Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the VolitionRX Limited First Quarter 2018 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference call will be opened for questions. [Operator Instructions] This conference is being recorded today, Friday, May 11, 2018. I’d now like to turn the conference over to Louise Day, Chief Marketing and Communications Officer. Please go ahead.

Thank you, and welcome, everyone, to today’s conference call for VolitionRx Limited. 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. 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 upon a number of factors that may cause the actual results or events to be materially different from future results, performance or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We do not undertake an obligation to update any forward-looking statements made during this call. I’d now like to turn over to our President and Chief Executive Officer, Mr. Cameron Reynolds. Cameron?

Thank you, Louise and thank you everyone for joining Volition’s first quarter 2018 earnings conference call. I would like to thank you all again for taking an interest in Volition at this exciting time for us. David Vanston, our Chief Financial Officer and Scott Powell, Executive VP, Investor Relations also join me on the call today. I'm absolutely delighted with the progress we're making on many fronts, which has been made possible by our growing expert team and our lab staff at our considerably larger 19,000 square foot purpose-built facility disability that opened last year. Our focus during the first quarter of 2018 was on advancing the development of our assays from the level of our past smaller trails to the analytical validity needed for large clinical grade trials and for products that can be run in laboratories and clinics worldwide. This development work will be the key to our future success. Furthermore, we have made significant achievements in many areas and we continue to be well within our target expenditures. We are extremely careful to minimize our cash burn rate and to keep it stable, taking into consideration our stage of development and the numerous activities that we are conducting. I was delighted in the first quarter to announce varying, encouraging interim results from the early stage performance of our Nu.Q test in the frontline asymptomatic colorectal cancer screening population study. To be absolutely clear, we have not yet selected the final panel for the product, but we have already chosen assays that are very statistically significant to move on to the much larger training steps from which we aim to choose a final panel for the launch of a frontline screening test. As part of this trial, we have run a range of other orthogonal markers, such as…

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

So it seems that Nu.Q has the potential to address a couple of huge markets, patients who are non-compliant with the current screening standards and patients who are compliant, but may not need a colonoscopy or may not want to go for one if that's an option. So how do you see adoption growing among these two groups, and which is going to be your initial focus? And then additionally, what are the major differences between the US, Asian and EU markets, which may impact your commercial strategy?

Yes. Very good question, Jason. I'll do with the first one first. I think as being a small company and one which obviously launching products is a long process and a complicated one. The best way to do it, as you said, is to start with the lowest hanging fruit and I think we’re the only company out there really developing routine low cost blood tests. So I think that’s the only way of really getting the compliant market to compliant. I think there's huge compliance issues with colonoscopies and with every single clinical test out there, all of the tests that measure blood in your stool. Nowhere in the world does it get, about two-thirds of the people end up doing either tests when they’re combined. So I think the only answer is a blood test and within blood test, ones that which are routine, which I mean basically do people actually take them in normal course of -- normal blood work. So that’s certainly -- I don’t think it’s going to be the case with the vast majority of the other tests on the development, they cannot be routine. If they need a large amount of blood and a whole separate lab and are very complicated and expensive, they'll never become a routine. So I think the only way of dealing with the compliance is what we're doing. So I'm very confident of that market. When you try to get into the rest of the market, it gets more complicated, because the colonoscopy is a very accurate test as is the exact test. So people who are currently doing those tests, until we get to the levels of accuracy that they have, the wise thing for everyone is – for them to continue to do those tests. So…

And then just one more quick question. I think it will be helpful if you could talk a bit about the advantages that differentiate Nu.Q from some of the other commercial tests in the market?

