VolitionRX Ltd (VNRX) 2019 Q4 法說會逐字稿

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the VolitionRx Limited's full year 2019 earnings conference call. (Operator Instructions) This conference is being recorded today, February 21, 2020.

I'd now like to turn the conference call 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 VolitionRx's financial and operating results for the fourth quarter and full year 2019 along with a discussion of our recent activities and key upcoming 2020 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 Benston, 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 conference 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 especially appreciate it given the busy earnings call season.

Let me first start by saying how extremely excited it is to see our field of epigenetics become so mainstream over the past year, which has always been our hope. We have been working for a decade now to develop our epigenetics platform, intellectual property, team and products and so to see this all come together at a time when epigenetics has become so widely accepted one could even say hot is incredibly gratifying and shows the amazing vision of our scientific team.

To every one of our team members, I am in owe of your fortitude and grateful for your perseverance particularly given the fact that cutting-edge innovation is really a straight line. I'm happy to say that we have great momentum and have made significant progress on many fronts over the past 12 months, particularly in assay and platform development with our Nu.Q Capture program, our colorectal cancer and lung work, Nu.Q Vet in collaboration with Texas A&M University and most recently with the acquisition of Octamer to expand our capabilities in epigenetics, and further our goal of bringing all three components of our test in-house.

Firstly, though, given this is our 2019 full year earnings call, let me start with the financials. We closed out 2019 with $17 million in cash and cash equivalents versus $13.4 million at the end of 2018. We continue to enjoy exceptional shareholder support throughout the year, receiving $16.6 million in cash proceeds upon the exercise of warrants by existing shareholders.

We also further strengthened our balance sheet with additional non-diluted funding totaling $3.3 million from Eurostars programme and various Walloon governmental agencies, taking our total non-dilutive funding to date to over $7.6 million. We are really proud to be able to have done all of our work with a consistent and remarkably low monthly cash burn rate of approximately $1.2 million a month throughout 2019.

We continue to manage cash very carefully and believe that we are in a solid position with regards to financial runway to achieve our key 2020 milestones.

During 2019 and into 2020, our organization grew significantly. Our laboratory team expanded appreciably to include, among others, the appointment of an Assay Validation Expert, who has been instrumental in taking our assays forward. We also added two new operating subsidiaries with the formation of Volition Vet Diagnostics in June of last year and the acquisition of our epigenetic reagent subsidiary, Octamer in the early part of this year.

In connection with the formation of Volition Veterinary Diagnostics, we welcomed Nathan Dewsbury as its Chief Executive Officer and through our collaboration with Texas A&M University, Dr. Heather Wilson-Robles to the Nu.Q Vet team as its Chief Medical Officer.

in connection with the acquisition of Octamer, we expanded our scientific advisory board to include Dr. Adrian Schomburg, one of the world's leading experts in nucleosomes and founder and CEO of Octamer. We also welcomed Dr. Phillip Barnes to our Board of Directors.

I'm delighted that throughout 2019 and indeed into the early part of this year, we have been able to convert memorandums of understanding into executed contracts with Fosun Long March in relation to our first studies in China, also with the National Taiwan University to conduct our first large-scale lung cancer study and with Texas A&M University to collaborate on the development of our Nu.Q Vet products. And most recently with the completion of our acquisition of the reagents company and recombinant nucleosome expert, Octamer, which represents the company's first acquisition.

I would like to thank the team for all their hard work in developing relationships with these key collaborators and executing on the above transactions and are delighted with all the work underway.

And so through our research and development progress, we have completely reengineered our Nu.Q Clinical Assays in all six key areas I will outline shortly. This has led to a step-change improvement in analytical performance and, as importantly, made our assays are very robust and reproducible, so that they can be adapted to a broad range of platforms in almost any lab in the world.

We expect this enhanced analytical performance to translate into improved clinical performance in the studies to be carried out and reported in coming months.

Relative to our ELISA plate Nu.Q assay format, the recently developed magnetic particle-based assay format demonstrate a 10 to 20 fold improvement in the analytical sensitivity of assays, typical within-day reproducibility of quantitative test results below 3%, previously below 10%.

