Galahad Profile picture
Nov 23, 2022 โ€ข 28 tweets โ€ข 8 min read โ€ข Read on X
Thesis on $VNRX


Did you know more dogs are diagnosed with cancer in the United States than humans?

Most dogs are diagnosed when it's too late - when physical signs are present.

In Q1 2023 $VNRX is launching the first LOW COST screening test to detect cancer in dogs.
$VNRX has signed global distribution agreements with $HSKA and an un-named global reference lab partner (likely $IDXX or Antech)

The cancer screen will have broad coverage in the US (covers 90%+ of veterinarians) and double digit % in Europe at launch.

How big is the market?
US addressable market: 84m dogs in US alone

US target market: 20m dogs over age 7

Europe: Similar size to US

83% US (70% Europe) of dogs visit a veterinarian at least once per year

The screen would be given as part of an annual wellness exam
This is what $HSKA CEO just said on their Q3 2022 earnings call: Image
What are the economics to $VNRX?

$5-10 per test sold
COGS likely $1 or less

In other words, their gross margin will most likely be 80%+ Image
$HSKA paid $28m in upfront and milestone payments to get exclusivity on the point of care market - still paying $5-10/test to $VNRX. This is only 10-15% of the total market. $HSKA will have to sell millions of tests per year just to breakeven.
That tells you something about how big $HSKA thinks the market will be for this test.

And how often do you get world-leading companies investing in, marketing, and selling a product for a $120m micro cap?
But wait there's more..

Cancer monitoring test launching late 2023 - targeting the 1-2 million dogs treated per year (US) by a veterinarian oncologist for cancer. The test would be given multiple times during treatment to track progression. 10-20m test opportunity US+Europe.
But wait there's even more..

Cats cancer screening + monitoring launch 2024 = another 10m test/year opportunity US + Europe.

Cancer and inflammation tests for production animals = equal or greater opportunity than companion animals ( $ZTS partnership maybe? )
In conclusion:

$VNRX is launching the first ever low cost cancer screening and monitoring test for companion animals with global veterinary distribution partners in 2023.

It's probably the best story in small cap and no one is paying attention - and it's all happening right now
Good video of $VNRX from the London Vet Show:
"Dogs may hold key to treating cancer in humans"

This could possibly mean an increased need for cancer screening/monitoring in dogs - which would benefit $VNRXโ€ฆ
$HSKA $VNRX Launch in early 2023 Image
$VNRX While the US is dominated by the big two reference labs players ( $IDXX and Antech) and $HSKA. In Europe, there are quite a few dominant local players. This is a good example of one - DNAtech has around 50%+ market share in Portugal. Image
$VNRX There's been a few insider buys lately. Tom (CEO of the Vet department) buying in late November and in December. General Counsel buying stock. The Chairman buying stock. ImageImageImage
$VNRX And they keep coming.. CEO of Vet buying more, his 3rd purchase in as as many weeks.

The CSO now also buying.

Impressive. ImageImage
$VNRX New deck out:โ€ฆ

2023 is shaping up to be an interesting year for the company.
$HSKA CEO with some interesting commentary regarding $VNRX during #JPM23 ImageImage
$IDXX announces NuQ Vet as part of their product offering.

This is massive news for $VNRX.โ€ฆ
$VNRX $IDXX official website for the NuQ Canine Cancer Screen:โ€ฆ
Official PR from $VNRX

Volition Announces Expansion of Availability of the Nu.Qยฎ Vet Cancer Test Through IDEXX's Reference Laboratory Networkโ€ฆ
$VNRX Volition's Nu.Qยฎ Vet Cancer Test Now Available for Pre-Order at The Point-of-Care Through Heska Corporation

This comes with a $6.5M milestone payment as well.โ€ฆ
$VNRX Slide from yesterdayโ€™s $IDXX Raymond James Institute presentation.

Just great to see $IDXX highlighting the NuQ Vet Cancer Screening test like this. Image
$VNRX had their Q4 conf. call on March 16th.

- Roughly $100K in rev from NuQ tests in Q4. That's roughly 10K tests sold. That's a great number and higher than I expected. Probably more tests than PetDx does in a year. And remember, $HSKA and $IDXX hadn't launched yet in Q4.

- The screening test has already been ordered by veterinarians in more than 40 states.
- Expect first commercial sale of the monitoring test in 1H 2023.
- Anticipates receiving milestone payments of $13 million in 1H 2023.
- They are in discussions with all the majors for more distribution deals.

Just a lot going on under the surface at $VNRX and the market isn't paying attention in my opinion.

2023 could be a big year from a commercialization standpoint - and I think it will be FWIW.
Wow, Mars Inc. to acquire $HSKA for $120/share.

This feels like a big win for $VNRX, especially if this means that Mars can tack onto the deal $HSKA has with $VNRX. That would result in $VNRX doubling their distribution over night.โ€ฆ
For context; $IDXX has 45% market share in the reference lab market. Mars (Antech) has the other 45%.

So this deal could mean that $VNRX has distribution deals with the two players that cover 90% of the ref lab market.

โ€ข โ€ข โ€ข

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