VolitionRx Limited (VNRX) Q3 2019 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen and thank you for standing by. Welcome to the VolitionRx Limited's Third 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 opened for questions. [Operator Instructions] This conference is being recorded today, November 13, 2019. I'd now like to turn the 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 third quarter ended September 30, 2019 along with a discussion of our recent activities and key upcoming 2019 milestones. Following our 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. David Benston, Chief Financial Officer. Before we begin I'd like to remind everyone that some of the information discussed on this conference call will include forward-looking statements covered under the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on our beliefs, as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties and assumptions. Actual future results may vary significantly based on a number of factors that may cause the actual results or events to be materially different from future results, performance or achievements expressed or implied by these statements. We have identified various risk factors associated with our operations in our most recent Annual Report on Form 10-K 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 we have great momentum and have made progress on many fronts this year in platform development with Nu.Q Capture, our colorectal and lung cancer work, 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 published in 2001, there have been tremendous advances in DNA sequencing technology. Billions of dollars have been spent by 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 is unlikely, for example, to be clinically useful for early cancer detection in many cancers. DNA does not occur in isolation, 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 and which protein dishes are made when is determined by the epigenetics type of the chromosomes. Many human diseases, including cancer, are caused by a loss of normal chromosomal epigenetic regulations. VolitionRx is an epigenetics company, focused on advancing the science of epigenetics and exploring these advances in human health. This has been our mission since our founding, and it's coming to fruition with our Nu.Q platform at the very heart of epigenetics. So we say, the epigenetics is as, if not more, important than the genetics, the DNA. In short, it's not DNA, it's the full chromosome. We strongly believe the last decade of work at VolitionRx with our ever expanding team in epigenetics, puts VolitionRx in an extremely strong position with our expansive IP portfolio to be a significant player in this key field. Overall I'm delighted with our progress we are making and I'm excited by the momentum we have. We have spent a great deal of effort over the last two years developing our assays to final product grade with many improvements including monoclonal antibodies and using recombinant nucleosomes as calibrants, something that was implausible just a few years ago and is now routine in our assays. As of today, we have now utilized two of our finalized Nu.Q assays in eight separate discovery cohorts across the five cancers and can confirm they have performed well in all studies to-date, demonstrating its reproducibility and robust nature on manipulate, [ph] the simplest platform. And so, I'm delighted to announce that with regards to our traditional play [ph], we are now in the process of CE Marking some of our finalized assays so that our IBD kit can then be used in both human and animal clinical trials. In parallel, in order to ensure our tests are accessible around the world, we have also undertaken broader work on automated platforms which are based on chemiluminescence and magnetic beads, a format which is used by all the leading global diagnostic companies, such as Roche, Abbott, et cetera, as well as a large range of smaller open platforms. These platforms are also on the very basic ELISA platform. To expedite this, we are delighted to announce that a clinical validation expert on these automotive platforms with more than 15 years experience in the industry has recently joined our Belgium team. This assay transfer project has allowed us to work on cutting edge AutoAnalyzer platforms from both Europe and China. Indeed we believe we are the first lab to be operating the [indiscernible] AutoAnalyzer outside China. Not only has this opened up a number of ELISA platforms that our technology can be operated on in the market, but also and perhaps even more importantly, the adaptation to automation platforms based on chemiluminescence and magnetic beads has significantly increased the analytical accuracy of our assays by a factor of more than tenfold. We will now utilize these bead based assays in our clinical studies including our large scale clinical trial program such as the colorectal and lung cancer studies collected in Taiwan. I am also delighted to announce that we have received our first revenues from both our first research only kit sales and from the service contract