Decrease in test result turnaround time from six hours to approximately 1 hour and 20 minutes, allowing much higher throughput, which is crucial for it to be truly a routine tests. The ability to be developed and processed on fully automated Random-Access platforms, which enables the use of a wide range of the commercial automated platforms. I'm incredibly proud of the effort the whole team has made in the assay development program over the past two years.

We are now very close to finalizing our blood plasma samples pre-analytic with these assays and are excited to utilize these automated magnetic chemiluminescence assays in our clinical studies and aim to start reporting data during the current quarter and throughout 2020. We have continued to create assets in the six key areas referenced earlier, developing recombinant nucleosomes as calibrants, which provides for assay specificity, and reliable quantization.

We previously developed synthetic nucleosomes with our partners that have now brought this expertise in-house with the recent acquisition of Octamer in January of this year. Also, by internalizing key processes such as chemiluminescence antibody labeling, and coating of magnetic beads. This secures our supply chain and provides flexibility to speed up or assay development work.

Next by moving from a microtiter plate format to magnetic particles-based assay format, this improved assay kinetic and hence assay sensitivity and reduces assay time and increases assay throughput.

Moving from a traditional colorimetric endpoint format to a chemiluminescent endpoint. This further reduces background noise, leading to additional improvements in assay sensitivity as well as greatly extending the usual range of the assays. Moreover, the combination of a chemiluminescence endpoint with a magnetic based assay format greatly improves the specificity of our assays.

Finally, moving all these improvements onto an FDA approved automated immunoassay analyzer, which is currently in clinical use across the United States and Europe. This further decreases assay processing time and greatly increases the reproducibility and reliability of assay results so that the same correct result is produced from any patient sample regardless of where or when the test is done or who operates the instrument.

And moving from blood serum to blood plasma as a test sample, which also reduces assay interference.

In terms of the all-important clinical accuracy over the past 12 months, as we have been working on the aforementioned assay development, we have completed some proof of concept studies to assess clinical performance. While this work is yet to be completed for the finalized assay, preliminary results were extremely encouraging that for even the development assays, we saw our highest ever area under the curve performance in blood cancer at 91% and in lung cancer at 85%, in addition to reporting positive data in colorectal cancer.

As of today, we have four finalized bead-based Nu.Q assay and anticipate a further four, we've finalized by the end of this quarter. We're excited to then report their clinical performance as both individual assays and in the panel combinations across the range of cancers and expect to release news in the second quarter of 2020 and beyond.

By the end of the second quarter of 2020, we also plan to obtain CE Mark on the traditional plate format of one of our Nu.Q assays. We believe this will be useful for our Triage product.

With regard to our large-scale clinical studies, collection is well underway in our National Taiwan University studies, with over 5,500 samples collected in the colorectal cancer study, and almost a third of the targeted samples already collected in the NTU lung study.

In the US, we have currently agreed with the Early Detection Research Network of the National Cancer Institute to amend our previous agreement for the GLNE010 colorectal cancer screening trial. The recent decrease in the incidence of new colorectal cases reduced the number of available qualified subjects for GLNE010 and would have delayed completion of our study.

To address this, EDRN is combining subjects accrued in GLNE010 with subjects previously collected study, GLNE007, and has reactivated GLNE007 to prospectively collect approximately 400 new colorectal cancer cases under a newly designed protocol. The aim of the new study design is to collect a large cohort allowing validation of biomarkers for the early detection of colorectal cancer.

Our financial contributions to the previous GLNE010 study, which has already been tied by the company will fully satisfied the company's financial obligations for the ongoing GLNE007 studies without further payments. The changes to the EDRN studies should not affect our FDA approval strategy, as we still plan to use the study to support our PMA application for colorectal cancer screening product.

On the veterinary side of the business, I'm absolutely delighted with the rapid progress that our team is making. At Texas A&M University, we are now in the process of securing the same machines and automates as we use in our facility in Belgium, so that the same work can be concurrently carried out on humans and animals at separate locations. This will likely help broaden our knowledge in both human and animal diagnostics, as the work today is proving very similar.

