VolitionRX Ltd (VNRX) 2020 Q1 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by, and welcome to the Volition Rx Limited first quarter 2020 earnings conference call. During today's presentation, all parties will be in listen-only mode. Following the presentation, the conference call will be open for questions. (Operator Instructions) This conference is being recorded today, May 8, 2020. I'd now like to turn the conference call over to Louise Batchelor, Chief Marketing and Communications Officer. Please go ahead.

Thank you, and welcome, everyone to today's earnings conference call for Volition Rx Ltd. This call will cover Evolution's financial and operating results for the first quarter of 2020, along with a discussion of 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 is Mr. Cameron Reynolds, President and Chief Executive Officer, Mr. David Vanston, Chief Financial Officer, and Dr. Jake Micallef, Chief Scientific 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, quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. We do not undertake an obligation to update any forward-looking statements made during the course of this call. I'd now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds, Cameron?

Thank you, everyone, for joining Volition conference call today. I especially appreciate it given the busy earnings call season and the ongoing pandemic. Speaking of which let me first start by addressing how the COVID-19 pandemic has affected operations for Volition thus far. During the first quarter of 2020, we implemented contingency planning to protect the health and well-being of our employees with most employees working remotely where possible.

Our lab in Belgium has remained open with the attendance of our dedicated laboratory technicians but kept our research and development work on track with our expectations. Many of our small and medium sized studies have already been collected, and this happens stored at our on-site biobank. So the trial well underway and plan for the first half of 2020 is still tracking expectations, regarding our large scale studies, both the colorectal cancer and lung cancer study underway in Taiwan are still ongoing with collection.

However, the study collection in the US with the EDRN has been paused during the pandemic. The overall time impact of the EDRN inflection both on the study is unknown at this stage. However, we will provide an update once the study recommences. Unsurprisingly, we have taken the decision given the current travel restrictions to postpone our Capital Market Day originally planned for June 1 July this year, most likely in September, and we will announce a new date as soon as possible. We hope to see many of you in person then.

Then for the quarter ended March 31, we did not observe significant impact on our business operations due to the COVID pandemic. However, going forward to the extent the pandemic continues and or worsens, we cannot at this time predict the effect it may have on our company in the future. The key potential risks from the pandemic relates to the slowing of the supply chain of consumables and antibody and the delays in the provision of services by external contractors. We are working hard to mitigate any risks whilst continuing to protect the health of our team.

I am truly proud of how hard the whole team has continued to work throughout these difficult times. My thanks to them and their families to quickly adjusting to the situation, our aim has been to continue to work at full speed to meet upfront milestones. On subject to COVID after the quarter end in mid-April, we announced that we are actively developing a COVID triage test using our proprietary Nu.Q platform. It aims predicts the likelihood that an individual who is COVID positive will develop complications and severe disease.

The goal of this test is to provide early insight into which patients may require a high level of monitoring, including hospitalization and critical care resources versus those who will not develop serious symptoms. Preliminary studies of patients with COVID infections are ongoing in hospitals in Belgium and Germany.

While cancer remains our core focus disease wise, our existing Nu.Q epigenetics toolbox may have potential to help doctors and patients in the COVID pandemic or in the future respiratory viral outbreak, including pneumonia. We have followed a normal pattern for the utilization of our new epigenetic platform for the triaging of COVID-19 suffers. This patent is also potentially useful going forward in many other respiratory infections such as the flu and pneumonia given their similarities.

I am delighted to announce today preliminary results from our first proof of concept study in 84 patients, 34 of which were who were PCR positive for COVID-19 and 50 control subjects, nucleosomes were highly elevated in the PCR positive COVID subject. The Area Under the curve, AUC, for single Nu.Q assay was 98.7% PCR positive, versus control subjects with 100% sensitivity detection at 94% specificity.

A second Nu.Q assay also showed promising results with an AUC of 86.2%. These top line results are hot off the press, so to speak, and further analysis of the data will be undertaken. However, I felt it important to share his initial news. I look forward to sharing further results of the trial and indeed, other ongoing study with the goal of developing a clinically useful product to help in the battle against COVID 19 global pandemic and potentially other diseases.

I am delighted that the hard work to develop our Nu.Q platform is starting to pay dividends. For example, for the COVID trials, we could send Nu.Q assay known as a robust, reproducible and reliable to a third party labs and hospitals. This year again shows the amazing potential range of uses of our epigenetics toolbox, as I'm sure you can imagine our team has worked exceptionally hard to facilitate the study in such a short period of time. So thanks once more to all of your efforts.

But even given this additional work in the COVID-19 arena. I'm also happy to say that we have kept our momentum on our core focus of cancer diagnostics and have made significant progress this quarter on numerous fronts, particularly in assay and platform developments and with our Nu.Q capture program. Let me emphasize we are currently on track with the milestones detailed in the corporate deck made available on our website last month with further details provided on this call. Firstly, at the beginning of the year, we completed the acquisition of Octamer to expand our capabilities in epigenetic and further our goal of bringing all three components of asset in-house.

Secondly, our simple multi-well plate format is expected to be seen by the end of this quarter Q2. Additionally, with regards to our fully automated magnetic bead-based can be luminescent format, we have now finalized eight assay by the end of last quarter, which was our target and starting to now ongoing for colorectal lung and blood cancers with data readout expected by the end of this quarter.

In addition, I'm also delighted to announce today that we have also recently signed a contract with Shanghai, Fosun Long March Medical Science Company, Fosun Long March China to further develop and use the magnetic have to bake assay for use on patients open access platform. Moving on to an automatic simulation in the immuno assay system. The agreement allows for the parties to negotiate an exclusive license agreement for personal loan to distribute Volition DPP test for the Lumia system in China. This is very strong progress on our strategy to begin the process of international commercialization of our assays.

