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Operator
Good morning, ladies and gentlemen, and thank you for standing by. Welcome to VolitionRx Limited's third quarter 2020 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. If you have a question, please press the star key followed by the number one on your touchtone phone. If you'd like to withdraw your question, please press the star key followed by the number two. If you're using speaker equipment, please lift the handset before making your selections. This conference call is being recorded today, November 13, 2020. I'd now like to turn the conference call over to Scott Powell, Executive President of Investor Relations. Please go ahead.
Scott Powell
Thank you, and welcome, everyone, to today's earnings conference call for VolitionRx Limited. This call will cover Volition's financial and operating results, for the third quarter of 2020, along with a discussion of our recent activities and key upcoming milestones. Following our prepared remarks, we will open the conference call to a question and answer session. Also on our call today are Mr. Cameron Reynolds, President and Chief Executive Officer, Mr. David Vanston, Chief Financial Officer, and Dr. Jason Terrell, Chief Medical 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 Securities Litigation Reform Act of 1995. These statements are based on our beliefs as well as assumptions we have used based upon information currently available to us. Because these statements reflect our current views concerning future events, these statements involve risks, uncertainties, and assumptions. 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 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. I'd now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds. Kevin?
Cameron Reynolds
Thank you, everyone, for joining Volition's conference call today. I especially appreciate it, as always, given the busy earnings call season and the ongoing pandemic and lockdowns. I would like yet again to recognise the amazing commitment and hard work shown by our team over the past quarter during these difficult times, allowing so much progress in so many areas. Thanks also for those that attended our recent Virtual Capital Markets event. After such a great reception, we will be sure to host another event in the new year. I will start today by covering our financials and then get straight down to discussing the upcoming launch of our first product. the new QVET cancer screening test that we're targeting for the 30th of November, exciting times. We have strengthened our cash position this year, providing a great runway to achieve our many milestones and give us flexibility during the continuing pandemic. We closed out the third quarter with approximately 21 million cash and cash equivalents compared with approximately 17 at the end of last year. We continue to manage our expenditures carefully As we approach commercialisation, our burn rate is approximately 1.6 to 1.7 million per month, which we expect to continue as we make additional investments towards our product launches and expansion of our platform. Regarding product launches, I am delighted to announce the target date of Monday, November 30th, for launch of the new QVET cancer screening test in the US. This is an extremely important milestone for the company, as this first launch, that we expect to be the first of many, shows that our platform has reached the level of reliability and refuseability to be launched in a completely independent lab. This test will be positioned for use in the animal health check of older dogs, those that are seven years and older and for cases where there is a high suspicion of cancer. It may also be a complementary test for younger dogs at high risk for developing cancer in their lifetimes such as Burmese Mountain Dogs, Golden Retrievers, Rottweilers, Beagles, Boxers, West Highland White Terriers and Shetland Sheepdogs. The test will initially be available from the GI Lab at Texas A&M University to potentially thousands of vets across Texas and the rest of the US. Further details will be released at launch, but in brief, vets will draw the blood as per the collection instructions and then ship it for processing to the GI Lab at Texas A&M. Results will be available within three to five business days of receipt. We expect the cost of the test from the GI lab to be around $122 of which Volition receives approximately $45 per test at a greater than 85% margin. We anticipate vets to charge between $160 and $200 for the test. Cancer in dogs is widespread. It is the leading cause of deaths for dogs over the age of 10 and there are over 6 million new dog cancer diagnoses each year. As cancer screening is not commonplace in animal health, as it is in human health, we believe blood tests like the new QVET cancer screening test could completely transform how vets manage cancer in companion animals. It really is a simple, low-cost, easy-to-utilise base screening blood test which we believe will help streamline the screening process for up to one-third of malignancies in dogs, including common malignancies such as lymphoma and angiosarcoma. As in humans, early diagnosis of cancer has the potential to improve the treatment and quality of life, as well as providing valuable additional information to inform the clinical decision-making process. If you have not had the opportunity to see it yet, I would recommend watching Professor Heather Wilson-Robles' presentation from the recent Capital Markets Day that is available on our website. Heather did a great job of bringing our first vet product and its clinical relevance to life. As part of our pre-launch marketing, you might have seen a release earlier this week of a report entitled, A Look to the Future of Cancer Diagnostics. which compiled contributions from some of the key opinion leaders in the VET oncology space. It's an interesting read and it's also available to download on our website. It was fantastic to connect with these thought leaders who continue to support us either through ongoing studies or upcoming launch activities, so watch this space. To leverage our global team, I'm also delighted to say that we've begun pre-launch work in Asia, led by Dr. Jasmine Quay and supported by our VET team, and I'm looking forward to updating you on progress in the coming months. Certainly, we will announce further details at the time of launch, but I wanted to spend a couple of minutes discussing the commercial opportunity that this initial VET product represents. The obvious big question is, what is the size of the potential addressable market? As I said earlier, there is high unmet need in the VET market with few simple non-invasive tests currently available. Cancer is the leading cause of death in dogs over the age of two, and up to 50% of all dogs over the age of 10 develop cancer in their lifetime. There are approximately 77 million dogs in the US, and according to the 2019 ABMA US Pet Study, which is completed every five years, 83% of all dogs visit the vet at least once per year, with 75% being classified as routine preventative visits. So, we believe the market is both large and accessible. Clearly building a market takes time, but just to give you an idea of the potential market, of the 77 million dogs in the US, approximately 20 million dogs are over the age of 7 and therefore at high risk of cancer. For every 1.2 million dogs of the 77 million dogs in the US tested using the current platform of plates, we would generate approximately 54 million in sales revenue and over 45 million in gross margin. Or looking at it a second way, if just 10% of the older dogs in the US got the test each year, that's 2 million dogs, we would generate approximately 