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Vermillion Posts $344K in Q2 Revenues

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Vermillion today reported revenues of $344,000 for the second quarter and a net loss of $698,000.

The company, which emerged from Chapter 11 reorganization in January, had posted no revenues in the year-ago period and a loss of $1.8 million.

For the three months ended June 30, Vermillion had $45,000 in product revenues from sales of its OVA1 triage ovarian cancer test, and $299,000 of license revenue from Quest Diagnostics for achieving certain milestones under the two companies' strategic alliance agreement.

On a per-share basis, the company saw a loss of $0.07 for the quarter, compared to $0.28 in the year-ago period.

Net loss for the quarter included non-cash expenses of about $371,000 in stock compensation expenses and $828,000 related to the debtor's incentive plan. Vermillion took gains of $3.5 million from the exercise and fair value revaluation of warrants, the company said.

The OVA1 test was launched in March and through the second quarter, 1,247 tests had been performed, company officials said, of which 342 were recognized as revenues. By the end of the year, the company expects between 8,000 to 10,000 tests to be performed, CEO Gail Page said during a conference call following the release of Vermillion's earnings.

In 2011, she said, Vermillion and Quest expect to launch OVA1 internationally with an initial introduction in England, India, and Mexico. The company will also evaluate the markets in Asia, Europe, and South America

During the call, Eric Fung, chief scientific officer of Vermillion, said that the company is currently working with collaborators at Johns Hopkins University to develop OVA2.

"We are evaluating and validating biomarkers that may expand our ability to enter into other diagnostic arenas in the field of ovarian cancer," he said. "Tests that have a wider field of view, such as evaluation of symptomatic women or high-risk women, will require greater clinical specificity."

The other test in Vermillion's pipeline is for peripheral arterial disease, which is being developed with Stanford University. By the end of the year, Vermillion plans to start an intended-use population study, Fung said.

Vermillion spent $938,000 on R&D in the quarter, up from $595,000 a year ago. SG&A costs rose to $3.1 million from $448,000 in Q2 2009.

As of June 30, the company which recently moved its headquarters to Austin, Texas, had about $29 million in cash, cash equivalents, and short-term investments.

During the quarter, Vermillion also hired 11 sales people, bringing the total number of employees to 23 as of today. Last month the company was relisted on the Nasdaq.

In early morning trade today, the company's stock was down about 21 percent at $7.16.

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