Welcome to the VolitionRx Limited Third Quarter 2016 Earnings Conference Call. [Operator Instructions]. I would like to turn the conference call over to Mr. Scott Powell, Vice President of Investor Relations for VolitionRx Limited. Please go ahead, sir.

Thank you, and welcome everyone to today’s earnings conference call for VolitionRx Limited. This call will cover Volition’s financial and operating results for the third quarter ended September 30, 2016, along with a discussion of our key upcoming 2016 and 2017 milestones. Following our prepared remarks, we will open up the conference call to a question-and-answer session. Also on our call today are Mr. Cameron Reynolds, Chief Executive Officer; and Mr. David Kratochvil, Chief Financial Officer of Volition. Before we begin our formal remarks, I’d like to remind everyone that some of the statements on this conference call may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended that concern matters that involve risks and uncertainties that could cause actual results to differ materially from those anticipated or projected in the forward-looking statements. Words such as expects, anticipates, intends, plans, aims, targets, believes, seeks, estimates, optimizing, potential, goal, suggests, and similar expressions identified forward-looking statements. These forward-looking statements relate to the effectiveness of the company’s bodily-fluid-based diagnostic tests as well as the company’s ability to develop and successfully commercialize such test platforms for early detection of cancer. The company’s actual results may differ materially from those indicated in these forward-looking statements due to numerous risks and uncertainties. For instance, if we fail to develop and commercialize diagnostic products, we may be unable to execute our plan of operations. Other risks and uncertainties include the company’s failure to obtain necessary regulatory clearances or approvals to distribute and market future products in the clinical IVD market; a failure by the marketplace to accept the products in the company’s development pipeline or any other diagnostic products the company might develop; the company…

Thank you Scott. And thank you everyone for joining Volition's third quarter 2016 earnings conference call. I'd like to thank you all for taking an interest in Volition at this very exciting time for us. I first like to review some important Q3 events. The third quarter of 2016 marked an important quarter for the progress in our commercial launch of the NuQ colorectal cancer screening Triage hours test also known as the three tests in Europe. I'm very happy to be able to announce now the completion of our NuQ 's Triage test validation study last week. This means that we still expect to obtain CE [ph] marking late this year and hope to be ready for commercial launch in the EU in early 2017. We intend to discuss this in greater detail around the JPMorgan Conference in early January of next year. This test offers European healthcare systems a simple and easy to use blood test which can be used to treat Triage patients who test positive in a fecal immunological test FIT for Colorectal cancer. This is very exciting as we anticipate coming to market with something that we feel meets a pressing and immediate need in several European countries. We plan to initially focus on launching our NuQ Triage test in EU member states which have an aggregate screening age population of approximately 148 million people. [Indiscernible] organized Colorectal Cancer Screening programs in 14 of these 28 EU states with a further 10 countries offering some form of public or private accessible screening. After much analysis I believe that commercializing this product a single normalized FA is the quickest way to generate revenue for our proprietary Nucleosomics platform. Being a single normalized FA we believe we can make the product both very cost effective for the…

[Operator Instructions]. Our first question comes from the line of Bruce Jackson with Lake Street Capital Markets. Please proceed with your question.

So a couple of questions around the Triage test. So I'm assuming that you've selected the markers and you do have CE Mark for each of those individual tests yet and what are some of the rate limiting characters in terms of being ready to have a saleable products by early next year?

So I will answer that first one, yes we chose the panel a month half, two months ago. So we could get a CE mark this year and on our assays we had previously CE marked as separately for the blood market. So that's why we could do it as quickly as we have. So we have CE marked a range of them individually for the blood market as a front line test. So we chose from those to make sure we could do it quickly enough. So that’s all that have been very good and it shows the forward thinking we had from last year to start the CE marking progress to make sure that it's a low risk launch. So we’re very confident with all of that. As far as right limiting [ph] I guess there are several factors involved in the launch itself and the production of the kits, the facility we use currently is CE certified so they can make large batches of a few thousand plates per day. So that's more than enough for our national program production for a year in just a couple of days. So that's not a problem. The antibodies used to roll monoclonal lines that we've developed and had developed quite a while now. So that's not a right limiting issue, the CE marketing is obviously a time issue. We're still confident we can get that done by the end of this year about the end of the year but that shouldn't be too much longer or shorter if it is. So I don't think there's always something that comes up and you can never guarantee anything but we're quite confident of the schedules we have and being analyzed the platform system the benefits apart from the cost and the ease of use and all those other things it's a much more low risk launch because you not relying on new equipment or your own equipment so because they're manualize their plates, it comes down to the plates, the antibodies and the manufacturer and we're very confident of all of those. So I think we're in very good shape. I guess time always that will tell but at the moment we're very confident and very relaxed with our schedules.

