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Operator
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 would like to withdraw your question, please press the star key followed by the number two. If you are using speaker equipment, please lift the handset before making your selections. This conference call is being recorded today, March 26, 2024. I would now like to turn the conference over to Louise Batchelor, Group Chief Marketing and Communications Officer. Please go ahead.
Louise Batchelor
Thank you and welcome everyone to today's earnings conference call for VolitionRx Limited. 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 Harbour 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 10K, quarterly reports on Form 10Q, 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 am joined today by Mr. Cameron Reynolds, President and Group Chief Executive Officer, Mr. Terry Cuse, Group Chief Financial Officer, Dr. Tom Brutera, Chief Executive Officer of our Volition veterinary subsidiary, and Dr. Andrew Retter, currently Medical Consultant to Volition, but has recently announced due to join Volition in the role of Chief Medical Officer in April 2024. During the call, we will cover Volition's financial and operating results for the fourth quarter and full fiscal year of 2023, along with a discussion of our recent activities and upcoming milestones. Following our prepared remarks, we will open the conference call to a question and answer session. I'll now turn the call over to Cameron Reynolds. Cameron?
Cameron Reynolds
Thanks, Lou, and thank you, everyone, for joining Volition's fourth quarter and full year 2023 earnings call today. We appreciate your time, given the busy annual 10K filing season. We will commence the call with a financial report from our group chief financial officer, Terry Hughes, before moving on to a pre-recorded update from Dr. Tom Butera, chief executive officer of VolitionVet, on the rollout of our new QVET cancer test, And I'm delighted to welcome Dr. Andy Retter to the call to provide an update on the UQ nets and capture PCR. As was announced last week, Andy will be joining Volition as our Chief Medical Officer beginning April 1st. Many of you will have heard from Andy previously, but I'd like to formally share his credentials. Dr Retta is an intensive care consultant at Guy's and St Thomas' NHS Foundation Trust in London, where he has worked as a consultant since 2014 and leads clinical governance in critical care. He specialises in the management of severe respiratory failure, ECMO and thrombosis. Dr Retta is the only consultant in the UK to hold dual entry on the specialist register in intensive care and in haematology. and provides national guidance on the management of complex haematology patients in critical care. He will continue his clinical and research duties at Guyston Thomas Foundation Trust after joining Volition. Dr. Retta has worked with Volition in an advisory capacity since January of 2022. To help guide the product development and clinical utility of NICU nets, our CE marked routine blood tests to detect disease associated with mitosis, such as sepsis. The whole team are absolutely delighted to be welcoming Andy more formally into Volition. As Chief Medical Officer, he will be vital to our success, ensuring the needs of the patient are placed at the heart of our research, development and commercialisation activities. It's great to have you on board, Andy, and I must say your enthusiasm for our mission and platform really helps us to fully understand the great importance of the work we do. Following Andy's update, I will wrap up with my thoughts and upcoming milestones and discuss our overall strategy going forward. Without further ado, I'll hand you across to Terry for our financial report.
Terry
Terry. Thanks very much Cameron and thank you everyone for joining our earnings call today. I'll now provide a summary of the key financial results for the quarter ended December 31 and full year 2023. From a revenue perspective, we recorded revenue of $244,000 for the quarter, a 104% increase over the same period last year. For the full year 2023, we recorded revenue of $775,000, an increase of 153% over the prior year. We believe that these results demonstrate steady progress, but not yet the ramp in revenues that we anticipate. We expect revenues to accelerate in 2024 as several additional distributors come online with our new QVet cancer test, in particular, Pantech and FujiVet, who are both about to launch, and our new QDiscover pipeline continues to grow. 2023 full-year revenue of the new QVet cancer test was $475,000, a year-on-year increase of 194%. mainly reflecting sales of reference kits through our agreement with IDEXX. Revenue for NewQ Discover for 2023 was $300,000, which reflects 107% growth over 2022. Moving on to the balance sheet, we ended the year with cash and cash equivalents of approximately $20.7 million, compared with $10.9 million at the end of 2022. Net cash generated from operating activities during the fourth quarter 2023 was approximately $6.4 million and reflected the receipt of $13 million in milestone payments from Hesker Corporation in December. For the full year 2023, net cash used in operating activities was $18.1 million compared to $15.3 million in the prior year. Net loss at fourth quarter 2023 was $8.8 million compared to $7.3 million for the fourth quarter 2022. And for the full year, $35.7 million compared to $30.6 million in 2022. This increase was primarily the result of increased research and development expenditures, mainly reflecting the costs of our US clinical trials, which added $3.1 million to the P&L costs in 2023. To date, various European funding bodies, and in particular, Belgian agencies, have committed to the company over $21 million in non-diluted funding in various forms, including cash grants and loans on favorable terms. In the fourth quarter, a Walloon institutional fund and regional government bodies of the Walloon region of Belgium committed additional funding to the company, aggregating approximately $5.5 million. of which approximately one-half was in the form of a loan. We would like to publicly thank the various government agencies of Belgium for their continued support. We have also initiated efforts with respect to seeking non-dilutive funding in the US. Our aim is to fund some of our major programs through either non-dilutive or project financing, which we anticipate could be substantial over the next two years. As mentioned earlier, at the end of the fourth quarter, we received $13 million in milestone payments from Hester Corporation, now an Antec company and part of Mars Petcare, one of the largest pet health companies in the world. And so to recap, we ended the year with cash and cash equivalents of $20.7 million. With that said, I believe that we are well placed to execute the plans the team have in place for 2024. And with that, I will pass over to Dr. Tom Botera, CEO of Alvolition Veterinary Subsidiary. Tom?