processing samples with our nuclear research kits. The results from the samples that we processed under contract were promising and will be published next year. This is yet again, progress momentum in yet another area of our business. Also this quarter, we were delighted to announce a significant milestone in our Nu.Q Capture development program. The ability to enrich nucleosomes and therefore DNA of tumor versus non-tumor origin by separating long from short nucleosomes. This breakthough could be used in a number of ways. Firstly, by using mass spectrometry, new biomarker targets may be discovered. Secondly, and importantly, as an enabling technology, in sequence based liquid biopsies by enriching the nucleosomes of cancer origin from the blood. And lastly, to increase specificity in VolitionRx's assays by moving the background signal. I am extremely excited that this enabling technology could bridge the gap between VolitionRx's epigenetic profiling approach to early detection and the sequencing approaches that have so far been limited to personalized treatment selection. These recent results, could impact the entire sector and highlight VolitionRx as a leader in the field of clinical epigenetics. The next step in our Nu.Q Capsure developmental work which is underway and we will be reporting in the coming months, is to determine the level of discrimination to achievement derive nucleosomes using immunoassays and sequencing to provide a complete analysis of [indiscernible] nucleosomes. Overall, our R&D team has made remarkable progress while keeping our cash burn right low and consistent with prior quarters. Thanks must go to Dr. Gaetan Michel and all the Belgium team for their continuing efforts. And so, to the all important financials this quarter. We closed out the third quarter of 2019 with $19.7 million in cash and cash equivalents versus $13.4 million at the year-end of last year. During the third quarter, a longstanding investor exercised $4.8 million in aggregate amount of outstanding warrants to purchase shares of our common stock, bringing the total cash received by the company upon exercise of warrants by existing shareholders in 2019 to date to $16.5 million, showing very strong shareholder support. I am also delighted to announce that subsequent to quarter end we further strengthened our balance sheet with some additional nondilutive funding from the SOFINEX fund in Belgium. We are also really proud to be able to have done all of our work with the consistent quarterly cash burn right throughout 2019 of approximately $3.6 million per quarter. We continue to manage cash carefully and believe that we are at a very sound position with regards to the financial runway to achieve our 2019 and 2020 key milestones. During the third quarter, we were delighted that the National Taiwan University commenced our first large-scale lung cancer study which will include 1200 subjects receiving Low-Dose Computed Tomography scans at a total cost of approximately $320,000 payable over two years. This study demonstrates once more VolitionRx's commitment to conducting large yet cost effective trials worldwide. We are hopeful that our recent proof-of-concept results in lung cancer will be repeated in this much larger cohort and expect to release preliminary data relating to the initial 600 patients in the first half of 2020 and the remainder by the end of next year. We were also excited to have executed a contract with Shanghai Fosun Long March Medical Science Co. Ltd to introduce the new key platform to China. Based on our recent promising proof-of-concept data, using product made from Nu.Q assays the parties initially started a lung cancer study and have already expanded to collect colorectal samples and we are working together on the new [indiscernible] platform that I mentioned earlier. I am traveling out to the Far East later this month with Dr. Jasmine Kway, Singapore VolitionRx's Chief Executive Officer and are very much looking forward to continuing our discussions with the Fosun team. We were happy this quarter to have completed the formation and commenced operations of our new majority owned Texas based subsidiary, VolitionRx Vet Diagnostic Development LLC and welcome its Chief Executive Officer, Nathan Dewsbury to our team. VolitionRx Veterinary will focus on the further development and commercialization of Nu.Q Vet products and helped driver early revenue for the company. On the Veterinary front, subsequent to the quarter end, we were also delighted to execute a contract with Texas, A&M University to collaborate on the research and development of our Nu.Q Vet product in the all important veterinary market and things are moving fast. Last month in October, Dr. Heather Wilson-Robles, Associate Professor at Texas A&M presented pre-analytical data at the Veterinary Cancer Society Annual Conference in Houston. The VCS Conference is one of the largest Veterinary, oncology meetings in the world. The presentation was well received and generated much interest in the potential of new Nu.Q Vet. Also in October, I along with other Members of the Board and