I believe that we have made fantastic progress on all fronts, particularly given the challenging circumstances of recent months. Given the strength of our platform, we have also made strong progress on the veterinary front. We are now following the end of the third quarter. Our initial data for Nu.Q in a proof of concept study conducted by Texas A&M University, one of the world's leading experts at a specificity of 90%, a single Nu.Q Vet assay to take it over 70% of both Canine blood and lymphoma cancers with an Area Under Curve of 84.5% and 83.1% versus healthy.

These two cancers alone represent almost a third of all canine cancers. These results with the team in Texas open us to move forward with other Nu.Q vet assays in our pipeline and with a larger range of cohorts and trials that we have collected and that are planned. There was a video interview with Associate Professor Heather Wilson Robles who also serves as Volition Vertinary's Chief Medical Officer on our website, as well as the presentation deck focused on Volition Vet Diagnostics so please take a look for a more in-depth analysis.

It is exciting to see such strong results from our first Nu.Q vet study conducted at Texas A&M University veterinary hospital. It is also interesting to note the similar patterns of detection seen in both canine and human samples, confirming that the Nu.Q platform does appear to be useful in more than just human diagnostics.

At its human diagnostics, there are currently no accurate, simple oral cancer screening test available in the vet medicine market, and yet 25% of dogs will develop at some stage in their life. Commercially, this is a significant opportunity, the US is currently the largest market in the world with almost 70 million pet dogs and approximately 6 million cancers diagnosed each year in dogs, which is about 2.5 times the number of diagnosed in humans.

Vet diagnostics have a clearly defined regulatory pathway via the USDA requiring fewer and smaller clinical studies when the FDA process human diagnostics, which generally allows a much faster route to revenue from vet products as compared to human products.

I look forward to completing the planned trials and to launch our first Nu.Q vet product in the US that we expect to open this year. And looking ahead, I'm very happy to report that we have had three abstracts accepted for publication by ASCO, American Society of Clinical Oncology, one of the world's biggest cancer conferences.

Due to their strict rules I cannot discuss these in detail today, but they are expected to be publicly released after market close on Wednesday May 13. I say so please keep an eye out for these. For those of you who follow us closely, you will be well aware that there has been some time since we published data at conferences.

Following the significant work on both the platform development and securing our IP, we expect the abstract publications to be the first of many this year and are also planning to bid a number of clinical papers for publication throughout this year and beyond. We believe that now is the time to publish and show the validity of any key platform in so many areas.

In financial terms, we closed out the quarter with approximately $12 million in cash and equivalents. We continue to manage cash carefully and believe that we are in a solid position with regards to the financial runway to achieve our key 2020 milestones. Looking to the future, I would like to reiterate our vision and what makes us so excited with our progress and down space. Volition is an epigenetics company focused on advancing the science of epigenetics and exploiting these advances in human and animal health.

This has been our mission since our founding, it is coming to fruition with our Nu.Q platform at the very heart of epigenetics. So we say the epigenetics is as, if not more important than the DNA genetic, in short, it's not the DNA, it's full chromosome. We believe that 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.

Overall, on so many fronts with our ever-growing team and IP, I'm delighted with the progress we're making, and I'm excited by the momentum we have developed in this epigenetic spill. Indeed, our whole team is incredibly excited by the company's future opportunities. We aim to report throughout this year and beyond several key milestones, including new feasibility to detect a range of cancers in both human and elements. In addition to the clinical data of the need to capture program data relating to COVID-19 triage tests in development.

We are 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 months and 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 season and the pandemic. We're happy to take your questions now. Operator?

Thank you. We will now be conducting the question and answer session. (Operator Instructions) Mark Breidenbach, Oppenheimer.

Hey, guys. We've got Matt on here for Mark. Thanks for taking our questions. And Cameron, let me extend my congratulations on the recent progress, an interesting proof of concept data in COVID. And I'm just I'm just wondering what you attribute to the high level of specificity and also whether you believe the new queues could discriminate COVID from other active infections, which may be increasing nucleosomes in blood presumably?

Yes. Very good questions. And yes, we were very surprised pleasantly surprised with the some of the results that came through from this. This was just COVID versus our normal controls certainly was an exceptionally high result, and we're doing a lot of work now on the prognostic and diagnostic process. Obviously, a lot of that includes other conditions which could cause some of the nucleosomes to be raised within a lot of work on that. Actually, it's being run this week and through the next week and our collaborators in Germany and Belgium are very excited with the results that's seen.

We're measuring the body's response to the virus. And it's in this case in the Nets, the neutrophil extracellular traps. So we'll see all those questions will be answered. But some we're just trying to be conservative at the moment. Just we're very excited with what we have. We'll be doing. A lot of work are reading out in the short to medium term, and we can answer all of those questions, but it was yes, a very good result to start with and something we will look very carefully at the diagnostic and prognostic value.

But I think what's important to note, as always in these areas is this is a COVID issue, but it's also the reaction the body has with the NETS. If it is useful in COVID it would also be useful in pneumonia and the flu, which also have a very raised level of NETS and also kills our people through a very similar mechanism. So we can open this pandemic, hopefully, and we'll have that information soon. And if it works for that, it could work for a long time in the future as well through the other mechanisms so very exciting, but we'll give a full update once we know, and that shouldn't be very long.

