Good morning, ladies and gentlemen and thank you for standing by. Welcome to the VolitionRX Limited Second Quarter 2019 Earnings Conference Call. During today’s presentation, all parties will be in a listen-only mode. Following the presentation, the conference call will be open for questions. [Operator Instructions] This conference is being recorded today, August 13, 2019. I would like to turn the conference call over to Scott Powell, Executive Vice President of Investor Relations. Please go ahead.

Thank you, and welcome everyone to today's earnings conference call for VolitionRX Limited. This call will cover VolitionRX's financial and operating results for the second quarter ended June 30, 2019 along with a discussion of our recent activities in key upcoming 2019 milestones. Following the prepared remarks, we will open the conference call to a question-and-answer session. Also on our call today are Mr. Cameron Reynolds, President and Chief Executive Officer, and Mr. Dave Benston, Chief Financial Officer. Before we begin I would like to remind everyone that some of the information discussed on this conference call will include forward-looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our beliefs, as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual future results may vary significantly based on a number of factors that may cause the actual results or events to be materially different from future results, performance or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. We do not undertake any 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’s conference call today. I'm happy to say that we have great momentum and have made strong progress on many fronts over the summer months, in platform development, with our colorectal cancer and lung cancer work, with Nu.Q Capture our Asian trials, and of course with Nu.Q Vet. Firstly, let me start by reiterating our vision and what makes us so excited with our progress and our space. Since the human genome was first published in 2001, there have been tremendous advances in DNA sequencing technology. Billions of dollars have been spent to buy several well-known companies, and a wide range of research groups, and great strides have been made in sequencing cancer mutations for drug treatment selection. However, there appears to now be a growing realization that the DNA sequence is only one part of the picture. And it's unlikely, for example, to be clinically useful for early cancer detection, in most or many cancers. DNA does not occur in isolations, but exists in cells as chromosomes made up of DNA and proteins in nucleosomes. The DNA essentially forms the recipe book for making all human proteins. But like all recipe books, we don't make every recipe every day. Some recipes are made often and others rarely, some are never made. The DNA recipes are just the same with protein dishes being made when it's determined by the epigenetic state of the chromosomes. Many human diseases, including cancer, are caused by a loss of normal chromosomal epigenetic regulations. Volition is an epigenetics company, focused on advancing the science of epigenetics and exploiting these advances in human health. This has been our mission since our founding, and it's now coming to fruition with our Nu.Q platform at the very heart of epigenetics. So we say,…

Thank you. We'll be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from the line of Jason McCarthy with Maxim Group. Please proceed with your question.

Hi, guys. Congratulations to the progress especially those warrant exercises seem to be providing a nice flow cash.

Thank you. They really are.

For the China lung study with Fosun. If you are in a fairly rapid completion of the trial. So could you give us a bit more color on the size and how the costs are going to be split between you and your partner? And then …

So I said on just the first question. There is a small cost involved in Chinese trials, there are a few hundred samples per cancer. Just to show the efficacy of the kids when they shipped around the world that being conducted in China with the Chinese team. So it's all for the three trials in lung, ovarian and colorectal. It's under $100,000, which is coming to our account, because -- and we're providing the kits that we can keep control that it's done properly. And we expect the first day to have that from this year, if lung perhaps some of the other ones as well. And so what was the question on the Taiwan side?

Just wondering this played into the Taiwan study at all.

Sorry? Separate -- completely separate. Yes. Sorry. I didn't understand that. That’s completely separate. Different PIs, different groups. It's from the National Taiwan University's long unit, which is a 1,000 cancers and a couple of hundred health ease, which will give us a very broad range of different lung cancers and different stages, after low dose CT scan. So it'll give us the potential product from a Triage point of view in lung cancer, when in conjunction with low dose CT, and then hopefully also some good information on as a frontline test. Separate from both sides, it should be a very good trial and a $320,000. I guess like everything, it's incredibly good value. If you're doing that in the states, it'd be thousands and thousands, 10s of thousands, that's per person. So but we are funding both of those trials. But obviously to be such a low cost base, there has to be some support from the local groups because they -- if you are funding all the actual cost of all that will be much, much higher. But yeah, we're very happy with lung space and very confident of the data coming through late this year and early next year from the two different lung trials. And as we have talked about their potential massive products given the very deadly nature of lung cancer and growing and deadly probably in Asia in particular.

Thank you. And then on to the colorectal side. Which is the largest study should we expect to read out in the near-term? And the current data pipeline kind of sufficient to support regular filings? Are there any other trials that maybe needed?

