Q4 2022 VolitionRX Ltd Earnings Call
Speaker 2: Good morning ladies and gentlemen. Thank you for standing by. Welcome to Volition Rx Limited's full year 2022 earnings conference call.
Speaker 2: During today's presentation all parties will be in listed only mode.
Speaker 2: Following the presentation, the conference call will be open for questions.
Speaker 2: If you have a question, please press the star key followed by the number one on your touchstone phone.
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Speaker 2: This conference is being recorded today, March 16, 2023.
Speaker 2: I'd now like to turn the conference call over to Scott Powell, Executive Vice President of Investor Relations. Please go ahead.
Speaker 3: Thank you and welcome everyone to today's earnings conference call for VolitionRx Limited.
Speaker 3: This call will cover Volitions Financial and Operating results for the full year 2022, along with a discussion of our recent activities and key upcoming milestones.
Speaker 3: Following our prepared remarks, we will open the conference call to a question and answer session.
Speaker 3: Also on our call today are Mr. Cameron Reynolds, President and Group Chief Executive Officer, Mr. Terry Cuse, Group Chief Financial Officer, and Dr. Tom Bitterra, Chief Executive Officer of our Volition Veterinary Subsidiary.
Speaker 3: 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's litigation reform act of 1995. These statements are based on our beliefs.
Speaker 3: as well as the functions we have used based upon information currently available to us.
Speaker 3: Because these statements reflect our current views concerning future events.
Speaker 3: 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.
Speaker 3: expressed or implied by these statements.
Speaker 3: 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.
Speaker 3: we do not undertake an obligation to update any forward-looking statements made during the course of this call.
Speaker 3: I'd now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds. Cameron? Hi, I'm Cameron Reynolds.
Speaker 4: Thanks Scott and thank you everyone for joining Volition's full year 2022 earnings call today. We especially appreciate your time given the busy earnings call season. 2022 was a transformational year for Volition. After 12 years in operation, we have successfully transitioned to the next generation of the rise of the gains factor and returning to local level at party?
Speaker 4: from a company solely focused on research and development to an organisation that has also commercial products.
Speaker 4: Volition is powered by New Cube, a cutting-edge nuclear ceramics platform which has enabled the development of all of our product pillars and is the foundation of the company.
Speaker 4: I am so proud of the hard work, expertise and commitment of our team and what we have achieved together. Given this is our full fiscal year result, we will commence the fall with our Group Chief Financial Officer, Terry Hughes.
Speaker 4: For moving on to Dr Tom Botera, Chief Executive Officer of VolitionVac.
Speaker 4: For an update on the rollout of the EU VET, bar I global supply and licensing agreements.
Speaker 4: And finally, I will provide an update on the great progress the team have been making with regards to another one of our key pillars, UQNet, as well as a brief update on UQCounter and UQCAPTCHA.
Speaker 4: Without further ado, I'll hand you across to Tereg for the financial report.
Speaker 5: Derek?
Speaker 4: Thanks very much Cameron and thank you everyone for joining our earnings call today.
Speaker 4: I will now provide a summary of the key financial results for the year ended December 31, 2022. Starting with cash, we close that year with cash and cash equivalents of approximately $10.9 million.
Speaker 4: From a revenue perspective, we recorded just over $300,000 in earned revenue in 2022, a 240% increase over the prior year, the majority of which was from sales of the New Q Vet Cancer Test, with a balance mainly attributable to the New Q Discover program.
Speaker 4: The net loss during 2022 was $30.6 million versus a $27 million loss for the prior year. This result was predominantly driven by higher personnel costs and sales and marketing spending as we prepared for commercialization. During 2022, the net loss during 2022 was $30.6 million versus a $30.6 million loss
Speaker 4: We strengthened our balance sheet by adding approximately $6.4 million in net cash before deducting offering expenses through an underwritten public offering of our common stock in August .
Speaker 4: Furthermore, in August 2022, we were delighted to announce the award of approximately $1.5 million in non-dilutive funding from the more-invest capital risk in Belgium.