Tom Botera
Thanks very much, Tarek, and good morning, everybody. In 2023, we supplied kits and components for over 58,000 tests, five times the number in the prior year. This growth demonstrates solid progress to date, and we certainly expect more growth to come as additional companies fully launch our product at home in the United States and around the world. By the end of 2023, the new QVET cancer test was available in the United States, the United Kingdom and Ireland, Portugal, Singapore, Taiwan, and Italy. 2023 was a breakthrough year for Volition Veterinary, gaining such wide distribution and with such respected companies. So kudos to the team and a special thanks to our legal department. We have also learned a great deal. Launching and introducing a new product in veterinary medicine, especially early cancer detection in dogs, takes a tremendous amount of education to teach veterinarians how to incorporate this early cancer dialogue into their routine wellness visits. Our new cue test also requires an additional cost to the client, which is part of our educational conversation in teaching doctors how to easily make this part of their wellness office visit. Additionally, we are always emphasizing the affordable cost of our test and encouraging doctors to keep the test at very reasonable margins. The fact is clearly related to the very large number of dogs that they will be screening for early cancer detection. All in all, I believe our Volition team will look back on 2023 as a proud, pivotal moment in the burgeoning field of early canine cancer detection, setting the stage to improve and extend the lives of millions of dogs in the months and years to come. We have also launched the NUQ test with IDEX, one of the world's leading veterinary diagnostic companies, and now HESCA, an Antec company and part of VARS Pet Care, another leading veterinary company, in completing the exciting tech transfer onto the HESCA Element I Plus in-house diagnostic platform. More recently, as you will have seen in an announcement just last week, we have signed a supply agreement with Fujifilm Vet Systems for our new QVet cancer test in Japan. Indeed, I have prerecorded my update for today's call as I am currently over in Japan with our colleagues from Fuji, And wow, what an incredible event this last week. We were delighted to be deeply engaged with our Fuji colleagues at their veterinary booth located at the World Veterinary Cancer Congress in Tokyo. This event also provided a significant exposure to numerous veterinary cancer specialists from around the world. We believe that Japan is a considerable market opportunity for Volition as we seek to expand our new QVet cancer test offering in Asia, and Fuji is a great partner with us. Fujifilm VetSystems is Japan's leading veterinary diagnostic laboratory service with a network of 10 laboratories, serving more than 90% of the 12,000 veterinary clinics and hospitals nationwide in Japan. As a reminder, Our test is a simple, affordable, easy-to-use blood screening test that can be easily integrated into preventive care programs and used alongside other routine blood work during regular wellness visits. We had an incredibly busy time at the Fuji booth and have been excited not only to see the response to the test, but also to hear about the exciting marketing plans Fuji has in place to drive the adoption of NuQ. Heather, also had the privilege of presenting a poster about the new QVET cancer test at the Congress. It's been a busy few days, and we look forward to working alongside Fujifilm Vet Systems as they roll out our tests countrywide across their extensive diagnostic laboratory network. We are also incredibly excited that the new QVET cancer test will soon be available as an in-house diagnostic via HESCA, an Antec company. We understand pre-orders are currently being processed and the tests will be rolled out fully at their upcoming national sales meeting at the end of this month. Soon veterinarians will have accurate, in-hospital, fast test results in under eight minutes so that they can discuss findings with pet owners and hopefully develop an action plan before the patient even goes home. Antec is initially pricing the test at $35 to the veterinarian And we really believe that the relatively low cost combined with the effectiveness of our test will help drive adoption of the test, not only as a screening test, but also in time as an important monitoring tool for disease progression and remission. So to quote Cameron, very exciting times indeed. That's a quick update for me, given our packed agenda today. I will now, with absolute great pleasure, hand over to our incoming Chief Medical Officer, Dr. Andrew Retter. Andy is a fabulous addition to our leadership team. Andy, over to you for an update on new QNETs.
