Q1 2022 VolitionRX Ltd Earnings Call
Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Volition RF Limited's first quarter 2022 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference call will be open for questions.
Good morning, ladies and gentlemen, thank you for standing by and welcome to the volition or accident Ltd first quarter 2022 earnings conference call during.
During todays presentation, all parties will be in a listen only mode. Following the presentation. The conference call will be open for questions. Do you have a question. Please press the star key followed by the number one on your Touchtone phone if.
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This conference call is being recorded today, May 12, 2022. And now I'd like to turn the conference call over to Scott Powell, Executive Vice President of Investor Relations. Please go ahead.
This conference call is being recorded today May 12 2022.
And now I'd like to turn the conference call over to Scott Powell Executive Vice President of Investor Relations. Please go ahead.
Thank you and welcome everyone to today's earnings conference call for VolitionRx Limited.
Thank you and welcome everyone to todays earnings conference call for Volition, all ex limited.
This call will cover Volitions financial and operating results for the first quarter of 2022, along with a discussion of our recent activities and key upcoming milestones.
This call will cover Volitions financial and operating results for the first quarter of 2022.
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.
Following our prepared remarks, we will open the conference call to a question and answer session.
Also on our call today is Mr. Cameron Reynolds, President and Chief Executive Officer.
Also on our call today.
Mr. Cameron Reynolds, President and Chief Executive Officer Dr.
Dr. Tom Butera, chief executive officer of our Volition Veterinary Subsidiary, and Mr. Terry Cuse, chief financial officer.
Dr. Tom The Terror, Chief Executive Officer of our Volition veterinary subsidiary.
And Mr Cherokees, 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 Security Litigation Reform Act of 1995.
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 the functions we have used based upon information currently available to us.
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.
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.
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 states.
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 quarterly reports on Form 10-Q and other filings with the Securities and Exchange Commission. We do not undertake an obligation to update any forward looking statements made during the course of this call.
We have 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 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?
I'd now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds Kelly.
Thanks, Scott, and thank you everyone for joining Volition's first quarter 2022 earnings call today.
Thanks, Scott and thank you everyone for joining Volitions first quarter 2022 earnings call Tonight.
We especially appreciate your time given the busy earnings call season.
We especially appreciate your time, given the busy earnings call season.
We will commence the call with our financial report and then, given all the activities surrounding Volition Vets, we are delighted to be joined by Dr. Tom Botera, Chief Executive Officer of Volition Vets.
We will commence the cold with a financial report and then given all the activity surrounding relief that we are delighted to be joined by Dr. Thomas <unk>, Chief Executive Officer evolution veterinary.
And then I will wrap up with a quick update of our exciting ongoing work. But first, an advertisement. Just in case you missed previous announcements.
And then I will wrap up with a quick update of our exciting ongoing work.
But first and advertisement just in case you missed previous announcements we are hosting a 2022 capital markets Day Tomorrow May 13 at 10, a M. Eastern time, you might just be in time to register to attend in person at the NYSE or else you are very welcome to join via the webcast.
We are hosting our 2022 Capital Markets Day tomorrow, May 13th, at 10am US Eastern Time. You might just be in time to register to attend in person at the NYIC or else you are very welcome to join via the webcast.
Details for both can be found on our website, volition.com.
Details can be found on our website volition dot com in the Investor Relations section.
Given the Capital Markets presentation tomorrow, and indeed the fairly recent filing of the 10K, we aim to keep this call quite tight, but as usual, we'll be happy to answer any questions you might have.
Given the capital markets presentation Tomorrow, and indeed, the fairly recent filing of the 10-K, we aimed physical quite tight but as usual, we'll be happy to answer any questions you might have.
And with that, I will hand over to Tereg for our financial update.
And with that I will hand, it over to Terry.
Our financial update.
Thanks very much, Cameron, and thank you, everyone, for joining our earnings call today.
Thanks, very much Cameron and thank you everyone for joining our earnings call today.
I will now provide a summary of the key financial results for the quarter ended March 31, 2022.
I will now provide a summary of the key financial results for the quarter ended March 31 2022.
We ended the quarter with cash and cash equivalents of approximately $23.7 million compared with $20.6 million at the end of 2021.
We ended the quarter with cash and cash equivalents of approximately $23 7 million.
With $26 million at the end of 2021.
This cash position includes an upfront milestone payment of $10 million received from HESCA Corporation in relation to the licensing and supply agreement executed with them on March 28, 2022.
This cash position includes an upfront milestone payments of $10 million received from Heska Corporation in relation to the licensing and supply agreement executed with them on March 28 2022.
Moving on to the P&L, while we continue to manage our costs carefully, as expected, the overall level of expenditure has increased in comparison to the first quarter of 2021.