Yes. Absolutely. Thanks, Jason. There is a lot of – obviously, there is a diagnostic currently for everything, but if you take colorectal for example and that's the very closest to the products in the frontline, you can obviously have a colonoscopy, which is a fantastic test, it’s just very expensive and invasive, which means a lot of people don’t do it. And outside the United States, very few people have it as a screening test, because of those reasons. The only other viable option is to check the blood in your stool, some of the tests are reasonably accurate, such as exact, so it’s quite accurate. Again, the big problem with the test is compliance. A huge number of people will absolutely not do that test for a whole – range of reasons. So what we believe makes us very different is being a blood test. Everyone is very familiar with blood tests. The only blood test currently used in a wide sense for cancer detection is in prostate, the PSA, which is similar to our test in platform. It’s also a low cost analyzer and therefore routine. And it’s used millions and millions of times every year around the world. So we have very few differences with other blood tests as well. We're really looking to circulating cell-free DNA or rare events in the blood, you test in inherently going to be much more complicated, expensive and need a lot more blood, which means unlikely to be routine and routine again means it just be part of your normal blood work goes to any lab to be what, to be a routine test, you have to be low cost, you have to be lighter and that’s exactly what we are and we’re certainly not familiar of anyone else that’s really developed another platform for routine blood tests beyond the things we’re doing. So I think it’s very unique and I think it’s absolutely needed and if we continue to launch products and they’re successful, I think we can really change the way cancer is diagnosed, because it needs to be done better. It’s a tragedy, if you are found early and have the cancer removed, you normally have a very good outcome and people tend not to have that outcome currently, because they don’t get tested or there is not a good diagnostic for that cancer. So once we really solve both those problems, which makes us very unique.

Thank you. Our next question comes from the line of Bruce Jackson with Lake Street Capital Markets.

So just if we can get a quick update on the clinical trials. So with the first one last quarter, you had done 17 out of the 30 Nu.Q markers. So the first question is, where is that trial right now? And then second, I'm assuming that the training set is running concurrently with that trial. So curious to know where that one is. And then if you can remind people what happens after that trial is finished. I assume you’re going to be selecting the markers. I know, this is a lot of questions, but if you can just try to --? And then when does the 10,000 patient validation trial kick in and how confident are you in these timelines?

Very good questions. So background, the trial has been running well. We're doing them concurrently, absolutely. We’re finishing off this and running the training steps. The key difference on timing has been, we've been very resolute that to be run in the training set, the FAs have to be of the final validated -- everything exactly as it will be used around the world, as in the research kits. So as I mentioned on the call, we've done a huge amount of background work, trying to make our assays as analytically valid that they can be, reproduced anywhere in the world and for all the different uses we’re looking for them, including research kits, including all the other collaborations we're working on. One of the biggest things we've actually discovered, which is very much to the benefit of the – precisely to the assay is the calibrant [ph] recombinant nucleosomes. I think we’ve discussed it briefly before. It’s actually very cool that worked out the way, actually Active Motif and another group have worked out of way of getting a very good calibrant, which was never possible before even up to a year ago. So it’s not the actual assay itself, but the calibrant. What they’ve done is put together a bunch of histones with DNA, the histones are made in Ireland and shipped to China where they’re assembled and then all that is added is the one nucleosome structure that we are after from the assay. So typically obviously, we’ve discussed before, there are hundreds or thousands of structures on the nucleosome. So being extremely precise to exactly what you’re measuring was not possible until this breakthrough was made. So being what we are, we’ve now instituted these as the calibrant for all of our assays throughout the, everything…

And then if you could just tell us a little bit about Active Motif, so they’re privately held. We don’t have a lot of information about them, but if you can give us a sense of, what kind of labs they sell to and how much reach they have in that market that will be helpful.

Very good question and thank you. That’s something that I should cover. So we’ve worked, with Active Motif in a range of different areas for a while now, obviously that supply things which we consume, such as the recombinant nucleosomes. So we’ve come into very much, a lot of people supply antibodies and other factors, some are very good, some are not. We found them to be very good. So we’ve been working more and more closely with them. So it’s a bit of a two way relationship, we use some of their products and because that being so good with what we’ve used as with some others. We thought that would be the perfect people to distribute worldwide. And so this distribution, we don’t want to be distracted from our frontline process in the frontline trials. They will also be manufacturing the kits, they will also be distributing them and all the follow-up. So we don’t actually lift a finger beyond what we’re currently doing. And so we’re getting a royalty from them. So all of that goes straight to the bottomline. There is no extra cost that’s involved. And their business apart from some of the other antibodies and recombinants is selling these types of kits worldwide. As I said, we found them extremely good in what we’ve been buying from them. So we’re very happy to work with them. On the revenue side, a lot of people wonder when you’re selling for $7000, if you sell a few thousand, it gets very interesting. But our revenue stream, because we don’t want to do the work ourselves, we will be mostly 100 to 200 per kit, because it’s just a royalty stream coming to us. But that goes straight to the bottomline. But what it really allows you…

Indeed, does this mean that you’re going to start giving revenue guidance anytime soon?