Associate Professor Dr. Heather Wilson-Robles of Texas A&M College of veterinary medicine, who will also work as Chief Medical Officer of Volition Veterinary Diagnostics. We are thrilled to formally welcome Heather to the team. It is hard to believe that we only signed the contract with Texas A&M in October of last year, and so much progress has already been made.

The preclinical work is almost completed, and our first two clinical studies are underway. We plan to get the news out quickly and have a busy conference calendar with a number of abstracts submitted and oral presentations already confirmed at some prestigious conferences throughout 2020. So watch this space.

I think, I've said this on previous calls, but we believe that the veterinary market presents a significant commercial opportunity for Volition and it creates very little by way of additional costs, given the fact that utilizes the same intellectual property, the same assay, the same formats, et cetera, as we use in our other markets. I truly hope that we'll be able to launch our first Nu.Q Vet products during this year.

As announced earlier this week, our many years of research in epigenetics has now led to the development of multiple new novel epigenetic tools in our Nu.Q Capture program for use not only in cancer diagnostics, but hopefully in other areas too. Our team could not be more excited by the potential of these newly developed tools that they believe will lead to a significant shift in epigenetic-based blood test.

We aim to leverage our technologies to establish a leadership position in epigenetics. We have developed and filed patent applications on our novel Nu.Q Capture based epigenetic tools, in addition to our bead-based Nu.Q assay format to decide for the epigenetic and environmental profiles of cancer nucleosomes with the aim of using this platform in several key areas.

Firstly, Nu.Q Capture methods to enrich cancer nucleosomes and simplify sequence-based liquid biopsies. Secondly, use our Nu.Q Capture methods to isolate intact nucleosomes from plasma for mass spectrometry analysis in the framework of both biomarker discovery and clinical diagnostic. Thirdly, by using our Nu.Q Capture technology to measure global methylation patterns in a simple format. Fourthly, use our Nu.Q Capture technology to concentrate nucleosomal markers prior to our Nu.Q assays with the aim of increasing accuracy. And finally, using our Nu.Q platform to detect and measure circulating nucleosomes and transcription factors, with the potential to be tissue specific, and therefore cancer specific.

This if successful, could result in a simple blood test for multiple cancers. This is very exciting.

Volition is using these tools to expand diagnostic developments that focus on circulating DNA fragments analysis to a broader and potentially more powerful investigation of the epigenetic status of a patient's circulating chromosome fragment, in addition to our ongoing work with this assay-based format in a range of cancer. We expect to announce patient data demonstrating the wide utility of these new methods in the coming months and beyond, and are looking forward to abstract, posters and papers to be published as well.

Overall, our research and development team has made remarkable progress while still keeping our cash burn rates low and consistent with prior quarters. I would like to thank our entire team for their tireless efforts.

On the intellectual property front, a worldwide portfolio of granted patents that protect various aspects of Volition Nu.Q technology is growing steadily.

We believe this is another key differentiator with the many other technologies under the development or available in the market. We have 23 patent families related to our diagnostic test, with a total of 44 patents granted including 8 in the United States, 9 in Europe, and a further 27 worldwide. Additionally, we have 105 patent applications pending, including 13 in the US, 10 in Europe, and a further 82 worldwide. Our patent portfolio also covers veterinary medicine applications.

We intend to continue our work in the field of epigenetics through the development of our proprietary Nucleosomics technology and will continue to apply for patents for future product development. Our strategy is to protect the technologies and gain market exclusivity with patents in Europe and the United States and in other strategic countries. We believe that the patents on the technologies underlying our products should provide broad coverage for each product, including protection through at least 2031.

And so, I will now cover the recent past and future plans. We announced in December of last year our intention to acquire epigenetic reagent company, Octamer, and we're delighted to quickly close the transaction in early January. This very strategic acquisition helps secure the supply of one of the key components of our Nu.Q test through accommodated nucleosomes use as the calibrant in addition to other know-how and expertise.

Since the signing of this agreement just last month, members of our Belgium R&D team have already commenced their training with Dr. Adrian Schomburg and his team at Octamer in Munich. And we're already developing the capability to manufacture recombinant nucleosomes ourselves.

We believe that this work will further our goals of becoming one of the world's leading epigenetic companies. In addition to nucleosomes, we plan to manufacture and sell histones, Octamers, and DNA templates to third parties. These reagents can be used for custom applications in epigenetic research and drug discovery and help drive early revenue for the company.

