Earnings Call Transcript - VNRX Q2 2022

Operator, Conference Operator

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to VolitionRx Limited's Second Quarter '22 Earnings Conference Call. This conference is being recorded today, August 11, 2022. I'd now like to turn the conference over to Scott Powell, Executive Vice President of Investor Relations. Please go ahead.

Scott Powell, Executive Vice President of Investor Relations

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 second quarter of 2022, 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 Mr. Cameron Reynolds, President and CEO; Dr. Tom Butera, Chief Executive Officer of our Volition Veterinary subsidiary; and Mr. Terig Hughes, Chief Financial 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 would now like to turn the call over to our President and Chief Executive Officer, Mr. Cameron Reynolds. Cameron?

Cameron Reynolds, President and CEO

Thank you, Scott, and thank you, everyone, for joining Volition's Second Quarter 2022 Earnings Call today. We especially appreciate your time, given this is the busy earnings call season. We will commence the call with our financial report from Terig Hughes, our Chief Financial Officer; after which I will provide an update on all the exciting activities surrounding Nu.Q NETs, before passing the baton on to Dr. Tom Butera, our Chief Executive Officer of Volition Vet, to discuss Nu.Q Vet. Finally, I'll wrap up the call with a quick update on our most recent developments with Nu.Q Discover. Terig, over to you for our financial update.

Terig Hughes, Chief Financial Officer

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 June 30, 2022. We ended the quarter with cash and cash equivalents of approximately $16.7 million compared with $20.6 million at the end of 2021. Subsequent to quarter end, we received approximately $6.4 million in cash, net of underwriter fees and expenses through an underwritten public offering of our common stock. Additionally, as recently announced, we secured a further $1.5 million in nondilutive funding from more invest capital risk in Belgium to fund an early access program for Volition Nu.Q product portfolio at key sites across the EU, U.K. and U.S., which Cameron will describe in more detail later. During the second quarter, we made no sales of our common stock under our aftermarket or ATM equity distribution program. We continue to manage our expenditures carefully with net cash used in operating activities averaging approximately $2.1 million per month in the quarter. Revenue reported in the first half of 2022 was $154,000 versus $50,000 for the first half of the prior year, with approximately half of the 2022 amount from sales of our Nu.Q Vet test and half from sales under our Nu.Q Discover offering. This revenue figure excludes the receipt of an upfront milestone payment of $10 million in cash from Heska Corporation received in March. It is worth noting that while this payment has been fully received and is nonrefundable, it has not been recognized as revenue in the period and has been accounted for as deferred revenue in accordance with the relevant accounting standard. This was not only a milestone payment, but also a company milestone, the culmination of much work across the company and truly marks the beginning of our commercial journey. This was just the first of what we hope will be several milestone payments in relation to the Heska contract. We anticipate that the next two milestones will be achieved and payments totaling $13 million will be paid by Heska within the next 12 months with the final payment of $5 million due upon publication of clinical use. Given our current balance sheet and the funds expected in the short to midterm, we are confident that we have the resources to deliver on our future milestones, and to see the revenue ramp we expect to start after the worldwide launch of the vet products anticipated in 2023. As we discussed on the previous call, given the product range, we believe we can develop from our proprietary nucleosomics platform. We believe our addressable markets are very significant, most notably in the short term with Nu.Q Vet and Nu.Q NET. And with that, to discuss these opportunities in more detail, I'll hand back over to Cameron.