Speaker 4: to fund an early access programme for our new CUBE product portfolio at key sites across the EU, the UK and the US.
Speaker 4: Additionally, we recorded grant income of $1.2 million in 2022 from the Maloon region in Belgium.
Speaker 4: We continued to manage our expenditures and cash flow carefully and whilst the overall level of expenditure increased in 2022 as compared to 2021,
Speaker 4: The impact on cash flow was more than offset by receipt of the HESCA milestone payment of $10 million in March 2022. As a result, net cash used in operating activities was $15.3 million for the 40-year, or a monthly average of approximately $1.3 million.
Speaker 4: In the most recent quarter ended December 31st, cash used in operating activities averaged approximately $1.7 million per month.
Speaker 4: While we expect expenditures to increase again in 2023, partly driven by our clinical trial activities.
Speaker 4: We also expect cash flow impact to be moderated by potential milestone payments of up to $13 million anticipated from the HESCA Corporation.
Speaker 4: So to recap, we closed the year with cash and cash equivalents of approximately $10.9 million.
Speaker 4: Subsequent to year end, we received approximately $8 million in net cash before deducting offering expenses through an underwritten public offering of our common stock in February . And we expect, upon achievement of near-term milestones, to receive a further $13 million this year from HESCA Corporation.
Speaker 4: We are now in revenue generating mode with a new Q Vet cancer test available through the reference lab networks of IDEX laboratories, HESCA, the Texas A&M GI lab and some local distributors such as DNAtech in Portugal.
Speaker 4: HESCA has also started pre-selling the new QVEC cancer test at the point of care, which we expect to provide a significant future revenue stream at a solid margin.
Speaker 4: It is great to see we are now up and running on our commercial journey and I look forward to sharing revenue updates with our next earnings call for the first quarter in May.
Speaker 4: Given the range of products that we expect to develop from our proprietary Nucleosomics platform, we believe that our addressable markets are significant and we look forward to accessing these opportunities and reporting in due course.
Speaker 4: So, we have made strong progress on many fronts in 2022 and into the first quarter of 2023 and with that I will hand over to Tom for further detailed updates on the roll-out of our new Q-Bet cancer test.
Speaker 6: and upcoming milestones.
Speaker 5: Tom?
Speaker 7: Thanks very much, Tarek, and good morning, everybody. 2022 is a breakthrough year, and I feel really proud of all the team's achievements.
Speaker 7: It seems just a while ago now, but looking back to the first quarter of 2022, we signed our first large-scale licensing and supply agreement with the HESCA Corporation.
Speaker 7: The HESCO agreement provides three specific areas that you should all be aware of. First of all, exclusive rights to HESCO to sell Volition's new Q Vet cancer test for companion animals at the point of care.
Speaker 7: Number two, non-exclusive rights to HESCA to sell the new Q Vet cancer test for companion animals via HESCA's reference laboratories. And three, certain rights of negotiation to HESCA to potentially commercialize a wider test menu for companion animals again at the point of care.
Speaker 7: The HESCA agreement also came with some very significant financial milestones.
Speaker 7: To give you the breakdown, first of all, Volition received a $10 million upfront payment on signing the agreement, and Volition will receive up to $18 million based upon the achievement of near and mid-term milestones.
Speaker 7: $13 million of which we anticipate receiving in the first half of 2023.
Speaker 7: In addition to these milestone payments, and most likely significantly greater than these payments,
Speaker 7: is the ongoing revenue that Volition expects to receive in relation to payment for kits for the reference lab market.
Speaker 7: and for the supply of key components for the exclusive point-of-care product that HESCA will bring to the market.
Speaker 7: You must all remember, every time HESCA sells a test, the whole nation will make money.
Speaker 7: be that through the sale of a kit or from the sale of a key component.
Speaker 7: It's a long-term deal and we believe that it's a fantastic market opportunity for us.