90 million in revenue and approximately 76 million in gross margin. And that's only 10% of the potential older dog market, not to mention the additional dogs that will be tested due to a suspicion of cancer or out of an abundance of caution for higher risk breeds and a wide range of potential new tests in dogs and other animals such as cats. In short, whichever way we look at this, we believe that this is a huge commercial opportunity. Our current expectations are based only on our initial canine cancer diagnostic test and the US market. However, we plan to launch additional veterinary tests and generate revenue outside the US in the future as well, and in other species. We are hopeful, given the demonstrated strong accuracy of our test, the market for our initial product will end up numbering in the millions of tests per year. While recognising the desire to receive revenue guidance, we're unable to provide such guidance at this time as we don't know how quickly things will ramp up, nor the total demand for the test. What we do know at this stage is that we have received our first request for a quote from the GR lab for approximately $370,000, this being the capacity for the first technician in the first year of the lab. We aim to announce the launch in further labs in the US and across the world once we review this beta launch in the first quarter of next year. This is just the beginning, but a fantastic opportunity and we are truly excited to start commercial operations. As discussed at the Capital Markets Day, our plan is to initially drive awareness of the new QVET test with specialist oncologists at the top institutions and have an extreme focus in Texas, training all of the oncology hospital specialists and have an outreach program with general practice veterinarians. I am really proud of how hard the whole team has worked to prepare the launch of our first clinical product. It's an incredible milestone for the company and we have an exciting few months ahead for us for sure. Moving from the vet business to human cancers, where, in parallel, we continue to make great progress. As was discussed at the Capital Markets Day, during the pandemic, we have focused on simplicity, and in particular, on our C-Mark H3.1 assay in blood cancers. You might ask, why? This is a product we can launch with a simple assay during the pandemic given the very similar results we have obtained in both human and dogs in these cancers with exactly the same assay. I think this makes a lot of sense during the pandemic to launch the same assay for the same cancers in humans and dogs, again showing the amazing versatility of our platform. To that end, I'm delighted to announce today that we have engaged Diagnostic Oncology as a contract research organisation to conduct a US clinical trial for non-Hodgkin's lymphoma . The trial is designed to obtain multiple FDA-approved adjunct tests to aid in the diagnosis of the five most common and aggressive forms of NHL. DxO is the largest US CRO specialising in oncology of purpose in vitro diagnostic device clinical trials. We are delighted to have them on board. NHL accounts for approximately 4% of all cancers with approximately 77,000 cases diagnosed per year in the US and around 700,000 worldwide. As Dr. Doyle discussed at Capital Markets Day, rapid diagnosis is essential as death can result in weeks whereas early treatment is often curative. Diagostis is often delayed as symptoms for NHL mimic those of common everyday conditions, such as tiredness. Existing data suggests UQ will greatly aid physicians in distinguishing NHL from common conditions, fulfilling what we feel is a critical unmet clinical need which represents a major market opportunity. The trial will enroll up to 1,500 subjects across 10 major US healthcare institutions over a total of 22 months. This extensive program will cost approximately $2.9 million over the two years, assuming the completion of numerous projects and includes not only the clinical study but also data analysis and regulatory and reimbursement submission preparation. We anticipate that diffuse large B-cell lymphoma which accounts for approximately 35% of NHL cases, will accrue study subjects more rapidly than less prevalent subtypes. To that end, we expect a DLBCL FDA 510 case submission will be possible approximately 10 to 12 months into the trial. At that time, we would like to submit a DLBCL 510K while petitioning FDA to accept subsequent 510Ks as sufficient NHL subtypes numbers accrue. The FDA approval for new QDLBCL, the subsequent 510Ks, can be filed utilising post-market data of an FDA-approved test. This strategy will streamline both FDA regulatory approval and CMS reimbursement approval to minimise our time to market and hopefully time to revenue. We're delighted to be working with Diagnostic Oncology LLC, DxO, and to get started on this pivotal study in the US. Dr. Terrell joins us on the call today to answer any questions on this exciting trial and potential product launch in our usual Q&A session at the end of the management summary. In addition to all of this, we have also made great progress on the research program for the use of new Q technology in netosis, and in particular in monitoring disease progression of COVID-19. And we're looking forward to broaden this into influenza and potentially other diseases such as sepsis. Currently, we have several studies that have either been collected or are being negotiated in Europe, and we anticipate the next results will be reported before the end of this year. As announced on the last call, we are also negotiating a large FDA trial for the use of our assays in NETs for COVID-19 and influenza in the US and will announce the full details once they have been finalised. Early identification and triaging of patients tested positive for COVID-19 who are the most likely to deteriorate and need critical care would enable both improved outcomes for patients and a more efficient use of critical care resources for healthcare providers. We believe this is still very much an unmet need worldwide in fighting the impact of the pandemic and given the information on the vaccine, many other conditions driven by mitosis such as influenza and sepsis. If we continue to see positive results in the longitudinal studies, we aim to have a C-mark product available on multiple platforms in the first half of 2021 and look to launch a low-cost product that could be used in any laboratory worldwide as soon as possible after that. We are yet again proud of the versatility of the NewQ platform and the range of applications for which these products can be leveraged. So while mitosis is still a relatively new field for Volition, given such positive early results, we have formed a NewQ NETS team to provide focus and drive to the product development program. To that end, we hope to announce an additional study in overall NETS and mitosis before the end of this year and are looking to use the NewQ technology in many ways in NETS. through diagnostic, disease monitoring and as a companion diagnostic to monitor treatment response. This once again underlines the strong breadth of the NewQ platform technology supported by a broad intellectual property portfolio. We plan to host another capital markets event focused on our NewQ NETS program early next year. From the large cancer clinical trial perspective, our marquee trials, I think it is fair to say that in various ways these have now been affected by the continued pandemic, either by slower or paused collection, or by a host of other supply chain or travel and communication issues. We believe we have successfully managed those areas under our control, such as assay development and running samples, both on track with our milestones, but many