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Vermillion's Q4 Revenues Increase 152 Percent on OVA1 Sales

NEW YORK (GenomeWeb News) – Paced by accelerating sales of its OVA1 test, Vermillion today reported revenues in the fourth quarter rose 152 percent year over year.

For the period ended Dec. 31, 2011, total revenues were $868,000, up from $345,000 a year ago as product revenues, comprised of sales of the company's OVA1 ovarian cancer test, increased to $755,000 from $149,000 a year ago. Testing volume increased 40 percent year over year to 4,118, the firm said.

OVA1 was launched in March 2010 after being cleared by the US Food and Drug Administration in September 2009.

License revenues slowed to $113,000 during the quarter, down 42 percent from $196,000 a year ago.

The company reported some preliminary financial results last month.

Vermillion's R&D spending for the quarter increased 9 percent to $1.2 million from $1.1 million a year ago, while SG&A was cut by 23 percent to $2.7 million from $3.5 million.

Its net loss for the quarter was $3.1 million, or $.21 per share, compared to a net loss of $4.0 million, or $.38 per share, in Q4 2010.

Vermillion saw total revenues rise 58 percent year over year to $1.9 million from $1.2 million for full-year 2011. Product revenues from OVA1 sales increased to $1.5 million from $308,000 a year ago as test volume increased in 2011 by 147 percent to 15,225.

License revenues dropped 48 percent to $454,000 from $867,000.

Its R&D costs spiked 42 percent to $5.4 million from $3.8 million, and SG&A spending increased 19 percent to $14.0 million from $11.8 million.

Vermillion posted a net loss of $17.8 million, or $1.25 per share, for 2011, compared to a net loss of $19.0 million, or $1.83 per share, in 2010.

The Austin, Texas-based molecular diagnostics firm ended 2011 with $22.5 million in cash and cash equivalents.

Highlights for 2011 included expanded payer coverage for OVA1. During the year, 10 additional independent Blue Cross Blue Shield plans began covering the test, bringing the total number of payers to 22 by the end of the year. Two additional payers have begun covering the test since 2011 ended, Vermillion said. In a statement, Gail Page, president and CEO of the firm, said that in January, the US Department of Defense added OVA1 to its contract.

"Since improving payer coverage and reimbursement for OVA1 remains our key strategic initiative in 2012, we are continuing to work closely with our partner, Quest Diagnostics, and our territory development managers to both engage with physician offices during the claims process and as well as better educate payers," she said. "We believe this two-pronged approach ultimately drives more favorable coverage decisions. We also recently launched a program to encourage local key opinion leaders to work with regional insurance providers and support coverage of OVA1."

In December, the firm acquired the ovarian cancer diagnostics assets of Correlogic Systems, and the company said today that it is using those assets to further its ovarian cancer franchise including development of its next-generation ovarian cancer test, OVA2.

Earlier this month, an American Medical Association panel approved Vermillion's application for a Category 1 CPT code for OVA1. Page said today that the approval is expected to increase test volume "since it will help streamline claims processing and accelerate further coverage and adoption by private payers."

In January, Vermillion announced a restructuring of its business to reduce headcount and bring down expenses, and Page said that the program "is continuing on track."

The firm did not address efforts by three shareholders who are seeking to replace Page and John Hamilton on Vermillion's board during its annual shareholders' meeting.

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