Andy
Thank you very much for those kind words, Tom, and good morning, everybody. I'd just like to take a moment to start by thanking Cameron, Jake, and the Board of Directors for working with me and inviting me to join the Volition team at such an important time. I've really enjoyed working with Volition for the last two years, And I'm really excited about leaning into and contributing to the delivery of our mission and purpose in the years to come. We really hope to have an impact and improve the lives and quality of lives of millions of people worldwide. I'd like to update you this morning on some of the significant progress we've made with NukiNets and our new breakthrough cancer detection method, which we now call CapturePCR. So first, starting with NukiNets and sepsis. Sepsis, as you've heard me say before, is one of the leading of causes of death worldwide, with almost 50 million cases annually and around 11 million deaths. Volition has made significant progress trying to address these issues in 2023, and I'd just like to recap a few highlights. In September, Volition hosted a key opinion leader roundtable event in Athens, Greece. The workshop, held over the course of two days, focused exclusively on sepsis and the potential role of new QNETs. is attended by some of the world's leading experts. Many of the attendees are operating under the umbrella of our Centre of Excellence programme with NUQ-NETS and have first-hand experience using AssayNow. And the sense from the group was that NUQ-NETS potentially represents one of the biggest breakthroughs in the diagnosis and monitoring of sepsis in the last 30 years. We're moving forward with this group and I'm now working on a review article with the intention to submit it for peer review and publication in a journal towards the end of the year. Continuing in the theme of publications, shortly after our key opinion leader event and subsequent quarter end in October, the first clinical paper from our clinical excellence group was published. Professor Guillaume Monneret's team in Lyon published data demonstrating the correlation of the NUQ-NET level and sepsis. There is a clear mortality signal. What does that mean? The higher a patient's NUQ-NET level, unfortunately, the more likely they are to die. We've also seen in a longitudinal fashion that the NUQ-NET level tracks very well with the severity of a patient's illness. We've been using something called the SOFA score, the sequential organ failure assessment score, to calibrate and check UQ net levels. It's brilliant that we've got the first paper out, and I'm really looking forward to publishing and sharing with you more data from our centres of excellence as we go through 2024 and 2025. Over in the US, I'm pleased to report that Volition completed the Q-Sub process with the US Food and Drug Administration. The FDA has confirmed that we can continue to follow a traditional 510K pathway. I'm also delighted to confirm that my own hospital, Guy's and St Thomas', has started using NICU nets in our first study. In a similar theme, we are trying to identify and track patients and monitor the severity of sepsis. This is a large study. We're aiming to enroll around 500 patients and compare patients with sepsis to healthy patients undergoing cardiac surgery. This should give us really good data to try and split the patients apart and understand differences between them. For those that might have missed the recent Edison webinar on sepsis or indeed their thematic report, I wanted to highlight a couple of ongoing studies which we hope will continue to reinforce and strengthen our clinical utility case. We have ongoing analysis of two large retrospective sepsis cohorts in Europe. The first is with the German sepsis group and the second is with the team at UMC Amsterdam. In total, these studies will examine the outcome and trajectory of over 2,500 patients with sepsis. They involve the processing of over 8,000 nuclear net samples. It's an unbelievably rich data source for us and we're really excited about this data. We're really excited about presenting it and submitting it for publication by the end of 2024. These studies will be a rich source of insight. They're using NUKINETS on a really large scale and should enable us to sharpen and improve it as we move forward to again bringing it into the clinical arena. Our project with key opinion leader Professor Djali Anan in France is progressing really well. Djali is involved in a consortium project with an ongoing prospective study of which Volition is a member. Again, it's longitudinal in nature and large scale and is aiming to recruit 1,500 patients. We've also extended our study with DOCRO in the US. We have refocused this study to concentrate on the sickest patients admitted from the emergency room rather than simply including intensive care patients. This is expanding the population of patients in which we're using NUQ and that's really exciting. We hope to close out the study by the end of the second quarter and we'll share the results as soon as we can. We're confident that we will have significantly strengthened our data within the confidential data room to support ongoing commercial discussions by the middle of the year. From a publication perspective, all eyes and our focus will be on the European Society of Intensive Care Meeting in October later this year. We anticipate a number of the studies I've just mentioned will report to ESRCM. We're also really proud to be sponsoring our first satellite symposium session at the Congress. More details will follow, but it's going to be a really busy