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Vermillion's Q2 Revenues Rise on Increased OVA1 Sales

NEW YORK (GenomeWeb News) – Vermillion reported after the close of the market that its second-quarter revenues increased 6 percent year over year as sales volume for its OVA1 flagship diagnostic test rose by the same percentage.

The Austin, Texas-based molecular diagnostics firm brought in total revenues of $321,000 for the three months ended June 30, compared to $304,000 for the second quarter of 2011. Its license revenues, collected from clinical lab firm Quest Diagnostics, were static year over year at $113,000, while its product revenues increased to $208,000 from $191,000.

Test volume for OVA1 was 4,150, in line with management's forecast.

During the quarter, the firm added 5.5 million lives of payer coverage with the additions of Blue Cross Blue Shield of Michigan and BCBS of Louisiana. In total, 27 BCBS organizations representing 47 million lives now cover OVA1. Inlcuding Medicare and other regional payers, total coverage for OVA1 is now around 95 million lives, said Vermillion.

Vermillion posted a net loss of $2 million, or $.13 per share, compared to a net loss of $5.7 million, or $.39 per share, for Q2 2011. The most recent quarter included a $1.8 million gain from the release of an escrow account related to the 2006 sale of its instrument business.

The firm's R&D costs for the quarter dropped 38 percent to $1 million from $1.6 million, and its SG&A spending fell 29 percent to $3 million from $4.2 million.

"As we begin the second half of 2012, we remain focused on our key initiatives," Vermillion President and CEO Gail Page said in a statement. "In addition to advancing our product discovery pipeline, these initiatives involve supporting further clinical research for OVA1, broadening its support by key opinion leaders, and expanding payer coverage."

As it had previously disclosed, Vermillion's board has formed a succession committee to seek a new CEO for the firm. It expects to complete its search this coming October, and after a new CEO is named Page is expected to become a strategic advisor to the company.

Vermillion finished the quarter with $18.3 million in cash and cash equivalents.

In early Wednesday trade on the Nasdaq, shares of Vermillion were down 4 percent at $1.87.

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