Cameron Reynolds, President and CEO

Thanks, Terig. I'm delighted with the progress we are making and in particular, could not be prouder of the team's achievements this quarter in advancing our product pillars. Our first pillar to discuss on this call is Nu.Q NET. During the second quarter, we secured a CE Mark for Nu.Q NET for the detection and evaluation of NETosis, enabling clinical use in more than 27 countries across Europe. As a reminder, NETosis is a unique form of disease that is characterized by the release of Neutrophil Extracellular Traps or NET, composed of de-condensed chromatin that trap and kill bacteria and viral particles. Although NET plays an important role in our immune system, excessive production can lead to tissue damage and, in severe cases, sepsis, shock, and death. Through a routine blood test, Volition's simple, low-cost, accessible technology can detect NETosis, predict disease severity, and monitor its progression and response to treatment. Nu.Q NET is the first biomarker approved to measure NET for patient management. Its broad intended use as a diagnostic tool to aid the detection and evaluation of diseases associated with NETosis offers a substantial commercial opportunity, as discussed at our Capital Markets Day we held in New York in May. We estimate that the total addressable market in Europe, per sepsis alone, amounts to almost $6.5 billion annually. Achieving CE Marking is a critical regulatory milestone for us. Nu.Q NET is now ready for use in Europe in both ELISA, which are the plastic plates, and automated ChLIA, which is Chemiluminescence automatic assay formats. The Commercial team has now commenced a market access program with key European opinion leaders and early adopters and expect to drive sales from the first half of next year in 2023. Subsequent to quarter end, momentum continued for the Nu.Q NET pillar, starting with new publications. In collaboration with researchers at the University of Namur, QUALIblood in Belgium, we published a paper entitled, 'NETosis and Nucleosome Biomarkers in Septic Shock and Critical COVID-19 Patients: An Observational Study.' We also presented a poster entitled, 'Evaluation and Comparison of NETosis Biomarkers in Sepsis and COVID-19 Patients' at the International Society on Thrombosis and Hemostasis (ISTH) Congress in July. The ISTH conference was a real highlight of the year to date, with many of the team in attendance to manage the booth and develop a network of key opinion leaders and potential licensing and distribution partners. We also sponsored a GenomeWeb webinar presented by Dr. Andrew Aswani of Guy's and St Thomas' Hospital titled, 'The Promise of Neutrophil Extracellular Traps (NETs) as Biomarkers in Inflammatory Disease.' This webinar, the second series, was incredibly well attended with an engaged audience. Indeed, the share of the meeting had the most questions he's ever received, so certainly interest remains high in this emerging field of medicine. To watch on-demand, visit the GenomeWeb website. And last, but certainly not least, we are delighted to announce some new clinical studies for NETs with MD Anderson and with Diagnostics Oncology CRO (DXO), both in the U.S. We're thrilled to be working with one of the world’s leading cancer research institutions, MD Anderson. Cancer patients have a weakened immune system and shockingly have a 10x higher likelihood of developing sepsis and are more likely to die if they develop it. Therefore, it is critical for physicians to identify cancer patients at risk of sepsis early and initiate treatment quickly to improve patient outcomes. Our study with MD Anderson is an important study that evaluates the potential utility of using Nu.Q NETs in managing cancer patients at risk of sepsis, and we're delighted to collaborate on this research. This week, we appointed the clinical research organization, DXOCRO, to undertake development and clinical validation of studies for our Nu.Q product portfolio in the U.S. DXOCRO will conduct large-scale findings studies across multiple sites in the U.S. using Volition's Nu.Q NETs and Nu.Q cancer tests to determine clinical utility in sepsis and cancer. We anticipate that subsequent studies will investigate the chosen intended use claims in the tests with the objective to gain clearance, authorization or approval from the United States Food and Drug Administration (FDA) and allow the test to be marketed in the U.S. These multisite development studies will help us demonstrate how our new cytomics technology can directly benefit patients and support our application to the FDA's breakthrough device program by year-end and a pre-submission anticipated in 2023. My thanks to Sharon Ballesteros and Gaetan Michel for spearheading our research efforts in the U.S. It's fantastic to get this project underway. So a truly exciting few months for Nu.Q NETs. Great to achieve the EU regulatory hurdle and start our marketing access program in earnest and equally fantastic to get our clinical and regulatory program underway in the U.S. And from one exciting pillar to another, Nu.Q Vet. I'll now pass over to Dr. Tom Butera, our Chief Executive Officer of our Veterinary subsidiary for his update.

