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Vermillion Posts $413K in Q3 Revenues, Inks New Deal with Quest

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Vermillion today reported $413,000 in revenues for the third quarter, led by licensing revenues.

In the year-ago period when the Austin, Texas-based molecular diagnostics company was in Chapter 11, it posted no revenues.

For the three months ended Sept. 30, licensing agreements generated the bulk of the revenues, $299,000, while product revenues totaled $114,000. During the quarter, 1,973 OVA tests — Vermillion's flagship product — were performed. Of that, revenues were recognized for 1,250 tests.

The firm's net loss for the quarter fell to $2.7 million, $0.26 per share, down from more than $11 million, $1.72 per share, a year ago.

Its R&D spending rose 191 percent to $1.1 million from $382,000 a year ago, and its SG&A costs spiked to $2.9 million in the third quarter from $310,000 a year ago.

Vermillion also reported today a new agreement with Quest Diagnostics, the company's sales and marketing partner for the OVA1 test. Vermillion will now receive an upfront payment of $50 for each test performed, along with royalties of 33 percent of Quest's gross profit on the test, Vermillion Chairperson and CEO Gail Page said on a conference call after the release of the company's earnings.

The agreement is retroactive to the launch of the test in March, she added. Under the old agreement, Vermillion received only a royalty payment of 25 percent of gross profit, company officials said.

Since the launch of OVA1 to the end of the third quarter, an estimated 3,220 tests have been performed, Sandra Gardiner, Vermillion vice president and CFO, said on the call.

During the third quarter, Vermillion received the CE mark for the OVA1 test, and the company now is exploring other markets for the test. It has begun a "meaningful dialogue" with Quest to bring the test to India, Mexico, and England, Page said. The company also has identified China and Brazil as markets of interest and is in conversation with potential partners and distributors to bring the OVA1 test to those territories.

As of Sept. 30, Vermillion had $25.3 million in cash and cash equivalents.

In early morning trade Thursday on the Nasdaq, the company's shares were up 3 percent at $6.31.

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