issues are obviously beyond our control. On particular note is the EDRN study in the US where in summary the EDRN expects lower collections in 2020 than originally planned and we expect this trial may be further extended as it is currently paused. As always, I will update with further details once available. On a better note, the collection of both large-scale studies at the National Taiwan University continues with the aim of to complete collection by the middle of next year. With regards to those studies, we have now completed 12 discovery-grade nuclear assays and five more orthogonal biomarkers on subsets of both our two National Taiwan University studies, colorectal and lung, and are working with our collaborators on data analysis. As for our more rigorous process of presenting data where we can, in either peer-reviewed papers or at conferences, an abstract has been accepted by the IASLC meeting in January, where we look forward to presenting our lung cancer detection results. The APDW meeting originally planned for December 2020 has been delayed to later next year, so we'll provide updates regarding colorectal cancer data in due course. From an expansion point of view, we are in the final paperwork stages for Silver One, a production hub for our products and components close to our lab in Belgium. We will soon be producing several key components and plan to achieve full ISO certification next year. We anticipate that as with our previous real estate transactions, at least some of these costs will be supported through non-dilutive grants and or loans from the NMU region. Our plan is to produce At large scale, raw materials such as recombinant nucleosomes, which act as a calibrant to our NUQ assays, in addition to antibodies that are key elements to our branded product, and indeed will manufacture our full diagnostic kits once finalised. We expect to offer all elements for both commercial sale and for clinical trial purposes and CE mark products for sale in Europe and beyond. We also intend to install a service lab in the new facility, which would undertake sample processing for external parties. The opening of the new facility will not only bring manufacture of key components in-house, thereby securing our supply chain. It should also significantly reduce the cost of production of many of these elements, and in turn, should reduce the cost of assay development. It's an exciting time, and I could not be happier that we could find a suitable site so closely situated to our current lab. Plus, it's another great step forward on our road to a diverse revenue stream. To that end, I'm also delighted to announce the appointment of our first sales manager, Emmanuelle Demure-Compte, who starts with the business in December. Emmanuel brings over 25 years of sales experience in the diagnostic field, having worked for companies such as Roche, Sanofi and most recently Vela. We believe he will be an excellent addition to our team with his focus to help drive revenue from our Silver One facility. I'm equally delighted to also announce on the call today that we have opened a small shared laboratory at California State University in San Marcos, California. This lab, initially with a team of just two, will be led by Dr. Terry Kelly, our Chief Strategic Officer, Evolution America. They will focus on blue-cell innovation and discovery research, which we hope will help us leapfrog forward on some of our more cutting-edge research projects, such as UQ Capture, which our team has been very active on over the past few months as well. So watch this space. I'm sure that you will agree that we have an incredible amount of existing and new activities underway. And so to support the runway needed for the new NHL clinical study, NET studies, including COVID-19, opening of Silver 1 laboratory expansion, and of course, launch of our initial NucuVet product, we've filed a takedown of our existing shelf registration statement to conduct it at the market equity offering, ATM, of an up to an aggregate of $25 million in shares of common stock to be sold periodically in the future. Oppenheimer and Sanderson Sherald will act as our sales agents under the ATM. The object for this new ATM, in contrast to our existing ATM, is to include more institutional investors over the life of the offering. As you may be aware from our filings with the SEC, our existing ATM has been in existence since September 2018 and we plan to utilise the available balance under the offering prior to the new ATM and so to the future. I'd like to reiterate our vision and what makes us so excited with our progress and our space. Volition is an epigenetics company focused on advancing the science of epigenetics and exploiting these advances in human and animal health. This has been our mission since our founding and is coming to fruition with our new cube platform at the very heart of epigenetics. We believe strongly the last decade of work at Volition with our ever-expanding team in epigenetics puts us in an extremely strong position with our expansive IP portfolio to be a significant player in this very key field. Overall, on so many fronts, with our ever-growing team and IP, I'm delighted with the progress we are making and I'm excited by the momentum we have developed in the epigenetics field. Indeed, our whole team is incredibly excited by the company's future opportunities. We aim to report through the end of this year and beyond into next year several key milestones including, most excitingly, the launch of our new QVET screening test. We will focus on driving revenue in the coming quarters where possible during the pandemic in four key areas. Vet products, disease monitoring tests through notosis, for example COVID-19, using our new production facility to drive reagent sales and licensing of our technology for others to commercialise. I, along with the rest of the board and indeed the whole company, look forward to sharing the results of key studies over the coming month and year with our optimised platform. Despite the pandemic, 2020 has proven to be our most exciting year yet, thanks to our fantastic hard-working team. Thanks for joining the call today. I very much appreciate it, given the busy earnings course season and the pandemic. We're happy now to take questions. Operator?
Operator
Thank you. Now to the question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1. One moment, please, while we poll for questions. Our first question today is coming from Jason McCarthy from Maxim Group. Your line is now live.
Jason McCarthy
Hey, good morning, guys. Thanks for taking the question. Good morning. So I'd like to ask about the NTU studies. You mentioned that you completed 12 discovery-grade assays on the NTU subjects in both colorectal and lung cancer. So my question is how long do you data set and should we expect to see any of that data in the near future? And also, are these on the plate or the beads format?
Cameron Reynolds
Yes, you expect to see them in the short term. They're eager to present them at conferences, so that's in a few months in January for the lung. And then when the conference comes around, these are just subsets of the original population, so it's not the final trial, but it's fantastic to get some progress during the pandemic on them, unlike the trial in the U.S., So yes, they're on the plates. So there's only, originally on the plates and now on the magnetic beads. We started with one and we've switched over to the both. So a little bit on the plates initially and then everything else on the beads. And yes, we'll be presenting that as soon as we can. They're eager to present them at conferences. So it'll be the lung in January and as soon as we can on the colorectal side as well. Thank you.
