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Vermillion's Q4 OVA1 Sales Grow 40 Percent

NEW YORK (GenomeWeb News) – Vermillion said after the close of the market on Thursday that fourth quarter OVA1 volume increased 40 percent year over year in preliminary results, while license revenues fell 42 percent.

Results for the quarter and for full-year 2011 are still subject to change as the company awaits a 2011 report from strategic partner Quest Diagnostics and a ruling in an arbitration case involving Molecular Analytical Systems, it said.

The company did not provide total revenue figures or its profit/net loss, but said that sales of its OVA1 ovarian cancer test, performed by Quest, climbed to 4,118 in the quarter. While it represented a 40 percent increase over Q4 2010 figures, it was flat with 4,108 sold in the third quarter of 2011.

Licensing fees dipped to $113,000 from $196,000.

Operating expenses during the quarter totaled $4 million, down 11 percent compared to $4.5 million in the year-ago period. The company spent a total of $5 million during the quarter including $435,000 to complete the acquisition of Correlogic, Vermillion said, adding it plans to reduce its expenses to $3 to $4 million in the first quarter of 2012.

Operating expenses for full year 2011 increased 24 percent to $19.5 million from $15.7 million in 2010.That increase was largely due to extra headcount in sales and marketing, higher clinical trial and collaboration costs, and increased legal fees, Vermillion said.

As of the end of the year, Vermillion had $22.5 million in cash and cash equivalents.

Company President and CEO Gail Page said in a statement that over the next year the company's focus will be on "commercializing OVA1 and advancing the pipeline while prudently managing our cash.

"Payor coverage and reimbursement remain our key strategic initiatives," she added. "Working in conjunction with our partner Quest Diagnostics, our territory development managers are engaging with physician offices during the claims process to educate payers and ultimately drive favorable coverage decisions. We've also launched a program to aid local key opinion leaders to work with regional insurance providers to support coverage of OVA1."

During a conference call following the release of Vermillion's earnings Page said the company has undertaken two new "critical R&D activities. The first is a major new clinical study of OVA1, focused on its performance in the predominantly pre-menopausal, non-gynecologic oncologist patient population."

She added that the study will follow up on and extend earlier studies "with a completely new patient cohort, and an independent, multi-center patient population."

The study is expected to be submitted later in 2012 for publication in a clinical journal.

Page said the second R&D effort is a series of Vermillion-assisted, independent clinical research studies on OVA1. Through this new program, Vermillion offers limited support for well qualified principal investigators in the form of materials, testing services, and scientific consulting. She said the company is currently in discussion with "a number of potential investigators" to support new research publication on OVA1's clinical utility and cost-effectiveness.

"The goal for Vermillion in 2011 was to create an awareness of OVA1 and better understand the areas and regions of the country which provided adoption, coverage, and key opinion leader support," Page said. The goal now is to maximize areas where it has seen early adoption while expanding and advancing its pipeline.