Speaker 7: And to bring folks right up to date in 2023, HESCA is now taking pre-orders for the HESCA NuQ canine cancer screen and monitor test at the point of care. And we anticipate a full commercial launch in the second quarter of 2023.
Speaker 7: During 2022, we also executed a supply and distribution agreement with IDEX laboratories.
Speaker 7: a global leader in pet healthcare innovation. This agreement was signed in October and provides IDEX with the rights to sell the new Q Vet cancer test worldwide through its global reference laboratory network.
Speaker 7: Pursuant to the IDEX agreement, the Lishon expects to receive ongoing revenue from the sales of its reference laboratory kits.
Speaker 7: I'd X launched our test at the world's largest veterinary conference, VMX, which was held in Orlando in the US earlier this year, and plans to continue to roll out to other countries throughout 2023. I am delighted that the new QVET cancer test...
Speaker 7: is now available in the mainstream mass market in the US. And indeed, happy to report to all of you, it's already been ordered by veterinarians in more than 40 states.
Speaker 7: Remember this important point. There are approximately 84 million pet dogs in the United States alone.
Speaker 7: nearly 50 percent.
50% of U.S. households bring their dog to the veterinarian annually for a health exam.
We believe that this provides a significant opportunity for us to introduce the new Q Vet cancer test as an accessible and affordable screen for senior dogs and at-risk breeds.
to aid early detection and improve outcomes.
simply great news for the veterinarians,
and a great reason to come to work every day. I'm also happy to report that Professor Wilson-Robles and team continue to make great progress in both ongoing and completed studies.
Of particular note is the use of the new Q Vet cancer test for monitoring disease progression and remission.
And to that end, Professor Wilson Robles recently submitted a paper for peer review about evaluating treatment
accurately monitoring the progression of lymphoma and identifying relapse soon, all of which will provide veterinarians terrific information to
It's a terrific paper and demonstrates another potential significant utility of our test.
In wrapping up and looking ahead, I'd say the next thing to look out for will be the full commercial launch of the HESCA NUCU Canine Screen and Monitor Test at the point of care, which we anticipate in the coming weeks.
We are also looking to expand our global distribution further and are pursuing commercial deals at a global,
regional and local level. So keep an eye out for that. And lastly, from an R&D perspective, we are working on our feline product and also looking to
mirroring the human side of volition
So we have lots to keep us busy and I look forward to providing further updates at our next update call and indeed at our Capital Markets Day in May. And with that, I'll pass back to Cameron Reynolds, our Group CEO .
So we have lots to keep us busy and I look forward to providing further updates at our next update call and indeed at our Capital Markets Day in May. And with that, I'll pass back to Cameron Reynolds, our Group CEO . Cameron?
to strengthen our broad IP portfolio, which is a real asset for the company, but we've also dedicated considerable time and resources to scaling up and strengthening our infrastructure for delivering high quality services under our licensing and supply agreements. During 2022 in particular, we sought to build out a HR IT
finance, legal and commercial functions to support the growing needs of the company.
We now have over 100 staff worldwide based in Belgium, the UK, the US and Singapore, all of whom play a part in our future success.
I will wrap up the call today with updates on several of our other product pillars, UQ Capture, UQ Cancer and UQ Nest.
Human blood is a mixture of many different cell types floating in a complex soup of proteins and other molecules, including nucleosomes released by cells from all around the body. Detecting a handful of cancerous or other abnormal cells in a patient's blood sample has historically been like finding a proverbial needle in a haystack.
Volition's Deque Capture program has several strands of technology which 1. essentially remove background noise thereby amplifying the signal or 2. look to identify the signal in a novel way including through mass spectrometry or 3. isolate various permanent fragments including nucleosomes and transcription factors
for further analysis of the mass spectrometry and the next generation DNA sequencing.
I am very happy to report we have made real progress on a number of these strands throughout 2022 and into 2023. As a reminder, this sample enrichment tool removes healthy nucleosomes leaving an enriched sample of abnormal nucleosomes behind the further analysis.