We also plan to expand our service offering to run samples within our own service laboratory in Belgium later this year.

Looking ahead to the future.

I would like to reiterate our vision and what makes us so excited with the progress in our space. Volition is an epigenetic company focused on advancing the science of epigenetic and exporting these advances in human health. This has been our mission since our founding and is coming to fruition with our Nu.Q platform at the very heart of epigenetic.

But we say the epigenetic is as, if not more, important than the genetic DNA. In short, it's not DNA; it's the full chromosome. We believe the last decade of work at Volition with our ever-expanding team in epigenetics puts us in an extremely strong position with our expansive IP portfolio to be a significant player in this key field. We also intend to further strengthen our supply chain for key components by bringing them in-house.

Overall on so many fronts with our ever-growing team and IP, I'm delighted with the progress we are making, and I'm excited by the momentum we have developed in this epigenetics field. We look forward to announcing the next and hopefully final step in demonstrating the clinical utility of our Nu.Q Capture through both sequencing and our immuno assay approach in the first half of this year.

Our whole team, including our Scientific Advisory Board, who met just last week, is incredibly excited by the company's future opportunities.

With regards to conference abstracts, posters and clinical papers, we hope to be able to release news around some of the major conferences this year. Exciting times indeed. We aim with our solid cash position to report throughout this year and beyond several key milestones, including Nu.Q ability to detect a range of cancers in both humans and animals, in addition to our clinical data and Nu.Q Capture.

We're absolutely delighted to be working with our collaborators from around the world, all of whom have outstanding reputations and share our aim in improving early diagnosis of cancer and other diseases. I along with the rest of the Board, and indeed the whole company, look forward to sharing the results of key studies over the coming year with our optimized platform.

We expect 2020 to be our most exciting year yet.

Thanks for joining the call today. I very much appreciate it given the busy earnings call season. I'm now very happy to take questions. Operator?

Mark Breidenbach, Oppenheimer.

Hey, thanks for taking the question. Cameron, I'm just wondering if, as part of the plans for 2020 include any side-by-side comparison of the new diagnostic format and its performance relative to your older microtiter plate format. So, let's start with that as a first question. Are we going to see any, like direct comparisons between the two this year?

Yes, absolutely. So, we've -- thanks for the question, and yes. So, the assay, the new bead-based format as we've said, is incredibly analytically sensitive so we expect very good results. And the old platform actually, the platform that we're demarking now is even not speed ahead of the plates we had even two years ago because all the advances we've had -- because the new plates also include recombinants, also includes in plasma not in serum, all those things. So it would be difficult to go back to the plates from three years ago, which even I can't replace the far better project.

We're having the key assays. We're not - we're only doing a few of them on plate now because the analytical performance is just really, really, really good on the base, I mean if we down to 1%, 2% or 3% CDs, that's a good the big machine. So, it's incredibly good, but we will have following benefits and also the market comparables.

But I think you'll also see that in the panels where we've had -- obviously we haven't optimized everything without checking that it's actually improving for the assays. And from the results we've shown in lung, colorectal, and most recently, in blood cancers, the results were like we've never had before in one or two assays, that's -- what -- we didn't do big panels on small populations. But we can do side by side, but we're very hopeful for that result overall. And that'll be coming soon.

And just to be clear on some of the ongoing studies, specifically, may be the one we're doing in collaboration with National Taiwan University in lung.

Is that study using the new format or the old format? And are -- I know in the past, you've guided, we should expect a reasonable body of data from that trial in the first half of 2020. Are we still on track for that or are you in the path of switching sort of assay format in that study?

So, the short answer is everything we do now will be on the bead-based format, which has become so good and so -- to be a product and be robust, reproducible, all those things which are obviously in a high throughput. The only thing that's going to be left on our old plate is one or two assays, which we'll see marking which are useful in the Triage market where you add it to something else. One or two of our assays have shown to be incredibly good in a range of cancers individually, but never quite a product. We never wanted to further monetize.