And then in terms of the sales and marketing components see if you’ve identified some countries with screening programs are good candidates for this test. What's the sales process like? Do these countries operate as a review process or a tender process and what's the likelihood that you can get a contract signed and start generating revenue sometime in 2017?

We chose five different countries and being Europe the five customers but they're all little different. I can discuss them with you offline in more detail but we have done a lot of research through a full time marketing officer, Louise Day and also through [indiscernible] so we have a lot of information and attending the big conferences where the country screening programs 10 [ph] has been very helpful and in lightning as to what they will do. As you know we just attended the World Endoscopy Organization last month in Vienna when all of the target countries and people were there and we've also started visiting each one of the target five countries and we have had a very good response. So each one is a little different. We would hope very much to get some very strong traction in at least a few of them soon. We have had a very good feedback, it is absolutely a pressing need for those governments and those countries. So we're very hopeful. It's very hard to give an exact time scale but I would be very surprised if there wasn't some very good traction next year as we launch because of the immediate need, it's very cost effective and colonoscopies are -- capacity is a real problem in every EU country. So we'll have a lot more information and we'll have some more information around JPMorgan, will have visited some more of the countries in person but we have a very solid plan and we're implementing it now.

Our next question comes from the line of Chad Waltz with the Benchmark Company [ph]. Please proceed with your question.

Let me push a little bit more on what the questioner just asked. In terms of the details [ph] process and recruit process in Europe, you’ve launched let's say early next year, let's say in the first quarter. You can begin to sell the product into those countries without any further regulatory process that you’ve to go through. The reimbursement process probably going to take a year or so to get, one, am I right about that and secondly how do you generate cash in 2017, if that’s the case?

I wouldn’t say Q1, I would say very early Q1, I'd be surprised if we didn't have the CE market. We’re planning to being at late December but let's say it is like -- I don’t think it will be but it will be generating not so much but we will be ready very soon. So once you’ve the CE mark you can legally sell in those 28 countries at a range of other countries around the world who would accept the CE mark. It's usually the private payer markets in other countries outside the U.S. particularly in Asia or in other regions. You can use the CE mark to sell to private player [indiscernible]. So there's always some work in each country sometimes it comes down to the pathway needed obviously giving blood each country is a little different, how that will happen whether it's your local doctor or a center those kind of things. We're working on some of those programs now and hope to have some news on that in the next quarter. So there is always a little bit of work to do but we can legally sell it in those countries. There is no more work from the CE mark point of view but sometimes each country wants a little work done just on their own processes which we're very happy to do because we want to make sure that we do the test as well as we can that we help where we can, there maybe some I mean it's a very simple test but different countries, if is a small lab where the work is done we may do it manually on small machine, we're looking at a machine that does a few play today or if it's a centralized facility like in…

And I guess concentrating on Europe, can you just provide an update on the U.S. strategy?

Absolutely. And that's -- the work we've done in the U.S. we have done Dr. Terrell who we took on in January full time has been excellent. He's been discussing the rollout plans for the U.S. in several different ways. The Triage test is probably not one for the United States because according to FIT it's not something widely used in the U.S. So I've had a lot of discussions with him and he with all of other groups as to the best path into the U.S. So our thoughts are the first test in the U.S. will be the front line test either as a screening or symptomatic population as we discussed I believe to [indiscernible] to go. We’re looking to do through a 5(10)k in the first instance. We've had several [indiscernible] from CROs and the 5(10)k's. We’re looking in that million plus or minus to do with the sample size needed. It's very much of our plan from what we had but I think as we discussed on the last call a company our size really cannot try to do too many things and I think revenue next year and the launch is a very good thing for us. So we decided certainly for the last two quarters and probably into the next quarter to really to focus to make sure we make this Triage test a success because this will be a real foot in the door with all the European governments, it will show that we have a test at a platform that works and provide us with very significant revenue for a company our size, but that's not to say by any means we're not serious, we’re not very active in the U.S. Dr. Terrell has done a fantastic job in setting up a plan for us. So when we push the button it's all ready to go so far as what we're doing the CROs. We're putting together a strategy for the FDA to approach them when we're ready but we really didn't want to go half loaded too early. We wanted to make sure we focused on the Triage test and succeeded so that's still very much in the way and when once we hopefully have a successful launch of Triage test then we will fix our attention back onto the 5(10)k process in the U.S. for the frontline blood test.