One area of progress is linked to new Q-CAPTCHA mass spec, whereby we enrich the sample and then use mass spec to help identify specific counts related to biomarkers.
In 2022, we published a paper using this technology in colorectal cancer and we have recently submitted for peer review a second paper, this time in relation to non-hodgkin's infomum.
These nucleosomes contain tumour specific DNA, typos, epigenetic changes and other biomarkers when analysed could potentially be used to diagnose a specific type of cancer or other medical condition, guide treatment selection and monitor disease and treatment progress.
Further, the use of muticaptor technology in the field of transcription factors has led to the successful isolation of tumor-derived transcription factor DNA complexes from blood samples obtained from calcium agents.
As transcription factor binding to DNA is cancer and tissue specific, this technology may in principle provide the basis for blood tests for cancer in general as well as blood tests for them by the organ or tissue affected by cancer.
Development is ongoing and I look forward to providing updates in future calls. In our new future caterpillar, we announced Volition's participation in a government-backed prospective study to evaluate the performance of blood biomarkers in the early detection of lung cancer with hospice's Sybil de Leon, HCL, France's second largest university hospital.
The LIA's initiative for the initiation of lung cancer screening, IAD, is a wide-ranging clinical study assessing the feasibility of a lung cancer screening program and the effectiveness of screening. The IAD study will evaluate the performance of the LITIN-UQ test as a blood biomarker for the early detection of lung cancer.
when used alone and in conjunction with CT scan.
with the ultimate goal of developing a national screening program in France. A longer term project, fantastic to be involved in such an initiative.
Blytton has also conducted a retrospective proof of concept study with HCL in lung cancer.
the results of which will be presented at an upcoming conference. And lastly, we completed the National Taiwan University's Lung Study. Analysis is underway with publication expected thereafter.
And so, to our final pillar covered today, the new QNET. In May 2022, the new QNET product with CMAR for the detection and evaluation of the Z-LIFS associated with the TOSIS on two platforms, the Aliser Plate and the automated I-10, enabling clinical use in more than 27 countries across Europe .
We firmly believe NUCU NETs will have wide applicability for diseases with a NET component such as sepsis, COVID-19, influenza, thrombosis, etc. and potentially could enable the specification of patients with a high level of NETs allowing physicians to rapidly triage these patients.
monitor their disease progression and response to treatment. In 2022, together with our collaborators, we published a peer-reviewed paper and two posters. The key findings reported is that levels of nucleonitosis as measured by oblation of eQ-Net are highly elevated in sepsis and moreover...
that the results correlate very well with the severity of disease, so the score sequential organ failure assessment.
This result has garnered a lot of interest from KUOL and has led to establishing some of our centers of excellence.
In August of 2022, Volition appointed Docro, a contract research organisation specialising in the commercialisation of diagnostic biomarker technologies to spearhead our clinical product development and FDA-regulated programmes in the US.
Dirt Growth is undertaking large scale finding studies across multiple sites using the Glitchin-Nukey platform to determine clinical utility in sepsis and cancer with the goal that one or more of such studies will support an application to the FDA breakthrough device program.
The first phase of the study, focused on sepsis, has been completed and the application to the FDA's breakthrough device program is expected to be submitted in the first half of this year. In drawing Zen's call to a close, I'd like to thank you for joining the call today. We really appreciate it.
I, along with the rest of the board and indeed the whole company, very much look forward to sharing further news regarding our new Q product pillars, as well as the results of our key clinical studies, publications and milestones at the coming months and quarters.
And to that end, I'm delighted to say we'll be hosting a Capital Markets Day at the New York Stock Exchange on the afternoon of Thursday May 11th.
We would love to see you there. But for today, I wrap up saying I very much feel we are in an extremely strong position to commercialise our new free platform in so many areas.
Pollution is truly powered by new foods. I could not be more positive about our work at the heart of epigenetics and I am very excited for the next phase of our journey. We're happy to take your questions.
by new students. I could not be more positive about our work at the heart of epigenetics and I'm very excited for the next phase of our journey. We're happy to take your questions.
