Q4 2021 VolitionRX Ltd Earnings Call
Good morning, ladies and gentlemen, thank you for standing by.
Welcome to the tissue Rx Limited's fourth quarter and full year 2021 earnings conference call.
During todays presentation, all parties will be in a listen only mode.
Following the presentation the conference call will be opened for questions.
If you have a question. Please press the star key followed by the number one on you touched on the phone.
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This conference is being recorded today March 31 2022.
I'd now 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 todays earnings conference call for Volition Rx limited.
This call will cover Volitions financial and operating results for the fourth quarter and full year of 2021.
Along with a discussion of our recent activities and.
Key upcoming 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, Mr. Accuse Chief Financial Officer, Dr. Tom deter our Chief Executive Officer of our bullish in veterinary subsidiary 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.
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.
<unk> 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've identified various risk factors associated with our operations in our most recent annual report on Form 10-K .
Quarterly reports on Form 10-Q , and other filings with the Securities and Exchange Commission we.
We do not undertake an obligation to update any forward looking statements made during the course of this call.
I would now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds Kevin.
Thanks, Scott and thank you everyone for joining Volitions full year 2021 earnings call today.
We especially appreciate your time, given the busy earnings call season.
We will come to a review of 2021 and financial statement shortly but given all the activities surrounding volition vet, we're delighted to start the call with Dr. Tom Butera, Chief Executive evolution veterinary.
Then we will do a review of all of our other exciting ongoing work.
Before I hand over to Tom I would just like to say that on a personal night that I honestly could not be proud of the team's achievements in securing a global licensing and supply contract with one of the industry's leading companies the Heska Corporation.
Good day will take time and this is a very good deal and I could not be happier.
And with that I'll hand over our presentation to Dr. Tom Butera, Tom over to you. Thanks.
Thanks, very much Kevin and Hello, everybody 2021, and this first quarter of 2022 really has been a breakthrough time for volition veterinary and I'm. So proud to update all of you on the call today.
I fully appreciate everyone will be eager to hear all about our recent announcements regarding the licensing and commercialization of our new Q vet test, but firstly I would like to quickly reflect on the team's many other achievements.
I first became involved with volition as an investor.
I was attracted to the nuclear Zomax platform and thought the technology could be extremely versatile.
Fast forward, a little while and I was honored to join Volitions Board of directors as an independent director in December of 'twenty, 'twenty and just a few months later delighted to join the company full time as Chief Executive Officer of the Volition veterinary subsidiary.
But the hard work started long before I arrived and so I would like to pay tribute to the whole volition team, who have worked diligently over the last 10 years or more to develop the technology the product the branding and the momentum for everything we have today.
Its remarkable to me that the memorandum of understanding with Texas A&M University was signed a little under three years ago and our announcement at the time was simply to explore the feasibility of a collaborative research relationship.
While we've come a long way in a very short period of time.
We went on to establish a subsidiary finalize our collaboration agreement with Texas A&M.
Publish a paper on pre analytics conduct our pivotal clinical studies and beta launch the test in Texas, all within a two year period, some quick footwork for sure.
In 2021 Dr. Heather Wilson roadways, published two peer reviewed papers reporting the detection rates for our new Q vet cancer screening tests in two common canine cancers.
We believe that this simple easy to use blood test addresses a huge unmet need in the veterinary market.
As I have said on previous calls cancer screening is not yet as commonplace in animal health as it is in human health, but I firmly believe blood tests like the new Q vet cancer tests could significantly help transform how veterinarians manage cancer and companion animals.
Despite this initial success our clinical work didn't stop with the screening test Dr. Wilson mobilize and team have been working on expanding the range of cancers are test detects and also on expanding the potential use of nuc event for the monitoring of diseases.
In the fourth quarter of 2021 I was excited that the first data in relation using the new Q vet test as a monitoring tool was published not.
Not to get too technical here, but the data presented at the veterinary Cancer Society conference in late 2021 demonstrates that <unk> may serve as a more sensitive measurement of both minimal residual disease and remission and could be very useful monitoring tests for dogs with cancer.
We believe that being able to use the new Q vet tests to not only screen for cancer as per our current product helped.
Helping identify disease earlier, but also then to be able to help monitor the disease progression as an early indication that a dog is coming out of her mission will meet a real unmet need in the market.
The first data regarding the new Cuvette test monitoring capabilities was really terrific and I know that Dr. Wilson roadways, and the whole team are excited to finish the study of over 100 dogs early in 2022.
Submit the study again for peer reviewed publication and then progress onto an expected launch later this year.
The clinical team has also completed the analysis of over 600 canine subjects 500 and for cancer patients and 135 healthy control dogs.
Unfortunately, I cannot say too much on the call. Today is this data has been accepted for publication at a widely read Veterinary Journal is currently under review.
But I am happy to say that nucleosome levels were evaluated in the plasma samples from patients with seven of the most common canine cancers. So we expect to broaden our marketing claims in the coming months. So please watch this space for further data updates on this multi cancer topic.
These studies papers and conference publications, while time consuming are helping to build our profile and credibility with Kols oncology specialists G. P doctors and importantly, our current and potential licensing partners I firmly believe this will position us in a leadership position within the veterinary oncology space long term.
And so speaking of licensee partners I honestly could not be prouder of our achievement is occurring global licensing our supply contract with one of the industry's leading companies Heska Corporation.
