By Steven Ralston, CFA
READ THE FULL VNRX RESEARCH REPORT
SIGNIFICANT OPERATIONAL UPDATES
Administration is implementing a important value slicing program with the aim of making certain that Volition (NYSE:VNRX) is money move impartial in 2025. Value reductions taken throughout 1H 2024 resulted in a 15.9% decline in working bills. Value discount measures have been carried out in all three areas of R&D, G&A and gross sales & advertising with the intent of attaining a $10 million discount in annualized bills. Among the actions embody that the Administrators intend to take 50% of their charges in fairness for a least six (6) months, that senior administration intends to take a share of their salaries (between from 10% to 50%) in fairness for a least six (6) months starting from 10% to 50% and that the funds of any money bonuses are postponed indefinitely.
Administration expects that income from Nu.Q Vet Canine Most cancers will speed up throughout 2H 2024 pushed by the product launches by two massive distributors, Antech Diagnostics (a part of the Mars Pet Care Group) and Fujifilm Vet Methods. Antech efficiently transferred the processing of the Nu.Q Vet Most cancers take a look at to its proprietary Aspect i+ Immunodiagnostic Analyzer point-of-care diagnostic platform and introduced the launch of the take a look at within the U.S., Europe, Australia, India and Singapore at an aggressive listing value of $35 to veterinarians. Fujifilm Vet Methods introduced its the Nu.Q Vet Most cancers take a look at on the World Veterinary Most cancers Congress held in Tokyo in March 2024 and launched the product all through Japan on July 1, additionally attractively pricing the take a look at beneath $40.
In the course of the second half of 2024, administration will give attention to negotiating a licensing settlement within the human house. In early July, PharmaVentures Ltd was engaged to offer strategic recommendation and transactional assist for licensing offers for Volition’s oncology and Seize PCR efforts.
On the commercialization facet, thus far Volition has acquired $23 million from signing preliminary agreements and milestone funds from Nu.Q Vet. In reference to the availability settlement signed with Heska, administration expects to obtain a $5 million milestone fee based mostly on the event of Nu.Q Feline Most cancers Check throughout the subsequent yr and a half. Administration additionally expects to obtain licensing milestone funds from Nu.Q NETs and Seize-PCR.
In early August, VolitionRx accomplished a Registered Direct Providing of 12,727,273 widespread shares at an providing value of $0.55 per share. Web proceeds are estimated to be roughly $6.4 million. As well as, milestone-linked warrants have been issued which have the potential to offer gross proceeds of an extra $14.5 million upon the train of those warrants. H.C. Wainwright & Co. acted because the unique placement agent for the providing.
The 2-year Sequence A warrants are exercisable for as much as 12,727,273 widespread shares are exercisable at $0.57 per widespread share with the expiration additionally linked upon an announcement of a important settlement to develop and commercialize a product, know-how or course of within the human house with milestone funds.
The 5-year Sequence B warrants are exercisable at $0.57 per share for 12,727,273 widespread shares with the expiration additionally linked upon an announcement of the receipt of an FDA approval of a Nu.Q product, know-how or course of within the human house.
Administration additionally expects to acquire additional significant authorities non-dilutive funding. The corporate has both utilized or is within the technique of making use of for $25 million in non-dilutive grants from funding our bodies within the U.S. and $18 million inside Europe.
VolitionRx offered an replace on its substantial IP portfolio. At the moment, the corporate holds 86 granted patents with an additional 128 patent purposes pending.
VolitionRx is creating Confidential Licensing Information Rooms, which can retailer scientific and scientific information from the finished and ongoing research. Via the rest of 2024 and onwards, a important quantity of scientific and scientific information referring to Nu.Q NETs (significantly for sepsis) and Seize-PCR (a possible breakthrough most cancers detection technique) shall be delivered to those Information Rooms in order that events can evaluate and analyze the industrial potential of Volition’s IP. These Rooms will create environments that ought to stimulate severe investigative discussions and promote a path towards licensing agreements.
UPDATE – Nu.Q VET CANCER TEST
Late 1Q 2024 Nu.Q Vet Developments
In March 2024, Volition introduced the signing of a provide settlement with Fujifilm Vet Methods Co. Ltd. for the Nu.Q Vet Most cancers Check to veterinarians in Japan. The settlement permits Fujifilm Vet Methods to promote and carry out canine most cancers screening providers with the Nu.Q Vet Most cancers Check all through its diagnostic community of 10 central reference laboratories that serve over 90% of the 12,000 veterinary clinics and hospitals in Japan.
Between March 21-24, 2024, Fujifilm Vet Methods launched the Nu.Q Vet Most cancers Check at its sales space on the World Veterinary Most cancers Congress in Tokyo. On the Congress, Dr. Heather Wilson-Robles introduced a poster in regards to the Nu.Q Vet Most cancers Check.
