By Kirell Lakhman

Vermillion today reported that it has generated $344,000 in total revenue during the second quarter.

The receipts, only $45,000 of which came from 342 OVA1 runs that generated revenue, is welcome news for a company that emerged from bankruptcy protection fewer than seven months ago.

But the numbers could also stir some anxiety from shareholders and from the estimated 1 million women each year who are discovered to have ovarian masses, and who could therefore benefit from OVA1.

Vermillion dug the hole in which it now finds itself last December, when it said it expects to generate $9.7 million in revenue in 2010 from sales of the test. The year is half over and the company has so far contributed only $417,000, or 4 percent, to its target.

So the big question is, 'Does Vermillion continue to expect to generate $9.28 million over the next six months to meet its 2010 sales target?'

And I'm being generous with my calculations. Technically, I should be counting only the $45,000 Vermillion counted as product sales, which came exclusively from OVA1 runs, because the 2010 revenue projections do not include licensing revenue.

More accurate would be to say the company has so far nibbled away less than half of 1 percent from its $9.7 million revenue target and needs to sell $9.65 million worth of OVA1s during the next six months to hit it.

The test, approved last September, costs $650 and is reimbursed at $540 by Medicare, according to the company.

'Substantial Investments'

In May I wrote Vermillion could have a few potentially lucrative tricks and possible scenarios up its sleeve. These include the likelihood that OB-GYNs will decide to begin using OVA1 off-label as a screening test, which would sharply increase the market for the assay; launching a sister assay, OVA2, which is currently in development; and debuting a peripheral artery disease blood test that it is developing.

I also wrote about some talk in the industry about an OVA3 test, but a Vermillion spokesperson at the time told me such a test does not exist. Moreover, the company could try to nab more payors, hire additional sales reps, and investigate other geographic markets for OVA1.

In Vermillion's earnings statement for the three months ended June 30, CEO Gail Page said the company is making "substantial investments … in order to build our sales and marketing infrastructure, which we believe will further accelerate market adoption in the second half of 2010."

She also said the company "continue[s] to invest in our pipeline as well as explore other avenues for revenue growth, including in-licensing and co-marketing opportunities."

All of these scenarios could generate revenue and help the firm trim the more than $290 million deficit it has accumulated since it went public a decade ago as Ciphergen Biosystems.

Five of them — off-label use (over which Vermillion has no control), new payors, additional sales reps, expanded geographic markets, and "co-marketing opportunities" — could help the company meet its extravagant 2010 OVA1 sales projection.

A Vermillion spokesperson was not immediately able to answer my questions about these issues, and I will update this post as soon as I hear from her or the company. I also plan to listen to Vermillion's Q2 earnings call and report any news tid-bits it offers.

Elsewhere in its second-quarter results, Vermillion said sales and general administrative costs surged to $533,000 from just $1,000 in the year-ago period, while net loss shrank 61 percent to $698,000 year over year.

The company said that as of June 30 it had around $28.6 million in cash and equivalents and $465,000 in short-term investments.

Got a tip? Click my byline above to send it along or submit it as a comment below. Follow my headlines on Twitter or subscribe to my RSS feed.