Jason McCarthy
So I wanted to ask about the kind of the data in the canines, since the nucleosomes are essentially the same and it's the same test, would you expect to see a similar result that you saw in dogs in the large-scale human trial? And also, would the entire patient be the same, using it as a first-line test in at-risk patients who may not warrant a biopsy?
Cameron Reynolds
Yes, so the short answer is it's been remarkable. The pre-analytics, the process has been almost exactly the same in the dogs Actually, the kits we sent over were the human kits, the same kits we've seen marked for the blood cancers. So, yeah, it's been remarkably similar. As you saw, superb results in the animal space, 97 and 87 AUCs for the two cancers. We're in the high 80s for the blood cancers. And Jason's on the line. Perhaps he could go through the use of what they would be used. But, yes, I think it is something that would be given to a lot of people, not just those Jason, do you want to give a quick description of who would see the market being for the NHL blood test?
Jason
Yeah, hi, this is Jason. Yeah, absolutely. So, you know, Cameron talked a little bit about the prevalence of NHL just in general in the U.S., mentioned that there's approximately 77,000 new diagnoses made every year. But the tricky thing about making a diagnosis of lymphoma is is that the symptoms often mimic those symptoms of very common everyday illnesses, you know, routine infections and autoimmune disease and things of that nature. So the symptoms patients present with are very common everyday, you know, patients seen by primary care physicians. One of the most, you know, common list of chief complaints that you'll see, you know, fever, fatigue, things of that nature. So even though there's 77,000 cases diagnosed in the U.S. every year, the market for patients who present with those symptoms that could be NHL is much, much larger. One of the most common chief complaints of medicine, honestly.
Cameron Reynolds
Okay, thanks. So basically, that was actually one of the real important things which we drove, while we're driving NHL through now, So we can do it through a 510K because it's not a screening test. It's not going to be given to everybody. And NHL can be actually quite young when you get the cancer. So it's kind of in between. It is symptomatic people, but it's much more broadly symptomatic, as Jason said, things which could be pretty much anybody. So we don't know what the market size is going to be. That's something we'll work on during the trial and work it out. I think very much like the vet space, if we show good data, I think it's something which a lot of doctors will end up using in those quite nonspecific symptoms, and then the market could easily be in the millions of tests per year. And I think we charge a very similar amount to what we do in the vet space on a very similar margin. So the addressable market is certainly in the hundreds of millions or billions of dollars a year. What we get of it will depend, of course, obviously on the results from the trial and the rollout and everything else. It's by no means a micro market, and it's a very good space for the company because you don't have to do a large PMA study like in colorectal, but it's still a very, very large addressable market. So I think if we can show good data, it could be an excellent product and really put us on the map in the US. And timing-wise, obviously, the first readout we hope to be the end of next year, so it could well be a 2022 story when we have an FDA-approved product that we could expect to be a very large addressable market. So time will tell, but we're very encouraged with what we can see so far. Thank you.
Jason McCarthy
And then I have one more, if you don't mind, on the mitosis product. Now, as the pandemic subsides, because even after the COVID pandemic, COVID is likely to remain with us for some time, probably at a smaller scale. Right. How would this product be applied in patients who do get it or for other diseases like influenza? Would it be largely patients who have severe cases and you're trying to determine whether their progression is critical? Could you go into a bit more detail on that?
Cameron Reynolds
Yeah, very good question. So, obviously, we got into this market. Nets have been sort of on the cutting edge in the last few years, and they're much better understood now. Obviously, with the pandemic, there's been a huge amount of focus back on them So during the COVID pandemic, the main use would be for a for an otosis test would be to say monitoring disease progression. You come into hospital. We've shown from the data we presented that people with severe COVID have very, very high levels of nests in their blood measured by our assay. People who are sick but not very sick have medium levels and people with low level COVID or asymptomatic have low levels. So it can monitor disease progression. We're seeing how good it is as a prognostic in longitudinal samples, which we'll have data on very soon. And I think, yeah, I think it is going to progress probably for at least a few more years while we work this through. But the body's immune response, the mitosis, is the driver in sepsis as well. And sepsis is the biggest killer in hospitals. And it's something which is really tricky for physicians because it's very hard to know that it's actually underweight, if you will. So we're working on trials now for COVID and influenza, and I think obviously influenza has been with us for millennia, so I think that's obviously going to continue. COVID I think will continue for a bit longer, but the validity of the endotosis test stretches way beyond even just COVID and influenza into things like sepsis. We've spoken to a lot of groups that have therapies underway for sepsis, for endotosis from sepsis, COVID, influenza, and they all say the same thing. There's absolutely no good companion diagnostic for the treatments. It's very hard to treat someone if you don't know if it's working or not beyond observations. There are some markers, but they don't work well. So we've had a lot of interest from groups to see if we can be a companion diagnostic. So all of those would be multiple tests on the same person. So the potential market is absolutely huge. And I think if we can prove any validity in influenza as with COVID, it's a massive ongoing market. And of course, sepsis would just be huge because there is nothing out there which can really monitor the progression or really tell you that it's building up and happening. And we expect to have a lot of data on that in the next six months. Because we have this platform now, it's very, very similar to the assays we have for different things we've developed. So it's something which we're oven ready, if you will. We can launch things very quickly now. It's taken a lot of time to perfect the platform, but now we couldn't be happier that it looks very useful in animals, a range of animals, humans, cancers, and things as wide as mitosis. So very good year ahead of us, I think. And I think mitosis will be a big part of us going forward and we'll have a lot more data in the short term. We've created a new small division within the company to focus on mitosis. on the trials and the marketing side, and expect to see a lot more data soon, and we have very big expectations for what this is going to look like.
Operator
All right. Thank you, Cameron.
Cameron Reynolds
Thank you. Have a good day.
Operator
Thank you. Our next question today is coming from Kyle Mixon from Cantor Fitzgerald. Your line is now live.