2Q 2024 Nu.Q Vet Achievements
• Throughout 2Q 2024, Heska started providing the Nu.Q Vet Most cancers Check on its Aspect i+ in-house diagnostic platform.
• In 2Q 2024, product revenues from gross sales of the Nu.Q Vet most cancers screening checks and H3.1 kits elevated 68.3%, primarily pushed by stocking up by Heska (Antech) for the U.S. and Europe, and likewise by Fujifilm Vet for Japan.
• VolitionRx is making progress on the pre-analytics for the Nu.Q Vet Feline Most cancers Check.
Volition Veterinary continues to expanded its distribution community by new provide agreements. The Nu.Q Vet Most cancers Check is at present obtainable in
• the U.S. (preliminary product launch in November 2020 by direct gross sales being processed on the GI Lab at Texas A&M College adopted by IDEXX in January 2023 and Heska, an Antech/Mars firm in April 2024),
• the U.Ok. & Eire (launched within the U.Ok. and Eire by the Veterinary Pathology Group, and within the U.Ok. by Nationwide Laboratories, each November 2023),
• Portugal & Spain (DNAtech – product launch in November 2022),
• Singapore (SAGE Healthcare – product launch in November 2023),
• Taiwan (Vita Genomics – product launch in November 2023),
• Italy, France, Spain, Germany, UK, India, Australia, Singapore, Hong Kong & New Zealand (scil animal care firm GmbH, an Antech firm),
• Japan (Fujifilm Vet Methods – product launch in March 2024),
• Poland and the Czech Republic (VetLab Polskie Laboratoria Weterynaryjna – July 2024)
Anticipated Nu.Q Vet Milestones in 2H 2024 – 2025
• Fujifilm Vet Methods Co. Ltd launched for the Nu.Q Vet Most cancers Check to veterinarians in Japan on July 1, 2024.
• Throughout 2H 2024, Heska (Antech) will start providing the Nu.Q Vet Most cancers Check in Australia, India and Singapore and probably in different nations.
• In July 2024, VetLab (Polskie Laboratoria Weterynarjvne) introduced the launch of the Nu.Q Vet Most cancers Check in Poland and also will provide the take a look at within the Czech Republic.
• In reference to the availability settlement signed with Heska, administration expects to obtain a $5 million milestone fee (based mostly on feline product improvement) throughout the subsequent yr and a half.
UPDATE – SEPSIS
Late-1Q 2024 Nu.Q NETs for Sepsis Developments
• On March 26, 2024, administration confirmed that Volition accomplished the FDA Q-Submission course of, a pre-submission mechanism to ask questions and to request suggestions from the FDA previous to submitting a 510(okay) Premarket Notification. The FDA confirmed that Volition can proceed following a Part 510(okay) regulatory pathway.
2Q 2024 Nu.Q NET Sepsis Achievements
• Throughout 2Q 2024, Volition carried out an interim evaluation of over 450 sufferers, of roughly 1,500 sufferers within the consortium research being led by Key Opinion Chief, Professor Djillali Annane (Dean of the College of Drugs on the College of Versailles Paris Saclay and Head of the Vital Care Division at Raymond Poincaré College Hospital in Garches, Paris). This interim evaluation shall be introduced on the firm’s second Key Opinion Chief Workshop in September 2024.
• On June 3, 2024 an article entitled: “Understanding Advanced Chromatin Dynamics of Major Human Neutrophils throughout PMA Induced NETosis” by Atteberry et al. was posted on bioRxiv for peer evaluate. The article finds that Volition’s Nu.Q NETs H3.1 assay enhances the understanding of NETosis, which probably may also help determine potential targets for modulating the method of inflammatory illnesses, corresponding to sepsis, systemic lupus erythematosus and rheumatoid arthritis.
• On June 10, 2024, an article entitled: “Fast high-throughput technique for investigating physiological regulation of neutrophil extracellular entice formation” was revealed within the Journal of Thrombosis and Haemostasis (JTH) by Zukas et al. The article describes Volition’s novel artificial sepsis mannequin and emphasizes the significance of investigating neutrophil physiology as a way to higher perceive NETosis-related illnesses, significantly COVID-19 and sepsis.
• Throughout 2Q 2024, over 8,000 Nu.Q NET samples from over 2,500 sufferers with sepsis have been run and processed from the two massive retrospective sepsis research being carried out in Europe (a Sepsis Group Examine in Germany and one other on the Amsterdam College Medical Middle). Samples have been collected all through their size of keep (from admission to final result) in order that longitudinal information might be obtained and the trajectory of illness may be examined.
Anticipated Nu.Q NET Sepsis Occasions in 2H 2024 – 2025
Scientific research and different information on Nu.Q NETs for sepsis are being gathered into confidential Information Rooms throughout the summer time of 2024 for the aim of supporting discussions and negotiations with events concerning a possible licensing association.
