VolitionRx Limited (NYSE: VNRX) – Enters Commercial Stage for Nu.Q Vet Cancer Test

  • VolitionRX Limited (NYSE:VNRX) enters commercial stage for Nu.Q Vet Cancer Test.
  • The first and only company to offer canine blood test for cancer
  • Large addressable market with revenue opportunity.
  • Continued to make strong progress with other Nu.Q® products

Company Overview

VolitionRx Limited (NYSE: VNRX) is an innovative life sciences company focused on developing blood-based diagnostic tests for the early detection of a range of cancers, as well as other conditions. Founded in 2011, Volition has developed a suite of proprietary technologies, such as NuQ assays and NexTech platforms, to create simple, accurate and cost-effective tests for early-stage cancer diagnostics. The company’s tests are based on the use of nucleosomes, the structural units of DNA, to detect cancer in a simple blood test.

VNRX’s tests have been developed to identify the presence of cancer and also to identify the type of cancer from the levels of nucleosomes in the blood as well as the different structure of nucleosomes. And while VNRX’s main focus is on cancer, there are also potential derivative applications that include diagnosis of other conditions such as autoimmune diseases, sepsis, and inflammatory-related diseases.

Company’s Business Model


Management’s commercial strategy has been fine-tuned into four pillars composed of Nu.Q Vet, Nu.Q NETs, Nu.Q Capture and Nu.Q.

  • Nu.Q Vet – pursue full commercialization of the current beta-launched Nu.Q Vet blood assay in the United States, Asia and Europe.
  • Nu.Q NETs – research program to bring the Nu.Q H3.1 assay to commercialization for monitoring the progression of diseases associated with NETosis, such as sepsis, COVID-19 and influenza.
  • Nu.Q Capture – advance sample enrichment platform that enhances samples using mass spectrometry and/or sequencing in order to be able to better identify new biomarker targets for the purpose of detecting tumors and other mutations
  • Nu.Q Cancer – ongoing human studies in hematological, lung and colorectal cancers
  • Nu.Q Discover – helps determine levels of circulating nucleosomes and provides epigenetic profiling in disease models, pre-clinical testing and clinical trials.

Unlike many other cancer diagnostic companies, VolitionRX’s niche is focused on easy to administer, rapid acting blood tests which are similar in nature to point of care diabetes and cholesterol diagnostic formats.

Their Nucleosomics platform (Nu.Q) and products are well protected with patents. The addressable market for their products is around $70Billion according to their investor presentation slides.

I believe VolitionRx presents a good investment opportunity right now as it is transitioning from a development stage company to commercialising their blood test for pet cancer. They are commercializing via a channel supported with broad distribution and I expect to attract meaningful demand.

Nu.Q Vet Cancer Test.

While testing on humans are currently on awaiting clinical results and the necessary approvals, VolitionRx has developed a simple, cost effective blood test to detect cancers and other serious diseases in dogs.

Volition signs global supply agreement for NU.Q vet cancer test

In 2022, VNRX signed 2 major deals with regards to their Nu.Q vet cancer test.

  1. $28 million License and Supply Agreement with Heska Corporation to Distribute Nu.Q® Vet Cancer Screening Test

VolitionRX signed an exclusive global supply and licensing agreement with Heska Corporation (NASDAQ: HSKA) (“Heska”). In this agreement, Heska to sell its Nu.Q® Vet Cancer Screening Test at the point of care for companion animals. Heska is a leading global provider of advanced veterinary diagnostics.

In exchange for granting Heska these exclusive worldwide rights to sell the Nu.Q® Vet Cancer Test, VolitionRX will receive:

  • a $10 million upfront payment on signing and
  • up to $18 million based upon the achievement of near/mid-term milestones.

I feel that a large company like Heska paying this amount to a very small company (Market Cap $122mil) upfront is a an endorsement of the veracity of VolitionRx’s product.


2. Volition signs global supply agreement with a market leader in pet healthcare

In Oct 22, VoilitionRX signed a global distribution agreement with an un-named global reference lab partner. Not much details were revealed with regards to this deal. However, this bodes well for the company as VolitionRX continues to capture significant mass market opportunities.