Okay, great. That makes sense. Yes. So now I guess turning to the clinical-grade assays. It sounds like you have eight now that have been validated. And I'm just wondering whether you think eventually you'll probably have to use different combinations of these assays based on the indication, whether it's longer colorectal or other? And then if you could just give us an update when you plan to have finalized panels for the Taiwanese lung trial and the EDRN. study?

Yes. So we have eight now that's exactly right. And that's by far the most we've ever had in this stage because we're doing this now. So we're doing three or four more per quarter. So it's not just state. We expect to have again 12 and 16 by the end of the year. And you're right. So and some of them are good in a range of different diseases and cancers.

And we would expect some of them to be better or worse in different diseases and different cancers. So that's a process. Of course, the ones we're going for are the ones that have been shown to be differential in the tissue because that's where we found them from and I think it's also important to know that we're also looking for a new biomarkers using the mass spec work in the Nu.Q Capture program.

So there's a lot of evidence of different structures in different diseases in different cancers, and we've developed the assays for them, and we'll run the trials to confirm all of that. And we're also adding to that, our new markets, which have not been shown before that we're discovering after Nu.Q Capture, and then mass spec works very exciting.

So we'll determine the panels. We are running the smaller populations now in colorectal and lung, and we'll add to that the medium and large populations. So I would expect to have a very good indication of I'll have [the Marburg] indication this year for lung and colorectal as we get more and more assays.

But we've seen some which work extremely well and we're looking to be now that they're working well, we don't think we need a panel of five or six that we're hoping a panel of as little as three or four will work. So we're zeroing in on it we're not there yet, but we'll have a lot more data once we can run 8, 10, 12 assays out through the populations, all of which we've adapted to the platform because they showed good utility in other things.

So we're very hopeful and don't forget it's not just something which is a good assay but doesn't correlate with the assays that currently work. You want something that detects differently. Otherwise, it's not additive. But we're extremely happy with how the development process is going on. A lot of assays to have done in the last few months, particularly given the pandemic and all the other work. The team in Belgium has done a fantastic job, and it's not just the number of assays, which is important and that's gone up a lot.

But now it's extremely robust and reproducible, which has allowed us not only to progress the work very well in the lung and colorectal space, but also do the vet and the capture and now the COVID work because it's all the same platform. So yes, it's been very good. So well, yes, eight assays for more each quarter, and we'll have a lot of data coming up in the months and we would aim to get the panel speak to you soon.

And then maybe just one more if I could squeeze it in. And do you still think you'll be able to have some data from the Taiwanese lung trial at some point in the first half of this year? Or do you think you have given the pandemic that that those timelines might shift by

I think it's a reasonable target, but if it slips it slips is only a few months with them. We will have data in the short term, short to medium term, we are reasonably on target I think, it's never exactly sure with everything, but I'm not aware it's delayed now. It could be in the future, but it's we're sticking to the targets. It's coming up on the special. The main delay was getting the assay developed on the platform and now that we have a lot, we should have that data.

Great. Thanks for taking my questions.

Thank you, Matt.

(Operator) Jason McCarthy, Maxim.

Hey, guys, thanks for taking the question. This is [Michael] is on for Jason. I would say that I'd like to see.

I have another follow-up question on the on the COVID tests and really even how do you transition this into the into the triage setting can based on the data you released seems to confirm that you guys can detect Nucleus on being elevated in COVID with high accuracy. But then what do you need to determine in order for it to be applied to triaging patients?

Yes. So you're absolutely correct. So what we showed was a COVID versus normal. So that's the first step. If you don't have that, you're not going to get anything in the triage. The next step is what we're doing now. We're getting a lot more samples with differential diagnosis and prognosis. Those that have proceeded very well, those have proceeded very badly into ICU and unfortunately, some deaths and how that relates to competing conditions and other things. So that's all-in process now.

What the aim is to say. So the body's reaction to the COVID is several-fold. I mean, a fever antibodies, but also our nets, which are what we can detect with our assays because it's chromatin based it's the last line of defense, if you will, the body throws out, the white cells throw out the nets to track the virus physically, which is a good defense mechanism, but like anything if there's too much of it, it can cause a lot of problems.

So we're getting very high signals in some of the COVID positives. We'll do analysis now to see what that's from. And if it is from the NETs and we can detect it, which is what we're looking to do, see how early we could have told someone that they're going to be getting into trouble and from the coronavirus through the body's immune response, which is what we detect, not the virus itself, the body's response and in this situation is the body's response, which actually causes the mortalities with NETs because it clogs up the lungs and some other organs if there's too much of it and if you think of it that way, like a fever, the body has fever and it's good to kill the virus because the virus.

But you can be too much, and you can have too much an immune response from the NETs. So we detect that and we did it. We now show we can attack that in the COVID patients. So now what we've got to do is not just to have a plus or minus but look through time points to see how early we could tell that someone is going to be in trouble because it's very tough now to really know what that's going to be.

So we think through our collaborators, it would be an extremely clinical useful product. If we can show all of that. The first times have been good for this but we've got more work to do. But given the pandemic, there's a lot of work being done now. And a lot of samples being collected. So it's something which we'll have in the short term to see what the prognostic value is. And because of the robustness of our platform and as we said, we've got very reproducible, very robust assays. It's something if it did become a product, it could happen quite quickly.

Things are being approved in very quick time as you know. So I will say we've been very happy with the results so far, and we're really trying to see if we can we can help out on the prognostic side and we'll move forward. But I think it's also important to notice that we're an epigenetics company, but our primary focus is also all the cancer trials we're having in the vet side and the capture, which have been going incredibly well during this pandemic. But it's very exciting. We'll see how the COVID fight goes, and we should have more information soon.