We'll now be conducting a question and answer session.
If you'd like to ask a question today, please press star 1 from your telephone keypad and a confirmation tone will indicate your line is in the question queue.
You may press star 2 if you would like to remove your question from the queue.
For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you.
Thank you and our first question comes from the line of Bruce Jackson with a benchmark. Please proceed with your question.
Hi, good morning and thanks for taking my questions. A two-part question here on the milestone payment mechanics. So do you plan to receive the full $13.5 million as a lump sum payment? And then does that get accounted for as deferred revenue and then does it come back into the Smith.
the income statement over time. I'll pass it over to Terry to answer the question. Hi Bruce. At this point we are expecting to receive the next $13 million.
We're expecting, it's actually two separate milestones of six and a half million dollars each. And the first one is on the commercial launch of the Point of Care product as a screening test. And the second one is for the first commercial sale as a monitoring test. We are expecting to get both of those within the first half of this year.
In terms of the accounting for that, it will initially be treated as a deferred revenue under the accounting rules and will be allocated along with the 10 million milestone payment that we received last year over the life of the product. So as we make sales, a
So the remaining 5 million will come to us in 2024, subject to us providing data or the first commercial sale of a CAT product. So we are expecting that in 2024. Can't tell you exactly when, but it's on track. Okay, super. Thank you very much.
on Tom's comments about receiving orders in 40 states. I was wondering a couple things about that. One is what's the profile of some of these early adopters in terms of their practice, just whatever characteristics you can share and then any kind of early lessons, both positive and negative in terms of...
how you're talking to these customers and any tweaks you might have in terms of messaging or promoting the product. Just looking for some color there. Thanks.
Hi Tom, thanks for the question. You know our awareness campaign and education of the veterinarians has been very specific. It's supposed to be used for wellness.
preventive care programs of which close to 50% of the dogs that are presented to the US on an annual basis come in for wellness exams. So these are healthy animals and that's been, and it's not supposed to be used for sick animals at this point in time. Of course it's also supposed to be predominantly used for dogs seven years of age and older because 50% of dogs that approach the ages of nine, 10 years of age die of cancer.
The other strong target is about 30 predisposed breeds starting at the age of four years of age. So that's how we have positioned the test.
We are gaining data as we are testing animals in a large number of diversified practices. They're predominantly general practices right now because it is a wellness preventive profile, and consequently those are the hospitals that are using it and using it pretty effectively. As far as giving you a...
a more broad spectrum piece of information is that specific hospitals obviously can't do that, but the feedback that we've gotten from the general basis is, and the questions that are given to us on Ask New Q, which is our hotline, predominantly come from general practitioners using it in their wellness profiles.
Great, thank you. And then just one follow up, I know you spent some time going over milestones and you did an offering in February and you belated the clinical trial expenses kind of ramping up this year. I'm wondering if you can give us any kind of sense for...
where we should expect burn to fall this year, particularly as you invest in some of these clinical programs? Yeah, sure, that's a good question. And we do expect that the burn will ramp up a little bit this year because of the clinical trial costs and clinical trial activities that we're undertaking.
Right now we're probably looking at something in the region of 2 to 2.5 million per month in this quarter, but that will be offset over the course of the year with the milestone payments that we receive.
So, although we expect the overall expenditures to go up, we expect that to be mitigated by the $13 million of milestone payments that we will receive in the first half of the year.
Does that answer your question? It does, thanks. I'll hop back in the queue.
Great. Thank you, Pastor Tim. Thank you. Take care. Thank you. Our next question is from the line of Stephen Ralston with Zax. Please receive your question.
Good morning or afternoon. I'd like to focus on the near-term revenue potential for the canine detection test.
