VolitionRx Limited (VNRX) is a multi-national epigenetics company that has developed a suite of innovative diagnostic tests designed to detect certain characteristic changes that occur from the earliest stages of disease. The company's patented technologies leverage chromosomal structures, such as nucleosomes, and transcription factors as biomarkers to enable early diagnosis and monitoring of a range of life-altering diseases, including certain cancers and diseases associated with NETosis, such as sepsis and COVID-19.
Business Overview
VolitionRx's key focus areas include Nu.Q® Vet, a suite of cost-effective, easy-to-use blood tests for dogs and other companion animals, Nu.Q® NETs for monitoring the immune system to save lives, Nu.Q® Discover, a complete solution to profiling nucleosomes, Nu.Q® Cancer for monitoring disease progression, response to treatment and Minimal Residual Disease, and Capture-PCR™, a novel method of liquid biopsy involving the physical isolation of tumor-derived circulating tumor DNA fragments for early cancer detection.
The company's commercialization strategy is guided by three underlying principles: ensuring its products result in low capital expenditures for licensors and end-users and low operating expenses for Volition, are affordable, and are accessible worldwide. To this end, Volition aims to partner with established diagnostic companies to market, sell, and process its tests, leveraging their networks and expertise.
Financials
For the fiscal year ended December 31, 2023, VolitionRx reported annual revenue of $775,302 and a net loss of $35,319,078. The company's annual operating cash flow was -$18,062,999, and its annual free cash flow was -$19,146,748.
In the first quarter of 2024, the company generated revenue of $171,535, a 15% increase compared to the same period in the prior year. Approximately 75% of the revenue was from the Nu.Q® Vet product line, with the remainder coming from the Nu.Q® Discover program.
Liquidity
As of March 31, 2024, VolitionRx had cash and cash equivalents of $11.8 million. The company has financed its operations primarily through private placements and public offerings of its common stock. Management has expressed substantial doubt about the company's ability to continue as a going concern, citing the need for additional financing to fund its operations and strategic plans.
To address this, the company has implemented several initiatives to preserve capital and reduce expenditures. These include targeting $25 million in non-dilutive funding from government agencies in the U.S. and an additional $18 million from various European agencies, as well as a plan to reduce operating expenses by $10 million on an annualized basis through a thorough review of all projects and streamlining of R&D, innovation, scientific, and sales and marketing activities. Additionally, the board of directors and leadership team have agreed to take a portion of their compensation in equity for a minimum of six months to demonstrate their continued commitment to the company.
Recent Developments
Nu.Q® Vet
VolitionRx has made significant progress in commercializing its Nu.Q® Vet Cancer Test, having received $23 million in upfront and milestone payments from its exclusive agreement with Heska Corporation (now part of Mars Petcare's Antech Diagnostics division). The test is now commercially available in the U.S., Europe, and Japan through Antech Diagnostics and Fujifilm Vet Systems, with both companies offering the test at a very competitive list price of around $35 to $40 to veterinarians.
While the initial product launch has taken longer than anticipated, the company expects revenues to accelerate in the second half of 2024 due to the recent product launches by Antech and Fujifilm. The company is also focused on developing a feline product to secure the final $5 million milestone payment from Heska Antech.
Nu.Q® NETs and Sepsis
VolitionRx is making significant progress in developing its Nu.Q® NETs technology for the diagnosis and monitoring of sepsis. The company has several large-scale retrospective and prospective studies underway, including collaborations with the German Sepsis Group, the University Medical Centre Amsterdam, and a consortium project led by Professor Djillali Annane in France. These studies are expected to provide robust clinical data on the ability of Nu.Q® NETs to correlate with Sepsis-3 diagnostic criteria, disease severity, intensive care mortality, 28-day mortality, duration of organ supportive therapies, and length of hospital stay.
The company aims to have a substantial amount of clinical data ready by the end of June 2024 to support ongoing commercial discussions and licensing negotiations. VolitionRx believes the Nu.Q® NETs technology represents a potential breakthrough in sepsis management and is generating significant interest from potential licensing partners.
Capture-PCR™
VolitionRx has developed a novel method of liquid biopsy called Capture-PCR™, which involves the physical isolation of tumor-derived circulating tumor DNA fragments from blood samples. The company's proof-of-concept data, presented at the European Society of Medical Oncology Conference in 2023, demonstrated the ability to detect a range of solid and liquid tumors, including early-stage cancers, with accuracy approaching that of current fecal immunochemical tests for colorectal cancer.
The company is working to complete its first manuscript on the Capture-PCR™ technology and plans to submit it for peer review by the end of June 2024. VolitionRx has also submitted several abstracts related to Capture-PCR™ and promising new data on the use of its Nu.Q® technology for lung cancer detection for consideration at the upcoming ESMO 2024 conference.
Risks and Challenges
VolitionRx faces several risks, including its ability to generate significant revenue, the need for additional capital to fund its operations, the highly competitive and rapidly changing nature of the diagnostics market, and the protection of its patents and intellectual property. The company's auditors have also expressed substantial doubt about its ability to continue as a going concern.
Outlook
However, the company's focus on commercializing its innovative diagnostic technologies, securing non-dilutive funding, and reducing operating expenses provides a path towards becoming cash flow neutral in 2025. The potential for meaningful milestone payments and ongoing royalties from licensing agreements for its Nu.Q® NETs and Capture-PCR™ technologies could also significantly improve the company's financial position.
Conclusion
Overall, VolitionRx's diverse portfolio of diagnostic solutions, strong partnerships, and commitment to cost-cutting measures position the company for potential growth and value creation, provided it can successfully navigate the challenges ahead and secure the necessary financing to execute its strategic plan.