Executive Team, visited Texas A&M to sign the contract, memorializing the collaboration between VolitionRx and Texas A&M in the veterinary market. And I have to say we are incredibly impressed with both the facility and the team we will be working with to bring Nu.Q Vet products to market. A video capturing some of the trip is available on our website. On the intellectual property front, our worldwide portfolio of granted patents that protects various aspects of VolitionRx's Nu.Q technology is growing steadily. This is yet another key differentiator with many other technologies under development or available in the market. And I would like to thank Dr. Jake Micallef, our Chief Scientific Officer for his outstanding work in writing all of these patents. We have 20 patent families related to our diagnostic tests with 8 patents granted in the United States, 7 patents granted in the European Union, and a further 25 patents granted worldwide. Additionally, we have 15 patent applications in the name of our subsidiaries pending in the U.S. and 13 such patent applications in the European Union. This portfolio also covers veterinary medical applications. We intend to continue our pioneering work in the field of epigenetics through the development of our proprietary Neucleosomics [ph] technologies and will continue to apply for patents for future product developments. Our strategy is to protect our technologies and gain market exclusivity with patents in Europe and the United States and in other strategy countries. We believe that the patents on the technologies underlying our products should provide broad coverage for each product including protection through at least 2031. And finally, to future milestones, as the assay development program has gone so well, we can now return to our lung and colorectal cancer trials with a range of assays on an automated platform in early 2020, starting with medium sized studies before moving on to our large scale flagship trials. We expect to report the first of this data in the first half of next year. We are stepping up the work on these trials and preparations for abstract submissions for upcoming scientific conferences are underway and we expect to submit at least one clinical paper for publication in the coming months. In addition, we have been working on several proof-of-concept studies, the first data from which we will be realizing later this year. The need for simple, easy to use, cost effective test for cancer is truly universal and we hope very much that our Nu.Q tests can help revolutionize the way cancer is diagnosed worldwide. We are excited about the commencement of our work in China and look forward to completing the studies and to a successful collaboration with Fosun Long March. We have also begun the process of CE marking for Europe and registration in key Asian markets for our first lung and colorectal cancer triage products and we'll provide further details on this in the coming months. The development of Nu.Q Vet is picking up pace and we are hopeful to announce data and indeed present at upcoming conferences throughout 2020, beginning in the first quarter an aim to launch our first Nu.Q Vet product in the second half of next year. We look forward to announcing the next and hopefully final step in demonstrating the clinical utility of Nu.Q Capture for both sequencing and in our immunoassay approach in the first half of next year. Our whole team, including our Finance Advisory Board who met just last week are incredibly excited by the opportunities this represents. We aim with our solid cash position to report throughout 2020 and beyond several key milestones, including Nu.Q's ability to detect a range of cancers in both humans and animals, including preliminary data from our first studies in China in addition to clinical data on Nu.Q Capture. We are delighted to be working with collaborators from around the world, all of whom have outstanding reputations and share our aim in improving early diagnosis of cancer and other diseases. VolitionRx is an epigenetics company focused on advancing the science of epigenetics and exploiting these advances in human and animal health. This has been our mission since our founding and it is coming to fruition with our Nu.Q platform at the very heart of epigenetics. Remember, it is not DNA, it is the full chromosome that is important. We believe the last decade of work in epigenetics puts VolitionRx in an extremely strong position with our expansive IP portfolio to be significant player in this field. We also intend to further strengthen our supply chain for key components by bringing them in-house. We are extremely proud of the accomplishments we have achieved thus far and look forward to what the future holds for VolitionRx. I, along with the rest of board and indeed the whole company look forward to sharing the results of key studies over the coming year with our optimized platform. We expect 2020 to be our most exciting year yes. Thanks for joining the call today. I very much appreciate it, given the busy earnings cold season, we are happy to take your question. Operator?