Kyle Mixon
Hi. Thanks so much for taking the questions. Congrats on all the great progress here. Just wanted to jump just straight into the vet cancer screening personal market. Cameron, that was a great overview of the potential market here, the $20 million, I think you said. But, you know, what penetration are you expecting to kind of see, like, early on? You know, maybe a year or two post-launch, if you kind of get to that point in your kind of own thoughts here. And ultimately, like, when you – I want to get one more piece in here for the question. Because ultimately, like, how long do you think it will take to get to maybe – mid-single-digit penetration, 10% or so would be really incredible. But you mentioned millions of tests per year, and so I want to understand what the roadmap is to get there. Obviously, it's super early, but if you could answer any of those questions or just comment on the difference in variables, it would be super helpful.
Cameron Reynolds
Thanks a lot. Yeah, that's a million or maybe billion-dollar question. We don't really know what that curve looks like because this is really something very unique, very new, Cancer screening in the US is not really common in dogs purely because there isn't a test. A very high percentage of dogs go to the vet every year in the US, 70 to 80%. The obvious addressable early market is the 20 odd million dogs who are geriatric, meaning over seven years old. Then you'd probably add a few million more dogs who are high risk. Also, you probably looked at her presentation. Therapy monitoring is also a part of the solution, I think, going forward. So, we're at zero today. I think that the general market is at least, I think, 10 to 20% of the addressable market, which would be two to three million dogs. Now, what does the curve look like? Is that going to take two years or three or five? It's very hard to tell. We are doing a lot of aggressive marketing on the The good news in this population, unlike the cancer market in humans, is there's only about just over 1,000 veterinary oncologists in the US, so I think a large percentage of those will know who we are in the next six months. We're starting with Texas because it's a very good, discreet market, about 5,000 vets. Weirdly enough, the majority have been trained at Texas A&M, so there's quite a good old tie network, if you will. between all of those people. So I think we can get a very large number of vets in Texas knowing who we are. So we're attacking, if you will, the top veterinary oncologists through the Lunch and Learns, the key opinion leaders, and they're all very positive. And then we're going in vets in Texas, the first 5,000. And we're doing a beta launch, so we're making the product available and then going through the marketing process now, which we've obviously begun. But then don't forget that's just one lab. We intend to roll out a wide range of labs which will then do their own marketing. We've already started work in Asia. Dr. Clay has contacted some groups there, so we'd expect to get some sales in the first half of the year in Asia as well. And then, well, of course, we've got a salesperson starting in December 1st in Europe. We can also start the European process So the short answer is it's really hard to gauge what that curve looks like, but I think we have a fantastic test. We have fantastic partners. There's 100% of need out there for a test. This is a very, very common cancer in dogs. The price point we're at seems to be something which isn't going to be a big problem in the United States. There's always a temptation to try and charge a really large amount, but our ethos has always been to keep it affordable. But given our accuracy, I think where we are, is very achievable, and we're on a very good margin anyway, so I think it works for everyone. So we have the first order from Texas A&M, and they asked for indicative quote for the first $370,000 worth of kits. So that's the start. I'm not sure how long it's gonna take them to go through that, but yeah, it's kicking off. But it's really hard to say exactly what that curve looks like, but we're very bullish.
Kyle Mixon
Got it. That was really helpful. Thanks a lot. I appreciate the cover on the sales and marketing strategy as well. I guess just turning to the blood test, the NHL test, can you just kind of walk through the clinical regulatory pathway for that? I know you mentioned the trials and, you know, it could take 22 months. You're working with the CRO. But first of all, has the trial begun enrollment yet? I wasn't quite clear on that. Or when could that start, I guess? And then what milestones and points, benchmarks are you looking for before you submit that first 510K? Okay. for DLBCL, and I guess some of the medical backgrounds here on the line, maybe that could be helpful. Yes, Jason. Good idea.
Cameron Reynolds
Jason, do you want to answer those questions, please?
Jason
Yeah, yeah, sure. So the trial has not begun enrollment. We're still in the start-up phases with IRB approvals, and protocol drafting and things like that. So it's not begun enrollment. That should begin sometime in the following quarter, so hopefully sooner rather than later. But the strategy, the regulatory strategy for the trial is to begin the trial, and after it's enrolled about 20% of the total patients, that should probably be in the 35 to 40% of the total of diffuse large B cell lymphomas that need to be enrolled to complete the study. And once we have about a third of the diffuse large B cells, we will go to the FDA at a pre-submission meeting. And at that time, we'll present the interim data from this trial. We'll present all the supporting evidence we have from all of our outside the U.S. trials and all the retrospective studies that we've done, and we'll ask the FDA grant us approval for the 510K once sufficient numbers of the diffuse large B cell have been met. So our hope is that we get the diffuse large B cell 510K first. Then at that point, we'll use the same test in the same trial to get approval of the subsequent less prevalent subtypes as they accrue statistically significant numbers in and pre-submission meetings accordingly as the trial progresses and gets nearer to the end. Excellent. That's great.
Kyle Mixon
Did that answer your question, Scott? Yes. Thank you. That's great, Jason. Thanks, and Cameron, too. So, actually, Cameron, assuming you guys do close this Silver I acquisition in the near term here, could you just help us think about the ramp in reagent revenue, you know, next year in 2022? I know it's tough, but I just would appreciate any color there. And just given the size of the facility, like, what do you estimate is, like, the, I guess, run rate, free agent revenue opportunity associated with Silver 1? Again, I know it's tough, but you must know, like, based on the size, what, you know, what the capacity kind of is. Just anything there would be helpful. Thanks a lot.
