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Vermillion to Raise up to $31.5M in Equity Financing

NEW YORK (GenomeWeb News) – Vermillion today said that it has inked an equity investment deal with certain investors to purchase up to $31.5 million of the firm's stock.

The Austin, Texas-based molecular diagnostics firm said that Oracle Investment Management, Jack Schuler, Matthew Strobeck, and other investors have agreed to make an initial investment in the company by purchasing 8 million shares of Vermillion common stock.

Once the transaction closes, the investors will receive a total of 12.5 million warrants with a strike price of $1.46. If the warrants are exercised, Vermillion would receive an additional $18.3 million in proceeds.

The firm said it would use the funds to support efforts aimed at increasing sales and improving reimbursement for its OVA1 test, which helps differentiate benign from malignant ovarian masses. It also said that the proceeds would help the firm expand its commercial opportunities in new markets and advance one or more next-generation ovarian cancer diagnostic tests.

Schuler, who is a former president and COO of Abbott Laboratories, is a co-founder of investment firm Crabtree Partners. Last year, he was part of an investment group that agreed to make an equity investment of up to $35 million in Accelr8 Diagnostics, and he now sits on that company's board of directors. He also is on the board of Quidel and previously served as chairman of the board of Ventana Medical Systems.

The equity investment comes about a month and a half after a dissident shareholder, Robert Goggin, was elected to Vermillion's board of directors.

Vermillion is scheduled to release its first-quarter financial results next week.

In Thursday morning trade on the Nasdaq, Vermillion's shares were up 20 percent at $1.75.