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

Hey guys, thanks for taking the question and congrats on the progress.

Thank you, Jason

So Nu.Q Capture I'd like to see if you could help you contextualize the milestone you hit back in September and specifically how that defers from the previous data you have on the program?

Yes, absolutely, and if you want to talk with our Chief Scientist is here, to go through it in much more depth, but for the purpose of this call. So now that we can capture the nucleosomes and pull them out, which is another benefit of all the background work we've been doing on magnetic beads. We started the process just with one assay which worked extremely well, the one we've [indiscernible] most in March and we proved back then we could pull between 70% to 80% of good returns, so that's structure out of the temple which was fantastic. Plus what we announced around the time of the Capital Markets Day in New York. And we said at that time what we're also looking to do, was also see if we could do other markets and also concentrate nucleosomes from tumor origins, not to get too technical, but it has been shown in a few papers including in Nature. With less than 150 base payers of DNA are much more likely to be from cancer than ones with more sections of DNA around the nucleosomes. So without the marker which does do that, it pulls out [indiscernible] verus lung and so we do a massive concentration of nucleosomes from the tumor. Now, so that was a very, very big breakthough and the team is incredibly happy. So what we're doing now is working on a range of markets including that to add the final steps of sequencing or mass spectrometry and starting to use it on our assays to see there is some dampness around what that concentration looks like so far as discrimination, but we can almost ahead of the finish pulling out the structures, but up to now we've done three and there is, I think there's a very wide range we can do. So, then no need to be preparing to pull out range of structures and one or hopefully many that are preferential in cancer. We can also do things like methylation [ph] and other markets preferentially pull them out, or lease them depending on concentrating or using. So extremely starting and like I said [indiscernible] meeting was last week I think on a scientific level and world changing level I think the advisory board are incredibly keen on the potential for this. Not only to help us but, but a wide range of other companies. And as far as revenue goes, I think it is potentially a very, very good source of revenue through licensing. So and we should have the next data around JP Morgan time or in the first part of next year which we would hope to include sequencing data so it is really picking up. Was that clear?

Yes, very much. So thank you. I have one more actually on the Capture because you do mention that it can be used to increase the specificity of the Nu.Q test. So I'd like to, this would be, would this be integrated into a second generation test or would it be more something that will be separately validated and then used as an additional step for the existing panels?

Yes, very good question. That's something, the reason we haven’t really guided, we're working thorough how that would be integrated. But first of all, what would it, by preferentially taking out nucleosomes from the tumor, it is a step where you use a magnet, because it is a, it's not obvious, but it is obvious since we've been at it, but use a magnetic blade and then use a magnet to pull out the nucleosomes, so that's then, once you have them, mainly as you are pulling out what either the background noise or the nucleosomes. So again, we haven’t go data on this, but that would lead you to believe he couldn’t sleep like noise which would give you a better signal to know his right share which has been obviously means better clinical accuracy. So I would, this is just, so this is our kind of thinking. We won't make it all public until we've made final decisions. This is part of all of the work we're doing now. It is a very simple step. It is an analogous to another assay could start, so it's a very low cost, again a few dollars to do with the first step. So the first step would be to either clear out the background or concentrate the nucleosomes from the cancer and then run the assays. That's the kind of thinking, but there're other ways to doing it which we also looked at. But we will have to have a process and numbers around what we're doing and how that helps us in the first half of the year but we can definitely pull the new systems up and we can definitely preference right long from short. So it's looking very good but the exact numbers will come through soon.

Thanks I mean just – perfect. And then just one more on actually on new Nu.Q Vet because you presented the preclinical work, you've established the subsidiary with a A&M. So what are the next steps for Nu.Q Vet and then how does that end up getting to market?