Cameron Reynolds
Yes. Yes, we're working through that now as well, and it's 10,000 square feet, and actually a very small footprint can actually make a huge amount of product because the two key components, the antibodies and the controls, sell retail for about three, two, three million a gram, and you can make a lot of grams in a small room. So it's not a capacity issue. It just comes down to what the market is. So, of course, the first use for it all will be for our own products. Now we've got Optima, now Volition Germany. We have the ability to make the controls as well as bring in-house the making of the antibodies. And again, that goes down about 95% from the retail cost of buying those components. So that's a huge saver for us, more than just the revenue. It's obviously bringing down the cost of goods. We're already on a very good margin. That will hopefully increase the margin. So there's a lot of things going on there. Number one, make our products cheaper so that we can make a very good margin. That's something which we'll be doing by about the middle of next year once it's certified. We're also going to have a contract research organisation. Now we have over a dozen different nucleosome assays on the beads. We expect to get incoming people. That one revenue we had last year was from Neems where we had about 17,000 euros from running a small number of samples. So people don't want to set up a lab and set up a machine to run a profile of nucleosome assays. So it can be a good revenue from that point of view. And then the reagents themselves, if we're making them at wholesale and selling at retail, nucleosomes and antibodies become very profitable as well. And we think, as you probably know, there's a huge amount of activity in this space Grail got bought for $8.1 billion and Kansas City for multiple billions. And there's a real shift to the epigenetic side now, even with the pharma companies. We think the demand for good antibodies, epigenetic profiling, and nucleosomes, and also a NUQ capture program, which we didn't talk about today, but it's very much underway, is going to be quite considerable. But I don't think it's going to be a lot in the first half of next year. We'll focus on making our own Obviously, for our own launches, we want to make sure that we can make the kits ourselves and bring down the price for our products. I'd expect the first half of next year for us to be sort of betting in, getting certifications. The second half of the year, we will start to release items on what we think the CRO market, the new crystal market could be, but we're trying to be conservative and really know what that answer is before we give anything, but I think it is going to be something which will become very, very meaningful as epigenetics become very important, and I think The huge amount of work we've now done to make our platform really robust, great ingredients will really pay off in reagent sales as well as our own products. But also don't forget when we license to, we've been speaking to groups in China and Fosun and others, we don't expect us to license. We also want to sell the key reagents to supply the Chinese market with nutrients and controls for people running our tests there as well. Could be a massive market as well. But, yeah, not guidance now, but we'll certainly be in a position to do that once the lab's fully operational and we've done the numbers ourselves and are comfortable. But that's going to be – anything meaningful is not going to be until the back half of next year, given the ramp-up needed in the facility.
Kyle Mixon
Okay. That's awesome. Thank you. And maybe just one last one for me. You actually kind of touched on this in your answer there. Can you just kind of update us or remind us where you kind of stand with the epigenetic toolbox and then you do capture the biopsy platform? It's really interesting areas of your business, and I know it's maybe more longer term, obviously, from a commercial standpoint, but was curious if you could just tell us what we should be expecting maybe in 2021 and maybe beyond.
Cameron Reynolds
Yes, Kyle, absolutely. We're unbelievably happy. This actually makes us scientists very excited, is the toolbox side, the capture. We're doing a lot of work on the mass spectrometry and the sequencing. Actually, you may have noticed there was a small bit in my presentation. We've opened a small laboratory in California where Dr. Terry will have an assistant, and that will grow slowly through the year so that we have a team just focusing on the capture side. As you know, Southern California is the key to a lot of this area. It's where Luminous headquarters and a lot of other companies. So we thought having a footprint there really helps us to become known in this space. So what do you expect to see? We've gone back like we have in to make sure that the platform – we got some very good results as you probably saw and we presented at ASCO but I think to launch a product we're doing exactly what we did on the bead and the plate side. We're just making sure everything is fully optimized. Because when it's not optimised, you get very good results and then things which change around as we used to get in what we did on our basic formats. So we're now just optimising the platform fully. So I'd expect that to be a lot more news on that in quarter one and quarter two as we go through that process. Because we've now optimised the other platforms, it should be quite quick and easy compared to what it used to be like to optimise this platform, but I think we should have a lot of news in the first half of next year and all the way through next year as we optimise the platform. And just as a reminder, what we're doing is separating long from short nucleosomes and the short have been shown to be where the cancer is and the short DNA. And the mass spectrometry, we've identified quite a few new biomarkers from mass spectrometry as well as potentially that could be a product in itself in the years to come. So we're very keen to be pushing the products we are, but we're also spending a small amount of effort on this blue sky work, which very much feeds off our basic work. So expect to see a lot in the next few quarters on that as well and something which could well lead to a product probably in the 2022 space. And if we can achieve what we are, it'll be a really important part of the sequencing world if we can concentrate the way we were hoping to as a product.
Kyle Mixon
Perfect. Yeah, it's definitely an exciting time in the cancer screening industry. I really appreciate you having time to answer all the questions and look forward to hearing more in the future here. Congrats on the progress again. Thanks a lot. Thank you, Carl.
Operator
Thanks. Our next question is coming from Bruce Jackson from Benchmark Company. Your line is now live.
Bruce Jackson
Hi. Thanks for taking my questions. If we could go into the upcoming abstract presentation at the IASLC, are these going to be the same markers that you reported on previously with the plates? And is the data going to be coming off of the BEAD platform this time?
Cameron Reynolds
Yes, the bead platform. There's a wider range of markers now obviously on the 13. We've progressed some from the plates to the beads and then added a lot more beads on there. It's a broader range than we had on the plates. That will be fully revealed. I don't want to fill it under, but there is a wide range available now on the plates. That will all be presented then. It's been a fantastic amount of work for the team to get a wide range of assays available on the platform. And it's been a great, it's been quite remarkable that Taiwanese have managed to still collect during the pandemic. So definitely something to watch for.
Bruce Jackson
Okay. Good. And then to be perfectly clear on the FDA strategy for the Mount Hodgkin's lymphoma test, is this a de novo 510K that you're going after first? Yes, it was 510K. So most likely a de novo 510 K and then with the the ones that follow after that, then you're hoping to make the first test the predicate device and then just use like a standard 510 K process for the remaining tests. Is that the strategy here?