Thank you. And then actually, two, I'm just switching over to the capture program. Seems like there's going to be a lot of data this year and assuming that comes in expected for another sequencing immunoassay mass spec data, that once you have that, what are the next steps? I know you're seeking some licensing opportunities for 2021. So could you give us a little bit of color on what those might look like and where this technology is, where you're looking to position this to be applied?

Yes, that's a very good question, Michael. So catch the capture program just for a quick refresher. We didn't discuss it a lot on this call because we had so much else going on, but that's progressing very, very well as well. We'll have a lot more updates on that soon. But what we can tell you now before the updates, which will be soon. And what it does is capture or pull out to the nucleosomes preferentially from whatever structure we have the antibody for. So one big use for that is pulling out loan from short nucleosides, which are short nucleosomes, 147 base pairs have been shown to be much more common in cancer.

So you're looking to enrich with some of the nucleosomes, enrich the DNA and the new presenters from the cancer, that could obviously be very helpful in our assays. If you can clear out some of the background noise, you always get a better result, and we think that would be extremely helpful in the sequencing business because there's such a problem.

They have a lot more problem with background than we do because the nucleosomes are a lot more common than the mutations in the DNA. So it can be extremely helpful. We think either in a clean out step before assays, and we're doing that work. We're also doing work on concentrating the DNA sequencing. As you say, if we can show that we can concentrate the nucleosomes in the DNA and that increases the validity of screening. That's a massive licensing opportunity for anyone in the space.

And as I mentioned before, once you have the nucleosomes, you can also do mass spectrometry, which in very simple terms is you smash it apart and looked exactly what was there. So it's an absolute proof as to what's on the nucleosomes and the mass spec work now can actually look down to the level of the history modifications and the methylation levels on each histone modification is quite remarkable.

So that's at the moment being used as a discovery tool for approving what we're looking for is they're also looking for new markets that have not been shown, so very powerful and in the future, potentially three, four, five years down the road, it would be great way to multiplex four or five different targets because there's no specificity issues.

If you're actually looking at the data, just the mass spec work. So how does that look? So we're doing the work now to see if it works well as a clear up step in our assays. We'll have data on that soon. We're also doing work on the concentration of nucleosomes from known cancers to see if we can increase the concentration of the mutations for sequencing with the aim of making sequencing much quicker and easier for those companies.

A lot of sequencing now goes to about 50,000 x. We're seeing if we can do with a lot lower coverage and therefore costs which could be, as I'm sure you're aware, would be extremely helpful. So all of the work we've done on the assays is actually help the capture program immensely because it's the same antibodies, the same work, it's actually. And just for background, the actual capture is as much cost as one assay that can be done on the machine because what you're doing is you have the antibodies on the magnetic beads and then you pull it out with a magnet.

So it really is still a very simple process. We've just taken a lot of work to work out and a lot of optimization is all our new intellectual property, which Dr. Micallef who's on the line now has been falling very a lot recently as well as all the way through our 10 years. It's extremely exciting. So it can be used in many ways and we'll have a lot more information on that this year and soon.

But at any given point, there's just one more from me. It looks like there's going to be a lot of progress in 2020 of that moving forward towards the market commercial prep for triage and a number of studies. So as we looked at expenses going forward, should we anticipate the higher run rate that we saw in the first quarter throughout the year? Or how should we look at?

I think for the moment, we were actually tracking what was a long-term target, which is $1.2 million, $1.3 million a month. If you look over the last 12 months, the first quarter is always higher because we have D&O and a lot of annual expenses that come out early in the year. And this quarter, we also had the ultimate purchase, and which is obviously a one-off. So we may end up doing more work, but at the moment, we are tracking a 12-month average there.

It is definitely lumpy between quarters for those reasons, but I don't think it's going to be raising a lot. And if it is we'll update it next quarter. But certainly, for these summer months until the next quarter and we update, I think we're looking to track our long-term average.

Thank you very much. Cameron and looking forward to the progress that it goes through.

Thank you, Michael. Yes, it's exciting times.

Bruce Jackson, Benchmark Company.

Good morning and thank you for taking my questions. So if we could just some talk for a moment about the veterinary program you on brought out the proof of concept data, what work remains to be done with that program? Do you still think it's going to be the first product out the door on? Is the commercialization strategy still going to be possibly as a lab-developed test? And then if you could also maybe as a follow-up run through the video, the rank order of the pipeline in terms of how they might be launched?

Yes. Thanks, Bruce. Good questions. And that's a very important part of what we do and make sure doesn't get lost in all the other news. So yes the proof of concept data was very, very encouraging. And those cancers were picked by the Texas A&M vet team because they're very important and it's about a third of all dog cancers.

So it was extremely good to see those results and it actually mirrors what we know from those cancers in humans. So all in all, it's a really good validation of what we do by an independent group. And it's what we've been working for with robust, reliable assays. We ship them the assays and we're working with great partners who know what questions are needed in the vet clinic. And obviously we don't, and they do. So it's been a really good network and the marriage of our about two abilities.

So I'm yes. So we've had the point of care data, and that was on plates. The plates we just shipped to them. It was almost simple format. As you know, they currently have an IDS machine, you know, our magnetic bead platform, which will be operational soon and then they can run up right where you have a few assays now in place, which is why we've only done a few.

We have had eight now on the plate, some of the magnetic beads, and we're going to have a lot more soon. So that will be running a lot of assays through a lot more samples, have a lot more stored up and for other cancers and trying to get bigger patents rather, I mean, it was quite remarkable results just for those single assays, and that's what we had on the plates.