Okay. I guess looking at the 10-Q that was announced, there is a discussion in there about financial reporting. Could you talk a little bit about the delinquencies and how you’re fixing them?

Doing [indiscernible] reporting requirements do you mean or in controls? Obviously it's a small company and we may connect to this anything beyond what -- but as a small company obviously we never had the 3 or 4 people necessarily for the controls in a single location and as you’re probably aware [indiscernible] is fast approaching a company our size. So if we’re at a valuation we’re now on June 30 we will have to make all those things right next year obviously it's coming year. So we put those issues into the 10K infused because they are, a company our size does not have the same control as the large company. We’re very much aware of that and it's part of a growing up as a company. So we expect to probably have to do [indiscernible] next year and all those issues will have to be solved and we take it all very seriously and I think we have controls which are certainly good enough for a small company but as we intend to very successful and a large company we’re in the process of putting all those in place and that’s an issue for everything we do if you think looking at the last few months we're getting a bigger trial with the Danish samples, we're getting a bigger facility, we're getting more staff, more admin staff because those are not costs which you went in on a very small company for the burn rate but it's something which we obviously are taking very seriously that includes a new computer system a whole lot of things which we've done a lot of work on and will come to fruition next year but if you look at just burn rate for example, the net loss of course which is…

Our next question comes from the line of Brian Marckx with Zacks Investment Research. Please proceed with your question.

Cameron regarding Triage how does it work with the National [Technical Difficulty] programs in the European countries that your initial targeting, is it essentially a binary decision that you're either included on the screening programs or you're not included nationwide or is there some sort of evaluation period and perhaps in local or regional areas before they would roll it out more widespread?

Ultimately as we've discussed we've got quite advanced discussions with some of the countries we're talking to and there's very little pushback on the sort of the cost because it isn't a huge cost for the systems that have a pressing need. It's a lot of money for us but obviously national screening program it's not going to break the budget so to speak. So a lot of it comes down to how it actually would work in practice which is I discussed with Bruce a little earlier comes down to the type of platform we launch on so they look at it in terms of a pathway design study which can take a few months perhaps three or four for no more than six where that is make sure the labs can run that many samples on that sort of machine, people will attend either one facility or the local GDP that kind of issue. For example Denmark has half a dozen regions. So we wouldn't want to rule -- but it's kind of little different like France has a national screening program, it's very centralized where almost a lot of it goes through one center for such a large country where some countries are more decentralized, so is horses for horses for different countries but just use Denmark. Obviously we have worked with them quite closely. We look to the very first product launch in one or two regions of the most to make sure we really get it right because you don't want to launch an everywhere just to be get it done quickly and then make mistakes because obviously as you’ve been largely dealing with you want to make sure we do the best thing for the patients but it's not a two year trial or…

Our next question comes from the line of Yi Chen with Rodman & Renshaw. Please proceed with your question.

So I’ve got several questions. So the first one being so what exactly will be your pricing strategy for the new Triage [indiscernible], what will be your gross margin that you will be expecting moving forward? So that’s my first one.

Okay. I will start with them one at time, I will do one at time. Yes, so the pricing. So obviously the -- as a single normalized assay that’s a scientific way of saying two assays, it isn't going to cost us a lot to make. So the profit margins obviously the first few batches you don't quite make quite as much as when you really get into full swing but we're looking to charge in the €50 range for the single normalized assay which is really talking a small amount per assay that’s a very, very healthy margin north of 70% or 80%, I can't give the exact details because we have got some fine details but it's extremely healthy margin and it's something which is very -- it's very easy to sell because it saves them a lot of money and a lot of lives, what we do so it returns a measurement we're doing the health economics now. We can publicize that once we finish it all but it's a very economically sound decision for them. Unlike most things which cost the money, this saves them a lot of money or allows a lot more people through the same system which is ultimately what they want.

And then my second question will be so based upon the current volume of FIT tests that you're seeing in the -- what volume can we reasonably expect for the NuQ tests?