Jason
Yes, you're exactly right.
Bruce Jackson
OK, OK, just want to clarify that. And then with the the new capture. Great progress. Have you gotten any inbound interest from anyone on that platform yet? It's a huge unmet need in terms of analyzing the cell-free DNA and the circulating tumor DNA. Given that there's an arms race right now in the space to get the assays working properly, I'm just kind of curious to know if you're getting any interest.
Cameron Reynolds
Yes, absolutely. Actually, we've got a lot of interest in this and a lot of areas are certainly becoming the attention of a lot of people. But I think where we were, I guess, six months or a year ago with the assays, we got some great results, but it's not a product until it's very stable and you've really optimized everything fully. So we've got very serious on that in the last couple of months. Dr. Terry is a real leader in the epigenetics field. We're really glad she came on board. And to use the American term, she's quarterbacking that now. We thought it was important to have a separate focus on CAPTCHA to make sure that it's fully optimized as quickly as we can. You might have noticed in the queue we've also taken on some expert help from Israel on the analysis side to make sure we really are doing this properly and we're trying to get the best well-defined samples we can to show how well it works. So yes, there's inbound interest. I can't talk about obviously unless anything comes of it but I think as we've had before we're in the fully optimising stage to launch a product and as I said it shouldn't take that long because of the the great work. We've become very experienced in optimizing this platform, and it's obviously quite a few of the key components, what we use for everything else. So very exciting, and I think there'll be a lot more news on that over the next few quarters. But we're in the optimization stage now, and then when we're ready, hopefully we can get some good publications. And as you say, it could be an incredibly good tool in the epigenetics field, and it couldn't possibly be hotter at the planet, as you know, with the amount of money being thrown around in the space for that. So it's something we've Again, take it very seriously and put some power onto it and some people doing nothing else to make sure that we get it done as quickly as possible. And then when we publish, it can be something that can be a product very quickly because we've done the homework.
Bruce Jackson
All right. That's great. That's it for me. Thank you very much. Thanks. Have a great day, Rich. Thank you.
Operator
Thank you. As a reminder, that's star one to be placed in the question queue. Our next question is coming from Jason Colbert from Hi, guys.
Jason Colbert
Great progress. I just would like to focus in on new Q at the veterinarian level. I mean, I think the real incentive to achieve market penetration for the vets is both what is the competitive landscape, so what is this replacing at the veterinary level, and how much revenue could this contribute in terms of margin to the veterinary to the veterinarian himself, because clearly, you know, a lot of veterinarians are doing in-house diagnostics, in-house testing. And so, you know, they're very, very strategic about what things they adopt and how it will change the profitability of their practice themselves. So if you could address those issues, you know, it helps us understand the rate of market penetration in the future. It's kind of a little bit of a follow-up on the direction that Dr. Akunovic was going on in the first few questions that he asked when you turned it over to him. Thanks.
Cameron Reynolds
Hi, Jake. Yes, very good questions, and that's something obviously we've spent a lot of time working through. Dr. Wilson-Robles, who we could perhaps set up a call if you could answer it a lot more in depth than I can, but I understand it reasonably well given where we are. So currently, there's no diagnostic blood tests, not that similar to humans, and things like scanning is much more difficult with a dog, because obviously, I'm not sure if you have a dog, but they're very tough to keep still for a few minutes in a scanning machine, so you have to anaesthetise them, and a dog cannot speak, obviously, and can't tell you they're having problems, which is actually one of the reasons they think the vet market has gone up so much during the pandemic, is people are home with their dogs and notice them much more, they're home all day, every day, and that they're problems, so they're taken a bit more often. So the competitive landscape basically is completely bereft of anything good in the screening sense for the cancers. So unlike the human field where there are quite a few good competition areas, good competition, and the blood cancers are much more prevalent in dogs than in humans, and that's the blood cancers where we've had fantastic results just with a very, very simple product and assay. In regards to the the doctors and different ways it can be used. At the moment it's a lab test. We're running it on plates. We plan on progressing into the beads sometime next year and then it can be a much higher throughput although where we are the plates are fine and we're also working on a point of care which would be a finger prick, well I guess in the dog's place a paw prick of blood. So a point of care is also very possible for the vet space as you said. Now, currently the vets are very used to sending blood to the big oncology centers, like Texas A&M, or the big centers, like the GI Lab in Texas, and there's seven big ones in the U.S., and there are, I think, when I asked the GI Lab that it's potentially possible for 14,000 vets to send it to the Texas A&M and have relationships with, they could actually send it to them if they wanted to. And we've also been very careful not to gouge everyone. We're making a very, a fair profit for us, we think, We're selling it for roughly $45 for the test. The GI lab does all the work of running the sample. They look to be at about $122, but there's still a nice margin for the bet as well. Different bets charge very different amounts, but we'd expect, you know, if it's somewhere in the high, below 100%, 50% to 70% margin, the bet will charge around, as I said, in the $160 to $200 range. So I think, and some vets charge a lot more depending on where you are. So it's something which the vet I think will be encouraged to do because the accuracy of the test, the utility is very, very good. I think it can help them a lot to try and sort through who has cancer. But also, they should make a little bit of money from it as well, which obviously everyone likes to do. So I think all of that should make it a very good test for profitability and for the drive. And we're doing a lot of marketing. A large number of vets in the U.S. will know about the test in the coming months. It's a reasonably large community but a reasonably small community. They read a certain number of journals and there's only, as I said, just over 1,000 oncologists in the space. So I think it's something certainly a very large number of vets will know about us. A very large number of vets can order the test if they want. But that's also the reason we're launching in one facility then to get sort of a hot zone of people who know about it and then broaden it out to the other big the other big centres, then they also start marketing it. They all have email lists of thousands of doctors they work with who are used to ordering through them. So, you know, it's very tough to know what the take-up's going to be, but I think it's an excellent product. We have excellent partners. There's a real need. We've incentivised everyone along the way, so I guess time will tell. But I think, like anything, we could be surprised on the upside of how well vets take to this And very profitable. I mean, the addressable market is multiple billion dollars. If you take 22 million dogs, it's a $200 test. Our section of it is even that section of the addressable market is over a billion from just what we are. And because we don't have a sales force needed because it's through the vets and through the labs, we don't need a lab, we don't need a big sales force. So almost 85% goes straight to the bottom line. So it's very good. Potentially, we'll find out.
