Sign up Australia
Proactive Investors - Run By Investors For Investors

VolitionRx first revenue from Nu Q technology is major milestone

The firm received an order for its clinical research use only (RUO) kits from a large, multinational pharma company
VolitionRx first revenue from Nu Q technology is major milestone
Early diagnosis is key in treating and helping cancer patients

Emerging cancer test specialist VolitionRx Ltd (NYSE:VNRX) has been making good progress in recent weeks and Friday's news of first revenues from its Nu.Q platform represented a milestone.

The firm received an order for its clinical research use only (RUO) kits from a large, multinational pharmaceutical company, it told investors on the same day it received a cash infusion of US$1.5mln, via a loan and a grant to advance its research.

Shares have lifted over 8% since Friday in New York to where they stand now at US$2.97 each. Broker HC Wainright rated shares a 'buy' after the news.

"We note that these RUO kits allow researchers to explore patterns of epigenetic modifications in circulating nucleosomes across a variety of clinical applications beyond cancers," said analyst Raghuram Selvaraju.

Recurring revenue stream potential..

"Importantly, if the assays become an indispensable companion diagnostic to another company’s therapeutic candidate, potential future licensing opportunities could generate recurring revenue streams in addition to the company’s planned commercialization of Nu.Q assays for colorectal cancer (CRC), in our view."

Two weeks ago, VolitionRx outlined its strategy for its colorectal cancer screening test, which it reckons is its largest near term commercial opportunity.

Aiming to launch test in Europe in 2018..

It is eyeing a launch of the diagnostic test in Europe in 2018, with a  panel chosen for its  Nu.Q colorectal cancer screening test for Europe in the fourth quarter of this year.

In the third quarter of 2018, CE Marking is expected to be completed, so the product could then be marketed in 28 European countries. The CE mark will also offer a regulatory platform to expedite approval in many Asian markets, VolitionRx said.

Selvaraju said this should provide a solution to the overwhelming compliance issue of patients foregoing available colorectal diagnostic and screening tools, and may potentially become the preferred option in colorectal cancer detection.

"We continue to expect the Nu.Q CRC triage test to be launched in the EU near term and start generating revenue for the company in 1Q18," he added.

What does the company do?

The firm is focused on developing blood tests - called Nu. Q tests - to discover if someone has cancer,  a disease for which a simple blood test is not normally an option.

The tests are based on the science of Nucleosomics, which identifies and measures nucleosomes in the bloodstream or other bodily fluid -  an indication that disease is present.

Early diagnosis is key in cancer and can not only prolong the life of patients, but also to improve their quality of life

US development also on track..

Volition America, a wholly-owned subsidiary of VolitionRx, is set to take part in a large multi-center CRC screening study funded by the U.S. National Cancer Institute's (NCI) Early Detection Research Network (EDRN).

A total of 13,500 samples would be tested in the study and all the data could take up to three years to be pooled together.

As reported previously,  VolitionRx will contribute around just $3mln towards the arrangement, as opposed to a $30-$40mln usual cost for a trial of this size.

"In our view, Nu.Q assays’ ability to detect precancerous polyps at a high rate of sensitivity may be crucial in improving patient outcomes, thus differentiating it from competing tests," noted HC Wainright.

What's it worth?

The broker says its price target of US$10 a share (over three times' where it is now) is derived from a market value of the firm at US$254mln, including  discounted cash flow-based enterprise value for Nu.Q assays, with a 15% discount rate and 2% terminal growth rate.

View full VNRX profile View Profile

VolitionRx Timeline

Related Articles

cancer cells in blood
July 17 2018
It’s been a tricky year for Redx, but it has come through it with a promising pipeline, cash in the bank and AstraZeneca’s former UK boss as its new chief executive
tumour cells
July 25 2018
Sign-off by the US Food & Drug Administration is considered the "global standard for approval", the company said
1538160791_petri-dishes.jpg
September 29 2018
The biotech group revealed it had brought in $9.1mln via an oversubscribed placing

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use