year ahead for NUKI nets and sepsis. I'd now like to take just a few minutes to discuss Volition's potentially breakthrough cancer detection method, which we first presented at the European Society of Medical Oncology Congress in 2023. Cancer, as we all know, affects the lives of millions around the world each year. Unfortunately, the number of new cases of cancer diagnosed each year is continuing to grow. Like many diseases, early diagnosis, when the cancer is smaller and hasn't spread, leads to a better outcome for patients. That's less surgery, less chemotherapy, and just these are better and improved outcomes. Sadly, cancer is often a silent disease. It's asymptomatic and people don't realise they have it until really quite late. In the UK, we're a perfect example of that, where around 45% in cancers are diagnosed at the latest stages, stage 3 and stage 4. Our test focuses around detecting circulating tumour DNA, CT DNA. Detecting ctDNA is really difficult because the levels of DNA in blood are relatively low and circulating tumour DNA compromises only about 0.01% of the circulating cell-free DNA. The challenge is compounded as most of the cancer DNA looks almost identical or is indeed exactly the same as normal DNA. Volition has developed a novel method of liquid biopsy involving the first reported physical isolation of tumour-derived DNA fragments from blood. The cancer-derived circulating tumour DNA fragments are then extracted after removal of all normal background DNA. and then they are sequenced using a low-cost PCR test. We're calling this technique CapturePCR. Volition's proof of concept data was presented at ESMO 2023, demonstrating the isolation of tumor-derived ctDNA fragments from plasma. Volition tested the new method in a small clinical experiment and detected a range of liquid and solid organ cancers, including early stage disease, stage 1 disease. These early assays were developed from our initial leukemia model, but to our surprise, we were also able to detect many other cancers. In particular, we were able to detect colorectal cancer. We're really excited about the potential for CAPTCHA PCR going forward. My colleague, Dr. Jake McAleff and team have presented at a number of cancer-specific conferences, such as the prostate cancer and liver cancer conferences. They have been sharing their data with important key opinion leaders, and we've received really valuable feedback and positive feedback as we go forward. The team have also continued to identify other potential markers and other potential targets associated with the PCR test and we very much look forward to sharing this data in particular in solid organ cancers throughout this year and beyond. Last but by certainly no means least, Jake is working hard on completing the manuscript to submit this breakthrough method for peer review and publication. This is going to be an incredibly important paper and is intrinsically aligned with Volition's core ethos and purpose of bringing a low-cost diagnostic test to millions of people around the world. Understandably, there will be ongoing commercial discussions throughout the year. In drawing to a close, and so I can hand back over to Cameron, I'd just like to take a moment, and I hope it's come across for me talking here, to express how personally excited I am to be joining the company. I really believe in Volition's ethos and purpose and I'll hand you back to Cameron for his closing remarks. Thank you ever so much.
Cameron Reynolds
Thanks very much, Andy, for providing those insights, and thanks as always to Tarek and Tom for their reports. It is a real sign of the varied expertise we now have at Volition. 2023 was certainly transformational for Volition, and a year we can look back on with pride. The commercialisation of our transformational NUQ Vet Cancer Test within the companion animal healthcare sector has led to agreements with several new global and regional partners, including last week with Fujifilm Vet Systems, Japan's leading veterinary diagnostic service provider. And looking just around the corner, the NUQ Vet Cancer Test will soon be available as an in-house diagnostic test through HESCA, an Antec company. We strongly suspect we will see very good revenue growth from NUQ Vet through 2024 and beyond. I'm also absolutely delighted in the progress made in our NUQ NETS pillar, and in particular, in determining our regulatory pathway forward with the US FDA, a key milestone for the company, and in having a number of large-scale clinical studies due for publication later this year. Thirdly, and as we always seem to run low on time, I won't cover too much, but I would like to quickly mention NUQ Discover. which recorded revenue of $300,000 in 2023, and now has a pipeline of projects valued at over $1 million. As a reminder, UQ Discover is a complete solution to profiling nucleosomes. Drug developers and scientists can work with us, access our state-of-the-art proprietary assays, and realize their long-term drug development needs. In this way, NewQ Discover is able to unlock value from Volition's IP portfolio by helping us commercialize the areas we are not going to focus on ourselves. As I mentioned, revenue in 2023 was $300,000, and we expect it to more than double in 2024 and be as profitable as early as 2025. And finally, I'm absolutely also delighted with our potential breakthrough CTCF cancer detection method, CapturePCR. which we had a poster in the fourth quarter at ESMO. We believe this is a true breakthrough moment. The first reported physical isolation of a class of tumor-derived cell-free DNA fragments from