Heska is a leading global provider of advanced veterinary diagnostic and specialty products and is dedicated to developing the next generation of rapid low cost point of care diagnostics for companion animals.
He has a worldwide distribution and partnering network.
Ask a very much shares our philosophy, how work ethic and vision as to how new Q vet can really help save lives and improve outcomes for millions of pets worldwide. Our executive agreement with Heska provides.
Exclusive rights to sell volition Nu Q vet cancer tests for companion animals at the point of care.
Non exclusive rights to sell the new Cuvette cancer tests for companion animals via Hesketh reference laboratories and.
And exclusive rights to canine cancer monitoring and feline lymphoma tests as well as certain rights to potentially commercialize a wider test menu to companion animals again at the point of care.
This multi year global supply and license agreement totals up to $28 million in milestone payments. In addition to ongoing payment for kits and kit components.
The exclusive part of this agreement is providing the new Q vet tests at the point of care for companion animals.
The plan is to transfer the new convert cancer tests onto Heska is point of care platform the element I plus immuno diagnostic analyzer.
As background Heska is element I, plus immuno diagnostic analyzer is a point of care platform, providing veterinarians with rapid accurate low cost and easy to use testing, which support their clinical decision, making in real time at the point of care in the Doctor's office.
In the future of veterinarians in both hospital and clinical settings will be able to detect cancer early and monitor treatment response by testing within their very own practice, both volition and Heska firmly believe this will help improve outcomes for both pets and pet owners.
The agreement also provides a nonexclusive license to heska for the provision of the new Q vet test for companion animals through the reference lab route what's.
Whilst volition and Heska are starting with canine cancer detection. Our focus is also likely to include disease monitoring in the near term and other companion animals, such as fee lines in the midterm.
Given the parties belief that the market potential and likely breadth of use of the new cube that technology is significant the negotiation and due diligence process has been extensive and therefore time consuming and so we thank you for your patience and awaiting this news but.
But we are absolutely delighted it has been fantastic getting to know the heska team and we very much look forward to a long and fruitful relationship.
And secondly, as a reminder, as it seems some time ago now but in December 'twenty 'twenty. One we also appointed Sage health care to serve as a nonexclusive license E and distributor for volition, Ncube vet cancer screening tests and centralized labs and Singapore.
Followed by expansion in conjunction with Sage health care into centralized labs, and other key Asian markets.
Launch preparations at Sage are well underway and I look forward to providing updates on future earnings calls.
We remain in advanced negotiations with other potential licensing partners and our efforts to make new Q vet as accessible as possible worldwide.
So please watch this space for further details in 2020 two.
All in all an incredibly busy time for the whole volition veterinary team and many of the volition executives too.
I would like to publicly commend and sincerely. Thank the team for their hard work a great job well done.
And I truly thank all of our efforts will be worth it.
In the near term for canine cancer, some statistics that demonstrate the opportunity.
One in four dogs will develop cancer.
Almost 50% of dogs over the age of 10 will develop cancer.
6 million new cancer diagnoses are made in dogs each year in the United States alone.
And 470 million dogs live as pets worldwide and the number continues to increase year on year.
To help us access these opportunities I am delighted to say that in the first quarter of 2022, we have added significant strength to the volition veterinary subsidiary with the appointment of a product manager to help drive our product development program, a marketing managers to continue to build the awareness and credibility of new Q vet and a global.
Account manager to work with our partners and key counts to drive the business.
Welcome to the team Daniel Devin and Christie.
And so to the future and what's coming up next.
Negotiations continue for other potential licensing opportunities in our efforts to make the new cuvette as accessible as possible worldwide and we expect to announce further developments along those lines in 2022.
I am also delighted to say that for all the cat lovers out there that we have started collection for our feline cancer study.
Feline samples are notoriously more challenging to collect but the study is now underway and we look forward to reporting study results in due course.
We continue to have a busy conference schedule, having already attended and presented at both VM ex N. W. V C. In 2022 and with some important upcoming events in Europe , as we start to spread our wings and build awareness in other countries with conference attendance plant in Italy, Germany, France, and the U K.
I'd like to thank you for your attention and indeed for your interest in volition veterinary.
With our published data and now the execution of our licensing and supply agreement with Heska, along with our supply and license agreement with Sage Health care, we are really gaining momentum.
I, along with the whole team and indeed, our partners believe that our new Q vet tests meets a significant unmet need in the market and could eventually be one of the most popular diagnostic tests utilized by the veterinary community in the future.
And with that I'll pass it back to Cameron.
Thanks, Tom for that very comprehensive update and thanks to the vet team and indeed, the whole volition team for their hard work and reaching myths fantastic milestone.
I am delighted with the progress we have made in this key area as we progressed strongly from a purely a research and development company to one with a wide range of products.
It is an exciting fast moving part of our business with clear potential to generate significant revenue for the company in terms of both milestone payments and an ongoing revenue stream from the sales of kits and key components to Heska and phage health care, both at a very healthy margin and now onto other aspects.
Of our business review, starting with what I believe is the most important element our people.
Throughout 2021 and indeed into the first quarter of 2022 we've expanded our team and strengthened the bench with some incredibly talented recruits.
Cause vora commercial expansion, we welcome Terry Hughes as our Chief Financial Officer, Gail for tear as our Chief commercialization Officer and Dr. Tom Butera as the Chief Executive about bet subsidiary.