Yeah very good question so we – just had actually first novel call with the teams from Texas – now we come to these homes and we are going through all the steps it same the human market actually the results we are getting into that market are really similar to humans because we do have very similar nuclear zones. So obviously there are potentials but things like you capture in the animals as well. But the next steps so there I am doing collecting two trials now. One in the relapse market, I guess it's very similar to the human market if you've been diagnosed or a high risk, you want to make sure you're not getting the cancer back so exciting samples for that. And also for frontline screening, and in the dog world one of the major cancers in the breeds which are very common I think like the blood cancers, like in humans things like non-Hodgkin’s lymphoma. So they are continuing – they are setting up the lab to be more like ours so they can run capture, can use a bio-analyzer in other areas. And we are shipping them and kits and we see markets they'll be a production in quality grade to be used on the animals as well. So that should greatly speed up the process. So as far as product goes, the only important product there is two ways to the market, two main ways use our kits in their lab. We had a very good tour of their facility it was quite remarkable lot better than humans are treated in lot of the world, it was an amazing facility in Texas. The team there has been absolutely fantastic. They run their own it's not a clear lab, it's not human, but it's a clear lab model, where they get blood samples coming from a wide range of areas and hundreds and hundreds a day. And they run some of their tests in their lab. So the aim would be to use our kits the way they are in a clear lab sensitivity world which is in their best hospital and facility which is underground below the hospital. And we are going to have that the first one next year, middle to the end of next year, based on the human assays. So it could be very quick. USDA, which actually potentially is up in a smaller markets from the clear labs or the vet hospitals that's still a fantastic market would be roughly 12 months after that. And then what you do is license the kits we will sell the kits to the other big vet hospitals around the United States and there is about nine big ones that - it [indiscernible] comfortable and happy in running and he the [indiscernible] running in those as well. So that's something we're hopeful to start off next year and then have a USDA production 2021.

All right, thank you very much.

Thank you, thanks for your time.

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

Hey, guys, thanks for taking the question.

Hi Mark.

So Cameron, you mentioned that the CE marking process is underway now for your Triage test product and I think I heard in both colorectal and lung. I was wondering first of all, if you can walk us through the timelines of sort of what needs to happen before the process of completing and sort of when you expect product launches for these Triage products, but also I don't think we've talked too much about the Triage product in lung before. We know quite a bit more about where it would be used in colorectal specifically in Scandinavian countries that have nationalize testing. Where would a lung Triage product fit in, and maybe you could talk to that point first?

Yes, absolutely so, currently there is the only screening commonly used for lung cancer, it’s a low dose CT scan, which you're probably familiar with, which is actually quite sensitive. It's used for high risk people in the United States also in Taiwan, where we're running a trial. So it's a very good test for sensitivity but horrible specificity, which [indiscernible] out there means it's good in picking up the cancers, but there is a huge number of false positives. And the problem with that is the next step can be a biopsy in the lung, which is not where you want a needle being stuck unless you're really certain something is going on, for the obvious risks. So we've talked to partners around the world about where we would fit into that. So what they're looking for. So the reason it's good for sensitivity the current kit is if you're a seven year old smoker, you probably have some lumps on your chest File 8 some lumps on your chest and if it's cancer then we will find a lump. But the problem is you probably have other lumps, even if you don't have cancer, if you're an older smoker. So it picks up all the lumps, including everything else. So what they do – is hoping there are the two problems we hope to be able to solve one or the other. If it's done – the two problems with the tests are the problems that currently low dose CT is problems with specificity, meaning false positives. So you have the low dose CT scan first, and then have the Nu.Q Triage second to really show who is extremely high risk for having cancer to make sure those people have the lung biopsy, but also if you're very low risk that you don't have a lung biopsy – you more on monitoring so, it's a secondary, it's increased specificity. If it's before which – same test you could also do before. The second problem is compliance about [indiscernible] compliances in colorectal screening There's a lot of people who don't want low dose CT scan because it's considered a little bit risky for radiation and people don't like having scans. So we talk to other groups who may want to do with first to drive compliance. So you have a Nu.Q test and say, look you really need to go to your low dose CT scan and then the data could be used afterwards as well for Triage in the test. So I think it fits very well into that pathway. Again, we're not looking to the assays which we have finished now are very good on the manual format. So this was why we're seeing – we're doing two platforms. The manual format, which you've seen from the data we released in March, is working very well in one or two assays. But we are doing a whole panel of assays like in colorectal and frontline screening we’ll do them all on the feedback platform because it's a very, very analytically accurate, reproducible, all those things so it's much better for large range of ad base. So when would we expect to see the data from there? So the Taiwanese trial includes people who have – all have had low dose CT scans so that's perfect for Triage. Some of which, obviously have cancer, some which have other benign nodules. And some of which have for better terms like a clean lung, there's no juice at all. So we'll be seeing and we expect it to be good on potentially be used for either positive or negative collection. You don't need a biopsy or you do as a positive or negative Triage. So we're very excited about that, as you can probably we tell lung has really come through the pack. We had some fantastic results that we've announced. We're doing trials in Taiwan and in China, and we hope to start them in the U.S. based on this kind of data. So timing wise, they are clicking very, very well in the lung and the colorectal in Taiwan. And we expect to have the first big chunk of those samples in the first half, hopefully near the end of the first or early to the second quarter. And then we'd run the assays because it's the Triage for that purpose, we'd run the pipe format, which are CE marking. So there is two reasons so once you've CE marked the place for one purpose, it’s much quicker to CE marks in for others so not sure if you remember this. But the main purpose of CE marking is to make sure the place very well made reproducible robust, the controls are properly run, and they can be run in any lab anywhere. So, once we CE mark it for one of our products, we’ll also incidentally use these CE markets for the dog market. We want to take care of the dogs as well not for the same purpose obviously lung cancer humans are different from animals, but it just means the kits have been properly made. And then when you run them in samples, inside the dog market or the other markets, they're absolutely perfect for the product. And then you just have tremendous CE mark for different purpose, but all the background work from the kits and all that works already been done. So it's a real momentum we’re getting in all those areas. And we still have the first dose from the lung.