The first product, as we've always expected, I believe will be in the Triage space in CRC. So we're doing the -- we've actually picked a panel now for our Triage product. We did have one before, but this is with our new, fully optimized assays. So we'll have some news on the data on the Triage in the coming months. Certainly this year, but we expect to see hopefully sooner this year. And that we expect to get a regulatory approval in Europe and in Asia starting in Taiwan. And perhaps some U.S. work which we're talking on, but certainly in those two. On the frontline products, the trials are being quite as we talked about with the GLNE in the U.S. We expect those readouts in 2021, it's a very large study. We intend to be the FDA regulatory trials. So that does take time in the states. The halfway through collecting the samples in Taiwan for the 7,000 samples there. So we'd expect some data on that in the next 12 months as well. And we've got all the European trials, as we've been talking about for a while now. So for the frontline product, the Triage product in and one product, the first one, as I discussed will be on the very simple platform that's right there in both of those cancers in the small trials. So we'll be launching the first product on that simple platform. But -- as we talked about, we're adapting the assays to be on magnetic beads now. The feedback from a lot of the groups was the big hospitals if you are going to be worldwide wanted to be on some several plug and play platforms. So we've got from that now. So all of the assays as they come off, the line now will be actually on the magnetic beads for that. So that they can be run quickly and easily for the trials and also for the products, the frontline products. So that would be our mantra going forward. The research kits and the simple products will be on the simple plate format. And everything for the larger products and letting the plug and play techniques from the base will be on the base. So that allows us to sublicense very quickly. And also, as I said in the call, we will definitely get to a couple of platforms now. And it's prudent reasonably easy platform the platform once it's on magnetic beads and pulse can move in essence. So very excited about the expanding platform. And the timelines are, as I said.

Thank you. And I just have a one quick one just for some clarification, you mentioned that you're going to begin the CE marking product process on some of the products I think you said long and CRC Triage. You said, that will get started this year?

We've started the process. So it usually takes around six months. So I'd expect that in the early part of next year, to be finished. We've picked a panel for both the Triage on the colorectal and both lung. And we're in process now of starting to CE marking and some regulatory work in Asia, starting with Taiwan, because that's where a lot of the trial work's done. So I'd expect to see that completed in the first half, hopefully the first quarter of next year.

Right. Thank you very much.

Thank you. Simply done.

Thank you. Our next question comes from the line of Bruce Jackson with The Benchmark Company. Please proceed with your question.

Good morning. And thank you for taking my questions. With the -- so with China, you had a -- there was a company and one of your competitors where they had a patent review. And it was found to be valid, but not covering the area of testing as they wanted to cover. And I'm just kind of curious about how you feel about the strength of your IP in China and what you've done to protect it?

Yeah. China has become quite vibrant. China is a tricky country for IP, I guess there's a lot of opinions, a lot of different areas about how to best deal with China. We've spent a lot of time with us, we have a team in Asia, as you know, headed up by Dr. [indiscernible] a small team, but we have a team there. So we've spent a lot of time trying to find the right partners, and make sure that our IP is supported. Now we do have patents applied for and grounded in China. I could have economical with Jake, Dr. McAllister is our IP guru, he can go through all that with you. But we are very happy with the patents situation worldwide, including China. There can be IP issues in China, absolutely. So it's up to place you do have to be careful. We've done a lot of work, we've spoken to a lot of different groups in China. Fosun has a very good reputation and they're very international, they’ve done a lot of work in this space. And a lot of other spaces probably seen that be involved in Thomas Cook and a few other things internationally. So we'll see how it goes with them. They've been very good and responsive so far, they've got a very good reputation. But there are other ways we could get into China if for whatever reason we decide that they're not the best for us, but at the moment it's working very well. And but we Scott and myself and a few others have worked in China quite a bit. We understand the potential pitfalls. But it's a massive market and one which we need to address. So we've thought about very carefully and we've come through with the Fosun group. But we have also moved very aggressively protect our IP as well. But I think it comes down to having a trusted partner like anywhere else you really don't want to get into a patent battle if you don't have to. So we're looking for the best partner to help us with that commercialization and so we're happy with the progress so far.

Okay, great. And then with the CE mark in the two Triage shots, I just want to confirm that the two Triage shots for colon cancer and for lung cancer, these are your two lead product candidates right now. And you anticipate finishing the CE marking process sometime next year? And I'm also assuming that now you've got the commercial grade assays for both of those tests ready to go, is that the case?

