officer of Volition Veterinary Diagnostics Development, LLC. 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, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. We do not undertake an obligation to update any of these 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. Cameron?

Thank you, everyone, for joining Volition's conference call today. I know I always say it, but we especially appreciate your time given how busy you all are during the earnings call season. Whilst we usually kick off with Terig and our financial report, where we have continued to keep our cash burn rate low, this quarter, given the anticipated surrounding updates on Volition Vets, we will start our presentation with Dr. Tom Butera, Chief Executive of our veterinary subsidiary. Tom, over to you.

Thanks a lot, Cameron, and thanks, everyone, for joining the call today. While it's been quite a ride since I joined the team in May, to use an American football analogy for all the sports fans out there, I believe we are on the 10-yard line with respect to executing the term sheet for our first licensing distribution deal for our Nu.Q Vet Cancer Screening Test. I'm delighted to say that we are on advanced term sheet discussions with three top global veterinary companies and anticipate signing the terms sheet with one of those parties before the end of 2021. We have been in continued extensive and wide-ranging negotiations with each of these three large multinationals on launching our test product worldwide, both via reference labs and point-of-care test, and on both an exclusive and nonexclusive basis. Large multinational organizations and, indeed, deals of this nature require extensive due diligence, but especially before launching a revolutionary test like ours. After all, this would be the first launch of a low-cost companion animal cancer screening test, so they obviously need to be sure. I'm excited to say that I believe each of these potential partners either have completed or are near completion of their extensive due diligence process of all aspects of the product. The due diligence process in all three companies has included but not been limited to our intellectual property, validating the test in their own labs, understanding learnings from our beta launch in Texas and determining the potential total addressable market and platform development. It's very apparent to me from this process to date that all three companies share our vision for the Nu.Q Vet Cancer Screening Test to be a simple, low-cost, easy-to-use test available to veterinarians and pet owners around the world. Pricing has probably been…

Thanks very much, Tom, for that comprehensive update, and thanks to all the veterinary team for their hard work this quarter. It's an exciting, fast-moving part of our business, with significant potential for not only helping man's best friend, but also in generating significant revenue for the company. I look forward to our first deal signed and the launch of our second product in the cancer treatment monitoring expected in 2022. And from one exciting part of our business to the other, Nu.Q NETs, NETosis. I'm delighted that our team is involved in such cutting-edge research with several internationally renowned institutions. As a reminder, we believe our Nu.Q NETs assays have wide applicability for monitoring diseases with a NETs component such as COVID-19, influenza, sepsis, autoimmune disease and even cancer, and potentially to risk stratify patients for treatment selection. During this quarter, our new product manager, [Remy Rebus], joined the team and is spearheading the NETosis product development and has immediately focused on defining the intended use of the product and our regulatory strategy. I am delighted to announce that we expect to register CE marks on our first Nu.Q NETs product across multiple platforms, including ELISA plate, automated beads, and a proof of concept on very high throughput platform by the summer of 2022. These are ambitious but achievable targets, given the huge amount of background work we have done on our platform. We intend to register our Nu.Q NETs product with a broad, almost C.R.P. tyle claim for the detection and evaluation of infection, tissue injury, inflammatory disorders and disease associated with NETosis. We believe that not only is this broad claim achievable, it also gives us the largest possible market opportunity. By way of example, C.R.P., C-reactive protein, is used extensively around the world with approximately 85…

Thanks, Cameron, and thank you, everyone, for joining our earnings call today. I will now provide a summary of the key financial results for the quarter ended September 30, 2021. We closed out the third quarter of 2021 with cash and cash equivalents of approximately $22.9 million compared with $19.4 million at the end of last year. The cash burn rate this quarter averaged approximately $1.7 million per month, a little lower than in the prior quarter and our previous guidance, mainly reflecting our ongoing efforts to tightly manage costs and improve cash management. Nevertheless, we continue to expect a gradual increase in the monthly cash burn rate to around $2 million a month by year-end, excluding the impact of any receipts from a licensing deal or deals, if any. The main reasons for the expected increase in spend is due to increased human resources costs as we build out the organization, including the U.S. team, as Cameron just mentioned. From a revenue perspective, the sales of our Nu.Q Vet Screening Tests have remained stable quarter-on-quarter, as expected, given the nature of our beta launch. We also anticipate Nu.Q Discover to add to the revenue this year with several contracts in process. The net loss this quarter was $7.2 million versus $5.6 million in the prior quarter, with its increase primarily due to noncash items. From an operational perspective, the finance team, along with senior management, has been working with managers across the business on a detailed planning exercise for 2022 and beyond. This ensures we have clear priorities and good visibility over the resources required, further strengthening our financial control over the business. So to summarize, the company continues to be in a healthy financial position, with sufficient runway to achieve our near-term commercial milestones. Cameron, Tom and I, along with the rest of the Board and indeed, the whole company, very much look forward to sharing Volition Vet licensing news and the results of key studies and publications over the coming months and quarters. Thank you for joining the call today. We very much appreciate it, given the busy earnings call season. We're happy to take your questions. Operator?