Good morning, or afternoon. I'd like to focus on the near-term revenue potential for the canine detection test. First of all, I'd like to focus on the near-term revenue potential for the canine detection test.
concerning the deferred revenues, when you say that it's going to be allocated over the life of the product
in that lifetime, are you assuming that it will be that $1.5 billion opportunity and that you'll achieve that and it'll be a percentage of that? Or is there something like a shorter time frame, like the expected sales over the next, well let's say five years or three years?
So the contract that we have that the deferred revenues relate to spreads over approximately 20 years. The way that the accounting rules apply is that we forecast the revenue over the life of the product.
And then we keep updating those forecasts and allocating the revenue accordingly. It is a bit of a complicated process and a bit of a moving target because as we get better at forecasting the revenues, the amount that we allocate per product sale will change over the years.
So it is It's a it's a bit of an unknown quantity at the moment But I think the best the best way to think about it is this will be allocated over quite a long time It's not going to be Over four five years it's going to be over something like closer to 20 years
All right, thank you. Actually, that's a good news bad news situation because the greater the potential of the product, the smaller the allocation. So in a way you're hoping that you won't be able to quickly monetize those revenues in sales because that means the product would have.
more potential than you expected. That's right Stephen, I think the important thing for us is that we get the cash when we get it and we're able to spend that cash and utilise it and from a discounted cash flow point of view it's the cash that's important rather than the accounting rules.
And these are as deferred revenues, is that when you talk about your cash balance, is that include the deferred revenues? Yes, that does. The cash balance includes the ten million dollars that we already received in March last year. Alright, and the paper that we submitted for peer review.
I assume that's the use of the test for monitoring? That's correct, Stephen. It was submitted about a month or two ago, and it's for monitoring for disease progression and remission. And we're currently getting some questions back. It looks very favorable, and we hope to have that publication approved, hopefully within the next month or two.
All right, and that's the reason for your target that you expect in the coming weeks.
and that would trigger one of those $6.5 million payments, correct?
That's correct, absolutely. And looking into the future, what do you expect the timeline for the feed line component of the test? When do you think that that will start generating sales or being commercialized? Is that a 2004 event?
Yeah, 2024 is when that would probably start. We're going through validation studies right now. We're working through all of that. You know, there's almost 100 million cats in the United States alone. We're just talking about canines right now. So obviously if we... We're just talking about canines right now.
If we are effective in bringing this to market, this could be a significant opportunity for us. We anticipate, hopefully, completing our studies on this, hopefully by the end of 2023 and early part of 2024 and having a paper validating our studies, hopefully by the first half of 2024. And I'm assuming that the next...
with the initial one being new Q-vets, obviously for different animals, and you see companion animals, and I assume that even goes into equines. Then the next grouping would be new Q-nets.
That's correct. So we've got the two-prong strategy, the US, which we're in the process, and I think we're reasonably close to applying for breakthrough designation status. We would expect if we do get breakthrough designation status, it's very nice, and we'd be ready to commercially launch by the end of 2025 in the US. If we do not get breakthrough designation status, we're hopeful, but you never know.
it would delay it sometime into 2026. But don't forget we do have a CE mark on two platforms in Europe now. We've got a lot of key opinion leaders now working on validating the product in their own areas. We would expect potentially some early revenue, smaller revenue later this year on clinical revenue or milestone revenue in new Q-Nets.
from Europe or a deal, but nothing really substantial until next year in Europe . And then as I said, 25 if we get breakthrough designation status or 26 if we do not. And I think it is going to follow the commercialization path.
of Nukeu VET, low CAPEX, low OPEX, deals with big companies. We're in very active discussions with a wide range of companies now on adapting Nukeu nets to their platforms. A handful of multi-billion dollar companies or larger. So the Nukeu net is really taking off on the commercialisation side and that should become a big part of the...
and sorry if I missed this, I'm newer to the volition story. So on the point of care veterinary new Q test, can you remind us again that the expected commercialization date on the point of care and what part of it is in your court versus what parts of it are in HESCA's court?