Yes, and yes. And actually hopefully possible when you say next year. We're trying to be conservative, I would expect to be in the first half, if not the first quarter. But yes, certainly next year and certainly would hope it's early in the year. And yes, the IVDs are because of the simple format which is which we’re using from day one. They are commercial grade Assays and they're ready depend on, we've chosen all situation where we can get them for as an IVD and CE mark the final product right assays. Absolutely.

Okay. And then last question for me, on the vet products. Are these also the commercial grade assays that you are going to be using for those for those tests?

So just to be clear on the vet side, we don't have a product, we have not picked the panel. We're just setting up the company, we've obviously had some encouraging results that make us confident to spend the time and the effort on this. And we've chosen a fantastic partner who's very cognizant of what were the assay are and what the best space is. But we have not chosen the assay for the product like in lung and colorectal. If they are the same assays in humans then they are heavy these days. But we will be trying -- at where we are, we've had some encouraging results, which gives us a very strong confidence to move into this space. But we're doing we're learning from the human space and doing the paralytics first, to make sure that the blood conditions and the collection protocols and everything are similar in doctors and humans. So, I think it's very realistic, I think we have a product next year, because the best stages of our assays and the partners we have. But we are not in a situation now where we could tell you which assay is for which conditions. So there are a lot of other diseases beyond cancer in dogs as well, which could be useful in inflammatory diseases as well as other things also. So we'll have updates on that and we've spend a lot of time on that now finishing off the company. We're just finishing off the final work with Texas A&M, hopefully, so we can announce exactly what that relationship looks like. But it's something we're very encouraged, very happy. But we're not in a situation now where we possess the test.

Alright. Well, congratulations on all the progress. And thank you for taking my questions.

Thank you. Very welcome Bruce. Thank you.

Thank you. Our next question comes from the line of Mark Breidenbach of Oppenheimer and Company. Please proceed with your question.

Hey, thanks for taking the questions. Cameron, sounds like there's a lot of moving parts here. And I was wondering if you could give us an update on where we stand with the finalization of the panel for the asymptomatic CNC [ph] screens? And also it maybe it would be helpful if you could just clarify what readouts we're really expecting in the back half of 2019, let's say in the next six months or so? What should we what we should be expecting in terms of data?

Yes. So the product line production mentioned, obviously, the Triage for lung and colorectal. We picked the panelists a simple format that we run with before. And I think part of reason for that is very good when you using with something else, it's often the keeping the whole thing very low, with much less pop was, much more likely to be used. We're very happy to all of that. We're just finishing up the work on the assays as we talked about before. The data we had from the last earnings call, where we were in the 80s to mid-80s just for the [indiscernible] assay. I think we're getting close to where we needed to be. We'll update more on that when we think we've got to the final panel for the frontline. We're not there yet. But we're very happy with the results that have been coming through. And the decision has been taken. And I think it's a very wise one is to launch products on chemiluminescent-b, so that it can be the last one product and changes. It's going to, obviously, to be everywhere in the world. And every platform, which I think is very achievable now given what we know and what's been going on. We will not launch the product on magnetic beads. So, I just thought that I think if you look at all the work being I mentioned it quite a bit on the call, but just to be clear where we think we are is a huge amount of interest in the space. And it's really coming towards epigenetics. If you look at the big companies that now own status, as far as I'm aware that they're going to need to add epigenetic signals through the DNA to anything approaching early…

Okay. And sounds like really the Taiwanese lung trial is the nearest term large data set we can expect from you guys. And I, I'm kind of curious to hear of what you would view as a positive outcome from that trial. What you're hoping to achieve before continuing development in that setting? And also, I noticed that a lot of the patients in that trial, looks like about 1000 out of 1200 are positive for lung cancer. And I'm just wondering if that's really representative of a broader population of patients who would be referred to a low dose tomography scan? Or is this basically being enriched substantially for lung cancer positive patients?

Yeah. Just make sure I get those questions correct. So the lung, I do expect large readouts in the colorectal space in the next six months, initially in the Triage space, which, because we have improved assays, we would expect to have improved data. I think the cut offs were very good last time. But I think with our improved assays, we should get considerably better results in our certainly product where the last time again, the problem with our platform. So I would expect that data I would certainly not say there's not going to be nothing else, there's a lot of CRC coming through. And once the assays are ready, we'll be running this the large colorectal trials, but we're running them through now. So just to be clear, on the lung side, there is a lot of lung cancers, we decided to go quite lung cancer heavy, because that to make sure that we can be very physically significant through the stages in the process. So these people have all had low dose CT scans, and will have matched match trophies [ph]. So the first product in every phase, I think and while we're talking about lung Triage, as well as colorectal Triage. The easiest thing to do will be running the trials with the IV, IVD approved products we expect in the space so that they can become products quite quickly. But the message we've got from clinicians here is the big help they need today is in the screening programs like in the U.S., like in Taiwan, where people are given low dose CT scan. It's extremely sensitive, but it's not very specific. So that said, and I've end up giving a lot of people biopsies and late stage detection, which is really quite invasive…

Okay. But in terms of the high ratio of patients who actually have cancer in that trial, can you comment on that?