blood. We expect that this method obviates expensive and time-consuming DNA sequencing and bioinformatics, allowing for a rapid, cost-effective detection in a routine blood test. This method could become a must-have technology. Given its significance, we are very much open to licensing this technology. We have been tremendously encouraged by the level of interest thus far. It has been and will continue to be a busy few months ahead of discussions and negotiations, not only now on CAPTCHA PCR, but as we build out the data room for NUQ-NETS through the second quarter of this year, we anticipate more active discussions on that front as well. It is an exciting time for us as a company, and we look forward to sharing further updates and milestones with you over the coming quarters as we continue to adapt to changing times and conditions to deliver on what we believe to be revolutionary technologies. Given the current macroeconomic conditions, we are focusing on getting each pillar to support itself, either through product revenues, milestone payments, outlicensing, or other non-dilutive funding in the coming year. We are making every attempt to ensure as little dilution as possible to reach break-even as a company with a mix of non-dilutive funding, revenue and milestone payments from our licensing as we have achieved in VET. As we've described before, we are currently targeting the following. Firstly, we expect new QVET to be overall cash positive from existing milestone payments and the expected revenue ramp as more partners launch and existing partners expand into new territories. We're also working on a range of new products to drive revenue growth and hopefully new outlasts and milestone payments in future years from VET. Secondly, we expect Nuku Discover to more than double revenue in 2024 and to become profitable as a unit starting in 2025 with over $1 million in the current pipeline and growing strongly. Thirdly, We have begun a strategy to fund, as Tarek alluded to earlier, our new QNETs pillar through non-dilutive and or project funding with an aim of $25 million. We have targeted a range of governmental agencies and are also preparing the background work aimed at attracting a large player to either out-license or invest in this product directly. We have made strong progress through the first quarter of 2024 in getting the data required. And our aim is to get the first payments in the next 12 months from either corporate or governmental sources. Lastly, as discussed by Gail Forte, our Chief Commercialization Officer in our recent webinar, there has been a lot of external interest in our CTCF and UQ cancer technologies. Our strategy is to license this out to one or more large companies as a commercial undertaking of this size is likely beyond our current capabilities. If successful, we believe this strategy could provide us with ongoing royalties and very meaningful milestone payments in the next 12 months. In drawing to a close, I would like to thank you all for joining the call today. We very much appreciate it, given how much there is to digest across all of our pillars. We are now happy to answer questions. Operator?
Operator
Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Tim Moore with EFIN. Please proceed.
Tim Moore
Oh, thank you. And that was very informative, prepared remarks. It was nice to hear that there's a lot of different levers being pulled and good optionality. Thank you. Sure. Maybe I just want to start out with IDEX. You know, you mentioned there were revenues, it sounds like, at the end of the year that started to come through. You know, I'm just kind of wondering if you can talk a little bit about, you know, it seems like have they finally finished kind of getting their standard operating procedures and best practices in place for the marketing launch? And if you can remind me, you know, is it something like $10 per kit you're getting on those because you're assembling the full kit? and shipping them?
Bruce
Yes, yes, it is. That's correct. So yeah, IDEX have been great partners for the last year and a half. And I think that we're putting a lot of work in to really try to get the sales growing. So I think there's an absolutely huge need for the test worldwide. And certainly to get to where we need to get to, there's had to be some education of the customers. It's a completely disruptive technology. So when it comes into the market, it's obviously a whole new thing for the vets as well as for the company. And so we've been working closely with them to really get sales moving. And I think, as it was mentioned several times, there were 58,000 tests this last year sold. So we sold the components for. So it's getting adoption. And obviously it's a very disruptive test. And I think also... when the new platform comes through, which is actually starting on the 1st. of next month. Having it available in a lab as well as a point of care I think will be absolutely huge to getting adoption out there. I think the more groups out there selling it, whether that's IDEX or HESCA or Fuji, it really helps to generate awareness and education and getting vets used to a disruptive new technology. As we discussed, there's been nothing available in the cancer space before. So yeah, and $10 a test is correct.
Tim Moore
Great. Well, thanks for that really good Japan Fujifilm Vet Systems update. That was terrific news. And I actually had a question about feline tests. Do you think that's still maybe on track to launch, you know, maybe late this year? And when would you think you would receive the $5 million milestone payment timing?