But we have a very wide range now. And interestingly, we're also going to be doing the same work we did in humans on the capture side from the animal side, just to give us a lot more information and see how this for validation and also for us for the potential vet market. So that will be coming through this year as well.

And then the launches? Yes, you're correct with the first test we aim to be as a lab-developed test, it's like a CLIA lab, it's not humans, but they have their own lab there, which we visited in Texas and their hospital. So that's the logical place to launch the test.

And I can do that off as soon as they're comfortable they can launch in their own lab because they're obviously specialists and it's their own lab that can do like a CLIA Lab. And then we look to do a USDA product for the cancers, which worked very well to launch sort of a kit product that can be truly shipped around.

So it's tracking very well. It's again, eerily similar to what we've seen in humans from both in the print analytics and how the assays perform. And I think we're starting to learn a lot both ways. You noticed the blood cancer was the one which worked extremely well. One of the two the work extremely well on the vet side.

And because of that, we started looking in humans in the blood cancers and it showed up incredibly well as well. So I think you will see a lot of cross-pollination, not just going to the vet side, but also starting to come back.

And it's a rising tide is lifting all boats as because I think we spend the time really getting the platform absolutely robust reproducible. It was a lot of work in the last 2.5 years, and it's been a lot of sweat from the team in Belgium, particularly, but it's really showing that we can really do a lot of different things.

So you will see a lot more data and Texas will start publishing quite aggressively like the rest of the company because we have a lot to say and we're very, very happy with the platform and our intellectual property in the vet space as well as the human side. There'll be a lot happening in the vet space. And then after we get the vet tests, launched, on the human side on which asset do you think is going to be the first one to reach the market on the human side?

Well, I would say if we do find something clinically useful in the COVID, it would pretty certainly be that because the approval processes are really shortened because of the pandemic. But again, that's unknown. But we'll know, I think in the short to medium term, if not, I think the most likely one is the triage, which would be [C-MAC] is on schedule for the end of next month.

And we're running it through some triage trials. So far is the lung and colorectal is tough to tell. We're running medium and big trials in both of those. We'll see what's the clinical use and what's this mean to the panel and which comes out from those. But we're doing a lot of work in both of those as well. And also, I think the highest results we have ever gotten detection has actually been the blood cancers we had better on, which has also been good. So we're now working through. What's the clinical question that's best answered and the trials for that.

So the short answer is if we can find something clinically useful from COVID, it's likely to be the first because the assays are ready and it's a very short approval process given the nature of the pandemic. And second to that, it would be the triage and and on top of all, that would have the Vet side. And I think we haven't done a lot of work on the research kits in the last few months. We've been so busy with everything else, but I think as we start to aggressively publish, I wouldn't be surprised if that really started to pick up as well.

I think there's a huge push now in the epigenetic space, and we really are at the heart of it. And I think we could -- we've shown really good efficacy now in cancer in humans and dogs, we've shown utility potentially very strongly in COVID. Collaborators are doing work in pregnancy, preeclampsia in lung diseases and other things. It's truly showing epigenetics to be incredibly important in a lot of different things. So there will a lot to talk about over the next 12 months.

Absolutely, getting back to the COVID 19 data that you showed this morning with the proof of concept on data. Was that the net assay that you were referring to or was it another one? And then you said you said there were two new assays that were on being evaluated.

So we are not publishing web publishing, and we're also patenting. So what I mentioned, which do assays they were. But yes, one worked incredibly well in this aspect. And the other one, I mean, 86 is still an incredibly good and you see they do different things. So we've got a lot of work to do. Our collaborators are working at a lot of other markets as well for the same purposes in clinical trials in combination housework, the different questions and prognostic as well as diagnostic, the PCR is a great test.

As you know, it is very accurate, but it has its issues. So they're working to see how it can work in a lot of different ways. A lot of clinical questions now been thrown up because of COVID beyond just the straight diagnostic questions, and it appears very much that the NETs are a very big part of what does the damage to your body and obviously, the NETs are very much related to chromatin and I mean it is chromatin that is spewed out. So that's what our assays appear like. It's all cutting edge now.

So we'll publish that and I think there'll be a lot of papers published in the future on how how are assays and can be determining all that. It's in the process, but we are working right now and we'll update a lot in the short term.

Okay, great. Thank you very much.

Thank you.

Jason Kolbert, Dawson James.

Thank you. A pretty good rundown, but I just want to pick up on some of the questions that have already been asked. When you talk about the COVID assay and detecting the NETs, my understanding of what you're saying, if you can detect what the body's immune response might be and it might be a predictor of who's going to get into a cytokine storm that's going to resolve them potentially candidates for ventilators.

And so it could be used as a prognostic to determine where there would better be benefit for a viral knockdown like remdesivir. And if that interpretation is correct, I'm wondering whether there's discussions going on with therapeutic developers so that they could use the assay a prognostic lead to determine which candidates would be best for therapy and what the timing of that therapeutic intervention might be?

I'll give a quick answer and then if Jake has anymore to add he can as Chief Scientist at, we're doing a lot of research and I can't talk about too much of an how because obviously, we're somewhat confidential. We make it public in the process, but there's a lot going on and I think we could be very helpful in the areas you mentioned that some will at anything that we actually finalized, we'll announce once it's completed. Jake, do you have any I would say on it?

Only that the work is ongoing and if the assays do indeed turn out to be prognostic then they could very well be used in the scenario that you described where we're not really at a stage where we can say that yet.