Moving onto the P&L, while we continue to manage our costs.
As expected the overall level of expenditure has increased in comparison to the first quarter of 2021.
Total operating expenses for the quarter were $7.8 million, compared to $6.1 million for the first quarter of 2021.
Total operating expenses for the quarter to $7 8 million.
Compared to $6 1 million for the first quarter 2021.
This increase was primarily the result of increased expenditures in the sales and marketing and general and administrative function.
This increase was primarily the result of increased expenditures and the sales and marketing and general and administrative functions mainly.
mainly due to higher personnel costs, primarily as a result of additional headcamps, as well as higher foot bases.
Mainly due to higher personnel costs, primarily as a result of additional head count as.
As well as higher stock based compensation charges.
Overall, research and development expenses were lower in the first quarter of 2022 compared to the first quarter of last year.
Overall research and development expenses were lower than first quarter of 2022.
First quarter of last year.
Revenue reported in the first quarter of 2022 was $114,000 versus $25,000 for the first quarter of the prior year.
Revenue reported in the first quarter of 2022 with $114000.
Is it $25000 for the first quarter yet.
The year-on-year increase was primarily from initial sales that NewQ discovered to customers in Europe , but also included the first sales of our NewQ best test to sage in Singapore, as well as sales of H3.1.
Year on year increase was primarily from initial sale of <unk> discover and customers in Europe , but also included the sale of our <unk>.
Sage in Singapore, as well as sales $3 <unk>.
Net loss of the portal was $7.7 million compared to $6.1 million for the three-month ended March 31, 2021.
Net loss for the quarter was $7 7 million compared to $6 1 million for the.
Three months ended March 31, 2000, Thank you Bob.
As mentioned previously, we received an up-front milestone payment of $10 million in cash from HESCA Corporation.
As mentioned previously we received an upfront milestone payments of $10 million in cash from Heska Corporation.
This was not only a milestone payment but also a company milestone, the culmination of much work across the company and truly marks the beginning of our commercial journey. It is worth noting that whilst this payment has been fully received and is non-refundable.
This was not only a milestone payments, but also accompany milestone the culmination of much work across the company I'm truly marks the beginning of our commercial journey.
It is worth noting that while.
<unk> has been fully received and is nonrefundable.
It has not been recognized as revenue in the period and has been accounted for as deferred revenue in accordance with the relevant accounting standards ASC 606, revenue from contracts with customers.
It has not been recognized as revenue in the period and Thats been accounted for as deferred revenue in accordance with the relevant accounting standards ASC 606 revenue from contracts with customers.
Given the complexity around ASC 606 in relation to our agreement with HESCA, it is difficult to predict our revenue outlook at this point. However, we aim to update you in the near future.
Given the complexity around ASC 606 in relation to our agreement with Heska.
Difficult to predict revenue outlook at this point, however, we input that you in the near future.
As we discussed from the previous call and plan to cover in some detail about our capital market event tomorrow.
As we discussed on the previous call and plan to cover in some detail at our capital markets event Tomorrow.
Given the product range we believe we can develop from our proprietary nuclear summits platform, we believe our addressable markets are very significant, most notably in the short term with new QBET and new QNET, and we look forward to updating you in due course on our progress in accessing these opportunities.
Given the product range. We believe we can develop from a proprietary new platform. We believe our addressable market are very significant most notably in the short term with <unk> and <unk> net.
We look forward to updating you in due course on our progress in accessing these opportunities.
And with that I'm delighted to hand over the hump of Tara who will provide further details regarding not only the heska licensing and supply agreement, but also other activities and upcoming milestones both initial and secondary.
And with that, I'm delighted to hand over to Dr. Tom Patera, who will provide further detail regarding not only the HESCA licensing and supply agreement, but also other activities and upcoming milestones for volition and veterinary.
Tom.
Thanks, very much Darren and Hello, everybody.
This first quarter of 2022 really has been a breakthrough time for Volition Veterinary. And I am so proud to update all of you on the call today.
This first quarter of 2022 really has been a breakthrough times bullish in veterinary.
I am so proud to update all of you on the call today.
I honestly could not be prouder of our achievement in securing a global licensing and supply contract with one of the industry's leading companies.
I honestly cannot be prouder of our achievements in securing a global licensing and supply contract.
With one of the industry's leading companies Heska Corporation.
HESCA 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 containing animals.
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.
It has a worldwide distribution and partnering network.
When we announced this deal in March, I commented about Heska very much sharing our philosophy, our work ethic, and vision as to how new to that can really help save lives and improve outcomes for millions of pets worldwide. And I have to say that since that, I believe this even more so.
When we announced this deal in March I commented about Heska very much sharing our philosophy.
Our work ethic and vision as to how new tool that can really help save lives and improve outcomes for millions of tests worldwide.