In addition, we also hired our Chief General Counsel Nick.
And moved could turn Michelle to head up our U S operations as our Chief operating officer to accelerate development of Volition America.
The caliber experience and expertise that Nick Terry Gail, Tom and Cotan collectively bring to Volitions leadership team puts the company in a strong position and certainly their skill set with showcase during the recently announced Heska agreement.
Meanwhile, Dr. Terry Kelly was promoted to Chief Innovation Officer, and work from our California Lab.
Terry is doing an excellent job building a team focused on cutting edge discovery research at a new innovation hub, which opens in California. This month.
To help drive work in a cutting edge capture program and other exciting areas.
And as you heard earlier from Tom our expansion has continued into the first quarter with new appointments to the vet team.
People are at the heart of everything we do.
I'd like to welcome our newest colleagues and congratulate our team members on their promotions.
And I'd like to thank the entire team for all their efforts and many achievements in 2020 one.
Our next key element of the company is our patents.
As of year end 2021 our patent portfolio included 29 patent families either.
Tyler AC four patents granted related to our diagnostic tests.
Including veterinary applications with 12 patents granted in the U F 14 in Europe , and a further 58 worldwide.
Additionally, we have a total of 93 other patent applications currently pending worldwide.
Next key element of the company is a product.
We have five product pillars, one of which Tom covered earlier with regards to Newquay vet.
Our next pillar is new units.
During 2021, we put significant effort towards developing a new product <unk> net to detect the ptosis.
Data published at Congresses, Thus far show that the level of separating net as measured using our new units as a correlate with current disease severity and mortality in COVID-19 patients.
In addition, the study showed that our net space tests could be used to predict the future disease severity and guide treatment selection in patients on admission.
We intend to register a new niche product with a broad almost CIP style claim for the detection and evaluation of infection tissue injury inflammatory disorders and disease associated with <unk>.
We believe that not only is this broad claim achievable. It also gives us the largest possible market opportunity.
Further we have established proof of concept for nuclear net as an effective test to monitor their response to our novel treatment for sepsis.
The development of net once again underlines the breath of the nuclear platform technology, which is supported by a robust intellectual property portfolio.
We have a product manager in place and are driving forward, our plans for commercialization aiming to CE Mark Newquay net.
Across multiple platforms. This summer.
We're also developing a U S clinical study plan geared towards FDA approval of <unk> product, which we expect to start the pilot study later this year.
Next up you can discover.
And I'm delighted to report a very strong progress in the commercialization of this product pillar in recent months.
As a reminder, you can discover give clinicians patients and researchers access to a range of state of the art assay is built on our proprietary nucleoside makes platform for rapid epigenetic profiling in disease model development.
Preclinical testing and clinical trials.
3.1 assay is also available for purchase as a research kit.
Our assays run an ASP of one facility in Belgium or on site.
Can be used to answer clinical questions such as measuring treatment.
I can see on target and off target effects in drug development.
Applications include biomarker discovery in oncology.
Inflammatory conditions diabetes and more.
Existing and potential customers include both pharmaceutical companies and academic research institutions.
I'm very happy to announce today that we hit a milestone of signing our first you could discover agreement in 2021 .
We've enjoyed excellent momentum so far in 2022 having signed a further five additional agreements with an aggregate of a little over $200000 on a full year basis.
This has been a great few months with six deals in total being signed.
Interestingly the Grimms involved five separate organizations and a real mix of pharma and academic research customers from a wide range of disciplines.
We believe that this really demonstrates the amazing adaptability of our Newquay platform beyond our core work.
We currently estimate the total addressable market for nuclear discover to be over 200 million per annum worldwide, but it is a tough area to get good visibility on revenues going forward due to the wide range of studies, we aimed to be working with.
The opportunity is calculated using publicly available drug pipeline data the number of clinical trials and the average failure rights for relevant epigenetic targets.
On average we estimate revenues are in the region of 40000 for the preclinical phase 150000 for phase one 200000 per phase two and over 750000 per phase III.
And clearly if the drug is subsequently registered and commercialized than larger additional ongoing revenue would be expected.
Now these are quite large numbers, but that would only be expected over quite a significant period. For example, it takes an average of 10 years to go from preclinical phase to commercialization.
Also these numbers, including our estimated total addressable market are of course subject to fluctuations based on numerous assumptions, which may prove incorrect.
Could materially impact our estimations and results.
So a fairly significant if someone unpredictable revenue stream, but we are delighted to get up and running with our first wide ranging contracts and talking of revenue I will now pass over to our Chief Financial Officer, Terry Hughes to provide a summary of the financial report of our full fiscal year 2020 . One in addition to ups.
Dating you on other financial related projects.
He will also provide an overview of what we estimate our total addressable market.
To be across our multiple product pillars.
Terry over to you.
Thanks, Cameron and thank you everyone for joining our earnings call today I will now provide a summary of the key financial results for the year ended 30 <unk> December 2021.
We closed out the year with cash and cash equivalents of approximately $26 million compared with $19.4 million at the end of 2020.
I'll just take a moment to recap our financing activities for the year.
You may recall that back in January 2021, we announced the award of approximately $4 million and non diluted funding from the balloon region and the more invest in Belgium.
That funding supported the purchase and fit out of silver one our new production facility in Belgium.