Gotcha. And then, you know, I really like the way it's positioned on the IDEC side as, you know, this is one of a series of ancillary tests that be used in a wellness setting. Can you talk about some of the some of the ancillary tests that people use in conjunction with new cases?
and this is supported a lot by the AVMA and the veterinary community. They typically come in once or twice a year for what we call a routine chemistry panel. And in that routine chemistry panel, typically CBC and routine chemistries are done. BUN, creatinine, liver enzymes, this type of thing.
That profile typically will cost a veterinarian excluding the exam, excuse me, a client, somewhere around a couple hundred dollars. If potentially an x-ray is done, it might be a little bit more than that. And if you think about it from that standpoint, including our very affordable test into that price structure as part of a cancer screening test.
it just fits right in the middle of it, especially for those dogs that are seven years or older. Because the veterinarian, when they communicate to the client, is not gonna say, oh yes, we have this other cancer screening test that's extremely expensive. No, it's highly affordable, can be delivered by the veterinary technician as well as the doctor.
The same scenario, David, also applies to the dogs that are four years of age and older. It's recommendations from the veterinary community right now that you start profiling animals at the age of sometimes three and four years of age so you can watch for medical trends. Again, the profile may not be as extensive as it is for the seven-year-old, but certainly we encourage veterinarians and many veterinary hospitals do that. Again, the new Q-Bet cancer test.
Yes, that definitely answered the question. Just on my last one here, can you talk about the feline product? Is that in the agreements that you have, the commercialization partnerships with either Huska or IDEX, would that be separate? And if it is separate, what would be your commercialization structure?
We're not going to be studying feline lymphoma, which is the predominant one in CAHCS that veterinarians frequently are having to deal with, but we're also looking for other additional cancers as well. But feline lymphoma is the specific one that comes up the most prevalent, and that's the one that we're hooked in in terms of the point of care test exclusivity with HESCO.
And so David, just to clarify one thing as well, just to our business model, you asked I think specifically would we add other things to our panel. Obviously the partners we license to and sell the basic products to, exactly what Tom said, but we do not see ourselves running our own lab, having our own sales force or even our own machines. So we will absolutely be used with other tests.
But Volition's focus is to produce the key components and then prove the product works and then let others do the selling, the panels, the collecting of the blood. That's in human and in animals. So that keeps our model very low capex, low opex from our side.
So typically that will happen a lot but it's not something we will do in that process. And that is the model we'll take through the human the human-netosis and human-cancer space as we grow. So that we can grow very quickly and do all the heavy lifting is done by our partners on the commercialisation side.
If that makes sense as well. It does. Thank you. Thank you. Thank you, David. Our next question is from the line of Jim Sidoti, the Sidoti company. Please proceed with your question. Hi, good morning, and thanks again for taking the questions. First one is, you've made a lot of progress so far. You've signed up two very large distributors.
discussions and they are active at the present time.
And then as far as capacity goes, do you have to make any investments to ramp up production to supply these key components or do you have the capacity on hand already for that?
A very good question. So we can produce the key components, obviously the two biggest ones are the antibodies and controls. We mass manufacture the controls now in Belgium at our silver one facility which has worked out fantastically well. We are doing some minor expansions in the freeze drying and some other areas.
We tend to get that actually as a support from the Belgian region, but you're talking the hundreds of thousands of dollars, it's nothing ever going to be very large. On far as production of the plates, we use a group in the US now for our US needs. I actually visited them last month and they're very capable of ramping up at a very high level so that should not be a problem unless it really, really got very big very quickly, but we do expect the growth to be smaller.
and through the next years we can meet it.
All right, thank you.
Thank you. Thank you.
Our next question is from the line of Ian Castle with IFCM. Please proceed with your questions. Yeah, I guess my question would be directed towards Tom. You know, the vet opportunity seems really, really enormous when you think about just the cancer screening now launching.
in the US and then globally cancer monitoring. It sounds like that should be launching later this year. Same thing is launching for cats then in a 2024. And you mentioned Netosis for Vet. And I don't know if that's a 2024, 2025 type of product, but I was wondering if you could kind of explain Tom, like what that test really is and how it could be applied at the GP office.