Have to say that since that I believe this even more so today.
We have many work streams up and running from technical transfer and logistics to sales and marketing and are making tremendous progress towards the law.
We have many work streams up and running from technical transfer and logistics to sales and marketing and we're making tremendous progress towards the launch.
As a reminder, our executed agreement with HESTA provides.
As a reminder, our executed agreement with Tesco provides.
Exclusive rights to sell volition's new QVET cancer test for companion animals at the point of care.
Exclusive rights to sell Volitions, new teams at cancer tests for companion animals at the point of care.
In addition to non-exclusive rights to sell the new Q Vet cancer test to companion animals via HESCUS reference.
In addition to nonexclusive rights to sell the new tools that cancer test to companion animals via Heska as reference laboratories.
And finally, looking to the future, it provides exclusive rights to canine cancer monitoring and feline lymphoma tests as well as certain rights to potentially commercialize a wider test manual for companion animals, again, at the point of view.
And finally looking to the future. It provides exclusive rights to $2 nine cancer monitoring and feline lymphoma tests as well as certain rights to potentially commercialize a wider test menu for companion animals again at the point of care.
This multi-year global supply and licensing agreement totals up to $28 million in miles
This multiyear global supply and licensing agreement totals up to $28 million in milestone payments to <unk>.
the first of which the upfront payment of $10 million, Derek, has spoken.
First of which the upfront payment of $10 million Darren has spoken about.
in addition to ongoing payments for kits and kits components.
In addition to ongoing things for kits and kits components.
I understand from some of the questions we received subsequent to the last call, there was some confusion surrounding the financial elements of this deal. And so while I don't wish to repeat myself too much, I would like to hope we'll provide a little more.
I understand from some of the questions. We received subsequent to the last call.
There was some confusion surrounding the financial elements of this deal.
And so while I don't wish to repeat myself too much I would like to hopefully provide a little more clarity.
This contract with HESCA provides for milestone payments to volition.
This contrasts with Heska provides for milestone payments duvelisib to.
To give you the breakdown volition received a $10 million upfront payment on signing the agreement.
The Commission received a $10 million upfront payment on signing the agreement.
and will receive up to $18 million based upon the achievement of near and midterm milestones.
And we will receive up to $18 million based upon the achievement of near and mid term milestones.
$13 million of which we anticipate receiving in 2020.
$13 million of which we anticipate receiving in 2023.
In addition to these milestone payments and most likely significantly greater than.
In addition to these milestone payments and most likely significantly greater than these payments is the ongoing revenue that volition expects to receive in relation to obtain for kits, which are used in the reference lab market.
is the ongoing revenue that Volition expects to receive in relation to payment for kits, which are used in the reference label.
and for the supply of key components for the exclusive point of care product that HESCA will bring to the market.
And for the supply of key components to the exclusive point of care product Heska will bring to the market.
Every time HESCA sells a test, volition will make money.
Every time Heska sales a test volition will make money.
be that through the sale of a kit or from the sale of a key component.
Be that through the sale of a kit.
From the sale of a key component.
And this is a long-term deal with incredible market potential.
And this is a long term deal with incredible market potential.
where we expect millions of tests will be sold each year. So the ongoing revenue for volition could be significant.
Where we expect millions of tests will be sold each year. So the ongoing revenue for volition could be significant.
It's a fantastic deal for both companies, and we are certainly excited to finish the legal work and get on to preparing for a launch possibly as early as later this year, but if not in early 2023.
It's a fantastic deal for both companies and we are certainly excited to finish the legal work and get on to preparing for a launch possibly as early as later this year, but if not in early 2023.
And talking of launches.
subsequent to quarter end, I'm delighted to say Sage Healthcare launched a new Q-bet cancer test in Singapore.
Subsequent to quarter end I am delighted to say stage healthcare launch the new Q that cancer tests in Singapore.
Dr. Wilson-Robles and I had the honor of presenting to the Singapore veterinarians via a launch webinar hosted by...
Dr. Wilson Enrollees and I had the honor of presenting to the Singapore veterinarians via launch webinar hosted by stage.
As ever, there was a lot of interest and a lot of great questions, and I know the SAGE team are now spreading the word and driving them in the clinic.
As ever there was a lot of interest and a lot of great questions and I know the sage team are now spreading the word and driving them being in the clinic.
I certainly expect to provide more updates in the coming course.
I certainly expect to provide more updates in the coming quarters.
With regards to our other negotiations, these remain ongoing. I am pleased to say that we are making progress, and as ever, I remain optimistic in signing further deals this calendar year.
Right.
With regards to our other negotiations these remain ongoing.
I'm pleased to say that we are making progress and as ever I remain optimistic in signing further deals this calendar year.