Bruce
Yeah, good question. And the first point, Fuji have done a huge amount of work before the launch. They're very organized. They're the biggest vet company in Japan. There's 60,000 vets in Japan and 12,000 vet hospitals. I didn't realize it was that big a market. It's obviously a large country and quite a rich country. So as you probably heard from Tom and the team, the enthusiasm from the vet conference there has been very large. So it's extremely good to see and enthusiasm coming through and have a good new market. Yes, so the feline side, we've been doing some work with a range of other products looking to launch in the vet space. We're looking to get it working in cats this year. So it's certainly possible this year or in the first half of next year that that payment will be made. As we talked about, an overall part of our strategy is to get as much funding as we can from non-diluted milestones And that would be the last of the payments due to us from HEFCA, the $23 million we've got so far. So, yeah, it's definitely still in process, and it's a reasonable thing to still have on the books.
Tim Moore
Great, great. My last set of questions is tied to sepsis. I mean, such a huge catalyst, gigantic market, number one killer in the hospitals. You have talked before about the traditional 510K regulatory pathway and If you can remind me, you're trying to demonstrate substantially equivalent performance and characteristics of a device already the FDA cleared in the U.S., right? Can you kind of walk us through that? And, you know, I know it's theoretical, but, you know, what is the timeline? You know, I get a lot of questions from investors about, you know, when do you think, you know, if it does work out and you get approved, when do you think you can maybe start achieving revenues on the sepsis side?
Bruce
Yeah, very good question. So obviously it's a product which has shown tremendous promise, as you said. And the two things we've proven so far, what publications have shown, that's closely correlated with intensive care mortality and SOFA score, which is obviously both of which are incredibly important. As we talked about, sorry, I've got a cold at the moment, there's a range of studies we're doing now which will put a mountain of data, an avalanche of data coming out in thousands and thousands of patients and tens of thousands of samples beginning this month and all the way through the rest of the year with a big crescendo kind of in June. They're looking to show correlation with the sepsis 3 score, which sepsis is now defined as a dysregulated immune response which is exactly what we measure, so it's actually incredibly useful. Disease severity, correlation with 28-day mortality, duration of organ support, and the length of stay in hospital. So all of those are incredibly important to the clinician, which I think is why Andy and all the other clinicians we've been working with are so keen on it. With regards to the exact 510K path, probably best get it from Andy. He was the key person in those trials. I don't want to make a mistake on that. There are quite a few predicate products, none of which measure what we measure, but there are products which have the ability to do some of this. That's why we were very lucky to get the 510K path, and I'm sure he can outline. I think he might be available on some later calls to go through the predicates as they were discussed. But no, it's something we're incredibly excited about. And I think if it continues to go well, and every bit of data we've seen so far has been outstanding, and because the test is low cost, can be run on any platform, can be a bedside test, it can be a lab test, it can be a lateral flow test, and doing it through a 510K, which is, as you know, the easier path through the FDA, is very important. Now, as for timing, obviously we're doing everything we can to preserve cash. So we're working with large governmental agencies to see if they can take a large part of the funding in the US as well as Europe. We're also getting the data ready so that we can get industry partners involved. So that's coming to a head in June when we'll open up a data room to look to get as much funded as possible from outside sources. For obvious reasons, the market is what it is at the moment, so we're doing everything we can not to spend money. And after that, our product would be at least a couple of years. But don't forget, our model has always been to make as much money as we can from licensing and upfront milestone payments. In the last two years, we've got $23 million just from HESCA alone which is obviously very, very meaningful in what we do. So I wouldn't just think of it as revenue, which is obviously a few years away, but as we have in VET, getting large chunks of money in the meantime from large industry partners and or government agencies. And I think there's certainly our aim, and I think it's a very reasonable chance that we'll get some licensing or milestone revenues from either or both transcription factors and the steps aside in the next 12 months. And if you look at the level of payments we've got in the VET side, it's a very important test in the VET. But I think the NUCI NETS test is a whole level of importance for humanity. So we'd be expecting some very significant payments in that sort of timescale. Does that answer your question?
Tim Moore
It does. It does. It's terrific color and granularity. And I have one last little related topic question. You kind of already addressed this. You know, there could be potential for project financing. You know, it could come from the corporate government. Both milestones. One question I get from investors a lot was, as things go well on the vet side, and maybe that becomes positive free cash flow and self-funding two years from now, hopefully, would you consider divesting the vet side or spending it out to maybe cash flow fund the human sepsis trials?