One to the [rough] that was going to be a blockbuster product in itself, but as a triage that look very good. So, for every trial, we do know, apart from the Triage, anything frontline or any of the others, lung, colorectal are going to be on the bead-based format. And instead, we have four assays finished, we expect to have eight by the end of this quarter. So that's just next month. It's really picking up now where we've really cracked it, so, it's a conveyor belt events. That's on every trial we do.

I think we're collecting a large amount of our plasma. So, we expect to test it on these very simple plate format using blood triage. We will at the trial will also be on a range of assays for the more front-line product but also as you probably gets from high department, the team is also very bullish on the Capture side, which holds the promise of a more accurate -- more expensive, but more accurate test along the lines of some of the other companies, which include sequencing or immuno precipitation.

So if you think what is -- as a continium from the very low cost, very -- one or two assays to still low cost bead-based platform. We still looking at under $10 for a panel to a potentially even more accurate, but more expensive in the hundreds of dollars cost of goods, but potentially a very, very accurate assay.

I'm not sure if you noticed on the press release just earlier this week, we're combining Nu.Q Capture with sequencing. And I think if we can get it to work, we'll be getting -- we expect very similar results to the big data companies are now looking -- funny enough, they're looking at epigenetics. Apparently, some -- they've come over to the benefits of methylation and nucleosomes in epigenetics. So, if you combine all that together.

But I think, there's definitely a place for all three in the market. There's a place for a very low-cost triage, similar to something like PSA. There's a market for an accurate panel on the bead-based platform in a range of cancers. And there's also a market, I think, for slightly more expensive, but very accurate test.

And I think, there's an extremely good chance, we'll have better in the first two in the coming months and this year and certainly possibly either there's an enabling technology or ourselves in the Capture program as well. So, all of our trials worldwide and in the vet space and just on that.

So this strategy, we're also doing in the vet space. The Texas A&M team will now have all the tools, a mini-Belgium, if you will, in the lab there. So, they can also do the Capture program on precipitation. They can also do the plate; they can also do the beads; and they can also use the bioanalyzer. So we expect to be -- we're producing our basic platform and a very wide range of those this year.

I think it's very fair to say we've spent a lot of time getting the platform developed. Now it's about delivery. We need to show it works in a range of areas and published in big publications. So, we expect all of that this year.

Okay. And just to be clear on the Taiwan study. Should we still expect a chunk of data from that coming in, in the first half of '20?

Yes.

Okay. And one last one from me. Just because you're such a global company, I'm wondering if you anticipate that the coronavirus outbreak is going to have any impact on your supply chain?

Not supply chain because we're very - one of good thing is being controlled. There's any really two ingredients in our test antibodies and recombinant nucleosomes, so we now have them all in-house. So not the supply chain, but certainly it has been affecting some of our operations in China. China has been kind of closed down for a month or two. So that slowed down a little bit, but it has not affected so far Taiwan or Singapore and certainly not collection.

But I'd say there's been a small effect on our operations due to - we are not selecting the Chinese trials right now for the obvious reason. They are already busy, I guess, but overall supply chain was zero effect and will have zero effect because we produce them all internally. None of them come from China anymore. We've reported over a half that I would expect some disruption in the trials in China. And if it got a lot worse perhaps Taiwan, but there's no sign of that yet.

Okay. Thanks for taking the questions.

Thank you, Mark.

Bruce Jackson, The Benchmark Company

Good morning and thank you for taking my question. If I could, I'd like to talk about the veterinary business for a couple of minutes. So, you've got two studies underway. Could you tell us a little bit more about whether there -- which animal? So, canine or feline? And then what are the assays that are being evaluated?

Yes, so the Vet program, just to quickly reiterate, we've shown very good similar results in pre-analytics as well as the results in the cancers. And one of the indications that we started looking in human blood cancers were an extremely common cancer in dogs, particularly the Alsatian or German Shepherds but -- so we're recreating. We're about halfway there recreating the exact lab in Texas.

So we've done some preliminary studies. We are doing the pre analytics to make sure the collection protocols are very similar. And that's all looks to be very similar to humans, which are proving to be very stable.

So our team there has been collecting samples from the hospital. It's a bit like a big clear lab next to a hospital, if you will. Dr. Wilson Robles has their own animals and also there's a big facility downstairs. It's pretty remarkable facilities better than most humans are treated in the world.

