VolitionRX Ltd (VNRX) Q2 2024 Earnings Call Transcript Highlights: Strong Revenue Growth and …

Release Date: August 15, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• VolitionRX Ltd (VNRX, Financial) saw a significant increase in revenue, with Q2 2024 revenue up 83% compared to the same period last year.
• The company successfully launched the Nu.Q Vet cancer test in multiple new markets, including Japan, Australia, India, and Singapore.
• VolitionRX Ltd (VNRX) has a robust patent portfolio with 86 granted patents and 128 patents pending worldwide, providing a competitive advantage.
• The company is making strong progress in its clinical trials for sepsis and cancer, with promising preliminary results and upcoming publications.
• VolitionRX Ltd (VNRX) is actively working on cost reduction measures, aiming to reduce expenditures by $10 million on an annualized basis.

Negative Points

• Despite the revenue growth, the company still faces challenges in achieving consistent revenue streams due to the lumpiness of orders from distribution partners.
• The company is heavily reliant on milestone payments and licensing deals to achieve cash flow positivity by 2025, which introduces uncertainty.
• General and administrative expenses have not decreased as significantly as R&D and sales and marketing expenses, indicating room for further cost-cutting.
• The recent funding raise, while necessary, involved expensive terms, reflecting the challenging current financial climate.
• The timeline for achieving significant licensing deals in the human space remains uncertain, adding risk to the company’s financial projections.

Q & A Highlights

Q: Could you provide insights on the revenue uptake for the vet product and the expected trend for the next few quarters?
A: Cameron Reynolds, President and CEO: We saw a significant uptick this quarter, with revenue from Vet in Q2 about double that of Q1. However, it’s difficult to predict a consistent trend as it can be lumpy due to stocking and reordering patterns. We expect revenue to increase over the next few quarters, especially with recent launches by Antech and Fuji.

Q: Will the current level of operating expenses be maintained going forward?
A: Terig Hughes, CFO: Operating expenses are coming down each quarter. We aim to reduce overall expenses by at least $10 million year-over-year on an annualized basis. This reduction started last quarter, and we will continue to see the impact over the balance of the year.

Q: How does the recent funding align with the strategy of funding each project separately?
A: Cameron Reynolds, President and CEO: We are ensuring each key area is self-funding through milestone payments, deals, and government grants. The recent fundraise was to ensure we could achieve upcoming milestones and get the necessary data out. We remain focused on making each pillar self-sustaining.

Q: Can you provide a breakdown of revenue trends across different countries?
A: Terig Hughes, CFO: We are not providing a detailed breakdown at the moment as the numbers are still relatively lumpy. However, the trend is strongly upwards, with more tests sold in the first half of this year than all of last year. We expect more regular trends in a few quarters once all partners have completed their launch phases.

Q: Why is the reduction in general and administrative expenses lagging behind R&D and sales and marketing?
A: Terig Hughes, CFO: R&D costs are coming down naturally as projects finish. G&A reductions take longer to implement, but we will continue to see progress over the next few months and into next year.

Q: What milestones are expected to trigger the A warrants from the recent financing?
A: Cameron Reynolds, President and CEO: The milestones are commercially driven, focusing on achieving a deal in the human space. Given the excellent data in Nu.Q, lung cancer, Capture-PCR, and sepsis, we believe this is a realistic possibility in the next two to three quarters.

Q: Are you implementing a cash management program to maximize interest income from cash balances?
A: Terig Hughes, CFO: Yes, we have interest-bearing accounts where we place any spare cash to manage it as efficiently as possible.

Q: How many papers will be presented at the European Society for Medical Oncology (ESMO) in September?
A: Andrew Retter, Chief Medical Officer: We will present one paper focused on lung cancer. Additionally, we have a satellite symposium at the European Society of Intensive Care Medicine in October, where we will present data from three large clinical trials.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.