VolitionRx, maker of cancer blood test, could have upside of 500%

One in nine men and one in 12 women die of cancer each year, according to estimates by the International Agency for Research on Cancer. A frequent contributing factor, VolitionRx believes, is difficulties and delays with diagnosis. The small-cap company is developing a simple test that could detect cancer using just a few drops of blood. This makes analysts bullish on its stock, which is seen as offering almost 500% upside.

VolitionRx was founded in 2010 by chemist Jake Micallef, biotech entrepreneur Mark Eccleston, and Cameron Reynolds, who had experience in structuring and financing startups. Reynolds became CEO, Micallef the chief scientific officer, and Eccleston a member of the scientific advisory board.

Their goal, according to the company’s site, was to “transform diagnostics from expensive, invasive, and often unpleasant procedures to something as fast and accessible as cholesterol or pregnancy testing.” The current standard method for confirming cancer is a liquid biopsy — a global market VolitionRx estimates to be worth $20 billion.

Today, the company has offices and labs in Belgium, the U.S., and the UK. But 15 years ago, VolitionRx operated from “a single two-meter lab bench” at the University of Namur in Belgium. It set out to develop a technology capable of detecting cellular changes at the earliest stages of disease — before symptoms appear — in both humans and animals.

In diseases such as cancer, cells die off, releasing small fragments of chromosomes called nucleosomes into the bloodstream. These are made of histone proteins wrapped in strands of DNA. VolitionRx believes that measuring and monitoring levels and modifications of nucleosomes in the blood can help both detect and predict the progression of many diseases. This led to the development of its proprietary technology, Nu.Q, which now underpins all the company's tests.

In 2020, VolitionRx launched its first commercial product, a vet cancer test. That same year, the company received its first order from Texas A&M University. It now distributes the test through partners in many countries. One partner is Antech Diagnostics, part of Mars Petcare, which operates veterinary labs; another is Fujifilm Vet Systems, which distributes the test in Japan.

VolitionRx recently announced that its test has already detected early-stage lung, breast, prostate, colorectal, and liver cancers in humans — with a low rate of false positives. “This is a breakthrough based on 15 years of development work by our scientific team at Volition,” said CSO Micallef, as quoted by the company.

The test is affordable and can be performed using existing lab equipment, making it routine and scalable. The company believes it has a chance to “disrupt the multi-billion dollar liquid biopsy industry.”

In theory, the test can be used to monitor treatment efficacy, as well. VolitionRx is currently working on this application with the Department of Biochemistry and Molecular Biology at the Hospices Civils de Lyon university hospital center in France, says professor Léa Payen.

Since its founding, VolitionRx has funded its operations primarily through private and public stock placements, as well as with grants, according to company data. In 2015, it completed an IPO on the New York Stock Exchange, selling nearly 2.48 million shares at $3.75 each and raising about $8.5 million.

Today, VolitionRx shares are trading about 87% below their IPO price. In the fourth quarter of 2024, the company reported $192,000 in revenue, less than a third of the Wall Street consensus estimate and a fifth of the forecast of Freedom Broker, according to a report by the latter. The main reason for the top-line miss: highly volatile order volumes for its vet test. In the fourth quarter, the company sold very few, as partners had stocked up in advance, Freedom Broker explains.

VolitionRx’s revenue instability is also noted in a report by GuruFocus.

For full-year 2024, the company posted $1.2 million in revenue, a 59% year-over-year increase. Its net loss was $27.3 million, 24% smaller than the year before.

Wall Street analysts covering VolitionRx remain bullish. Their average target price (among five analysts) is $2.92 per share, according to MarketWatch. Four of the analysts rate the stock a “buy,” while one has it as a “hold.” As of yesterday, April 17, the stock closed at $0.49 per share, implying nearly sixfold upside.

Freedom Broker believes VolitionRx sales will grow over time, partly thanks to an expanded partnership with Fujifilm: In March, the company announced that Fujifilm would become the first to perform diagnostics via an automated analyzer platform, rather than manually. While the manual format requires technicians to prepare samples and execute each test step individually, automation allows for much higher throughput, meaning more tests can be done in the same amount of time. This opens new revenue opportunities for VolitionRx.

Larger contracts for its other product — Nu.Q Discover — are also expected to contribute to better sales performance, Freedom Broker believes. It is a research-use program, effectively a lab service designed for drug developers and scientists to test drug models and conduct preclinical and clinical trials.

Much in 2025 will depend on whether the company can attract partners to commercialize its products for oncology and sepsis, Freedom Broker argues.

Licensing is a key part of VolitionRx’s commercialization strategy.

The company is currently “in active discussions regarding our cancer portfolio with several large diagnostic and liquid biopsy companies, with the goal of signing multiple licensing agreements this year,” said CCO Gael Forterre. Pharmaceutical companies often license their products, transferring sales rights in exchange for royalties. Such deals often include upfront payments — essentially targeted investments in a future product.

Because the company is still in the early stages of commercialization, its revenues are hard to predict, GuruFocus notes. Freedom Broker agrees: VolitionRx is “laying the groundwork for future recurring revenue,” it wrote in the abovementioned recent report. It expects significant growth starting in 2026. Until then, the company may continue to raise capital by selling stock, potentially meaning shareholder dilution.