Bruce
Yeah, absolutely. So obviously at the moment it is actually not from revenue because you've seen what that is, but from the milestone payments and the other payments we're getting, it's actually cash flow positive at the moment from all those other payments. $23 million obviously has been a lot from those sides. Yes, we would absolutely look to corporatize and then have a run as a separate entity because This is just the very first test on what should be a very long pathway of products we can launch in the vet space. We mentioned feline as well. Obviously, sepsis happens in dogs and every other animal as it does in humans. And also the human transcription factor work. We have every reason to believe it would work in animals just as well as humans and all the other animals. So I think going forward, our business model has been very much to develop the technology and then prove it works get a product launched like we have in VET, like we're about to in Natosys and then make revenue from licensing it out. But I think the final step on that path would be to make it to the Vesta itself and I think that's something which could well happen in VET in the next couple of years. And actually there's obviously been some interest from other groups where the only cancer detection company out there at the moment which has a product in the market. So I think it's going to be a very attractive one. But we want to get that value curve kind of pushed up the curve by printing felines and or sepsis and or transcription factors in the next 12 months. So it's probably a two-year target for that.
Tim Moore
So that's terrific. And thanks so much. And that's it for my questions.
Operator
Thank you.
Bruce
Thanks for your time, Tim.
Operator
Our next question is from Ilya Zubkov with Freedom Broker. Please proceed.
Ilya Zubkov
Good morning and congrats for the progress in Q4. I have a question on the oncology tests. Talking about capture PCR technology, what types of cancer are currently considered as the most promising for detection according to studies and your expectation?
Bruce
That's a very good question. So transcription factors are actually indicative of all types of cancer. because it's an epigenetic signal, which is in all the cancers. So we've done some work in a varied range of cancers, including lung and colorectal and the blood cancers. And initially we'll focus on the larger cancers, the more prevalent ones, particularly, of course, like we have in the past in lung and colorectal and the blood cancers, because that's where we did the first work. But it certainly holds the promise of it's definitely going to be low cost, very easy to run, as easy to run as a COVID test in blood. But certainly potential for every single type of cancer. But you would probably not develop a test for every single type of cancer. You'd probably develop the top five or seven types, which between them account for the vast majority of cancer cases.
Ilya Zubkov
Thank you. That's helpful. And one more from me. The cancer test has demonstrated strong sensitivity in leukemia detection. And I'm wondering, has any progress been made in its diagnostic performance for detection of solid tumors since October last year? And do you see the opportunity for such improvement?
Andrew
Do you mean in solid tumors with capture PCR? Yeah.
Ilya Zubkov
Yeah.
Andrew
Yes, we've done a lot of work.
Bruce
The first thing we've been doing is been optimizing the process to make it as quick as easy as possible and on discovery on a wide range of different targets. So yes, we've been making progress. I think Andy alluded to a paper that's in process of being published and also to make the process as quickly, the process we announced was a prototype We've been developing as much as we can to make it quicker, easier, and cheaper, and also on a broad range of solid tumors as well as the liquid tumor. And yes, we're making very good progress, and we're aiming to publish in the next few, or submit it soon, in the next few months, and also work heavily on outlicensing. We've discussed several times on public calls that we think it's a complete breakthrough, and if we continue to show selection or concentration of tumor-derived DNA, it's going to have to be a must-have for anyone in the liquid biopsy business. So we've been very pleasantly surprised with the level of excitement and interest from a range of different groups, and those active discussions are going on as well. I would expect to have some news on that in the coming months and quarters as well, because again, we want to license it out and get upfront payments as well as a share of the upside going forward. So expect to keep an eye on all of that in the next few months and next few quarters.
Louise Batchelor
Yeah, and Cam, if I can just add, this is Lou Batchelor here, if I can just add, we've also presented at a number of conferences this year, cancer-specific conferences. So we've been at a prostate cancer conference, liver cancer conference, and then just this last weekend, a lung cancer conference with cancer-specific posters. with the ctcf capture pcr technology and we've then got breast and crc to come um in this second quarter so there has been some additional data presented and then we've got some um some stuff as cameron says further down the line uh with the generation two great thank you so much i passed the line thank you it's a great day
Operator
Our next question is from Bruce Jackson with the Benchmark Company. Please proceed.
Bruce Jackson
Hi, good morning, and thanks for taking my questions.
Operator
Hi, Bruce.
Bruce Jackson
So my first question is for Andrew. With the 500-patient study that you've just initiated, could that be ready in time for the conference in October?
Andrew
I'm sorry, Andy's actually not answering the question.
Louise Batchelor
No, he's just been pulled into clinic. The full study won't have been finished, Bruce, by October of this year, but we are hoping that we might potentially have some interim analysis available. But we will have the results from several large-scale studies that will be presented at the October conference. So the UMC Amsterdam and also the German sepsis group study will be presented in October. But potentially, there might just be an interim analysis of epitetus. Here's one.
Bruce
Here's the prospective, Bruce. So the retrospective ones, UMC Amsterdam and the German study, will be presented, we believe, but not the prospective. That will be a bit slower, of course.