Jason Colbert
Does it make sense to kind of explore contracting with some consolidated veterinary practices, for example, like Veterinary Centers of America and, you know, other kind of such entities to establish proof of concept where, you know, you get it contracted at that level and you're instantly in 50 to 100 practices?
Cameron Reynolds
Absolutely. I can't discuss them at all because obviously we're not public with all yet, but we're looking at a lot of options. So this is the highest margin for us, $45 a test, but if someone can sell a large number of tests, we can certainly be part of that. Obviously, there's two big companies involved in this space, Mars and IDEX, which tend to control a lot of the area as well as, as you said, a lot of consolidation going on. I think to get to, if we do get into millions or even hopefully into the higher millions of numbers of tests per year, which I think is possible if it goes moderately well, we're going to have to use different groups like that to not just prove a concept but also to roll out. But, you know, we're very flexible where our burn rate isn't very large so all this revenue would be incredibly meaningful. So, and this is just one, we've also been in discussions with launching potential products in the CAT space as well as They don't have the same regular tests as dogs do but that's supposedly changing. So I think we'll be very flexible and we'll be very adaptable, not just on our own in the labs but also potentially point of care which a vet could do in their own facility. So all that to be played for but at the moment we're focusing on making the launch successful in Texas. Again, not a micro market, there's seven and a half million dogs in Texas just under 5,000 vets, but I think there'll be a very large percentage of those who know who we are by the first quarter, and then we'll have a good indication of how it's going, I think. Terrific. Thanks for the update. Thank you. Thanks for your time, Vince.
Operator
Thanks. Our next question today is coming from Stephen Ralston from Zach. Your line is now live.
Stephen Ralston
Hello. Thank you for taking my questions. I'd like to concentrate on the top line. You mentioned that the first order of for the new QVET product was roughly $370,000, which I calculate to be about 8,000 tests. When will you record those sales on the income statement?
Cameron Reynolds
Sorry, just to be clear, that was an indicative quote. How these big universities work, it's not the first order. What they do is they ask for your quote for a larger amount than they're ordering right now, so that it maintains the price and also goes through a review system to make sure, university purchasing, make sure there's no fraud and we're not related to the person buying it and all those kind of things. So the first order would be, we'd expect that order sort of a month at a time. So that would be reported in the next filing. The $370,000 was just the first indicative quote of what they're hiring one person to run the test in the first instance in that one lab and that's about what they can run in one year, so four or five plates a week. but that would obviously ramp up if the demand is higher and then would go through a lot of different universities and other chains. So we would be reporting that revenue. It will not be $370,000 right now. That's the indicative quote for a longer period of time, which they ask for. But it shows they're very serious. They're hiring a technician to run it just for this test. And they're as keen as we are to really get it moving. So we'll have the first order, which will be, as I said, the first couple of weeks, the first month supply. And then they just keep chipping away at that indicative quote until it's finished. But it's a mechanism for them to maintain price and make sure that everything is fully reported properly within their organization.
Stephen Ralston
Thank you. And looking at the Silver One facility, you mentioned that you're The first half of 2021 will be the setup of the facility, and you'd expect to be able to do some contract lab services in the second half. When would you start resuming shipping test kits?
Cameron Reynolds
That's probably a good question for Gitan. I'll get back to him. We're still in the process of working how long the certification will take and when. So some key components you can actually do much quicker than that, depending on who they are and what they're for, whether they're for research use or any sort of clinical use. Those are quite involved questions, and we're working through it now. We're also working how much to resource on extra people in this situation. But I would say by the second half of next year, it should be at a level where we can do a very large number of things there. Now, the fit-out is pretty close to being finished, so we will be doing some things in there from the end of this year, and then we'll ramp up through next year. But that's probably a question I can get offline from Gitan and a schedule as to what that all looks like and you'll probably have a very good idea of that once we've fully resourced the facility. But the fit-out will be finished in the next few weeks, and we'll start doing work on there very soon. But the process from now, by the end of next year, we'll be producing our own plates, our own antibodies, our own controls, the contract research facility. The curve from that now till then is something which I guess we'll have to really fill in next quarter. But he's really running at the wall. We're throwing a lot of resources at this because I think from what I was saying to Jason, I think we might get surprised on the upside. You can always get surprised on the downside with sales, but I want to be ready that if there is demand that picks up quickly for the dog test or the COVID test or the ptosis or the blood cancers, that we can really meet demand in our own facility where we make a much better margin. So we're taking it really, really carefully, but really quickly. So starting now and finish by the end of next year, but we'll be doing the first things definitely this year in the lab.
Stephen Ralston
Thank you for taking my question.
Cameron Reynolds
Thank you, Stephen.
Operator
Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over to management for any further closing comments.
Cameron Reynolds
Thanks, everyone, for being on the call. It's an extremely exciting time for us, and I'd like to thank the entire team for working during the pandemic to make sure we could launch our first products. It's something which we're extremely excited about, and I think it could well be the first of many, many products. We're in a fantastic space. We have a fantastic team, and our platform on intellectual property is just fantastic. So I think 2021 is going to be a great year. So I'm really looking forward to reporting our actual earnings on the earnings call, the next call for the K. Thank you very much for your time.
Operator
Thank you. That does conclude the teleconference. Let me just connect your line at this time and have a wonderful day. We thank you for your
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