We believe that this simple, easy-to-use blood test addresses a huge unmet need in the veterinary market. As I have said,
We believe that the 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 humans.
Cancer screening is not yet that is commonplace in animal health as it is in human health.
But I firmly believe blood tests like the new QVET cancer test could significant.
But I firmly believe.
<unk> like the new kill that cancer tests could significantly.
significantly transform how veterinarians manage cancer in companion animals. Clinical work.
Significantly transform how veterinarians manage cancer.
Companion animals.
Our clinical work didn't stop with the screening test Dr.
Dr. Wilson-Robles and team have been working on expanding the range of cancers or test effects and also on expanding the potential use of new cuvette for the monitoring of diseases.
Dr. Wilson enrollees and team had been working on expanding the range of cancers are test detects and also on expanding the potential use of <unk> for the monitoring of diseases.
I discussed last time the data Dr. Wilson-Robles presented at the Veterinary Cancer Society meeting in the fourth quarter of 2021.
I discussed last time the data Dr. Wilson globally as presented at the Veterinary cancer Society meeting in the fourth quarter of 2021.
in relation to using the new QVET test as a monitoring tool and I'm delighted to say on the call today that Dr. Wilson Robles will be presenting further data in this regard at the European Society of Veterinary Oncology Congress later this month in system.
No relation to using the new <unk> desktop as a monitoring tool and I'm delighted to say on the call today are Dr. Wilson Robles, we will be presenting further data in this regard at the European Society of Veterinary Oncology Congress later this month.
Consistently.
Not to get too technical here, but excitingly, NuQVet may serve as a more sensitive measurement of both minimal residual disease and remission.
Not to get too technical here, but excitingly, new Tuesday may serve as a more sensitive measurement of both minimal residual disease and remission.
and could be a very useful monitoring test for dogs with cancer.
And could be a very useful monitoring tests for dogs with cancer.
We believe that being able to use the new king desktops to not only screen for cancer as per our current products.
We believe that being able to use the new Q Vet test to not only speed for cancer as per our current product, helping identify disease early, but also to then be able to help monitor a dog's response to treatment and the disease progression as an early indication that a dog is coming out of remission.
Helping identify disease earlier, but also to then be able to help monitor and dogs response to treatment and the disease progression as an early indication that a dog is coming out of remission.
will meet a real unmet need in the veterinary market.
We will meet a real unmet need in the veterinary market.
All in all, an incredibly busy time for the whole Volition Veterinary Team and many of the Volition Executives as well.
All in all an incredibly busy time for the whole volition veterinary team and many of the volition executives as well.
I would like to publicly commend and thank the team for their tremendous hard work. a great
I would like to publicly commend and thank the team for their tremendous hard work.
A great job.
All done.
I hope many of you can join the Capital Market State tomorrow, or else view us on catch-up as we will be sure to be guarding more details on the many activities we have ongoing at Volition Veterinary, but today, as I was asked to keep it short, so with that, I'll hand it back to Cameron. Thanks very much.
I hope many of you can join the capital markets Day Tomorrow.
Else views on catch up as we will be sure to providing more details on the many activities. We have ongoing in volition veterinary, but today as I was asked to keep it short.
So with that I'll hand, it back to Ken.
Thanks, very much Tom.
Like to add that on a personal note.
I could not be prouder of the team's achievement in securing a global licensing and supply contract with one of the industry's leading companies, the Haskell Corporation.
Could not be 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.
I could do is take time and I could not be happier with the outcome and am excited with everything the VET and commercial team have in the pipeline.
Could do take time and I could not be happier with the outcome and are excited with everything the vet and commercial teams have in the pipeline.
I'm also delighted with the progress we have made in this key pillar of the business as we progress strongly from a purely research and development company to a commercial company 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, as Tom explained from the sales of kits and key components. Not only the health gas, but also
I'm also delighted with the progress we have made in this key pillar of the business as we progressed strongly from a purely research and development company to a commercial company 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 as Tom explained from the sales of kits and key components.
And if you have got but also who decides to health care.
And now on to other aspects of our business review and starting as ever with our people.
And now onto other aspects of our business view and starting as ever with our people.
In the first quarter of 2022, we have expanded our team and strengthened the bench with some incredibly talented recruits, especially
In the first quarter of 2022, we have expanded that team and strengthen the bench with some incredibly talented recruits.
Especially in the veterinary team.
Additionally, subsequent to quarter-end, we welcome Sharon Balaceros as head of U.S. Quality
Additionally, subsequent to quarter end, we welcome Sharon Ballesteros as head of U S quality and development processes.
Sharon has over 20 years experience within the in vitro diagnostic industry, with senior program management, quality assurance.
Karen has over 20 years experience within the in vitro diagnostic industry with senior program management quality assurance.
process improvement roles at Stevens Health Diagnosis.