Okay, but that I mean that's the true differentiator, right? Because there are a lot of good assays that will determine what COVID presents. But there are very few assays that can determine the magnitude and or predict kind of the response because that's the whole game, right? There are a lot of people who get COVID and have no symptoms. And there are other people that get into real trouble. So being able to delineate those two to me seems like you have an incredibly differentiated product. If that turns out to be the case, is that how you're looking at it too?

That's exactly like how we're looking at it.

Exactly, right, yes. But I think with the nature and size of potential is.

I was going to say that what we're measuring, although we get super protection for COVID, that's not actually our goal at all. And what we are measuring, as Kevin was saying is not the COVID itself, but the body's response to the COVID and it is and overall response. And one aspect of that is besides current score storm, that is the cause of the complications is that that we're measuring and so we very successfully measuring that. And whether that is clinically useful in the way that you described is something that we're investigating now.

Yes. I mean, we all understand the implications of that are huge. So have you had any early discussions or any contact with people on the COVID taskforce or (inaudible) or Barda? I assume those channels are open to you?

Yes, we have been very active. We've been looking at this for several months. And given the size of the opportunity and how much we can help, we're just trying to be conservative and to we're certain exactly what we can do. But all the things you described is exactly what we've looked to do. And we've been in communication with the authorities, as you mentioned, in the US as well as in Europe as well as in Asia because if you can have a prognostic, it's incredibly useful.

And as you said, there's really nothing out there currently in this space. And as Jake has mentioned before, it's also potentially very useful in pneumonia in the flu, which cause millions of hospitalizations every year as well going forward.

With same kind of cytokine storm associated with I think?

Exactly, exactly, yes.

Thank you. That's really exciting. And on the veterinary side, this is also on the human side, the ability to determine kind of the source of the cancer, help me understand on the veterinary side, what the sequence of events are, patient brings in their dog and the veterinarian either determine if there's a GI related or other related tumor.

But they may not know unlike a human, right? The dogs don't talk so your ability to isolate back what type of cancer it is, how far advanced is the diagnostic library that will allow you to kind of link those two. So what the question I'm really asking is beyond detection. It's a source of library matching right now. Of course, that has huge implications, not just for canines but in ethical diagnostics, too. And I just wanted to make sure I understand that connection.

And so just a quick answer to that. And I think again, it's probably good to hook you up with our vet team because they had no one on this call is as of expert, and that's why we work with Texas A&M because they understand the clinic very well and the processes. So we relied on them very heavily to tell us what clinical questions, what are the different cancers and what the what the clinical process would be for each of the, it's different from the vet hospitals to a vet lab to single vet hospitals, and they're working on that a lot.

As for the epigenetics and the human space, Jake can go through that with you. But it's as we talked about a lot, there are a lot of epigenetic structures on the nucleosomes, hundreds and hundreds and hundreds has not been shown to be different in different diseases in different cancers and the tissue, which is what we've been following.

And now we're looking at our own markets through domestic commentary, but we thought the process we've gone through is that, that work's all been done by others on what targets and look from the tissue. We've been really optimizing our platform to make sure we can measure all of those, which is what we've done and just coming through now and now we're going to be using a lot of those assays to trying to get the differences between the different cancers as well as just detecting the cancers themselves.

And we've seen some differences of what there's a lot of similarities with some assays between the cancers, which makes sense. And there's a lot of we're looking now for assays in our growing library, which are differential between the cancers, which are definitely others.

So we've got to work to work out a good panel to detect that cancer and also something which differentiates from other cancers and other competing conditions, which is also very important of course. And that's the work which is ongoing now, which is why we'd like to have a lot of assays so that we can really differentiate as well as just discriminate.

Right so and mass spec is really just an internal tool that helps you build the library. So that going forward, on a volume basis, it just becomes a digital comparison. If you will. Is that correct?

Jake, do you want to answer that?

Yes, domestic really has high two uses. One is that we can look far and wide for which market really are different on nucleosomes in different cancers as opposed to looking in what other people have found in the literature in tissue, we can really investigate what's different in the blood, as you say, a discovery tool and the second possibility, and at this stage, it's very, very early. But in the future, it could in itself become a diagnostic tool where instead of looking at a panel of three or four nuclear zones and to see whether that panel is characteristic of lung cancer or colorectal cancer and so on, we could conceivably be looking at a panel of dozens or even hundreds.

And at this point in time, it's far too early to say that we can do such a thing. But in principle that's possible and it's all covered by our intellectual property.

But what I'm just thinking in terms of throughput, right, it's hard to have throughput when you involve a mass spec. So I'm just for now what I'm doing is I'm compartmentalizing the mass spec as kind of the internal research tool to help build a library.

(inaudible) but also confirm also confirmed markets that we see there from the antibodies and the recombinant controls are also definitely the so it's confirmatory as well as exploratory but yes, for the next foreseeable future, that's absolutely correct.

Okay. And just I want to close. And I know I'm Michael Okunowitch mentioned this, but I just wanted to make sure I have a handle on the time lines for Nu.Q, there's so much going on. But if I if what I understand you're saying is that we should be looking for more incremental data throughout the rest of the year, triage next on London, the colorectal study and then some of the hematological assays towards the end of the year. Is that right?

Yes. And if you look at the presentation, we have on slides 6 and 7, there's all the targets for all the different areas from the assays, the trials, the vet and the capture. And there's two pages of them just to be accurate if you want to refer to that, we've kept that up to date.

Really, really professional breakdown. Thank you very much. I'm excited to see as the platform and the company matures, particularly given COVID. I mean, this really has the potential to kind of in the words of our President be a game changer. So it is exciting. Thanks.

Thank you very much. We're excited too.

Nathan Weinstein, Aegis Capital.