VolitionRx has cash and cash equivalents of $16.4 million as of September 30, 2022, compared with $16.7 million at the quarter ended June 30, 2022. VolitionRX has been predominantly a research stage company and has a monthly burn rate of $2.3million per month. As part of the Heska global licensing & supply agreement, VolitionRx expects to receive another $13.0 million within the first half of 2023. This means their balance sheet should be able to cover their expenses for FY23. However, they may required additional funding if the product rollout is not able to cover the expenses in the near future.

Revenue reported year-to-date 2022 was approximately $187,000 which consisted of product revenue from direct sales of the Nu.Q Vet Cancer Screening Tests being processed by the GI (Gastrointestinal) laboratory at Texas A&M University. In their latest 3Q22 earnings call, they announced a multiple contract sign for their Nu.Q Discover platform that had an aggregate annual worth of $200,000 and they were expected to ramp up on during the fourth quarter.

Cameron Reynolds, CEO

Revenue Opportunity for VolitionRx

To have a valuation for VolitionRx, we need to estimate the potential of the cancer screening test for dogs. In the March 22 press release Heska’s CEO stated that the test should cost under $50. VolitionRx is set to receive a percentage whenever a test kit is sold.

We refer to the investors’ presentation by VolitionRx. They have put up a chart that suggests $7.50 of revenue per test sold

With this in mind, we now see the potential addressable market per year for this test kit.

The Veterinary Cancer Society estimates one in four dogs and nearly 50% of dogs over the age of 10 will develop cancer. According to the National Cancer Institute, in the U.S. approximately six million new cancer diagnoses are made in dogs each year. Based on VolitionRX’s data, there are 23m vet visits/year for dogs in their target age range.

From the chart above, they would need at least 3.5m tests in the US (about 15% of screening opportunity) to breakeven. (Cover their cash burn rate) Note that this is only the US market and does not include Heska’s global network.

The dog cancer screening test is worth $28mil to Heska. They were willing to give up royalties as well. Heska would understand the potential of this product more than anyone else. If we assume the price of the test after deducting Volition’s share to be around $25 a pop. Heska would need to sell about 1.12million tests just to clock $28mil of sales.

With this in mind, I would value the revenue opportunity between $26m to $38m per year. I would consider this to be conservative as Heska would have to sell millions of this test to be profitable. This tells you that Heska sees a big market for this test.


  • VolitionRx is a clinical stage company. Since its formation, the company has incurred losses due to the continued spending on the time-consuming and costly efforts to discover and develop diagnostic products. This includes conducting clinical studies, obtaining regulatory clearance/approval in the United States, Asia and Europe.
  • They have taken a long time to commercialize their platform and this has taken a toll on its share price. This was initially supposed to be test for human cancers. VolitionRx changed direction midway and is now targeting the pets industry instead.
  • Management expects continued losses from ongoing research and development expenses, along with administrative, manufacturing, sales and marketing expenses.
  • Additional capital is required to continue funding management’s strategic plan of commercializing the Nu.Q platform through the development of a suite of blood-based diagnostic tests. To date, VolitionRx has been successful in raising capital to fund the company’s initiatives.


We already have some numbers from their dog screening test. Assuming revenue is $38m, we will have about $14m of profit per year. A PE ratio of 15 will value VolitionRx at around $3.65. Volition has a huge potential to capture this market that currently has no direct competition.

I would want to put up a disclaimer for this valuation. It is assumed that VolitionRx will be able to rollout their cancer test kit and achieve the targeted sales. Previous attempts to commercialise their product has been met with disappointment.


VolitionRx is commercially introducing a product with a huge addressable market with no direct competition. Should the company experience early success, the market will rerate the stock at higher valuation metrics.

There are also other products in their pipeline which I will not cover in this post. Volition has contracts signed for processing samples under their Nu.Q Discover programme. But the rest of it are still in the early stages of development.


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