If I can interrupt just for a second?

Yeah sure.

Then the CE marks that you're pursuing right now won't necessarily be the products that go to market is that correct you'll have maybe different Triage products that are eventually launched at some point in the future and the stuff you're CE marketing now is not exactly what you'll be selling?

Yes, well and no you’ll CE mark one or two areas, and then we'll be doing bigger trials with those assays. So a CE mark means you can sell it for whatever purpose the CE mark for and you can do that on a few hundred samples, which we obviously have in a range of different cancers that we're going to be doing bigger and bigger trials, including this 1,000 to 1,500one trial in Taiwan for lung cancer. So it's a platform. So once you CE marked for one use, even in the animal market it becomes much easier to launch products in those areas. But yes, we do expect to do multiple trial, in colorectal and lung and the animal side using these CE marks File 9 the animal side using these CE marks. But yeah, so that's something which will be doing a lot of.

Okay, and just one last follow-up from me, can you give us a ballpark estimate for how far away we are from initiating – let's call them the flagship studies in the larger scale studies in colorectal and maybe lung for asymptomatic patient?

Yeah so, as I said they're collecting very, very well. And we will need a range of them on the new format, which has kept going very well. So that’s the first assay this year, and we expect to have enough of them in the first or second quarter to give us a very good accuracy to launch products in asymptomatic, but we start running the trials. The big flagship trials in the second half of next year, but we'll have a lot of data on the platform on still very meaningful medium – small medium size trials starting next month and then through the first half of next year, but the flagship will start just on the base as late in the second half of next year.

Got it, thank you for taking the questions.

Thank you anytime.

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

Hi thank you for taking the questions.

Hi Bruce.

So with the upcoming data releases and publications is this coming from the bond study and from the in the endometriosis study and maybe could give us a little bit of a feel for which cancers are going to be reported first?

Yes actually there will be a wide range of cancers as we've done a lot of background work in lung in colorectal. We’ve also done some lung cancer work as you know in endometriosis. We’ve also learnt from one of our dog work another cancer which is we're going to be announcing next month [indiscernible] it will be public in a few weeks but we're very excited about that as well. So I think the very best work we've had and the best results we've had actually been on lung with these first the last assays on the plate format. So are expected to be lung. We've also done contract research work with names which will also be published, which is also a non-cancer. And we're also doing a lot of work on capture, as well as all the preanalytics that's all very publishable. So we're the first group to really – and only group to work on these reasons. So there is an absolute treasure trove of information will be publishing on what's the best way to run our assays. We've gone through all the stuff with recombinant in the antibodies in serum and plasma. All those things are going to be published. So we expect to start that process now. We wanted it to be all finished and Jake's been – as you know well has been writing patents furiously. We've done another bunch of them in the last few months. So we're a very confident position now. We absolutely believe the epigenetics is the answer to a huge part of the problem in diagnostics. I think we've worked for the solutions. We're still working all the time on improving bits of it. But I think now is the time we're very confident start publishing, and in a range of cancers and background work and other non cancer. The exact details will be when publications come out, but we have a huge amount to talk about now we'll start soon.