Good question. David is here and I think we -- we think that demand for the kits is in the 1000s. We’re not sure when that’s going to be. So for the short term, we will not be giving guidance because and don’t expect massive revenue from research kits. It’s something which is nice, but it’s not going to become cash flow neutral for the company or anything like that. It’s nothing like the revenue from the frontline kits, but it’s – we expect this to add to guidance when it becomes clearer to us. I think it will be until we see the traction on and get a very good. Once we take the final panel and finish the training set for the frontline test and the Triage test, we should have a better idea, but certainly that would be the early side of this year or next year. David?

Yes. So I would see next year. I think, think of the research kits to validate and grow our platform more than a significant revenue stream.

But we’ll see how that pans out throughout the year and then we strongly expect to get revenue, they will have the sales next month and we strongly expect sales in Q3.

Our next question comes from [indiscernible].

Just a couple of questions. As you’re tailoring the colorectal screening product for different markets in Europe and Asia and the US, which all may have different sensitivity and specificity requirements, I’m just wondering if you feel the matter of tweaking the software, the algorithm for analyzing the readout of the diagnostic or do you see sort of a different set of markers required for each territory?

That’s a very good question. I think first of all, what we’re going to be doing is CE marking the product in the Europe and then trying that product on the agent trials and on some US samples, just to see if there is a difference, there may be, there may not be. There is some speculation that probably we’re hoping not, but you never know until you try. So if we were to get to the moment we discussed this obviously at length in the team, probably more likely to be slightly different algorithm than necessary different assays, but we’re certainly leaving to open to that, because obviously there are quite a few choices we can use amongst the interval. So I think in these situations, what you typically do is run the European panel through an Asian population, for example, if it works very well, that gives you a huge head start, because a CE marked product is much quicker to get approval for in Asia for example. If it’s not, you then turn the trial into a training set and then see, if it’s different combination of assays or the algorithm would actually give you a better outcome and then into a separation validation set for an Asian population or a US population. I would be surprised if there was a much of a difference between the US and Europe, but we can be surprised if we find out. There could be more of a difference with Asia, but the only way of really telling that is to run these trials. So as you know, we have a very large trial being selected with EDR in the US. We’re looking to get a smaller US population along the same lines to test our panels before we do…

And can you just remind us what the regulatory strategy is for the diagnostic and symptomatic patients and maybe different from the early reliance screening tests?

Yes. Symptomatic is different, just for the listeners who aren’t familiar. Frontline test is a test given to everyone, just because of the age, once you are 50, you are just much more likely to have cancer, colorectal for example. The Triage is used in conjunction with the test particularly in Europe and Asia. Symptomatic is obviously, if you have symptoms, you go to the doctor with bleeding in the rectal area or something cramps, those kind of things. Therefore, typically more late stage patients, if you are bleeding or if you probably not likely to be stage 1 as likely. So the question then, actually and there is two questions, it's an open question we’re still seeking advice on. It’s whether we want to rule in or rule out cancer. So it's been a -- like everything we do, everyone has a different opinion on what -- the clinicians particularly, what would be best, the rule in would tell you, we think you have cancer, go get a colonoscopy and they get it particularly value, looks at the other end of the curve to say, it's very unlikely you have colorectal cancer, you probably got a stomach problem or an ulcer or something else. So we’re still working on that and it's probably still the same pathways to decide between those two. But probably a different panel from the frontline and the frontline test particularly on your second or third screen, the stage one and the pre-cancers are by far the most important, where once you’re symptomatic, you’re much more likely to have the latest stage cancer. So as we discuss different assays better at different stages of the cancer and it depends on whether we settled on a rule in or rule out of these, both of which have merit and we can also give enough flexibility. We probably have a product that does both and in some of the commissioning. And I think in Europe, I just want to say colonoscopy capacity, but they probably want to rule out cancer. With the US, you could do both. So that is still one of the open questions. We try to think through things very carefully and do a lot of consultation and that product is the third one in line behind the two I mentioned. So, I'm sure we’ll take advantage of that in the next couple of quarters before we really finish that work to really, analysis of those samples with our assays, answer the question in which we can, or indeed both and then we can patch that to different test, different questions.

Our next question comes from the line of Raymond Myers with The Benchmark Company.

My first question is a clarification about the Active Motif research kits. You talked about the price being in the $100 to $200 per kit range. That's intriguing, because it's higher than I believe than the price we’re expecting. Why don’t you clarify then?