Well as a number of ongoing cutting edge research and development project.
That was followed in February by an underwritten public offering of our common stock, which raised net proceeds of approximately $18 $9 million.
Last but not least through the course of the year. We also received net receipts of approximately $4 $6 million from equity sales through our at the market equity distribution programs.
We continue to manage our expenditure carefully and while there is some quarterly variation and indeed, the overall level of expenditure has increased in 2021 as compared to prior periods. We have an underlying cash burn of approximately $2 million per month.
We expect that May increase slightly in the first quarter of 2022 as it did in the first quarter of 2021.
Moving onto the P&L the net loss for the full fiscal year, 2021 was $27 million versus $24 million loss for the prior year.
Research and development spending was $15 $5 million in 2021, an increase of approximately $1 million as compared to 2020 and was primarily impacted by higher personnel costs due to new highs.
General and administrative expenses were $8.8 million in 2021, an increase of approximately $3 $1 million as compared to 2020 and were primarily driven by higher noncash based compensation cost, which partly reflected one off charges to two extend option expiration periods from six to 10.
Years to align with market norms.
Sales and marketing costs were $4 $1 million in 2021, an increase of approximately $3 1 million as compared to 2020 and were primarily impacted by higher personnel costs as we built out our commercial team.
Grant income recorded in 2021 with $1.5 million compared with $1.6 million in 2020.
From a revenue perspective, we recorded $90000 in 2021, the majority of which was from sales of the new Q vet test related to our beta launch with a single lap at Texas, A&M University and the remainder from initial sales of <unk> discover to customers in Europe .
So to recap we closed the year out with a strong balance sheet with cash and cash equivalents of approximately $26 million.
Subsequent to year end and as discussed by both Cameron and Tom We are delighted to have executed a licensing and supply agreement with Heska Corporation for the new Q vet cancer test to reiterate under the Heska agreement volition will receive an upfront payment of $10 million up.
Up to $18 million based upon the achievement of near and mid term milestones and payments the kits and key components at pre agreed prices, which we expect will provide a significant future revenue stream with margins that reflect the value of our intellectual property.
This is fantastic news for the company and like Cameron and Tom I'd like to offer my congratulations to the whole team. It is great to feel we are now up and running on our commercial journey.
In terms of our revenue outlook, it's hard to predict with any certainty the ramp up in product sales this year.
So erring on the side of caution, we would say, including the upfront payment from the Heska deal. We would expect full year revenues to be around $10.5 million with expectations of a significant ramp up in product sales from the start of 2023 onwards.
And so here might be a good point to provide a summary of our markets and their thighs.
We estimate our total annual addressable market or Tam to be approximately $70 billion worldwide, including Youku vent youku discover youku nets and Youku cancer.
This estimate of our annual Tam is broken down with key assumptions as follows.
We estimate the new Q Tam to be approximately $11 billion annually worldwide based on global canine and feline population, that's eligible for screening and monitoring and the price assumption at $50 per test to the consumer.
The ncube discover we estimate our opportunity to be over $200 million per annum on a worldwide basis.
We estimate this using drug pipeline data at registered clinical trial programs for relevant epigenetic target.
Moving to our future product launches, we estimate the <unk> net 10 to be approximately $22 billion annually on the worldwide basis.
Unfortunately, sepsis remains old too prevalent accounting for approximately 20% of deaths worldwide.
Our Tam is calculated based on estimated hospital admissions and discharges for sepsis and the associated average length of stay.
And last but not least we estimate Taiwan youku cancer Tam to be approximately $37 billion annually on a worldwide basis.
This was calculated based on eligible populations for annual screening target participation rate in incidence and prevalence of specific cancers and risk stratification use cases.
Price per test assumptions, the Nu Q in Youku net range from $120 for the U S to $50 for Europe and $25 for the rest of the world.
Given the product range. We believe we can develop from a proprietary nucleosome X platform. We believe our addressable markets are significant and we look forward to accepting those opportunities and reporting in due course.
Please note however that these numbers, including our estimated total addressable markets are of course subject to fluctuations based on numerous assumptions, which if prove incorrect could materially impact our estimations and result.
We have made strong progress on many fronts in 2021 laying the foundation for all commercialization journey, where we have already see now first success in the first quarter of 2022.
And with that I will hand back to Cameron for his update on the future product pipeline and upcoming milestones Cameron.
Thanks, very much Terry for that comprehensive financial report and for highlighting the tremendous commercial opportunity we have before us.
I appreciate given all the news this is quite a long call, but before we wrap up I'd like to provide a quick update on another one of our pillars, our youku cancer program.
Overall, the impact of the pandemic on our business has been most notably limited to delay in collections of studies and supply issues. For example, our U S studies have encountered delays.
With the NHL study, we took the opportunity to alter the study protocol to upgrade the platform to a high throughput platform from plates, which will help us facilitate and FDA compliant product and are shifting away from appraisal to fresh samples.
We currently anticipate the U S N H O study collection will begin in the second quarter of this year and I'll be sure to keep you abreast of developments as we move through the year.
The U S. Colorectal cancer study led by the E D. Iran. The early detection research network re initiated enrollment in June of 2021 and has continued to enroll subjects during the pandemic at a steady, but unfortunately decreased right.
As government health care agencies begin to relax pandemic restrictions the actual rate is expected to increase accordingly.