Dr. Tom Butera, Chief Executive Officer of Volition Veterinary

Thanks very much, Cameron, and hello, everybody. This first quarter of 2022 really was a breakthrough time for Volition Veterinary with the execution of a global licensing and supply contract with one of the industry's leading companies, Heska Corporation. But let me tell you the hard work and progress continued into the second quarter. As you can imagine, we have many work streams up and running from technical transfer and logistics to sales and marketing and are making tremendous progress towards the launch, which we still anticipate will be later this year or early in 2023. This contract provides for milestone payments to Volition. To give you the breakdown, Volition received a $10 million upfront payment upon signing the agreement and will receive up to $18 million based upon the achievement of near- and mid-term milestones. $13 million, of which, as Terig already mentioned, we anticipate receiving in 2023. In addition to these milestone payments and most likely significantly greater than these payments, is the ongoing revenue that Volition expects to receive in relation to payment for kits for the reference lab market and for the supply of key components for the exclusive point-of-care product that Heska will bring to the market. Every time Heska sells a test, Volition will make money, be that through the sale of a kit or from the sale of a key component. And this is a long-term deal with incredible market potential, where we expect millions of tests will be sold each year, so the ongoing revenue for Volition could be significant. It's a fantastic deal for both companies, and we are certainly excited to get on to preparing for launch. And talking of launches, I am delighted to say SAGE Healthcare launched the Nu.Q Vet cancer test in Singapore. Dr. Wilson-Robles and I had the honor of presenting to a number of veterinarians via a launch webinar hosted by SAGE. And as ever, there was a lot of interest and a lot of great questions. And I know the SAGE team is now spreading the word, creating further educational awareness, and driving demand in the clinic for our Nu.Q Vet cancer test. We are in advanced negotiations with other potential licensing and supply partners in our efforts to make Nu.Q Vet products as accessible as possible worldwide. And as ever, I remain optimistic about signing further deals this calendar year. From a product perspective, I'm delighted to report we have expanded our product claims with the presentation of new clinical data at the European Society of Veterinary Oncology Congress in May with regards to monitoring and at the American College of Veterinary Internal Medicine (ACVIM) in June concerning multi-cancer detection. Our clinical research program, led by Dr. Wilson-Robles, really continues to deliver, and we are excited to expand further. Our clinical research laboratory at Texas A&M University has been extended. In addition to working with several veterinary oncologists, we are delighted to have appointed a veterinary emergency criticalist who will be starting our research into non-cancer indications. So pretty soon, you'll start to hear me talk about NET studies in dogs. Yet another exciting development at Volition. Dr. Wilson-Robles has recently started a role with the United Veterinary Health, Ethos Discovery Group, which, in addition to her serving as President of the Veterinary Cancer Society, certainly opens up further exciting possibilities for collaborations and research programs. Congratulations, Heather, on your additional role. Lastly and yes, I've tried to keep it concise today. I have traveled extensively during the second quarter and have been truly delighted with the level of interest and support we are receiving from our technology in Europe by both veterinary oncologists and general practitioners. I look forward to future calls discussing not only our clinical research network in Europe, but also our commercial rollout. We believe that this simple, affordable, and easy-to-use blood test addresses a huge unmet need in the veterinary market. As I have said on previous calls, cancer screening is not yet as commonplace in animal health as it is in human health. But I firmly believe blood tests like the Nu.Q Vet cancer test could significantly help transform how veterinarians manage cancer in companion animals. All in all, an incredibly busy time for the whole Volition veterinary team and many of the Volition executives too. I would like to publicly commend and thank the team for their tremendous hard work and great job well done. And with that, I'll hand it back to Cameron.

Cameron Reynolds, President and CEO

Thanks very much, Tom. I am delighted with the progress we have made in this key pillar of the business as we progress strongly from purely a research and development company to a commercial company with a wide range of products. It's an exciting, fast-moving part of our business with clear potential to generate significant revenue for the company in terms of both milestone payments and ongoing revenue streams, as Tom explained, for the sale of kits and key components, not only to Heska but also to SAGE, Healthcare and hopefully, in the not-too-distant future, other potential partners. The final pillar I'll cover on today's call is Nu.Q Discover, where the team has also made some good progress. As Terig mentioned earlier, revenue reported to date through the end of June is around $150,000. But aside from the revenue, what I'm happy to report is that both the range of customers from academia to charities to biopharma and pharmaceutical companies and the type of projects continue to expand. We have recently signed contracts with three biopharmaceutical companies who are accessing our assay portfolio for rapid epigenetic profiling of their drugs. These drugs are in Phase I and Phase II development, and thus the collaborations span animal and early clinical studies. Clearly, this information is of a sensitive nature, but what is promising from a Nu.Q Discover perspective is that one drug, in particular, looks like it will be moving into human studies later this year with Nu.Q Discover as part of the program. We are excited to be involved in a number of cutting-edge projects and hopefully, in doing so, we're helping them develop and release the groundbreaking therapy to benefit the patients. It's difficult to provide exact revenue guidance in this area since we are dependent on the pace and success of other companies' product development programs. Suffice it to say, Nu.Q Discover remains an interesting pillar, certainly one to watch as the drugs move through the development phases. And so in conclusion, I'm delighted with the significant progress we have made so far this year. In drawing this earnings call to a close, I would like to thank you all for joining the call today. We very much appreciate it, given the busy earnings call season. I, along with the rest of the Board, and indeed the whole company, very much look forward to sharing further news regarding Volition Vet and our other subsidiaries, as well as the results of our key clinical studies, publications and milestones over the coming months and quarters. I feel very much we are in an extremely strong position to commercialize our Nu.Q platform in so many areas. I could not be more positive about our work at the heart of epigenetics and I'm excited for the next phase of our journey. We're happy to take your questions.