And process improvement roles at Stephens Health diagnostics.
Thermo Fisher, Agena Biosciences, and most recently, Sharon was Director of Design Quality and Risk at Grail, where she led the company's design control and risk program.
Fisher at Gina Biosciences, and most recently shine with director of design quality and risks at Grail.
Where she led the company's design control and risk programs.
I'm absolutely delighted to say, in true volition style, Sharon has hit the ground running and will be presenting the clinical and regulatory strategy, including the FDA strategy for our new QNET program tomorrow at the Capital Market stage. Great to have you on board Sharon.
I'm, absolutely delighted to say improve listen style fair and has hit the ground running and we will be presenting the clinical and regulatory strategy, including the FAA strategy for our New unit program Tomorrow at the capital markets day.
Great to have you onboard Shannon.
Our next key element of the company is our product we.
We have five product pillars, one of which Tom covered earlier with regards to new QVETs.
We have five product pillars, one of which Tom covered earlier with regards to <unk> given.
Given it has only been a few weeks since our last call, we have no significant updates regarding our need to cancer or need to discover progress.
Given it has only been a few weeks since our last call. We have no significant update regarding our <unk> cancer or need to discover programs.
Further, as Dr. Jake McCalloch will fully cover YouTube Nets in detail tomorrow at the Capital Markets Day, and so not to steal his thunder, I will just provide a brief update on YouTube Capture today.
Further as Dr. Jane Mcauliffe will fully cover new unit and detailed tomorrow at the capital markets day.
So not to steal his thunder I will just provide a brief update on <unk> kept for today.
As I've said on previous calls, we believe the new Q-Capture technology will be transformational as a DNA enrichment technology which could potentially aid diagnosis, treatment selection and both treatment and disease monitoring.
As I've said on previous calls we believe that you capture technology will be transformational as the DNA enrichment technology, which could potentially a diagnosis and treatment selection and both treatment and disease monitoring.
when used in combination with either sequencing, mass spectrometry and or new Q-Assays.
When used in combination with either sequencing method commentary <unk> assays.
The <unk> capture program now has several strands of technology, which either essentially remove background noise there.
The new Q-Capture program now has several strands of technology which either essentially remove background noise
thereby amplifying signal, or looks to identify the signal in a novel way.
Thereby and flying signal.
Oh, it looks to identify the signal in a novel way.
Other strands of the new Q-Capture technology involve isolating various chromatin fragments
Other strands of the nuclear capture technology involve isolating various premises in fragrance.
including nucleosomes and transcription factors from plasma for analysis by mass spectrometry and next generation DNA signals.
Leading nucleus items and transcription factors from plasma for analysis by mass spectrometry and next generation DNA sequencing.
We are currently actively working on four different strands of nuclear capture in Belgium and in our new California lab, all of which are potentially very exciting product areas.
We are currently actively working on four different strategy and you could capture in Belgium, and in our New California lab, all of which are potentially very exciting product areas.
Subsequent to your end, we were delighted to sponsor a genome web webinar which featured key opinion leader Professor Axel Imhoff and our very own Dr. Terry Kelly.
Subsequent to year end, we were.
July to sponsor a genome webinar, which featured key opinion leader professor actual <unk> and our very own Dr. Terry Kelly.
This webinar was incredibly well received with over 300 attendees spanning industries, including many of the leading liquid biopsy companies and academia.
This webinar was incredibly well received with over 300 attendees spanning industry, including many of the leading liquid biopsy company and academia.
It included a busy question and answer session demonstrating the interest in epigenetics and the work we are undertaking.
It included a busy question and answer session demonstrating interest in epigenetics and the work we are undertaking.
Should you be interested, the webinar is still available on demand catch-up. For more details, please contact media relations at volition.com.
Should you be interested the webinar is still available on demand catch up for more details. Please contact media relations at volition Dot com.
We will also be sponsoring future G-NURB web webinars with the next one due late July focused on the ptosis with leading intensive care consultants Dr Andrew Essoam
We will also be fun for any future Zineb webinar.
The next one viewed late July focused on the choices with leading intensive care consultant Dr. Andrew It's Bonnie.
And so, in conclusion, I'm delighted with the significant progress we made in the first quarter of 2022, and the momentum has carried into the second quarter. I hope to see many of you at our capital.
So in conclusion I'm delighted with the significant progress we made in the first quarter of 2022 and momentum has carried into the second quarter.
I hope to see many of you at our capital markets Day Tomorrow.
But if not in person, that you're able to join our webcast.
But if not in person that youre able to join our webcast.
I will be joined by many members of our executive team who will share further details, focused this time on YouTube Vets.
I will be joined by many members of our executive team, who will share further details focused this time on <unk> and <unk> net.