So, that's selected a range of samples, which we're very encouraged with. And now from bio banks and also collecting herself, she's taking hundreds and hundreds of samples. We're focusing on dogs, and particularly, I think, disease is prevalence to different types of dogs. As I said, a lot of that is the blood cancers. But she is also got access -- it's not public yet, so I won't give the full details, but we will do that in public when we publish it. But she is accessing some very good bio bank as well as taking lots of stuff in the lab there.

And, as I said to Mark previously, we expect results from that using a simple plate format with the CE mark plates, which we expect ready by the end of next quarter. Also, they have the [Tecan] machine so they can run them on the magnetic bead. We've had fantastic analytical results. And that can be a very wide range of assay

And as excitingly, we're doing it on the Capture program, so that we'll see how capturing nucleosomes for the methylation markers as well as sequencing goes on the animal side. So as in the human side, in Taiwan and around the world, we're going to have a very wide range of results this year.

[China] they are also very keen to publish and attend conferences and papers. I think there's going to be a big shift in the company this year. We haven't published a lot because we've been developing the platform. Also, we wanted to be sure about intellectual property before we fully went public with how it all works.

But now we're very confident with all those aspects. So, expect to see a lot of publications this year and the vet space will be a very important part of that -- the data, the process, the pre-analytics, all of those we expect to published in the vet space this year as well as in the human space.

Okay, great. And then in terms of the commercialization, how would these tests roll out to the market with this done? So, Texas A&M has their own lab, for example, where they could start running the test and selling it. Would that be the first version that's available, and then somewhere down the road you consider going into a vet diagnostic platform? How are you looking at the commercialization process for the vet test?

Yeah. Very good question. So yes, we've visited the labs as you know in October and they absolutely had a clear lab equivalent in the animal, but a clear lab in the basement, so that we currently run a range of tests in there. And if the trials go as well as they are going, we expect them to go very [plausible] we'll have the test running in their facilities this year. And then that's running they need a license to a range of the other big hospitals. There are the non-key ones, the kind of some hospitals where -- around the United States for the same purpose, and then go for USDA product.

And also there are a couple of big companies in the space, IDEXX, MAXX, we've been speaking to some of those groups also about boarding to other animals. We're kind of busy with dogs but cats, obviously, also has a very big market that also has nucleosomes.

So we've been looking most probably license in other animals because we can't. The model in all aspects has been to launch a few products that they think pump private if you will to start work and get it out there and then start licensing. So, I think we could start licensing in a wide range of animals to experts in those animals in the United States and worldwide.

So, the short answer is yes. In the clear lab environment in the [technical side near the end] of this year, then a range of other ones around the United States and then other animals licensing.

All right. Thank you very much. I'll hop back in queue.

Thank you Bruce. Have a good day.

Jason McCarthy, Maxim Group.

Hey, good morning, guys. This is Michael Kennedy on for Jason.

Good morning.

I want to see if you could review the time lines on the human product, particularly Nu.Q triage and frontline colorectal as well as the lung panel. And then also when should we expect to see the data from the vet test? And are those ongoing studies registrational?

So yes, a few things together. So, the timeline for the products, and as I said before, I think it's been an absolutely phenomenal process we've gone through to get the assays as good as we possibly can. Robust, reproducible, reliable.

There can be a product we have all the key components. I ran trials before, but I guess the whole technology is fully developed, which works, but it's very tough to turn it into a product until you have all this very basic work finished. And that's been a huge amount of work.

But as of now, I think it's very fair to say that all that are finished or very close to being finished. So now it's about delivery and delivery means data. We really need to get it out there and get the products out there.

So, on that continuum. I was talking about with Mark from Oppenheimer. The continuum from a very simple, the plate-based format with a couple of assays in a Triage format. It's in the process of being CE marked now.

The last thing for that product was the localization of the controls that's now finished. So that's now in process. So, we'll have a CE-marked kit, which has worked very well individually in a range of cancers. We saw the data in the lung and colorectal and in the blood cancers that was the core of that work.