That's a very good question, we can answer that once from country by country but I can talk in generalities. So if you take the entire I can give you the overall potential European market which is the top market we will never get the full amount and then I can give you sort of an a feel for country by country how many tests that would entail. If you just want to do the numbers for what's potentially you know in 5 or 10 years' time there's approximately 150 million Europeans of screening age about 6% are FIT positives if they were all to have them which they won't so I will cut them down but just take that number, makes about 9 million, 9 million being 6% of 150 million and then if they do it every two years which is normal screening program that's about 4.5 million a year that if you take compliance into account at about 2/3rds which would be the maximums. You're looking around 3 million tests per year at the most but that's not what we expect of course, just as penciling and the arm waving is the total market. So country by country or a small country you're looking between 30 million, 40 million, 50 million , 20,000 to 50,000 tests per year. You know talking more like Ireland, Holland, Denmark under 100,000. If you're talking France or Germany, United Kingdom or England you looking in 100,000 to 200,000 FIT positives per year. So it depends on your view on which countries and when but if you had -- some countries do not have FIT programs yet we have waving [ph] so you're on the second wave become part of the solution before they start rather than trying to fix the program that's not working. The easiest target is obviously trying to fix programs which are FIT test now that have just become overwhelmed with colonoscopies but the second wave we aim to approach the countries which are about to get into the FIT programs to fix it before it breaks if that makes sense. So if you were to just iterate overall, three million would be the theoretical maximum, maximum obviously not what we expect but you get that in chunks of between 30,000 to 200,000 test depending on the size of the country you sign up. And if you're looking at are 80% margin which is probably reasonable. I mean that’s a product margin it would take in the range of five, six countries depending on the size to become profitable as an organization for the current burn rate.

Okay. And then my last question will be what's your expectation for the sales ramp up in 2017?

We have not given guidance on that as of now and I think we've done a lot of work and we're very active but I think we're probably more willing to do that on the next earnings call when once we've had the CE Mark granted which again we expect late next month or at the worst in January and we would have a lot more meetings with those target countries. So I don't think we're prepared at the moment to issue a guidance on that. David is that correct?

Yes. We're currently not providing guidance but I think you’re exactly correct in terms of the timing on when we should have a better indication of what's happening in the marketplace and how could things will be adopted.

Our next question comes from the line of Bruce Jackson with Lake Street Capital Markets. Please proceed with your question.

I just wanted to ask a follow up question on the new [indiscernible] pipeline. So you’ve got the pancreatic the lung and the prostate in the pipeline, is pancreatic still your lead candidate in terms of the test that’s going to follow after colorectal or -- any thoughts maybe moving the party's around?

Yes, we have part the others -- we'll have our new facility up and running in the end of Q1 we think or really Q2, we got to fit out the new lab and those kind of things and then we can really do more than one or two things well at the time. So pancreatic is still very much the next cap off the ring. We've been working on some other markets which we're reasonably excited about in pancreatic cancer. So that's the reason and we have a large study already signed up with the [indiscernible] German group. So that's something which if the Triage gets traction we expect and we have the extra lab space that would be the first to cap off the rent very much and I think it's something which we really had a lot of value to the company have been successful. So we have the samples. We are working on some new markets and old markets to run the trial and having the samples themselves. It would once we pressed the -- when we decided to pull the trigger on the trial again it could go very quickly as we have samples, and the antibodies -- in the background we're developing our existing market as well as a few new ones for pancreatic so that's something which wouldn’t take a lot of time once we do. And don't underestimate I guess -- I haven't discussed it no one's asked this on the call so I will quickly mention it but the new study we have with the Hvidovre Hospital in Copenhagen for those 30,000 patients. Don’t forget in that population not only we're getting 30,000 patients of reach [ph] of the senior age which will mean there's a lot of other diseases and…

Thank you. There are no further questions at this time. I would like to turn the call back over to Mr. Reynolds for any closing remarks.

Thank you very much everyone and thank you all for taking an interest in Volition at another exciting time for us as we transition the company from research to production and actually having our first product in revenues. I couldn't be happier and prouder of the team we have, the trials is been running and the work we're doing is very exciting field at this time for us and it's all coming together very well and I look forward to updating you further as we reach these milestones in the coming months particularly the CE Mark and the product launch as well as the other trials and background work which we have going on. So I thank you all very much for your time.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.