In drawing this earnings call to a close, I would like to thank you all for joining this call today. We very much appreciate it, given this is the earnings call season.
Drawing this earnings call to a close I would like to thank you all for joining the call today, we very much appreciate it given this earnings season.
I, along with the rest of the board, and indeed the whole company, very much look forward to sharing further news regarding volition vets and our other subsidiaries, as well as the results of our key clinical studies, publications and milestones over the coming months and quarters.
Hi, along with the rest of the board and indeed, the whole company very much look forward to sharing further news regarding <unk> and our other subsidiaries as well as the results of our key clinical studies publications and milestones over the coming months and quarters.
I very much feel we are an extremely strong position to commercialise our new Q-platform in so many areas.
I very much feel we are in extremely strong position to commercialize our new <unk> platform in so many areas.
I could not be more positive about our work at the heart of epigenetics, and I'm excited for the next phase of our journey.
Could not be more positive about our work at the heart of Epigenetics and I'm excited for the next phase of our journey.
We're now happy to take your questions.
<unk>.
Okay.
We'll now begin the question and answer session. To join the question queue, press star, then one on a touch tone phone.
We will now begin the question and answer session to join the question queue. Chris Star then one on a touchtone phone.
To remove yourself from the question queue, press star then 2.
Remove yourself from the question queue Press Star then two.
And if you are using a speakerphone, you may need to pick up your handset before pressing any of the keys.
And if you are using a speakerphone you may need to pick up the central core pricing in the air.
Uh huh.
And the first question comes from Ross Osborne with Tantra Fitzgerald. Please go ahead.
And the first question comes from Ross Osborne with Cantor Fitzgerald. Please go ahead.
Hi, good morning. Thanks for taking our questions and congrats on the progress.
Hi, good morning, Thanks for taking our questions and congrats on the progress.
Thank you.
Starting off, could you maybe provide a little bit more insight into your trajectory to recognizing some of the 18 million in incremental milestone pavements?
I guess starting off could.
Could you maybe provide a little bit more insight.
And here, it's Greg here, recognizing some of the $18 million.
Mental milestone payments.
Yes, sorry, Gary, do you want to do that? Yeah, sure. So, as we said on the call with respect to...
Yes, Terry is going to do with it.
Yes, sure so as we said.
On the call.
With respect to <unk>.
the first 10 million. We've treated that as deferred revenue at this point. The money's in the bank. It's non-refundable. But given the complexity around the accounting for that in respect to this contract, we're going to take a bit of time to work out how exactly we're going to
$10 million.
We've treated that as.
Deferred revenue at this point.
Somebody's in the bank.
It's nonrefundable.
But given the complexity around the accounting.
For that risk.
With respect to this contract.
Where we could take a bit of time.
To work out.
Good luck.
recognize that over the coming quarters and similarly with the other 18 million and so we're going to update you probably next quarter on what that's likely to look like. At this point it's difficult to give firm guidance on that in relation to this year's
Recognize that over the coming quarters.
And similarly, with the other $18 million.
So we're going to update you probably next quarter.
What that's likely to look like at this point, it's difficult to get.
Firm guidance on that.
<unk> this year.
But I think it's also very important to point out Ross and to everyone listening. The other 18 million is on three, what we think are very achievable milestones. The actual just launch of the first product, which is what the CEO of HESCA is expecting later this year or early next year. And the second product, which we would expect to be in the next kind of 12 months as well. And then an option on the feline market, which hopefully could be next year as well.
But I think it's also very important to point out Ross.
Let's see the other 18 million is on three what we think are very achievable milestones.
We actually just launch of the first products, which is what they are.
The CEO of Heska is expecting later this year early next year and the second product, which we would expect to be in the next kind of 12 months as well and then an option on the feline market, which.
Hopefully it could be next year as well so between the 10 and the <unk> $28 million, which I think goes a long way to buttressing, our burn over the next two years.
So between the 10 and the 18, that's $28 million, which I think goes a long way to buttressing our burn over the next two years, assuming we get the others, which I think is a reasonable assumption. And so we couldn't be happier.
I mean, we get the others, which I think is a reasonable assumption.
And so we couldnt be happier.
Once we've achieved those milestone, that's when the revenue kicks in, we would expect from the kids' hours, which we also expect to be very, very meaningful as well. So overall, I think it drastically changes our position so far as we can really start to have a lot of money coming in, which would go a long way to dealing with our burn rate. So we're extremely happy with both the ongoing revenue and the 28 million potential milestone payments.
Yes.
Once we've achieved those milestones thats when the revenue kicks in we would expect from the kit sales, which we also expect to be very very meaningful as well. So overall I think its drastically changes hour.
Physicians, so far as we can really start to.
Have a lot of money coming in which will go a long way to.