[Operator Instructions] Our first question comes from the line of Bruce Jackson with The Benchmark Company.

So with the vet product, obviously, you're contemplating some menu expansion with additional tests. In terms of the negotiations with the vet companies, how do those term sheets contemplate the new test? Is it something that can get folded in automatically? Or do you have to renegotiate for every new test?

Thanks for the question. A couple of things on that. So each agreement is a little bit different. Obviously, each company has its own worldwide reach. Some are more lab based, some are very vet focused, some are quite point of care focused. So each one is a bit different. And I think how these negotiations typically go is they tend to try to roll everything in at the start, and we try to kind of break it out so that we can continue to kind of get value for each one as we add on. So it could easily be either of those two rolled in -- it depends on the company and what they're after. But it is for the same cancer, so it does kind of naturally fit with the first test. It's a different market. And the monitoring could easily be millions of tests per year as well because there are 6 million dogs with cancer, and you may need it three or four or five times for every animal to trace or even more to monitor. So in some discussions, it is part of it and some discussions, it's separate. But obviously, there's a lot of potential products beyond these two as well, as you can tell just from the Capture side, but also from other animals, also a range of other cancers and other things. So we would see there's strong potential for a handful of products in the vet space at least. And -- but having said that, I think once we work with a partner or partners, we'd probably -- if everything is equal, everything is going well, we'd prefer to keep relationship with them and work through with them as kind of a cancer franchise. But we're working with different companies on different discussions. And so each one is a bit different. But it would be probably working with the same company or companies on both of those products.

Okay, got it. And then moving over to the human data for National Taiwan University. Is that going to be -- can you tell us which meeting it could be presented at, or which -- just generally, is it going to be a regional meeting or an international meeting?

An international meeting in Asia, and it's about -- we just don't say it because they've moved around the pandemic, things start [tossing] me around. It's due for Q1, and they've submitted it. And that will be, hopefully, early in Q1. And a big international meeting, that's what they're waiting for. They're acting with the data, so they want to present at a big conference.

[Operator Instructions] Our next question comes from the line of Steven Ralston with Zacks.

Could you go into the progress at Silver One and bringing up the revenue base there. You've gotten some approvals. You mentioned that you had some inquiries in the last quarter. And how is that panning out?

Yes. So very well. So Silver One has been a fantastic approach for us. It's a facility where we can manufacture the key components for ourselves. The key components, most notably being the antibodies, the controls. And as you rightly point out, Nu.Q Discover, which is where we're offering our services and what we do to a range of different companies. And yes, as we said before, there's been a lot of interest. We have a handful of contracts in negotiation now for a range of different uses from -- actually, from a wide range of companies and processes. So this is kind of the maximum we can handle at the time to negotiate. And we're working through that, and we expect one or more to be signed this year. And I think there's a good chance a fair number of those will reach completion, and there has been a lot of interest. Also, so Silver One will be producing the key components of what we do worldwide. The antibodies, the controls are both on the formats of the plates, which are manufactured currently there, but also in the U.S. Dr. Michel has moved to the U.S. to really make sure we can get a strong start in the U.S. on production as well. So we're looking to outsource FDA-compliant productions of the plates and also the key components on the other platforms, like the beads as soon as we can, so that we'll really get things produced. But the Silver One itself will be producing the key components for the two key components, the antibodies and the controls. And we're also looking to expand, I guess, you could tell from the call, the point of care. We've been working on a lateral flow. So that, we produce externally as…

You also received another tranche of grant money from the local government there in Belgium, so another -- at least $400,000. So that's over $800,000 in the last two quarters. Are there any contingency of where that money is targeted? Or is that free flowing, and you can designate it wherever you want?