Good morning, guys, and thanks for taking my questions. So if I can perhaps you could just remind us about the Octamer acquisition that you closed early in the quarter and what was exciting to you guys about that? And then has integration turned out as expected?

It's actually funny. We planned this obviously in the last few quarters of last year, we got to know Dr. Schomburg quite well from our science advisory board and part of having a very robust platform was having a very good control, which is the recumbent nuclease homes.

And there are very few people in the world who can make them well, actually very cutting edge and very new, but it's a really key part of the level of robustness that we currently have. So we've thought about this a lot. And we want to control our entire supply chain, which given what's happened since then it certainly wasn't what we predicted. But some it's been very helpful to be having the key components that we have under our control.

So the main purpose of it all was to inherit that company's ability to make recombinant nucleosomes, which is the control in all the things we do in the assays in the human assays in the capture program, I and everything and the antibodies, optimum age makes excellent nucleosomes, and we've been we've been consuming them.

So part of licensing, we're doing our own products. Obviously, we're a big part of what we want to do going forward is licensing because there's no way if epigenetics is attempted as widespread as it seems to be to us. It is applicability. We're not going to be able to do it all as a small company or even medium company. So we'll start licensing and we've always had the vision to license. But if we can license where we grant the rights to use our intellectual property, which we have a huge amount of now, but also provide the consumables, the nucleus items and the antibodies.

We can keep a good track of how much someone is using and therefore, how much product they're making and also stop companies from coming around because we can tag the antibodies and the nucleosomes. So it was a very good strategy and our antibodies had actually come to--sorry nucleosomes had come through Shanghai and which had been tough obviously in the early days of the pandemic because that would have shut down.

So it was actually I'm very lucky. We did it when we did. It's been a very good process and we have not been aggressively marketing them during the pandemic, mainly because we've been very busy making a lot of nucleosomes for ourselves obviously, in all these programs, we've been wanting to do the integration so we can understand how to make the nucleosomes and really develop ourselves beyond the team in Munich doing it.

And we're looking to bring as much of that back into our headquarters in Belgium. So that's a go-to place and we will switch from the integration and making things for ourselves to start actively marketing the nucleosomes because the ones my document unbiased now a very good and we're learning to mass, produce them and mass producing them and tagging them means you bring the cost down a lot.

And it also means you can control the supply chain and also control what you give to other people in licensing. So a very key aspect of what we do, and we are thinking big that this could become a very big piece of the epigenetics market. So we're trying to make sure we've thought of all the things that we need to do, and this is a key part of it.

Thank you. And then perhaps just one more for me. If we think about the supply chain that leads to your assay, just any disruption there from COVID, and just in good times is that tend to be a number, a lot of vendors and easy to get the supply that you need?

So the fantastic thing with our process, unlike sequencing that all the other things circulating tumor cells. It's actually I mean, it's been a lot of work, but it's very simple in its in its heart. It's the antibodies and the nucleosomes controls on magnetic beads, which are made by dozens of companies.

So we aim to be manufacturing in our facility, the key components for when we start producing products and licensing ourselves. There are some supply chain issues because obviously, we're looking at dozens and dozens and dozens of nuclear targets. So we don't manufacture our nuclear segment it into. We've got some utility and developed or an antibody.

So we have been we still buy some antibodies. We still buy a range of things from different groups. So as I said, there have been some of those that have been held up a bit. And we've typically, as part of what we do, trying to find at least two or three supplies for all key components so that we're not clogged up, but there have been some disruptions and things have been coming slower.

And there's been like with everyone of this crisis, but it hasn't had a major impact on operations because we're doing a lot more ourselves and we've tried to have a few different suppliers and eventually things do it has been a bit slower during this crisis, but some supplies do tend to supply even if there is a bit light. So we'll be trying to think ahead and order larger amounts in the areas we're not producing ourselves.

Cameron, thanks so much. Thank you.

Thanks, Nathan.

(Operator Instructions) Anita Dushyanth, Zack Investment Research.

Hi, good morning and congratulations on the progress. I just have a couple of questions also on the COVID in the specialty space and just to have a better understanding of how the COVID product go to the regulatory path.

Could you discuss the next steps in what you're doing that? And also considering this pandemic could subside temporarily and they said to us that there is a possibility of recurrence maybe a couple of times later in the season. How do you sort of expect to rollout this into the market? Maybe there is some lumpiness in certain quarters and then it's kind of storm related?

Yes, absolutely. So the next steps, and we're doing a lot more clinical work. So the assays have, as we've seen discriminate extremely well between COVID and normal patients. Now we're going through a serial sample from the same people to see what the outcome was and how early we could predict that outcomes, obviously, and we have some very good clinical partners who have collected samples for this for a lot of different questions, I mean, including that.

So we'll have the next step is to see where the discrimination we found could be useful along the lines that we've talked about. So that's all-in process and they're collecting a lot. And now that we've had very good proof-of-concept data, getting keener indicate, obviously because as Jason mentioned earlier, it's a potentially a massive use to the clinic if we can show what we're looking to show.

And so they've been extremely helpful. And a quick in getting us samples and running. So these are not being run ourselves. We don't run an infectious lab, so we cannot we don't have the protection for our staff to be running them so that these are all being run in hospitals where the COVID is being treated and protected.

So we've been shipping them kits. So again, it shows the robustness of what we do, the fact that we can ship kits and they can run them. It otherwise would be very difficult to have done it ourselves because we don't run a lab that can run infectious samples. So the next steps are to see the value in all the things we're looking at. If we can find something that is useful, and we'll look to launch a product in the clinic in Europe. That will mean a CE Mark, which are getting approved quite quickly now.