Operator, Conference Operator

Our first question comes from Ross Osborn with Cantor Fitzgerald.

Ross Osborn, Analyst

Congrats on the progress made during the quarter, especially receiving the CE Mark.

Cameron Reynolds, President and CEO

Thank you.

Ross Osborn, Analyst

I guess starting with product revenue, it looks like there was a sequential decline. I know it's still in the really early stages of everything. But could you just parse out the drivers there?

Cameron Reynolds, President and CEO

Sorry, it's tough to hear the question. Could you repeat that, please?

Ross Osborn, Analyst

Sure. I was saying maybe we'll start with product revenue. It looks like there was a bit of a sequential decline. I realize you're still in the early stages of everything. But could you just parse out the drivers during the quarter?

Cameron Reynolds, President and CEO

Yes. Terig, can you take that?

Terig Hughes, Chief Financial Officer

Yes, sure. As you know, product revenue, as you see in the account, is a bit of a mix of Vet and some of the samples that we sell through our Nu.Q Discover offering. So as we mentioned in the past, Nu.Q Discover is a bit lumpy. It's project-based, and it's very difficult to predict. So on the vet side, it continued in line with the prior quarter with Texas A&M churning out about the same number of tests as they had in the previous quarter. We got some revenue from SAGE. But I think any decline you see in the product revenue there is just a function of the lumpiness of the Nu.Q Discover offering.

Cameron Reynolds, President and CEO

And I think, Ross, also, remember, this quarter, we did sign several Nu.Q Discover deals. I think that was just a big lump that came through, we sorted out some IP issues earlier in the year and what we were looking for. So, there was a real rush of deals. A couple of things to remember, all the deals we've had and there’s seven now organizations we're working with. Every one of those has been inbound. So we're incredibly happy with the take-up on the Discover side. And the vet revenue has been very steady while waiting for the launches from Heska, both in the lab and on the point of care. And we'd expect, as Tom said, to be signing one of the big companies as well in the lab setting sometime later this year.

Ross Osborn, Analyst

Okay. Great. Understood. And then next, could you provide more color on the scale of the Singapore launch? And then as a follow-up to that, when can we expect you to expand outside of Singapore to other Asian markets?

Cameron Reynolds, President and CEO

Tom, do you want to take that?

Dr. Tom Butera, Chief Executive Officer of Volition Veterinary

Sure. With any markets you go into, a lot of it has to do with continued awareness and education to the doctors on how to use the test, how to position the test, when and where to use it. And we've launched in Singapore, as I mentioned in my opening comments. Dr. Robles and I did a webinar presenting the information to them. There was significant interest. And now based off that webinar, we are now making contact with all of the hospitals, quite frankly, in Singapore. We have business development people on the ground. They're asking a lot more specific questions now, and we are answering a lot of them. So we are creating a significant amount of awareness on the part of the doctors there on how to use it. That takes a little bit of time to ramp up. There's over 100 hospitals in Singapore and close to 400 veterinarians. So it's an ongoing project, and we expect to receive some significant benefit from it over the coming months as they become more comfortable with the test and as they specifically know how to use it.

Cameron Reynolds, President and CEO

Other countries, sorry, the other countries, expansion? I guess is that Europe or Asia?

Ross Osborn, Analyst

Specifically Asia.

Dr. Tom Butera, Chief Executive Officer of Volition Veterinary

Yes. We are certainly getting inquiries from a number of other countries, both in Southeast Asia as well as Asia. We obviously want to remain focused on Singapore right now because that's where our first initial launch is. And as we develop additional exposure, both in Asia as well as in Europe and in the U.S., that's going to allow us – it's going to make it easier for us to begin to start traction in other Asian countries, and that will come over time.