Sorry. I’ll just break it down. So what they sell us far is up to them. We obviously, it’s their product, we’re licensing to them. We’ll be somewhere below $1000 for a kit, which is not high. When we set $100 or less in the US, that’s the one test, which is just a few different depending on the assays from the 96. So that’s for the entire kit. So that would be a few dollars for however, how much they sell it for. But to be clear, it’s a very good question. We didn’t want to be involved in customer service and they have a lot of contact worldwide and they go to all conferences with these kind of kits and they have a lot of customers like us for different things. So we didn’t want to reinvent that we are very happy with their service and their products they have been giving us. So we decided to license to them, they will manufacture our kits for the research kit and chip them around the world and we get a royalty from that, which we would expect depending on the use and as a contract, but we will be somewhere $150 to $200 range depending on what the process is and other factors, but that is all pure profits. We don’t have to look to finger, they ship them around the world, they follow up, all those things, which ends up and understand all those things to do it.

And so will you not be manufacturing the kits either, this is like a royalty revenue at a 100% margin, is that correct?

Correct.

The outlook for expenses, I know you’ve always been very good about controlling your expenses, can you give us a sense of where expenses are likely to go this year as we approach commercialization.

Thank you. It’s a very good question. I think it will be the same in the same average burn rate on cash of around $3 million per quarter. If you look at the history over the last year as well, we’ve managed to keep in that range. We do not expect to see it significantly move away from that.

A very important point. I think a lot of people quite rightly have decided that and this has been something that I’ve heard for three or four years, how to do all these things with such a small burn rate. We do it, because we have the facility in Belgium, we have very strong support in the region there and we like to thank them again. Our team is very conscious of the fact that until we’re profitable, we have to keep things very low cost. Our collaborators have given us amazing access to samples as well as -- and we have a lot of support from a lot of groups around the world, because everyone is really desperate for blood test for cancer. So we're very, very mindful that it's shareholders’ money that we've been given and we have to use it extremely carefully. So we’ve never had a blowout in the amount of money we spending recently. In the near to medium future either, because obviously it’s all about the runway to get all the things we need done. So we're very, very careful.

And the last clarification, the $600,000 loan that you mentioned, is that something that you received in Q2 and is it included in the financial statements that were published for Q1?

No. That's -- we received a letter of intent and it will be given, we will take it down in Q3. So if you noted, it's not included in the quarter’s statements that you’re looking at.

Okay. So for Q3? Q2 or Q3?

It will either be Q2 or Q3, but it’s already, it’s gone through the stages and we know that we’ll get it. Timing will be one month.

And we strongly expect to be getting a range of these as we move from a product company, exactly what they want us to do and it obviously helps the strengthen the run rate. So we’ve been very -- it's really allowed us to build up the same in Belgium. All the mountain of work we’ve discussed has been done within the budget with a fantastic, and the team has pretty much doubled I think over the last couple of years in Belgium on the bench which has given us the flexibility to really do huge amount of work on the background of the assays themselves.

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

On Triage, the results that you expect to announce in Q3, will that include updated specificity and sensitivity and if so, will it be parsed by cancer stage.

Yes and yes. We would expect both of those.

And then it terms of initial commercialization of Triage, can you kind of just give us sort of a sense of what your thoughts are today.

Yes. Obviously, we’re a small company and distributing is a difficult issue. So what we've done with the research kits is we found a group of fantastic who have worldwide reach, who can do it. Obviously, some countries, we might have a small home advantage, some of the European countries, some in Asia like Singapore, but I think generally, our model would be for distributors, but we've actually been speaking to quite a few European wide and Asian wide distributors or for specific regions. Given the complexities involved in getting different European governments approved and some of the other areas, I think that's probably the best way to go. And we’ve also -- from the 27 cancer study, as we said, it’s going to be fascinating to see how our clinical assays work through all the cancers. Our model going forward I think is also going to be the license to some other groups, for example, we couldn’t license to launch products in that cancer, where we would be the same sense of run a trial with them, then they can help us launch the product because obviously that’s whole different skillset and it’s one which we don’t necessarily want to rephrase to the world. So I think wherever possible and almost everywhere it’s possible, we would like to use distributors except for a few areas where we have strong relationships, but I think overall, it’s a model which works very well. And then that’s for the ones where we produce it and that means, beyond that, for the other characters, maybe the better uses, other divisions we would look at, I think licensing is absolutely the way to go and that’s kind of revenue stream. We’d also eventually like to license our assays to the leading platform makers, to their platforms so that the royalty streams are a primary source of income. And we think that’s very achievable, given it’s a very simple platform. We have very total intellectual property and I can’t say it enough times, I think we are a little ahead of the time I guess and it’s taking time to catch up, but it really is going to become very important. The switching on and off and nucleosomes themselves, I think now more than ever, it’s become a huge part of a lot of research programs and eventually could become almost increasingly important the DNA. So and we are really front and center at all of those projects because in circulation, any disease that has itself there and it’s ranging, our assays and our tests and our whole technology and approach, we’re the only ones who do it, we think given our IP, with anyone who can do it and we’ve got very good team. But it means we also have a strong intellectual property position because we’ve worked a lot of things there, which we’re obvious when we started. So for all those, I think it’s distributor and licensing model.