The D. R N still estimate the study completion date to be at the end of 2022 .
The brightest note in this product pillar during the pandemic is Asia, where we not only reached our target patient cohorts for both colorectal cancer studies and the lung cancer study all collected in conjunction with the National Taiwan University.
But it also presented initial data from the colorectal cancer study at the prestigious Alco G are meeting held earlier this year.
It is great to have this first data out and we look forward to sharing more analysis in the future.
The lung team has also completed the preliminary analysis and submitted abstracts for the lung cancer study for two conferences to be held later this year.
So please watch this space for that and so dwell off product pillar <unk> capture.
As I've said on previous calls we believe the nuclear capture technology will be transformational as the DNA enrichment technology, which could potentially a diagnosis treatment selection and both treatment and disease monitoring when used in combination with either sequencing mass spectrometry Amador and EQ assays.
And you could capture program now has several other strands of technology, which either essentially removes background noise, thereby amplifying the signal or looks to identify the signal in a novel way.
Furthest dragged the nucleocapsid analogy involve isolating various parameters and fragrance, including nucleus aims and transcription factors from plasma from analysis by mass spectrometry and next generation DNA sequencing. So together. We are currently actively working on four different strands venetia capture in Belgium.
And in our New California lab.
All of which are potentially very exciting product areas.
In 2020 , one a novel method utilizing you can capture and mass spec was published and demonstrate the detection and quantification of histone modifications present in the circulating nuclear signs in the blood of cancer patients.
Furthermore, the use of our NICU capture technology may open up the possibility of using mass spec not only for biomarker discovery and.
As demonstrated in this paper, but also has a high throughput platform Prescreening Ando diagnostics when used in combination with either sequencing or <unk> assays.
This has progressed to the stage whereby we are now working on setting up a large 1000, plus patient study in lung cancer and colorectal cancer.
And I look forward to updating you on this later this year.
It is incredibly exciting potentially IP rich breakthrough technology.
And we expect to report and public further finding throughout 2022 and beyond.
And so in conclusion I'm delighted with the significant progress we made on many of our product pillars in 2020 , one in particular and continuing to strengthen both our intellectual property portfolio and our exceptional team.
I am of course incredibly proud of the team's achievement in securing a global licensing and supply contract with one of the industry's leading companies the Heska Corporation.
A great job well done.
Heska and sage very much share our philosophy, our work ethic and vision as to how you can be that can really help save.
Lives and improve outcomes for millions of pets worldwide.
And we are excited to move forward to the next phase.
As Tom said negotiations continue for other potential licensing opportunities in our efforts to make newquay vet as accessible as possible worldwide and we expect to announce further developments along those lines this year.
I along with the rest of the board and indeed, the whole company very much look forward to sharing further news regarding volition vet and all other subsidiaries as well as the results of our key clinical studies publications and milestones over the coming months and quarters.
Thanks, so much for joining the call today, we very much appreciate it given the earnings call season.
We're happy to take questions now.
Operator.
Thank you and at this time, we will be conducting a question and answer session.
Again, if you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
You May also press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing historic piece.
One moment, please while we pull for questions.
Yeah.
Our first question comes from the line of Ross Osborne with Cantor Fitzgerald.
Please proceed with your question.
Hi, good morning, Congrats on the progress.
Thank you.
Starting off I know you're not.
Giving quarterly guidance.
Help us think about how the year should congrats.
$5 million got it.
Any clarity there would be helpful.
Yes, Jonathan.
Yeah.
Yes sure.
So.
As <unk>.
Cameron mentioned earlier.
The <unk> discover revenue.
Can be somewhat unpredictable.
But we do have.
A number of contracts already signed so that will that will form.
Part of the revenue that we see through the balance of the year.
And as we said we've taken a fairly.
Conservative approach in terms of the ramp up of the product sales.
The vet product.
We're expecting.
Commercial launch.
These two somewhat towards the end of the year or beginning of next year.
And therefore, we would expect that to ramp up.
Much more significantly next year.
So I think what youll see.
Is.
Stream of growing quarterly revenues from the other products.
And then perhaps the.
Some small amounts of revenue coming in from the back.
Towards the end of the year, sorry, I cant give it.
More clear and so on that quarter by quarter at this point, but it's just it's just a little bit unpredictable.
Yes.
Just to talk about just in general as well I think.
It surprised us I think all the models, what we thought which book.
A slow year for any revenue.
Getting this upfront payment, which goes straight to the bottom line of $10 million, it's already arrived generic counts.
We're already.
110 times last year's revenue.
With one check.
Well listen thousands within guidance. So that's a good start to the year.
Yes, there may be some other milestone payments late this year or from the three more milestone payments.
Joe totaled 18 coming in from Heska. If those milestones are achieved and I think they are all quite achievable.
Euronext.
As you can see the need for discover suddenly picked up a lot.
Six deals is absolutely fantastic.
Dan kind of burst, we sorted out the IP issues in.
I have to make sure we had all the quality we hate it for all the things were doing and now we haven't sorted out.
Actual issues.
That was a fantastic outcome to go from one to now fix in a few months.
It's Alex.
Together.
More than double last year's revenue of two or three times last year's revenue.
The sales were not quite sure because it depends on the ramp up and that's now in the hands of several external companies but.
At sages launch is coming in a few weeks so they'll start selling the.