• Administration believes there’s a life like risk that the corporate may enter right into a licensing settlement associated to Nu.Q NETs sepsis throughout the subsequent three quarters.
The information evaluation of the two massive European retrospective sepsis research of over 8,000 Nu.Q NET samples from over 2,500 sufferers with sepsis is being finalized. The aim is to full the research by the top of August in order that the research and information may be delivered into the Information Rooms and may be shared within the Key Opinion Chief Workshop in September.
In September 2024, the corporate’s second Key Opinion Chief Workshop, which is centered on sharing and advancing therapeutic administration of sepsis, will convene in Paris. The occasion shall be chaired once more by Professor Djillali Annane. Key information and findings from the newest research on sepsis shall be shared and mentioned, together with, however not restricted to:
• the interim evaluation of over 450 sufferers (of roughly 1,500 sufferers) in the consortium research being led by Professor Annane.
• the whole (or interim) evaluation of over 8,000 Nu.Q NET samples taken from over 2,500 sufferers within the two massive European retrospective sepsis research.
Between October 5-9 2024, VolitionRx shall be sponsoring its first Satellite tv for pc Symposium on the thirty seventh Annual ESICM (European Society of Intensive Care Drugs) Convention in Barcelona. Information from interim/ultimate outcomes from massive scientific research in addition to from upcoming scientific trials are anticipated to be introduced:
• two massive retrospective sepsis research (n = 2,500+) that have been carried out in Europe.
• SISPCT retrospective research (n = 971),
• Amsterdam UMC retrospective research (n = 1,713),
• interim evaluation of RHU Information (n = ~450 out of 1,500)
After the ESICM Convention, the publication of a lot of scientific research with massive datasets can be anticipated. Further papers are additionally anticipated from Volition’s Facilities of Excellence in 2024.
Dr. Andrew Retter is collaborating with Professor Annane and Professor Mervyn Singer on an article entitled “Neutrophil extracellular traps: a possible key part of the dysregulated host immune response in sepsis,” which can almost definitely first seem on bioRxiv for peer evaluate throughout 2H 2024.
Interim evaluation of a 500-patient research opened at Man’s and Thomas’s Hospital throughout 1Q 2024 could also be launched throughout 1H 2025. The research is evaluating 450 sufferers with sepsis to 50 wholesome sufferers present process cardiac surgical procedure. The research is anticipated to be accomplished in 2025.
After signing an settlement with Diagnostic Oncology CRO (DXOCRO) in August 2022 to assist improvement and scientific validation research within the U.S., DXOCRO carried out large-scale discovering research as a way to decide scientific utility of utilizing the Nu.Q NETs take a look at, at first for monitoring sepsis and later for non-Hodgkin’s lymphoma. In February 2024, DXOCRO was additional engaged to conduct one other vary discovering research of Volition’s Nu.Q H3.1 in vitro diagnostic (IVD) take a look at to be used in sepsis. Throughout 2Q 2024, the recruitment course of closed. By the top of 3Q 2024, the information evaluation is anticipated to have been accomplished.
UPDATE – Nu.Q CANCER
2Q 2024 Most cancers Achievements
A crew at Hospices Civils de Lyon, one in every of Volition’s Facilities of Excellence, accomplished the OncoProLung research, a retrospective evaluation of 70 lung most cancers sufferers. The research evaluated the potential scientific utility of Nu.Q assays for the prognosis and administration of lung most cancers sufferers by learning the assay taken at prognosis, throughout remedy and at relapse.
• An summary was submitted for consideration to ESMO 2024; subsequently, the summary was accepted.
On Might 5, 2024 an article entitled: “Lengthy-read sequencing reveals aberrant fragmentation patterns and origins of circulating DNA in most cancers” by Berman et al. was posted on bioRxiv for peer evaluate. The article found sure fragmentation patterns may be related to elevated cfDNA and nucleosomes ranges.
Additionally, a crew at Hospices Civils de Lyon accomplished a research on ovarian most cancers. Work continues on finalizing the manuscript.
A lung most cancers research carried out on the Nationwide Taiwan College was accomplished throughout 2Q 2024.
Anticipated Nu.Q Most cancers Occasions in 2H 2024 – 2025
Scientific research and different information on Nu.Q Most cancers are being gathered to be delivered to confidential Information Rooms throughout the summer time of 2024 for the aim of supporting discussions and negotiations with events concerning a possible licensing association.
• Administration believes there’s a life like risk that the corporate may enter right into a licensing settlement associated to Nu.Q Most cancers.
• When finalized, the manuscript for the simply accomplished research on ovarian most cancers shall be added to the firm’s confidential Information Rooms.