Dealing with the our burn rate. So we're extremely happy with both the ongoing revenue and the 28 million in potential milestone payments.
Okay, sounds great. And then maybe to remember to discover contracts, would you remind us how many you have signed now? And then if you can provide any visibility to new contracts? And then I suppose a follow up, would you be able to provide a little bit more clarity on what phase each contract is in or at least an average so we can better understand the revenue potential there?
Okay sounds great and then maybe switching over to discover contract would you remind us how many you have by now and then if you can provide any visibility to new contracts.
And then there's a call.
Would you be able to provide a little bit more clarity.
Each contract is an or at least an average so you can better understand the revenue potential there.
So there's not much of an update since the last call on the 10K.
Yes.
Not much of an update.
The last call.
10-K.
Yes.
We've got five signed contracts and the average is somewhere around $40,000 on average that we expect to realize this year. So we're looking at just in terms of the signed contracts, about $200,000 for this year, but then we've also got a pipeline with a couple of other contracts that we expect to materialize this year as well. So we're looking at somewhere between $200,000 and $400,000 for this year.
We have got.
<unk>.
Signed contracts.
And the average.
Good morning, Ryan.
<unk> SaaS dollars on average, but we expect to realize this year. So we're looking at.
Yes, just in terms of the signed contracts to entertain us.
For this year, but then we've also got a pipeline with a couple of other contracts.
We expect to materialize this year as well so we're looking at somewhere between 200 400000 for this year.
And I think going forward, Ross, is probably just important just to say where we're going to be put our emphasis, though. So Discover is very exciting, and this is great revenue compared to $90,000 for everything last year. But I think you'll see on the capital markets day, to get another advertising for that tomorrow, you'll see very much, I think, the total addressable market for VET and the TOSIS is about $33 billion between them.
And again I think going forward.
I think going forward Ross is probably just as important just to show to say, where we're going to put our emphasis so to Scott. This is very exciting and this is great revenue compared to 90000 for everything last year.
I think you will see on the capital markets day to get another advertising for tomorrow.
You will see very much I think the total addressable market for that.
And the total is.
It's about $33 billion between them. So we think.
We will put some effort into Discover, and it's very good, great contracts, great to get at the heart of epigenetics.
We will put some effort into discover and it's very good great contracts quite to get at the heart of epigenetics about the total addressable market is a fraction of that is skiba. So given.
But the total addressable market is a fraction of what he's been discovering. So given we're not a big company, I think we're going to put a lot of effort. You'll hear a lot tomorrow about the FDA strategy for Natosis from Sharon, who just directly joined us from Grail's side on the regulatory US side.
Not a big company I think we're going to put a lot of efforts you'll hear a lot tomorrow about the FDA strategy from the ptosis from Sharon who just directly joined us from <unk> side on the regulatory use.
So, discovery is important and we're excited about it, but potentially it's not an elephant in the same way vet and atosis is, so the focus tomorrow will really be on the elephant country, if you will, and how we were going to get revenue and what it's going to look like going forward.
So I would describe is important and it's we're excited about it but potentially it's not an elephant in the same way and the <unk>. So the focus tomorrow, we will really be on the elephant country, If you will and how.
We were going to get revenue and what is going to look like going forward. So just keep that in mind on the discovery side, it's never going to be a massive market for us, but as good as it is it's never going to be massive.
So just keep that in mind on the Discover side. It's never going to be a massive market for us. But as good as it is, it's never going to be massive.
Okay.
Okay, yeah, looking forward to tomorrow and then maybe we'll watch.
Looking forward to Tomorrow, and then maybe last one for me.
You're able to control the expenditures a little better than we were forecast.
Youre able to control and ensuring hold up better than we were forecasting.
Um, you maybe just help the thing about the rest of the year where you're able to pull in and maybe where you'll throw a little bit.
Can you maybe just help us think about the rest of the year, where you are able to continue to pull in band and maybe where you offer a little bit.
So, yeah, in terms of cash burn, it has picked up a little bit. The first quarter is always a bit heavier for us than the balance of the year, just because of the nature of some of the expenditures in the first quarter, but we're underlying cash burn is somewhere a little above 2 million, but not much. So it's
Karen.
So yes in terms of cash.
Cash burn it has ticked up a little bit the first quarter is always a bit heavier.
For us.
Balance of the year.
Because that's the nature of some of the expenditures in the first quarter.
But underlying cash burn is somewhere.
Little above $2 million, but not much so.
As you'd expect, it's ticked up a little bit compared to the same period last year but it's still well under control.
As you would expect it ticked up a little bit compared to the same period last year, but it's still well under control.
And I think that's just again to point out something, thank you, we are a little below where we thought we'd be and the projections were. We're really trying to, you know, obviously it's difficult market conditions at the moment. We want to make sure we're spending our money very wisely, but at the same time, I think we need to get out there and start commercializing our products. I think you can see how much money can be made from the VET space and we're about to show how much can be made from the NET space.