Debates in Singapore, Texas identity to selling the test of course.
Then.
This contract and we're also hoping to time.
Some of the large.
Reference labs contracts sometime.
Sometime soon.
Possibly going to come into this year as well.
We don't really know.
Every time, so we're being conservative, but I think that that conservative figure is property.
Bigger than anyone was expecting for the entire year.
Given the nature of it all it can be lumpy with the discovery of these milestone payments. So it's a little hard to predict but we just could not be happier.
Uh Huh March now and we're already 100.
And Tom do you want to check what we got.
Last year, so it's a great start, but we'll guide as we as it becomes more obvious to us what the revenue is the aim is to get the big payments data and also increase the incremental revenue totaled the quarter on quarter as it ramps up.
Okay, great. Thanks for the additional color there.
That sounds like yeah, I'll say, great start so maybe one one more for me and I'll jump back in the queue.
Just given the Lockdowns in China.
Has that adjusted your Asia commercially commercialization plans, probably use age and.
And then you know what countries will you initially target because the beta launch in Singapore.
Yes, sorry.
Certainly if I can China, we've been.
Working with a large company that they have been fantastic but.
Obviously the little.
That's correct John .
But still.
Singapore is coming out of the launches in a few weeks' time should keep an eye out for that and and I'd say, it's more a focus in the short term on southeast Asia.
They are quite rapidly lifting their lockdowns now as well.
It definitely has affected the Chinese market.
And.
The South East Asia, where I think.
We will focus going short term.
It's really starting to move now and sorry, what was the second part of that question.
You addressed it.
And I think taking my question Congrats again.
Thanks for your questions and have a great day.
Yeah.
And our next question comes from the line of Bruce Jackson with the Benchmark Company. Please proceed with your question.
Hi, everybody. Thanks for taking my questions just a few more questions.
Questions.
You've discussed maybe getting some more contracts and in the lab space Heska does have a bit of a footprint in Europe are you going after any of the other labs in Europe .
Yes.
Yeah, So I guess the whole background for all.
And then I guess, Tom can answer from them from a European side, but I mean, it's been as Tom said, it's a fantastic outcome from Heska, but they are focused on.
Point of care. They do have some reference labs and I believe they are intending to launching those we.
We do have very active negotiations with the big Tech companies.
And that's gone well that could be used in the short term, but as with phage.
Yes, it could well be regional players throughout the world and we're in discussions with a few of those.
The big players so.
Her career to get to our vision of being many labs as possible in front of as many as possible worldwide.
To reach as many of those half a billion dogs as there are in the world.
It should be as many deals as we can so there'll be some more news on that later this year from Jonas Pictures.
Yeah, I was just going to add to that candidate.
We have a significant European strategy currently underway, you've had tremendous interest from the European <unk>.
French labs, as well and we anticipate that they will be agreements signed with them as well during the course of 2022 and going into 2023.
Okay, Great and then in terms of the fee line testing so collecting samples right now realistically when cadet test beyond the market and have some some impact on revenue is just more of a 'twenty 'twenty four type of a product or could it contribute to 2023.
Yes, I think I think realistically, we're going to be doing a lot of the collection in 2022, the latter part of 2022.
Initial validation tests I mean initial validation work will be done in 2022, some anticipation would be at least our goal is to in 2023 tried to bring that test to market.
Okay, which would probably be pretty full revenue.
A year behind I think this year, it's about finding the deals and getting it available and launching some good revenues, but I think it would really ramp up next year. So I'll get to that will be on the bulk side I guess it would be more 24 story for the cat market.
Okay.
Yeah.
You mentioned things like we haven't developed market, but the actual product revenue.
2024.
I'm going to give it very well.
Yeah absolutely.
T D D E B R N studying United States.
When they say they're going to finish.
That means does that mean the collection of samples and then you do the testing or is the test yet I'm going right now so in terms of the timeline.
So that's yes the.
'twenty three 'twenty four story.
Yes, that's the one thing I think what we've done now has been a tremendous validation and verification of our strategy in the vet space.
And then places to really push that now the human cancer sites in the U S has been slow because it dependent understandably people don't want to go part of the trials and the hospitals are closed or the fear of theaters outfit.
So that has slowed but I think as you can see reviews I'm very wisely. So I think that would be a 'twenty three 'twenty four story for the Edr inside.
Okay got it and then last question for me on the burn has been running at maybe about 2 million a month.
The second tick up slightly this year with the extra hires and everything here should we still be modeling net debt you know roughly $2 million per month burn rate.
Sure Yeah, I think yes, it's there so.
So.
Currently running on average two and a month of first quarter will be a bit higher.
As it always is.
And throughout the year, we can expect it to tick up a little bit.
As activities ramp up.
Alright, great. Thank you so much and congratulations on all the progress.
Thank you. Thank you for your time Bruce Thank you.
Our next question comes from the line of Nathan Weinstein with aegis.
<unk> capital. Please proceed with your question.
Hey, Good morning, Cameron and then Melissa and team thanks for taking my questions.
Firstly, congratulations on securing this licensing deal with Tesco very well established and highly respected that diagnostics company. So it was really excited to see that press release come across them.
I guess I'll just start with the question in your Q that side just prior to revenues ramping there from product sales like how you know how do we track the progress of the partnership over the next year or so will that be around milestone announcements or how do we keep an eye on that.
I think it will update is a cooperation on the quarterly calls.