Yeah, certainly. Thanks for the question, Ian. First of all, we are currently starting, we are starting our studies in the ptosis this year in 2023. We anticipate hopefully having some papers by 2024 and doing some presentations on it at the various conferences probably throughout the world. To speak a little bit about ptosis, you asked specifically about gp.
There's two levels here. The first level, with rhephastin and ptosis, it's a biomarker that uses our platform to be able to identify non-cancer diseases. In particular, diseases such as sepsis, thrombosis, pancreatitis, aspiration pneumonia. These are all diseases that are very common on the human side as well, but they're also very common on the canine, on the animal side.
in one of those disease entities that I just mentioned to you. So an animal that comes in that's sick, vomiting, diarrhea, septic.
Not feeling well. Before you have to run a whole ton of chemistries, this could be the initial biomarker that that GP, late in the afternoon, takes on that animal to give an indication whether to go to emergency, whether to stay in the hospital, or maybe you can go home and come back again the next day for routine treatment. With reference to the specialty in emergency hospitals...
This is something that's really going to be something very beneficial from a triage situation. These hospitals are over inundated with animals coming in on emergency and then trying to triage which ones are going to get treated first and which are the most ill. This biomarker, the nutosis biomarker from us, potentially will be that differentiated, will be the first test that we go to to give us an indication as to where are we going to go with this animal, how sick is it, and what level of treatment does it need.
and crosses over between humans and animals. So obviously we developed Netosis First in the human space and I outlined that. And Tom now has done very well on outlining on the veterinary space how that works. And so we have a very symbiotic relationship between the vet and the human side and it's really helped. And the vet side often helps the human side. For example, the platform which we believe HESCA is about to launch on could also be very useful.
and making sure we raise all boats. Maybe the last question I have as well is, there's an area of vet that hasn't been talked about yet that is very significant, and that's on the production animal side. Is there applicability to either the cancer screen test or the ptosis test, hitting that large market opportunity as well?
Yeah, I would say the answer to that again is, the ptosis in particular when we're looking at potentially an equine or potentially a bovine or a cattle situation, with reference to cattle which is a multi-billion dollar industry, there's a lot of diseases with reference to meatritus or mastitis or respiratory disease. And that really falls into the ptosis type product where you can come in and diagnose and get a strong indication of herd as...
therapeutics. So those are the two areas that we're going to be looking into. Most likely that those types of studies will be really starting to ramp up a little bit in the latter part of 2023 going into 2024.
Those are the two areas that we're going to be looking into. Most likely, those types of studies will be really starting to ramp up a little bit, latter part of 2023 going into 2024. Okay, thank you.
Thank you. Thank you. Thank you. Thank you. At this time we have the end of our question and answer session and I'll hand the floor back to Cameron Reynolds for closing remarks. Thank you. Before I start the closing remarks I'll just make one statement. We've been asked a few times whether we had any exposure to Silicon Valley Bank and other market issues with the banks. The short answer is no we do not.
and we are obviously monitoring the situation and like everyone there's some fluctuations in markets and things going on but we have no direct exposure to it whatsoever. Just to be clear in case anyone asks that in the future. And so thank you very much for the call today. I think it's very clear we are now very much on the commercialization path.
We are continuing on with our development and research, but we're really on the front foot now on the vet space, and I think on the natosis space, and we are really following up now on the human cancer space as well. So expect to see a lot of more information throughout the year as the revenue goes up, and as the revenue goes up and really start to show a steady ramp on what we are.
and then as we really start to layer in the Natosis and some more Natosis deals and revenue, as well as the human cancer side, we'll have a lot more coming in on as well. So thank you very much, and as a final reminder, we have a Capital Markets Day, which will be before the next queue, which is on May 11th, around the queue, May 11th in New York City, and yet again, we'd like to thank the New York Stock Exchange for letting us...
time.
This will conclude today's conference. We may disconnect your lines at this time. Thank you for your participation.