It is targeted. So the region -- you're right. So we raised money a few different ways, and the region in Belgium has been incredibly generous. We went there for that reason, also extremely good qualified staff that have really built out our facilities. The facilities are very, very cheap, just a few million dollars, and we've got two very, very outstanding facilities now. It's a bit of both those. So they're targeted to particular projects, but they can be used in developing antibodies or -- I mean, there's a lot of different ones, which we can go through separately or Gaetan can go through. But they're usually for projects, but they can help lift a lot of different boats as well. The genius, I think, with the Nu.Q platform is, what helps us in one area can help us in many other areas. So as we talked about, if you develop a point of care for the vet space, it can also be used in the human space, and same with plates and beads and everything. So they are targeted to an area, but we designed them so that they can help us in as many areas as possible. And I'd like to thank again the regions in Belgium who've been tremendously helpful in giving us many millions. I can't exactly remember, $6 million or $7 million now. It's been a very big help for us. So not only is it a great place to work, it's a great place to hire people, a very low-cost place to have great facilities, and they've been extremely helpful in their nondilutive funding as well.

[Operator Instructions] Our next question comes from the line of Jason McCarthy with Maxim Group.

This is Michael Okunewitch on the line for Jason. Cameron, obviously, the pandemic has placed a bit of pressure on timelines across biotechs. So I'd like to see if you could walk us through the expected timing for some of the near-term potential human commercial assets and which data sets you need to obtain for those for the different regulatory environments.

So human commercial, I guess, will start around the world and move across. So starting in Asia, which is where, I guess, the pandemic has caused us the least problems. The -- we're working with a group in China, a very large group, who've been adapting our platform to their machines. And we're hoping to have the first licensing work underway with them in the next quarter or 2. They've successfully [developed] their platform. They've got some great results in colorectal cancer, and they're looking to licensing it from us -- license it from us, so that's going to be a next year story. National Taiwan University has, as you know, their lung and colorectal were going. We have got the data readout. And obviously, it's good enough to publish, which they're doing at -- present at a conference, which will be happening in Q1. And then we'll describe what that looks like for products, hopefully, in Taiwan. Their focus was on using ours for early detection and even in adenomas, in conjunction with the current screening. So that's something we'll have a better visibility, whether we can talk about it public after the conference, but we're hopeful from that. We're also hopeful for the lung cancer work in Taiwan. That will be coming out. They've finished it, so they're reviewing it now. So it's something we'll have to either -- assuming it's good enough to publish like the colorectal, will be sometime in the first half of next year. On the human side, I'd guess go through -- well, I guess, work with the rest of the human cancers. In the U.S., the monitoring study. Unfortunately, it was encouraging, but collecting a lot of time points from one person during the pandemic has proven to be a very difficult…

Yes. Appreciate it. And then so on that larger NHL study, could you just touch a bit on the practical advantage from a regulatory commercial perspective to upgrade into the high-throughput assay format. Does that just give you data with a more commercial-ready product?

Yes. So the platform we've been using, obviously, because we're a small company in the ELISA is a plate format. We've been working on beads a long time. It's now working incredibly well. Our beads give you a lot of advantages. Plates are great for starting a lot of tests, and the vet products have been working greater on plates. But if you are going to be a mass market product, millions of tests per year, it gets a bit tight in running in plates. I mean the beads -- the magnetic beads and large order analyzer machines. Timewise, if you're looking for -- it's reasonably quick on plates. It can be done the same day in like six hours. But six hours to be in a critical situation or if it turned around is obviously not ideal. The beads and the large order analyzers run it in under an hour. And the new high throughput machines we're looking at can do it in a matter of minutes. So that -- it gives you several advantages. The beads, you can -- you do it one by one. You can run 10 or 20 or 50 or -- usually, the machines run up to about 500 a day. But you can just do five or six in a day, where in plates, you do batches of 40, so -- which is -- works fine, but if you want really high throughput and sort of plug-and-play, the next platform is definitely where you want to be. So because it's -- the delays are taken with the lockdowns, we thought we might as well -- we've moved on and keep improving. So we're upgrading that platform, but it gives you a lot of advantages. And actually, if you continue on with that, if…

Ladies and gentlemen, this concludes our question-and-answer session. I'll turn the floor back to Mr. Reynolds for any final comments.

Well, I'd just like to say, thank you, everyone. I know, as I said, everyone is extremely busy. It's an incredibly exciting time at Volition. We've managed to really pivot towards what we can do during the pandemic on the veterinary space, on NETosis, while really keeping our platform development and broadening the team and what we do on the platforms, and also keeping as much going as we can on the human cancer side as well. So I think the next few months and the next few quarters are going to be very exciting. So please keep a close eye on us. I look forward to updating you as things continue to go forward. Thank you for your time.

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