We are hitting the ground running.
They had the kickoff meeting a call yesterday.
Because it really came together quickly.
We've spent a lot of time working with them adapting to the elements of high plus platform.
And looking at also to launch.
Flight testing like a snap test so thats in constant development and they also of course have the rights to launch it in the laboratory as well in the reference labs. So I think it would be a lots of things going on in the very serious about getting it running I think showing $28 million in payments, including 10 on siding.
But I think it's a very big product.
And as you said I think it's a great deal for everyone.
Exactly the deal I like it's good for us it's good for Heska.
Good.
Douglas potentially cats, and it's a it's good for everyone because it's a real need in the market and I think I'm very very dynamic company. They really hooking to dominate the point of care space and I think I made a very good decision in working with us to launch this test at the point of care. So, we'll we'll update big events.
On the earnings calls and texts as it goes through the year and also of course, there are three milestone payments totaling $818 million to come which we think are very achievable this year and next.
So that would be the big ones I guess that has the revenue that comes.
And that's what's exciting.
Launching this month.
And I hope it a few weeks time, so there'll be a steady drumbeat of different things happening.
Okay Fair enough and then just turning to Newquay discover obviously signing several agreements there was a couple of hundred thousand dollars that number is starting to get interesting I guess can you sort of break out how those dollar figures go up as you have a customer that's further along in clinical trials is it because their order.
Or any more product or a different products later in their trial and the trial.
Typically its the same it depends on so it's about half universities and half pharma companies.
As you use that they order a few kicks in then that works. They order a few more sorry, sometimes we got from either five or 10000 to 40000, and then it jumped to the hundreds of thousands to be part of the next stage and then if it becomes part of the product to the companion Nora you've got very key in the drug development or the research program it couldn't.
With a lot of money.
So it's.
It's been interesting.
We've really learned a lot about Iraq, where he is and what the whole industry, it's serving a few purposes.
So it would be revenue.
A few hundred thousand dollars from misalignment sort of more than doubles, our revenue from last year from everything so it's interesting just for incremental revenue growth.
Oh, sorry, sorry.
The facility of the platform, but I think also it really allows us to kind of understand what's going on in epigenetics. We have big aims to be the heart of epigenetics and provide better tools for a lot of people.
So working with different groups in different areas I'm really allows us to be.
At the heart of what's going on in this incredibly.
Notably exciting space. So I mean, he is the revenue and that's been very non spits also really keeping track of a lot of different things. So we can better understand epigenetics ourselves and our own products and also really helped them through these purchases.
Okay Fantastic and then just one final question for me and sorry to jump around but Theres a lot of different projects, you're working on so I really do like asking about new units. If you don't mind and you did ask us new nets it links but maybe.
Maybe just remind us or summarize what are the next prospective catalyst in that program.
Yeah actually that's really.
Extremely extraordinary you're below the surface.
We've hired team members to really drive it.
The tightness.
Just to remind everyone is what kills the majority of people in Canada, but also sepsis, which is it's one of the biggest killers, if not the biggest killer from hospitals.
And it's very hard to detect particularly early quickly treat pretty easily what we do so we're incredibly excited about this product platform. It's exactly the same platform has been using.
And so we are expecting our first CE mark quite soon.
The regulations are changing in Europe in a few months' time. So we're trying to get some of them are before the regulations changed so they sort of summer timeframe. We would expect a few CE marks on different platforms why different platforms for different purposes.
Do you want to run to the lap on a lab machine, sometimes you wonder at the point of care, sometimes you want plates and if we are going to get to something like CRP, which is 85 million tests per year.
This inflammation marker, which the choices of course.
Inflammation.
Need to go on different platforms.
Sort of wave of news will be the CE marks to the European.
Launches I'm, sorry, the development of the products and the launches.
Part of what I was doing in the U S. This last trip when I was in the states with really work sitting down on the U S regulatory side, so expect to see some key hires in the U S. On the regulatory side in the short term I think some quite exciting people are going to be joining us to really help us drive that you went to regulatory side and we think beyond the current prices.
This is where we're at now.
Exciting money.
Particularly I, even get sepsis, which is our older tragic killer.
To see a lot of information on how we intend to launch in the U S advertisers products, which we expect to be a fantastic blockbusters later this year I'm sorry over the summer the CE Mark in Europe . Later this year the U S strategy and a lot more data and a lot more information coming out and we're also working with companies that could be a companion diagnostic arbitrary diagnose.
Diagnosing is one thing helping to treat versus another so expect to see some information on that this year as well. So yeah. There was a lot going on and we can do it because we have a very versatile adaptable very simple platform that can be used in many areas.
You got to be a very big part of that.
Over the summer to second half of it to see if we can.
Okay, great. Thank you so much for taking my questions camera and congrats to you Dr. <unk> and the whole team at volition, among all of the progress, especially on the backside.
Thanks very much.
Right.
And again as a reminder, if anyone has any questions you May press star one on your telephone keypad to join the queue.
Our next question comes from the line of Michael <unk> with Maxim. Please proceed with your question.
Hey, guys. Thanks for taking my questions. Thank.
Thank you.
So I wanted to ask regarding the Heska point of care diagnostics platform, how wide reaching is that as it stands and is there is there a base platform widely available at bet lab and clinic.
Hum.
Yes.
Yes.
It's Michael.