So once it's CE marked, we'll be using it in a range of trials, which we expect to be product trials for the Triage market in things like lung, colorectal, the blood cancers. As far as the main assay platform, which everything else will be on, we have four assays finished.

We expect to start the big trials once we have a bigger range 8 or 10, which we expect to have eight ready by the end of this quarter, which is only six months. It's really speeding up. It's quite a conveyor belt of assays. Now that we've developed a very wide range of antibodies, a very wide range of recombinant nucleosomes. We very much understand the platform now. And that's all the in-house expertise to do it all.

So from that, we'll start running the samples and start releasing results on our main assay platform, which is the magnetic beads and all the other improvements what we'll actually start-very soon on the small and medium sized trials. And then we'll start the regulatory trials, probably in the second half of the year once we've shown how well they work on the smaller regulatory trials -- smaller trials and the big regulatory trials.

So, as far as data goes, that means from the main assay-based format, we'd expect the first trial in very meaningful numbers with low key values. We will give you a very good indication of how it's working in the coming -- in the next few months and certainly through quarter two, quarter three.

And then assuming that it's going as well as we expect, we would start the bigger trials by this May, in the second half of the year with the aim of launching products in 2021 in Europe and Asia on the frontline products in lung and colorectal and perhaps blood cancers and in the US in 2022.

And on the vet side, it's quicker than that because it's much smaller trials needed and less regulation. And it's a clear lab environment we couldn't launch product very quickly. So, we'd expect to have that first product launch this year and a range of products potentially in a range of species next year. And the market for this space is potentially as big as the human cancers for the reasons which we discussed.

There are 2.5 times as many dogs die every year as humans, for example, because they get cancers very young. And the pricing structure is actually quite similar to the human market. It's amazing how much we spend a lot. And we're also going to augment that with some revenues from -- well, now we have both optimum.

There was some revenue coming in this year. We expect from the nucleosome sales throughout the groups. Also, we're does reanalyzing the research used market from adjusting on plates to also base as a service model. We had up one test in that last year, which was a very big percentage of revenue last year was where we ran the assays as a service. That's very high-margin business and it allows us to keep control of understanding who's using our assays. So, expect to see some updates on that this year.

So, how it [characterizes] the last two years has been getting our assays and the platform developed and all the Capture side, which the team is in. I didn't even mention a lot, but that's potentially revenue next year as well to develop. So, it's absolutely as good as it can be. And then this year is about getting the data and the revenue from the first products. The next year and the year after where we can really take it home and a very wide range of those on the platform and in a range of diseases, in a range of animal, and on the Capture side.

Thank you. And then actually on the Octamer stuff, I'd like see if it could actually give us a bit more color on the revenue opportunity there for selling the hit on the Octamer in the DNA template?

Yes. So, this is something we're looking to do how much effort we put into it, you're looking at. So basically, we've promised to secure on supply because it's a very new thing to do. And there's very, very few people in the world can do it well.

So it was very important to bring in-house. That revenue, what we'll guide on that, it depends on how seriously we take it. How much we want to be selling. It is a very high-margin business and that we make very good nucleosomes for those. We'll update the next quarter.

But you're talking revenues in the tens of thousands per month to start with in the first year, but if the pharma companies really take on these nucleosomes and drug development programs, it could be becoming millions in the years to come. Because they're very, very good nucleosomes. Very few people do them.

But I think if you're looking at kind of in the next year or two in the tens of thousands, and then if we take it seriously and really push the boat out in pharma companies. And I think we bought this company because they do a fantastic nucleosome, it could get big in, say, '21, '22. But in the tens of thousands this year would be reasonable where we are and then moving to the hundreds and millions.

But I think this is a kind of us. If you look at where we are, the epigenetics, which is what we do has absolutely become mainstream. The DNA companies are moving towards epigenetics through sequencing and through bisulfite conversion, which is, we think the wrong way to go about. And it's very complicated, very expensive.

I think, by providing our epigenetic toolbox, which is through the Capture program, nucleosome as well as the antibodies. We can not only provide the intellectual property to license the early aspects of the test to really keep control of everything we do. So, I think it's something which could really take off in the next couple of years from your agent side as well as the cancer side. But we're just going to whip that ourselves. What's the mix here? how big we want to get into it as selling kit or services or nucleosome?