The lung most cancers research carried out on the Nationwide Taiwan College is anticipated to be revealed on bioRxiv within the September 2024 timeframe.
Between September 13-17 2024, ESMO 2024 (European Society for Medical Oncology) Congress will convene in Barcelona. An summary on the OncoProLung research shall be introduced.
UPDATE – CAPTURE-PCR
Seize-PCR is a novel liquid biopsy technique that allows the isolation of DNA sequences from CTCF transcription elements and extraction of cancer-associated DNA fragments from blood such {that a} vary of stable and liquid cancers may be detected by a PCR take a look at.
2H 2024 Seize-PCR Achievements
• In the course of the 1H 2024, Dr. Jake Micallef, Chief Scientific Officer of VolitionRx, and his crew have introduced Seize-PCR, together with the related information, at a lot of most cancers particular conferences in an effort to tell vital key opinion leaders of this breakthrough most cancers detection technique.
• Dr. Micallef and his crew proceed to conduct analysis in small affected person cohorts to determine different potential biomarkers and the related PCR checks to detect cancers, together with stable tumors.
Anticipated Seize-PCR Occasions in 2H 2024 – 2025
Scientific research and different information on Seize-PCR for the detection of most cancers are being gathered into confidential Information Rooms throughout the summer time of 2024 for the aim of supporting discussions and negotiations with events concerning a possible licensing association.
o Administration believes there’s a life like risk that the corporate may enter right into a licensing settlement associated to Seize-PCR throughout the subsequent three quarters
A paper on the Seize-PCR breakthrough most cancers detection technique is anticipated to be accomplished throughout 2H 2024 for peer evaluate.
o When finalized, the manuscript shall be added to the firm’s confidential Information Rooms to assist assist the industrial discussions with potential licensing companions.
UPDATE – LICENSING DISCUSSIONS & NEGOTIATIONS
VolitionRx has a considerable IP portfolio with 86 granted patents with an additional 128 patent purposes pending. Administration’s aim is to enter into licensing or provide agreements, significantly within the human house for Nu.Q NETs, Nu.Q Most cancers and Seize-PCR, and to start receiving milestone funds below these agreements.
A latest key exercise to attain this aim is the creation of Confidential Licensing Information Rooms, which can retailer scientific and scientific information from the finished and ongoing research. events within the realms of liquid biopsy, IVD, sepsis and/or oncology will be capable to evaluate and analyze all of the supporting information in a single place and in an atmosphere that ought to stimulate considerate fact-finding discussions and promote a path towards licensing agreements.
2Q 2024 FINANCIAL RESULTS
On August 14, 2024 after the market shut, VolitionRx reported monetary outcomes for the second quarter ending June 30, 2024. Whole revenues elevated 83.0% YOY to $395,797 in comparison with $216,310 within the second quarter of 2023. Service income (Nu.Q Uncover) elevated 131% to $116,090 whereas product income from gross sales of the Nu.Q Vet most cancers screening and H3.1 kits elevated 68.3% to $279,707.
Working bills decreased 24.4% from $9.77 million to $7.39 million. R&D bills declined 31.8% to roughly $3.72 million. G&A bills declined 13.6% to roughly $2.28 million attributable to much less scientific trial exercise with DXOCRO, decrease personnel bills and stock-based compensation; full-time staff (FTE) decreased from 21 to twenty. Gross sales and advertising bills decreased 16.9% from 1.67 million to 1.39 million attributable to decrease personnel bills, direct advertising & skilled charges and stock-based compensation. FTE decreased from 21 to 19. Curiosity expense declined 98.3% attributable to a discount of investable money.
For the second quarter, VolitionRx reported a web lack of $7.06 million (or $0.08 per diluted share for stockholders) versus a web lack of roughly $9.55 million (or $0.14 per diluted share) within the comparable quarter final yr.
12 months-to-date, shares excellent elevated by 16,1% to 82,669,335 shares from 81,898,321 shares on December 31, 2023. As of June 30, 2024, Volition had roughly $6.0 million cash-on-hand. Subsequently in August, the cash-on-hand was bolstered by roughly $6.4 million in web proceeds from a Registered Direct Providing of 12,727,273 widespread shares.
INSTITUTIONAL OWNERSHIP UPDATE
In the course of the first half of 2024, institutional possession has elevated to over 9% of the excellent shares. Notably, since February 2024, Lagoda Funding Administration, L.P. has elevated its holdings of VolitionRx from 3,882,850 shares to five,438,000 shares in August 2024.
VALUATION
Using a monetary mannequin based mostly on DCF methodology, which forecasts out to 2031, and makes use of a ten% low cost charge (based mostly on CAPM), a 2% terminal development charge and a terminal P/S a number of of 0.52, the indicated worth of VNRX is $3.60 per share.
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