Michael the.
Heska as the number one their entire focus is point of care diagnostics.
Where that's where they have there.
Strongest emphasis.
That's where they have the biggest footprint.
Just to kind of give you an idea.
Got it.
U S basis alone, probably pretty close to 70% of the veterinary hospitals that are out there had in house laboratories, and Heska, probably has at least 15% of that market.
And with the introduction eventually have a point of care test with them.
And especially with reference to cancer, it's going to be something that veterinarians are going to very much gravitate to.
The anticipation is that especially with reference there to their element I am you know actually.
We spoke to that it's going to be probably a significant uptick for them in terms of abuse in the U S.
That market.
Thank you Michael could you don't also forget its not just the machine. This is a point of care license. So I believe that there is developing lateral flow test as well, which do not relate to machine. It can be run anywhere as well. So I think they're all about it until I have point of care solution.
So the machine is obviously, a big part of it and the machine they use is fantastic.
Very accurate very reliable platform, but they also I think looking to move into more bespoke who test as well so it's really.
Vital worldwide.
Through the machines and also through snap tests or lateral play.
Alright. Thank you I appreciate the extra color I'd just like to see also if you could provide a bit more granularity on.
The economics behind sales do Tesco in the point of care setting as well as.
The milestone what those are for those largely development milestone sales milestones could you talk a bit about that.
Yes, obviously.
It will be a little careful we're negotiating.
Negotiating with two other companies at the moment. So we don't want to give too much away overall first of all we're very happy I think it's a good deal for us and for them for all the reasons we talked about.
The milestone payments are fantastic.
Millions more coming and milestone payments.
If we achieve those milestones I don't think there's a reasonable chance.
Could do them all at the three of them by the end of next year and they pertain to the product launches and also to the feline.
Most of them as we discussed.
As far as what we've said obviously, we've got to be careful for all the reasons.
As we talked about but we're very happy with the deal we have.
So the kids were looking at about 10, those are coming to us.
And if the price is sort of $50 to the end user.
Heska, we'd expect to get about half of that and we were to get what we shipped from us and if we're selling components, it's cheaper than the kitchen, because obviously, we don't have to put together a kit.
Less than $10 for us, but at $10 for the kitchen and reduced Florida components. So that's I think a very healthy percentage for us and it really.
Our strategy of silver one in producing and key components allow us to provide a.
A big part of the solution to the vet company. So they don't have to do any development work that they need to produce anything themselves, we fully antibodies and controls which are very very good ones. We produce now I think we produced the best in the World certainly the nucleoside numerous times and Sydney Heska can adapt it to their machines or to the other point of care platforms or collateral.
So we get the milestone payments and then I think a very reasonable.
The revenue because we provide not only the IP. We also provide fantastic compare notes, which means they don't have to develop them.
Is that how you stay at home.
Yes, it is Tim.
Yeah.
Yes, thank you very much.
And then I also wanted to touch on the met hostess program, because you mentioned youre going through a broad CRP style claim and that you're potentially getting a CE mark over the summer so.
After you secure that claim what would be the next steps for <unk> to drive its adoption as a clinical product.
Very good question. So we're now in the process as we said we've taken on and the choices product lifecycle manager and his job to put together as a team to launch the product in Europe , and we're working on the right strategy. So the fee market means you can sell it to pay that purpose and if you want that clinical adoption.
You have one.
Mid range of proof that works very well so we're working with some great key opinion leaders from great a world renowned hospitals universities, showing how useful it is.
In the clinical setting.
So it's a critical product will be used in publications in trials and showing a really strong background and how well it works.
Also clinical adoption is partly driven by being a lot of different platforms.
As I said some people wanted to centralize lap if you don't know how are you.
Taking four or five hours in the lab is fine if you've got someone in emergency or intensive care you want something pretty quick.
When you go for a point of care and this is where the whole business leaves off each other and helps each other you know what's the point of care platform for the vet space can also help us in the human space and vice versa.
So to get adoption, we're getting the regulatory approval then we're getting a lot of great key opinion leaders behind the production I'm, showing how well it works and the buyback and we'll use it and then we make it available on as many platforms as possible. So that it's easily at hand, if you will to whoever is looking for the test can be run.
And as I said, it's something which we think is incredibly useful and.
And the total addressable market looks at people, we're giving it.
Every day when they are an emergency which I think is very very valid assumption given how deadly skepticism, knowing you're starting to get sepsis or how bad it is incredibly important.
And I think even everyone who goes into hospital in the first and last day of knowing if knits is becoming a problem.
Because it is such a massive killer. So I think we're working through the strategies now and we'll update on the coming quarters, but I think we've got a very good indication now with the path forward.
We're working through that process.
Alright, Thank you so much and congratulations on all the progress.
Thank you.
Yeah.
Yeah.
Okay.
And we have reached the end of the question and answer session I will now turn the call back over to Cameron Reynolds for closing remarks.
So I think for everyone and I know, it's been a long call, but I hope you can hear we have a tremendous amount happening at volition and if you go through all the things we're doing it's going to be a tremendously exciting year I'd like to congratulate the entire team for a fantastic outcome.
With the first very big deal fund and the first revenue in and I think it's going to be a fantastic 2022. So please keep a close eye on what's going on and thank you again for your time.
Thank you again for participating in today's conference call. You may disconnect your lines at this time.
Okay.
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