And that depends again, what platform we use we have the very simple plate format, which has its uses. And we also have the magnetic beads, which can be adapted to many platforms, including one of the ones which we have in Europe and the one we are working with focusing on in China. And that will become obvious once we know if there is good clinical utility. And then yes, there are there are I mean, the COVID does have the potential to work some lanes foreseeable future until there's a vaccine. So we'll see how that goes.

But also don't forget the same net mechanism is very common to a lot of other diseases, which are very common in normal times the ammonia and insulins outbreaks. So I think if we can show clinical utility that could well be a strong utility going forward and millions and millions of people hospitalized every year from those as well.

So I think it's the same platform as the same assay. So we're seeing where we can help, but I think that will become obvious once we see what the clinical utility is and we can give a good timeline and plan for that once we know, but we're very actively working on it.

Well, that was helpful. Thank you. And regarding the veterinary space, does the hemangiosarcoma and lymphoma are they specific to certain breeds in the canine? And are you also looking at detection in other animals?

Yes, dog cancers is a little different from human so far as because of integrating I guess in a limited, particularly have dogs are very inbred. So they are much more prone to specific cancers. So yes, I will go through the brief because that's a bad question, but there are very specific.

So a lot of cancers in a lot of different breeds of dogs. It's very common to get one particular type of cancer, often over half the cancers, in particular breed of one particular cancer because of the in breeding. So it's something which is actually quite breed specific, which is actually very helpful because then you if you have cancer and a certain breed, you can have a very good guess at what sort of cancer it is.

And that's again issues which the reason we've used our vet schools to do all this work is there's obviously some very specific knowledge there, which is not in currently in Volition, but very much in Volition Veterinary in Texas. So they targeted cancers, which are very common in the breeds, they see a lot and very common in dogs overall, so that it could be very clinically useful and that's why they chose the cancers, which we looked at. It was extremely encouraging to see the discrimination that we did so early in the program.

This was really the first shot at it and it was some very encouraging, as far as other animals go and anything with DNA has the segment very similar nucleosomes. So we've had preliminary discussions on a range of other animals, but we thought the new cubit process, let's go through dogs, launch diverse products, and then we'll look at the other animals.

But the most obvious ones are cats obviously, and there's obviously some agricultural is logical uses as well. But that's really a next year story while we get dogs through the process. And then add the other item was on, but there's if we launch successful products in the dog space, there's no reason to think we couldn't do in a wide range of other animals because they will have the same problems, they all get cancer and they will have the same nucleosomes.

So it's something which has a potential very large value for all those areas. But that's something we'd really start to look to license out even from a vet subsidiary because it's a lot of work and all those things, but it would be the same platform. So it could be done very quickly with groups that are very specialists in those other animals and that'll be a process in the future.

And I presume that you're possibly after launching this by the end of the year, looking in other cancers and dogs?

That's correct. They've collected in Texas, a range of different cancers in different dogs. And so the process forward is not just more assays in these cancers, which obviously be helpful. It's good if you can have a panel of two or three, which is even better than these.

And obviously, each assay doesn't cost a lot of time, a lot of blood. So you add more assays if you can get better discrimination. So they're in the process of doing that. And also the process of looking at other cancers, and we expect some data on that side in the short to medium term and then do bigger trials and launch products in those as you get them.

It's very important to remember how common cancer in dogs and how dire the current situation is in detection of cancer in dogs. Because as Jason mentioned earlier, it's very tough to ask those questions. It's very tough to scan it and animal because they move, they won't stay fields obviously, and human proteins don't work in animals for obvious reasons.

So it's an even more dire situation in diagnostics, in animals than in humans. So potentially a very, very big opportunity and one that we're very happy with the partnership we have with Texas A&M because they really know what they're doing in the vet space. And we're providing the assays and the know-how from the epigenetic side and they're providing the veterinary knowledge that's a very good unit.

Yes. Thank you. And lastly, regarding the cancers studies that are going on in human populations, so geographically, also the population is exposed to different type of cancer so do you plan to sort of license in partner in different regions?

Yes, absolutely. So very good questions. So we want to become experts in epigenetics and the assays and intellectual property will launch our own products because we think we can do that with what we have in the trials we're collecting. But I think that's going to be in the epigenetic space is going to be far too big for one company to launch products in all those areas. As I mentioned, all the different cancers as a lot of other diseases are showing a lot of big epigenetic component, even COVID, which is a virus because of immune response.

So I think this can be very, very important in a lot of areas. So the first revenue will come from our own products and I think we aim to layer in more and more licensing. And key to that is keeping control of the key components ourselves, which we can sell and also keep control of to really ascertain what's the volume of sales from the licensees.

And so we're building it all up for our first products but also to be very aggressively licensing. And I think the licensing will become a bigger and bigger and bigger share of what we do as it become so widely applicable in a lot of areas as we expect. And so we'll wait. We launched the first pre-production and really aggressively launch.

Great. Thank you. That's all from me and Dan, good luck on the releasing data.

Thank you. Hopefully we can be helpful in a lot of areas. Thank you, Anita.

Thank you. We have no additional questions at this time. So I'd like to pass the floor over to management for any additional concluding comments.

Thank you very much for coming on the call today. I know it's a difficult time for everybody, and we really appreciate your interest at this very difficult pandemic time. And I really look forward to all the milestones are for the rest for next few months in the few quarters and look forward to speaking to you on the next earnings call. Thank you.

Ladies and gentlemen, this does conclude today's teleconference. Once again, we thank you for your participation. And you may disconnect your lines at this time.