Okay, great. And then, with regard to the revenue this quarter, I think this is your first quarter of revenue, right some research revenue?

Yes so that was a mixture. We sold about 11 kits so we're very happy with how it started. And we did a contract research we’re using our kits so it’s all very much our base technology. So yes great carting and – everything is really starting of well.

And then in terms of like continuing to generate revenue is this research, revenue stream, something that can grow do you think it's going to be interment. And then second part of the question is when do you think you're going to begin generating revenue from one of the clinical products?

Yeah, good question and something obviously, we've given a lot of thought to how to best drive revenue and get it done as quickly as possible. So I'll just give a quick run through. Yes, we're very happy with the revenue we got last quarter, there was a bit of a burst, since the first time we've done both of those tickets were launched and the first time we looked for contract. So I think it's going to be a bit of a burst from last quarter, but I think it'll grow steadily through next year. So just listing – the areas we can get revenue from, I think the research bit and contract will be lumpy because some quarters will have contracts and some we want, but we expect that to build solidly through the year this is only from a one or two types of research. So we intend to have a wide range on the market. And as I said, epigenetics is really taking off and we're the only company who really has kits in all of these areas. And the contract research I think will become more and more what we do when people want to run samples but don't want to do it in their lab. We can do that File 10 we can do that and charge as we have. The next source of revenue is obviously, we will be CE marking the assays for the Triage uses. And also we’ll have a lot of results from that in the first half. And I think the next sort of revenue is probably the best products, it's tough to say the lung side has really picked up colorectal taken a long time to get the assays perfect working and also to collect these big trials. So I’d expect as you said to launch revenue from the – veterinary space by the end of next year. And we do have a lot of opportunities now in licensing I'm in China in a few weeks. I think there is certainly a possibility next year of licensing are updates in the Chinese market. I'll give you some more updates if that does happen and also from capture. As I said, I can’t claim absolutely enraptured with the prospects for Nu.Q Capture and how it could really transform the whole industry. So we will begin discussions on that in the first half, we haven't now because we're still perfecting and getting data on the quarter finals. But that's, I think very strongly potential for next year. But I think the big revenue from the big I think Jason mentioned the big – the asymptomatic trials in Europe in the U.S., and Europe and Asia. I think are much more likely to be at the earliest the end of next year, but much more likely to be in 2021. So that’s big kick in revenue, but we do expect revenue for range of sources next year, but I wouldn't expect to see a large kick in until 2021. And then it should really take off, because we will have I think, at least a dozen assays on the platform ready next year. And we have a huge pent up demand of different cancers, different conditions. And I think the research use is really going to take off as epigenetics really begins to feels its potential lift. We thought it would have an absolutely coming through now.

Right.

If you want to free mobile I can talk the three models afterwards if you'd like you can get through all the need.

That will be great. Thanks that will be great, right. Thank you very much.

Thanks Bruce.

Thank you. Our next question comes from the line of Jonas Peciulis with Edison Research. Please proceed with your question.

Yes hi sounds like you had a quite busy quarter so congratulations for this. You talked about the Nu.Q vet product about the timelines and – the setup with the university and then it sounds like they will have you to distribute those seems like tell the product why they all lapsed. But what about the marketing side of things so how I mean will you need to increase some kind of – sure capabilities and also been commercial capacity or will be high reps or do some promotional activities. I mean how, what are you thinking how to increase awareness about practitioners I mean they are like that – just talk the kind of risk?