Ross Osborn, Analyst

Okay. Great. Congrats on the progress.

Operator, Conference Operator

Our next question comes from Bruce Jackson with The Benchmark Company.

Bruce Jackson, Analyst

My first question is around the NETs cancer study at MD Anderson. This is a potentially exciting application of the technology. Can you give us maybe a few more details about the size of the study when you might have data and when it might be presented at a bigger medical meeting?

Cameron Reynolds, President and CEO

Yes. Thank you, Bruce. We're very, very excited as well and working with the world's best cancer organization. And I think of the crossroads of the two big important things for us, NETosis and cancer is incredibly exciting, and we couldn't be happier to be underway with them. And hopefully, this is the first of a few things we can do with MD Anderson. So the scale of the study. So yes, it's extremely important because, as I mentioned in the earnings call, you are 10 times more likely to get sepsis, which is really shocking if you have cancer, and it's often actually the final cause of death. So anything that can give the clinician some warning on that, I think will be tremendously beneficial at the crossroads of cancer and NETosis. The actual cost itself is a few hundred thousand dollars. Because they're working with them. It was actually their process and their idea on the background of this. It's something they're very passionate about and very aware of NETosis and cancer. It can take up to two years of work, but we'd expect to get data. Unfortunately for the patients, but fortunately for the trial time, obviously, these things tend to resolve reasonably quickly one way or the other, so you get data. It's not something that can to trial normally takes years. Obviously, if someone's in hospital with sepsis, they either recover or die in a reasonably short period of time. So it's something we could expect a reasonable amount of data throughout the process of the trial. And I hope this is the first of many applications where we're looking at NETosis and cancer, and MD Anderson is a fantastic place to start. And the $1.5 million we got in soft funding will be funding 15 more operations like this throughout the world, centered on Europe where we're working with organizations for the same sort of standing as MD Anderson in Europe for other use cases for NETosis. So it's really kicking off, and I couldn't be happier with the start with MD Anderson.

Bruce Jackson, Analyst

That's great. And then can you just like discuss maybe a little bit about when we might get the first look at the interim data?

Cameron Reynolds, President and CEO

That's to be determined. As I said, it can happen reasonably quickly because it's obviously dependent on the patients. I would expect to see data next year, but I'm not – I wouldn't want to publicly try and predict exactly when that is, but they are starting quite quickly. The assays are ready. It's the same assay, which is CE Mark in Europe, so it can happen quite quickly. And it is the final product version of it. So I'd expect data next year, but I'll perhaps have a better update in the November call when we'd expect to see the first data. But it's something that we'll be getting data quite quickly as they share it with us, which will depend on, I guess, numbers but very, very excited, and so are we. So I would be certainly trying to get it as quickly as possible.

Bruce Jackson, Analyst

Okay. Great. And then my question for Terig on the operating expense profile ticked up just slightly during the quarter. You've got a lot going on. Should we be assuming this particular run rate for operating expenses going forward? Or could it vary somewhat?

Terig Hughes, Chief Financial Officer

Yes. It's a good question and a good observation. And we do expect it to tick up over the next quarter or rather probably more towards the end of the year or towards Q4 because that's when we will have started being in full swing with some of our projects, including the DXO work that will be done. So we would expect that to tick up, particularly over Q4.

Cameron Reynolds, President and CEO

And I think just a quick thought on that, Bruce, also that some people obviously asked. We have a reasonable amount of cash left; why did we do a small raise? We've also got some nondilutive funding and expecting a large amount coming from the milestone payments. So I think to be prudent and given all the fantastic things going on and the product launches and trials, it was just wise to slightly strengthen our balance sheet between the money we had in the bank, the $16.7 million, the $6.4 million we got in some non-dilutive funding and also in total, $18 million more we expect to get from the milestone payments. But the combination, I think, shows our adaptability in these difficult markets, and I think it was an essential thing to do.

Bruce Jackson, Analyst

All right. Well, that's it for me. Congratulations on all the progress.

Operator, Conference Operator

Our next question comes from Nathan Weinstein with Aegis Capital.

Nathan Weinstein, Analyst

And perhaps we can just start with the Heska potential payments that you expect related to near and mid-term milestones. Could you give us some more color on what kind of milestones those consist of that would trigger additional payments?