But I think, there's very little doubt now that the space we're in is incredibly important, and it's going to grow exponentially over the next couple of years. So, I think it will make sense for us to dip our foot in that water. If we're making the nucleosome for ourselves, and that we will be selling them to other groups as well. So that will become clear in the next quarter or two. But it's an aspect, which we're taking very seriously and thinking a lot about. And when we'll finish that process, we'll make it public.

Alright, thank you. And then just one more, let's see if you could focus on Capture for a second and more specifically the how behind it in the liquid biopsy space. What is really the advantage of reaching for nucleosome compared to traditional methods for isolating ctDNA?

Yeah, very good question. And I think that feels good to have a chance to talk about Capture. So currently, you probably read there was a huge promise among sequencing in the past 20 years. It was going to solve every problem. But I think some companies have done a very good job with treatment selection, late-stage monitoring. But I think it's also very fair to say that all failed the early detection from DNA because you're looking for the needle in the haystack of high-tech.

So now we're on magnetic beads. We've always just used the plate format, which is a very simple and good format. But once your magnetic beads that helps you manipulate nucleosomes in machines being magnetic. But what it also crucially does is you pull the nucleosomes out using magnetics.

That's a very simple process. We call immuno precipitation. It's called immuno precipitation. So, it is simple [processes] assays. So, whatever we do on the Capture antibody on the magnetic bead is pulled out or concentrated for. So, for example, long versus short nucleosomes. Short nucleosomes have been shown in a Nature paper to be more prevalent in the cancer.

But you can also pull out for things like methylation patterns for example, which is where all the DNA companies are getting their discrimination now. It's the epigenetic feature methylation patents.

So, if you can, and we can, pull out the nucleosomes and preferentially pull out by certain structures methylation or long or short or linker DNA. And you are really clearing up the pool, as we say, if you look for the needle in the haystack, if you can sweep away the haystack, you can make a much better job of sequencing.

And if you can concentrate by methylation patterns, for example, and any combination of all our assays and these things and even transcription factors which we're working on now, which has proven to be very tissue-specific, you can do several things. You can clear up all the background noise, which should greatly help the results. You can also concentrate the nucleosomes from the cancer, which should really help with sequencing. And you can also do -- if you look at it this way, it's not just the DNA, it's the whole chromatin structure, which has a much, much more deeper signal than just the DNA itself, which the DNA company have realized.

But the only thing that can really target the epigenetic side is the methylation levels and that through either sequencing [or buys of our conversion or the jobs] like long and short is not a very easy, cheap or quick way of doing it, and it's not proving at all accurate early-stage detection just over the whole cell-free DNA.

So we think, it's actually doing a lot of [focus] for them moving to the epigenetic space. The proving through these complicated methods, you can actually get good discrimination in the epigenetic space. What we are do is a far easier, far quicker, and far more powerful way of doing it, when you can concentrate from any single structure of the hundreds and hundreds on the nucleosomes.

So now we're concentrating on those seven different structures and kind of very different things. So, I think it's really fair to say our advisory board, our team are absolutely extremely excited about the potential for the Capture program. Not only they help our assays and our program, but really make a step change in epigenetics and in cancer diagnostics, and in a range of other areas.

The whole chromatin fragment is the key, not the DNA by itself, and that's something we absolutely will do a lot of work on this year. And if we can show any of this, it would be a massive breakthrough and a very big publication and really help us and products.

Alright, thank you, Cameron, for taking the question. Looking forward for future updates.

Thank you.

We have reached the end of the question-and-answer session. I would now turn the call back over management for any closing remarks.

Thank you very much for your time. And it's a very exciting time for us. And we are looking forward to seeing all of you over the next quarter as we deliver the results, which we've all been working on for a long time there. It's been 10 years. And we have a lot going on.

Also June 1, we're doing the Capital Markets Day in New York, again on the New York Stock Exchange. So, anyone who could attend, particularly the analyst side would be very helpful. We intend to have a lot of data by then and also quite a few of our experts. You can really get in-depth on the questions. So, June 1 will be a big day for them. Thank you very much for your time.

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