Yeah. So we went for high rate of cancer, that was, we work without PI there, what they were looking for. So basically, if you only have 50, 30, 40, 50 cancers, it's very hard to get large groups and representative to make sure stages of cancer and all different types of lung cancer. So it fits perfectly. And this is what the conditions we're accepting for their product needs. For everyone who has a low dose CT scan, could we have actually had checked them specificity wise, to make sure that they actually low dose CT scan with a good process. So this is the design we worked on with the clinicians in Taiwan. And this is what I wanted to really see if I could get that product. And then we could work to further trials on the frontline screening test. But this should give us a very good indication on the frontline way. And also for their primary initial aim, which is something in conjunction with low dose CT scan. But again we do offline and with a statistical team. That is something we thought about very carefully. And it's what we came up with our investigators in Taiwan.

All right. Thanks for taking the questions.

Thank you.

Thank you, John.

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

Good morning, Cameron.

Good morning.

Good morning. You reference referenced competitors in the space that are including genomic biomarkers in their blood based cancer tests in order to enhance their performance. I'm just wondering if you can talk about what your thoughts are on their ability to accomplish what they're trying to do without potentially infringing on your IP.

Yeah, there's actually -- I think, if you're looking back three or four or five years, we've always thought the epigenetics was very important. And there was a lot of money spent in our name companies. But I'm sure you know the more looking for DNA alone that was the feeling a very strong feeling from them, that they could get there. Our team has proven to be correct, that it was going to be extremely difficult to find early stage cancers in a wide range of cancers. There's some exceptions, but that's the general rule from DNA alone. And that's now absolutely proven to be the case. So they've gone to several ways. And I can discuss, I guess, but if you want to discuss separately, but on an urgent call [ph] the basic system that started with different ways of methylation [ph], which they also used to sequencing, and that's pretty much all of them, that the big companies in the DNA space. Some have gone for other protein, as well and another has gone for fragment dynamics, which was bought from Bellwether [ph]. What do I think? I think they're very well run companies with great people. I think if you put enough complicated expensive things together, you probably end up getting a good result eventually. But the complexity is multiplied the more things I mean, DNA itself is very complicated and expensive. Methylation [ph] markers using DNA sequencing, not neucleosomes like we do is extremely complicated and expensive. And fragment timing has potential to be very complicated and expensive as well. So we've always been about low cost easy to use tests. None of those methods just to be clear, use the lies of a systems in the blood using nuclear same as the way we…

Okay. Relative to the two initial tests that the two CRC tests that you anticipate launching in Europe. Just for clarification, did you say that those that you expect those will be run on the magnetic beads?

The simplest platform we run on now, which is the research kits. And the lung and colorectal, only one long run colorectal will be run on a simple platform, which is just substrate 100% base, [indiscernible] platform. Everything else now we're developing, we will have on magnetic beads and can believe in essence, that's the strategy going forward. And we've been doing a lot of work on base for a while for the Capture program. And we've also spoken to the big diagnostic companies for a while now. And they're very keen on beads. It's just -- it's still a very low cost platform, but every routine lab auto analyzer does. And we're sticking to [indiscernible] and we’re sticking to low cost, but you can get very good specificity and sensitivity, I mean, analytically on the machines and edit the plug and play. So we are very keen to make sure it's used as widely as possible. So we've been adapting to some open platforms as well as we intend to adapted to the closed platform, so it can be used everywhere. But going forward, a very big part of it will be based in chemiluminescents. And I think that's just makes perfect sense. We didn't do it early on, we've kept with the simple format, just until it was fully optimized on that simple format now that we're very happy, what we've done is fully optimized, we may as well make a jump and really get onto the big machine so that we really can be worldwide very quickly.

Okay. And just one on Nu.Q Vet. I know this is -- it's still kind of early stage. But wonder if you can kind of talk about what your expectations are in terms of the extent of clinical data that you'll need to support regulatory approval? And then beyond that, do you anticipate that you'll need additional clinical data to support commercialization to generate interest in the test?