And then in terms of the EU screen. I think it anticipated that you – last quarter, you expected to announce results of the 4300 sample study in Q2, is that still doable.

No. That’s next month. So we’re making very strong progress as we discussed and we're very happy with how the progress is going, but we will do the Triage announcement first, because it takes less as we discussed. So we aim to have them both done in the second half with the Triage first and then the frontline test. But given all the background work we've done on the research kits and for the rest, we decided we wouldn‘t mind any assay in the final trial for the training or validation set for any product nor any files really now at all without these much, much more precise calibrants and the other things we've done. So this has taken some time, but it’s absolutely the right thing to have done, because it's given us a much more precise assays and we can actually quantify what we’re measuring in ways which weren’t scientifically possibly a year or two ago. But expect to see both of those in the second half and the products in Q4 and Q1 from those.

Do you expect to announce the results of the 4300 study when it's completed? Will that be an announcement?

Yes. Absolutely. There is quite a few -- looking for news flows. Well, the research kits, the Triage, the frontline test and yes, all those will be announced when it’s finished. And as I mentioned before, it’s actually not running the trial, we just want to make sure all the ingredients are as good as you can make them. So and some of those seem to be, because there’s been good things, good from the cutting edge of sides, but really cool things being developed, which makes our kits more precise and more reproducible and we’ve added all those into the test, but we need to calibrate the range of assays and it takes time to do properly, which is why we expanded the team and got the process going, but we’re comfortable with them now and the process we’ve gone through.

[Operator Instructions] Our next question comes from the line of [indiscernible]

Many of my questions have been answered, but I thought I would ask a little bit more, could you expand a little bit about the size of the opportunity and the timing as you pursue a license agreement for the veterinarian market.

Dr. Terrell, US CMO and CEO has done a lot of work on this. The veterinary market is a multi-billion dollar market. We didn’t spend a lot keeping, obviously very good reasons and I think it’s very safe to say that diagnostic market and animal market in animals is even more than humans. So I think a lot of is given to animals because we don’t have adequate diagnosis, but it is a easier process to get to revenue. It’s regulated by the USDA, not the FDA obviously. So obviously we’ve got to be careful to make products, because animals are important as well, but it is a different process and one which is a lot quicker to get to revenue. But it’s not one which we’re expert at and we don’t want to. So we’ve been in discussions with a few different groups, we’ll have just news on that later this year as well where also it’s not worthy to note I guess, but it looks like the animals have very similar nucleosomes, a lot of animals, the bigger ones particularly seem like those have very similar nucleosome patents to humans. So it’s not that much extra development work. The assays which again the research quality ones, we have now, we aim to have an agreement with some veterinary groups or people who are experts in different animals to test our assays in animals. Now, we don’t know, but as we can detect nucleosomes in the circulation of those animals, we’ve done, the dogs. So, the next step is to set up a clinical trial to see the sensitivity and specificity in those animals and we’re very hopeful. I think it’s something we could really hope with a lot of animals and it’s a multi billion dollar business where…

Ladies and gentlemen, we have come to the end of our time allowed for questions. I will turn the floor back to Mr. Reynolds for any closing comments.

Thanks again everyone for taking the time in this call. Yet another exciting and building quarter. I think next quarter is going to be exciting and the second half of the year as we announced these big trails. First, revenues come through from our Nucleosomics platform and as we develop all the other uses, which we've been discussing in these calls. Thank you all for your involvement and I really look forward to keeping you up to date in the coming months. Thanks for your time.

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