Yes may be question and – yes thanks it has been a really busy I couldn’t be happy with how things are going its really coming through in so many fronts. So yes so the product launch would be – imagine in the clear lab equipment in the vet market. And we would look to broaden that to licensing to the other big labs, which does not need sales reps. We are taking on [indiscernible] who is a specialist in the sales area. He is putting together plans from us how we roll it out through that universities, and then product through reps, but I think this is not made public, but I can tell you what are thesis has been with everything else. And I don't see we change in the vet market is we really don't want the large numbers of sales reps. Being a simple [indiscernible] there is a system set up currently for a whole of tests in human and the dog space and current price for products to go through. We don't intend to reinvent the wheel we don't intend to have large sales forces or teams. And that's how we kept everything really low cost. Now if we don't need to do it. We don't do it. So we did a lot in the human space. We need a few key people to market the process to the people who sell them. But I don’t see any situation where we're going to need a lot of sales force and there's absolutely no need for one. And that's also the good thing on being a magnetic base is we can also move from the plate format to the machines also in the vet market as well for the big centralized hospitals, the vet hospitals. So it's a very, very complimentary to the human space and I think we'll tackle it the same in human space. And yes, I said tackle cancer File 11 tackle cancer to both ends of the leash in the same way. I think our model is very transferable to the vet market.

No disclaim so going to the close and collaboration in China, so I have the lung cancer files you one international ongoing. And if I'm correct, you mentioned in the press release that you started working in colorectal cancer as well. Can you tell a little bit more about it?

Yes, absolutely so question I think I've been impressed with the results and what we do and what we're about. They also have their machine the Lumina. So they can use manual plates or the Lumina uses beads, so we’re getting that to work. Yeah, they're very happy with what was going on so they've initiated the colorectal trial as well. So we could have that on that coming up soon. I've mentioned that as a data point, because it's obviously within their gifts when they release the data, but I expect to see some data from either the lung or colorectal soon. And I'm in charge with a few weeks, actually two weeks, and I am going to continue those discussions on how we can best roll out our Nu.Q in China. But I think given the very large size of the market and the size of our opportunity in so many countries. I would see China as a licensing opportunity, not something where we really want to launch a large range of products. So I’ll be looking for deals with the mixture of milestone payments and royalties. And we'll continue on with what we do best which is developing the platform and really revolutionizing epigenetics and label selling in China to a Chinese group. So hopefully that's going to be facing if we continue the discussions, but I'm very happy how that's going.

All right yeah, I know you took probably what the lead was in terms of international opportunity probably wouldn’t make sense to answering way. But I just know there would be that would be [indiscernible] from the data in lung cancer and colorectal cancer there will be indication important for you as well. But in terms of the collaboration so are these two manipulation focusing going or is there like potential to see with more cancers?

The Chinese have some slightly different cancers, different populations, things like the [indiscernible] and head and neck and other cancers are more common there. But, we're all human beings so we have a commonality in a lot of cancers. I think a perfect relationship with someone in China or other groups in Asia like India or areas would be to licensed one or two products, get the relationship working, and then develop it through a wide range of products if that relationships going well. And as colorectal cancer is on the rise in China, lung is massive as we know, but there's every indication that our assays could work in a range of cancers and yet they're very interested in working in any cancer which could be launched in China, so all of that I think would lead us to, if I may not be our choice to finish the work there. It's going very well, so far. We like working with them. But I think if we did, that'd be very good. But there are other options. But the trial seem to be going well, and I’m look forward to continuing those discussions soon.

Okay, thank you. So [indiscernible].

Thanks Jonas.

Thank you, ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Reynolds for any final comments.

Thank you, everyone and I know it's a busy time for you all so thanks for taking interest. Also those of you going to be at JP Morgan we're going to have a big team there. That's I mean to two short months we're going to be over there. And I think our 2020 would truly be a fantastic year for Volition. So hopefully you can all keep track of what we're doing and we'll have a lot updates coming up. Thanks again for your time.

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