And I think Thats, just again to point out something.
Yes, we are a little below where we thought we'd be and the projections, where we're really trying to obviously, it's difficult market conditions at the moment, we want to make sure we're spending money very wisely, but at the same time I think we need to get out there and start commercializing our products I think you can see how much money can be made from the vet space and we're about to show how much can be made from the net.
So it's a balance of keeping a tight but making sure we deliver revenue because I think one message loud and clear from.
So it's a balance of keeping it tight, but making sure we deliver revenue because I think one message we've got loud and clear from everybody is fantastic platform, great theme, but make some money. So we're balancing spending money to make more money, which I think proved very successful in the vet space.
Everybody is fantastic platform, great Fame, but make some money so we're balancing spending.
Spending money to make more money, which I think has proved very successful in the vet space.
But we will keep it very tight because I think I'm sure you're well aware of the markets a little rough out there at the moment in the overall biotech space. So we want to make sure every dollar is spent very wisely. You're wearing a better financial position than we were, which is already quite okay. Last quarter, given the money we've come in, but we are going to keep a tight reign on things while making sure we invest in getting revenue.
But we will keep it very tight because I think.
Sure you are well aware of the market's a little rough out there at the moment in the overall biotech space.
We want to make sure every dollar we spend very wisely.
We're in a better financial position everywhere, which is already quite okay last quarter, given the money we've come in but we are going to keep a tight rein on things, while making sure we invest in getting revenue.
That will make sense.
Yeah, makes sense. Congrats again on the quarter, and thanks for taking our questions.
Yes makes sense, congrats again on the quarter and I. Thank you for taking my questions.
Thank you.
We still have time for questions, so again, if you'd like to ask a question, press star then 1 to join the queue.
We still have time for questions. So again, if you'd like to ask a question Press Star then one to join the queue.
Actually, sorry, I've just been informed there's a technical issue on the phone line. Given the fact that we've got a Capital Markets Day tomorrow, we'll be answering questions. We have a two hour Capital Markets Day and the second half is all questions.
Sorry, I've just been informed as a technical issue on the phone line.
Given the fact that we've got our capital markets Day Tomorrow.
We will be answering questions to our capital markets day in the second half is all questions.
I understand there's some analysts who are trying to get on but cannot, but look given it's tomorrow, it's a much longer session anyway. We can take the rest of the calls tomorrow and answer them perhaps more fully given the longer time we have.
I understand there's some analysts who were trying to get on but cannot.
Look given its tomorrow, so much long efficient anyway, we can take the rest of the calls tomorrow and add to them, perhaps more fully given the longer time, we have so I apologize for the technical issue on the phone line.
So I apologize for the technical issue on the phone line, but I'm very happy to take down those questions, those who are trying to get on the call today, tomorrow, given the Capital Markets Day.
So I'm very happy to take analyst questions. Obviously, we are trying to get on the call today Tomorrow, given the capital markets day.
So, to wrap up, thank you very much. I think I couldn't be happier with where we are. I think you've heard a lot of how our team has grown stronger and deeper, how our patent portfolio is growing, how we are developing a very wide range of products. And tomorrow I think will be a very good indication of that. You'll hear from quite a few people you perhaps have not heard from before from Volition. You're hearing about the path forward on the VET space and where we're going to be making revenue and also finitosis.
So to wrap up thank you very much I think I couldnt be happier with where we are I think <unk> heard a lot of how our team is growing stronger and deeper how our patent portfolio is growing.
We are developing a very wide range of products and.
Tomorrow I think we're very good indication of that Youll hear from quite a few people you perhaps have not heard from before from volition you hearing about the path forward on the vet space and where we're going to be making revenue and also fund the ptosis.
So overall, I think we're in an incredibly good position.
Overall, I think we're an incredibly good position.
I think the 12 years we've spent has really put us in a great position where we are now and we have a great strategy now going forward to commercialize what we're doing. So those of you who can, please attend tomorrow live or live in person. It's a great event at the New York Stock Exchange or online. Thank you very much for your time. I hope to update you a lot more next quarter and I think there should be a lot going on. So have a great few months and I look forward to presenting more updates to you soon. Have a great day.
I think the 12 years, we've spent has really put us in a great position, where we are now.
Have a great strategy now going forward to commercialize what we're doing so those of you who tend to please attend tomorrow alive.
Sure.
Awesome.
It's a great event to the New York stock exchange.
On online.
Thank you very much for your time I hope to update you a lot more next quarter and I think there should be a lot going on so we have a great few months and I look forward to presenting more updates to you soon.
Have a great day. Thank you.
Yeah.
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The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.