Yeah. So we're taking on [indiscernible] to tell us that obviously, we're not experienced in event space. But the good news is, it's a lot less onerous numbers wise in human space, to get approval to be used in United States. We’re talking in the hundreds of dogs [ph] not in the 10s of thousands or thousands of humans like we are. So I think it's going to be something which is ongoing, I think it's very adaptable to a wide range of breed, species, as well as beyond cancer there's a lot of diseases, which strongly epigenetic in the nature as well. So we've been thinking through all of that, we’ll make that public once we've decided the first lung tests. But it's something which I think will launch tests and then continue to have a whole range in the veterinary space because it's the neucleosome the epigenetic market is very similar between species as are in a lot of diseases. And the vet space is quite tragically bad. So for what options are available to vets really low. For a couple of reasons, animals obviously can't tell you what's wrong, human proteins don't work in humans -- in animal sorry, quite naturally. And even things like doing a scan can be very difficult for an animal which moves you can't tell it to stay still. So you have to do a lot more work in the vet space. So we very firmly believe and so do our partners in Texas that there is a massive in a very wide range of dose diseases as well as other animals on the platform. So we’re just looking to finish the patents and not the relationship with Texas A&M so they can really help us in rolling this out. And we’re going to be there in October. We should have some news on before that what relationship is. But we’re very-very happy with it. And then we’ll have the news coming through as we finish as we talked about on the patient before learning to human space way which starting with preanalytics to make sure when we run the trials it’d be the conditions are the same or the best optimized for the trials, probably you are looking at a very small number of animals compared to what in the human space. So our expectations to have the products on the market next year in the veterinary space and add a lot to it over the coming years because it’s a very exciting which makes it a multi-billion dollar business.

Okay. It sounds like this could be a huge opportunity for you. I'm just wondering if there is sort of a U.S. PSTF for the veterinarian space similar to the human clinical space.

Actually it’s -- I'm learning. I’ll make that quick summary but I can leave that with we now have a [indiscernible] and have specialists and we’ll have in-house relationships with Texas A&M and then we can talk officially. But it's actually similar that the U.S. FDA will have the FDA regulatory purposes but there is also a range of large centers in California, [indiscernible] and then in Texas an Northeast and Northwest of the United States and Midwest that’s coming at a regional center where the lung comes to then they’re officially approved products. But it’s not anyway near as essentially the human space because we’re very much take care about pulling infringe. But obviously it’s a different system that one which we’re getting to learn with the company, we’re taking on the experienced team member who can really help us get this done. But market potential as you said is actually 2.5 times on dog diagnose cancer here in the United States in humans. And given how much we care for dog, our friends is you can judge a question remark given where low cost test is for something to charge about $5000 to $10,000 more like a DNA test, but we’ll be talking $100 or $200 is very achievable. And it’s something which we’d expect to take off very quickly if we can successfully run the trials and launch the products which were very hopeful for. So yes we’re very excited. We’re taking very seriously and we have a separate team now and we want a different company, because we’re obviously focused here, mainly corporate with the deal on the human space. So taking on team members. We’re also expecting to get some non-derivative funding which we hopefully announced for specifically the vet program over the coming months as well. So it’s all coming together we’re very excited.

All right thanks Cameron.

Thank you.

Thank you. Our next question comes from the line of Alice Nettleton with Edison. Please proceed with your question.

Hello thanks for taking my questions. So I'm wondering about the Veterinary subsidiary is it a wholly owned subsidiary or do you have Texas A&M as a shareholder? Are there any other shareholders in this subsidiary?

Good question. So yeah at the moment it’s wholly-owned. We haven’t finalized the agreements with Texas A&M. But we’re looking to bring them on for some equity as well and we’ll announce all of that once we finalize the deal is finalized. But we would always expect to have a lot of attention of the company is obviously on potential property we’re hoping to fund. And we also expect to get the non-diluted funding which we hope to announce in the coming months. So Texas A&M is very important partner and we expect if the negotiation continue with that to the equity shareholders in the company. But we’d expect to be the government party equity wise until we do anything else in the future but that’s something how we intend to begin because of our intellectual property. But we’re taking it very seriously. They are being very helpful. And we’re very happy to be educating them potentially as shareholders in our subsidiary. But as of now it’s 100% Volition.

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

Yeah. I just like to thank you again. It’s very busy time for everyone. I think it’s really-really showing that what we’ve been doing with key in the space. And epigenetics is very-very important and so coming to fruition. And we will have some very exciting months ahead with [indiscernible] we have in so many different areas. And a very strengthened balance sheet we have from the strong support from our shareholders. So thank you very much again. I'm looking forward to updating you again in the coming months. Thank you.

Thank you. This concludes today’s conference. You may disconnect your lines at this time. And thank you for your participation. And have a wonderful day.