Bruce Jackson
Okay. Okay, and then... A question on the burn rate. Is it going to stay where it was last year, roughly? How is that going to develop over the course of this year in 2025?
Eric
Good question. Hi, Bruce. So, as we mentioned just now, we ended the year with cash of about $20.7 million in the bank. And we used net cash in operating activities last year of $18.1 million. So that was partly offset or rather our costs were partly offset by the $13 million that we received in licensing fees last year. What we can expect is that our cost this year will be slightly lower than they were last year. And that's partly a result of the cost saving actions that we took at the back end of last year saving a little over $2 million on a full year basis. And our focus this year is on achieving our next licensing deals in the human space. as Cameron mentioned. So we've also initiated efforts with respect to seeking non-diluted funding in the US and again as Cameron mentioned, we're looking at getting each leg to support itself. What we're focusing on is bringing in those licensing deals so that we can achieve upfront payments and milestone payments. We do expect to make good progress on those by the end of the year. one or more licensing deals by the end of the year. And so I'm pretty confident with the resources that we've got available to us with some additional non-dilutive funding that we're working on at the moment that we'll be able to achieve those milestones that we've got planned for this year.
Bruce Jackson
Okay, great. That's it for me. Thank you very much.
Andrew
Thank you.
Operator
Our next question is from Steven Rustin with Zax. Please proceed.
Steven Rustin
Good morning or evening. You certainly have a lot of irons in the fire right now, more than I've seen in the past. And despite the progress you've made in your R&D efforts in cancer and sepsis, I'm trying to get a better handle on your two developing revenue streams. When I look at the – you have product categories, well, product and service listed, and the revenue streams are in the vet and discover areas. Could you delineate those a little better so I can better model the company?
spk03
Eric? Yeah, sure. So – In terms of our vet revenue, we achieved about $475,000 of vet revenue last year.
Eric
That was up 194%. And that has not yet ramped, but we expect it to start ramping this year as we bring online the two new distributors. So we've got Antec and FujiVet, who are both about to launch, both aggressively pricing the test in the market at under $40. both having aggressive plans for marketing and launching of the test. So looking ahead I think we'll see a decent ramp starting in Q2 and going into the second half of the year. So on NewQ Discover, we did about $300,000 of earned revenue last year. We've also got a very good pipeline building of over a million dollars of opportunities. That's a bit more difficult to forecast quarter to quarter because it's very lumpy in nature because it's a number of projects of different sizes and the timing is from one quarter to another difficult to estimate. but I do expect to see strong growth over the next year and for the year as a whole. So, yeah, I think we can look forward to further strong growth in the new Q-Discover project. Did that answer your question? I think so.
Steven Rustin
I think so. In other words, some of the Discover revenue is, well... Discover revenue is classified both under product and service categories.
Eric
That's right. It is. It's probably slightly more weighted towards the service than the product.
Steven Rustin
Is it too early in the process to determine the relative profitability between Discover and VET?
Eric
So both are highly profitable in terms of gross margin. That, I would say, is probably higher or more highly profitable once we get it to scale and discover, although highly profitable, there's a service element there and so that makes it slightly less profitable, but still we have very, very good gross margins on both products.
Steven Rustin
Also, is there a corporate model of when to capture your deferred revenue? I know it's a long-tail and a very large market, and it might be too early to determine that, but you are generating some sales in that, and therefore some minuscule percentage of the deferred revenue should be coming over through the bottom line, well, being put into the top line to come.
Eric
Yeah, that's a good point, and I'm glad you brought that up because, as you know, we've received – $23 million so far in payments related to the license agreement with HESCA, now Antec. And that's currently classified as deferred income on the balance sheet. And I do expect that to start earning out this year because it's linked to when the point of care or in-house diagnostic test launches with HESCA, which is, as we said, is imminent. And so I do expect to start to see some of that earning this year. But it is a long tail over the lifetime of the agreement, which is 20 years.
Steven Rustin
Thank you. Just two comments. I'd like to thank you for those informative webinars on cancer and sepsis. I've listened to them several times. Every time I listen to them, I get more out of it. And also that the $2 million grant Cost cutting was not unnoticed. It came all below my expectations with the lower cost. Thank you for your time.
Louise Batchelor
Thank you.
Operator
Thank you. We have reached the end of our question and answer session. I would like to turn the conference back over to Cameron for closing remarks.
Bruce
Thank you, everyone, for attending our call. We really appreciate it, and we look forward to updating you with all the developments that we've outlined over the next few months and on the first quarter earnings call, which is, of course, due in mid-May. So thank you very much, and have a great day. Thank you.
Operator
Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.
Andrew
Thank you very much, Sherry.
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