Cameron Reynolds, President and CEO

Tom, would you like to take that?

Dr. Tom Butera, Chief Executive Officer of Volition Veterinary

Sure. Yes, happy to do that. The next two payments of $13 million are based on, first of all, the first $6.5 million will come when we actually launch the product on POC, and we are in the final stages of validation of that. And as Kevin Wilson, even on his most recent call with Heska, said, the anticipation of the launch is still late this year or early 2023. So that would be the first $6.5 million payment with reference to launch. And then also Dr. Robles is planning to submit the monitoring paper, which we've been doing a lot of work on. When we talk about monitoring, we're talking about using our marker for disease progression during treatment and during remission, and we've collected all the cohort information. We're planning on submitting that monitoring paper for peer review publication in the third quarter of this year and anticipate that it will probably be published by the first and second quarter of next year. Once that is published, we will be ready to pursue the second payment, and we will introduce and launch the monitoring application of our platform, which will trigger the second payment of $6.5 million sometime in 2023. Those are where the $13 million is coming from. And we're confident that both of those will be forthcoming based on the information I just provided.

Nathan Weinstein, Analyst

Great. That's very helpful. And then maybe just one follow-up question on the vet side. It seems like you still have optionality to sign other types of agreements. Can you give us a little insight into what those other types of agreements you could sign, geographies, et cetera, just so we can think about how to frame that?

Cameron Reynolds, President and CEO

Tom, do you want to take that?

Dr. Tom Butera, Chief Executive Officer of Volition Veterinary

Well, that – okay, yes. Just Nathan, just so you have some clarity or reiteration clarity. When we signed with Heska, they have an exclusive agreement with us on the point-of-care test. And that's something good. So any point-of-care test that we currently are using, with reference to our current market due to cancer, they have an exclusive with us. They have a non-exclusive with us on reference lab contacts that they have both with reference to the U.S. as well as internationally, and they have a pretty strong reference lab connection in the EU. What's that allowing us to do is with the other corporate groups and large corporate groups. We can also formulate agreements with them, which are also non-exclusive with reference to reference lab. So it gives us a lot of flexibility in terms of additional distribution not only in the U.S. but also in other parts of the world, EU and eventually into Asia with other potential corporate agreements. Does that help answer your question?

Nathan Weinstein, Analyst

Yes, that's very helpful.

Cameron Reynolds, President and CEO

Just one addition to that, Nathan. So the point-of-care, depending on the numbers, but somewhere as a rule of thumb, 15% or 20% of the market typically is point-of-care. So the lion's share currently. I mean, Heska's a fantastic organization and point-of-care is incredibly important. But if we do, and we expect to sign with one or two more of the big companies, our coverage in the U.S. would go to around 80% or 90% of vets upon signing. So we're very excited. The vet team has done a lot of work getting ready for Heska's launch and also potentially launching in one of the very large companies from the lab perspective as well. So I think the Heska launch will be a very good milestone and I think also the signing and launch of the very large lab companies, which gives us massive coverage in the U.S. And having a company our size with as little money we've spent being able to be ordered by 90% of vets in the U.S., I think, is an outstanding outcome. And as Tom said so well, we get paid every single time the test is done between $5 and $10. And the amount of money going to the cost of the vet is only about $25. And those companies will do the marketing, we'll run the test, we'll run the whole process. So quite profitable to us, and we'll be leveraging their massive infrastructure throughout the world. So very exciting, and all those we expect in the next few quarters.

Nathan Weinstein, Analyst

Great. Looking forward to those updates later in the year.

Operator, Conference Operator

There are no further questions at this time. I would like to turn the floor back over to Mr. Cameron Reynolds for closing comments.

Cameron Reynolds, President and CEO

Thank you, everyone, and I really appreciate your time. And I think as you can tell, we've used this quarter very wisely. We've strengthened the balance sheet in several important ways. We've made great progress in NETosis with a clear European and U.S. strategy now, working with great institutions worldwide. And of course, from what Tom went through, we have very much made progress in the vet space and getting closer and closer to large international launches of our products. And a lot more other news we did not talk about today and capture in other areas, but there was strong progress as well. So I'm extremely happy with the team and extremely happy with our progress. And thank you all for your interest in Volition at this very exciting time. Thank you.

Operator, Conference Operator

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and thank you for your participation. Have a great day.