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Vermillion Q2 Revenues Up 33 Percent, OVA1 Sales Down

NEW YORK (Genomeweb) – Vermillion reported today that its second quarter revenues rose 33 percent from Q2 2015, after commencing operations of its Aspira IVD diagnostics specialized laboratory provider.

For the quarter ended June 30, the company reported revenues of $709,000, up from $535,000 a year ago. Product revenue rose to $554,000, up slightly from $535,000 in Q2 2015. The company also posted $155,000 in service revenue, compared to none in the year-ago quarter.

Vermillion sold 2,345 OVA1 tests in the quarter, down 43 percent from 4,103 OVA1 tests performed in Q2 2015. However, revenue per test increased to $236 from $130 in Q2 2015.

On a conference call following the release of the results, Vermillion CEO Valerie Palmieri highlighted Aspira IVD, which the company launched this April. The business is targeted toward "IVD manufacturers and pharma [firms] commercializing high complexity assays," she said, noting that two studies conducted by Aspira IVD were responsible for the $155,000 in service revenue the company posted for the quarter. She added that Aspira IVD "is on track to start multiple IVD studies in the second half of 2016."

Weakness in OVA1 sales continued during the quarter, though the company's decision to end its partnership with Quest did yield apparent benefits in that it is now capturing a significantly higher amount or revenue per test.

In May, Vermillion launched a targeted roll-out of Overa, its second-generation ovarian cancer test, which offers improvements in specificity compared to OVA1. Palmieri said the company will be in a targeted launch phase for the next 12 to 18 months, during which it will focus on "driving protocol and practice integration with select strategic customers and healthcare systems."

The company also signed two international distribution deals for Overa, one with ProGenetics covering Israel and another with Macro Health covering the Philippines. Palmieri said the company expects those deals to begin meaningfully contributing to Overa test volume and revenues in 2017.

Vermillion also continues work on establishing its pelvic mass registry, which is key to its plans to expand its tests into additional conditions and intended uses. However, Palmieri noted that the company would not be using $7.5 million in funding from the Cancer Prevention and Research Institute of Texas (CPRIT) that it had previously said would support development of the registry.

The CPRIT grant was subject to completion of a contract between Vermillion and the institute and could have included terms such as payment of future product royalties to CPRIT by Vermillion. "Ultimately we could not come to mutually agreeable contractual terms," Palmieri said.

Vermillion's net loss for the quarter narrowed to $3.7 million, or $.07 per share, from $4.8 million, or $.11 per share, in Q2 2015.

The company's R&D expenses for Q2 were $564,000, down 39 percent from $919,000 in Q2 2015. Its SG&A expenses fell 15 percent to $3.3 million from $3.9 million in the same period last year.

Vermillion ended the quarter with $11.1 million in cash and cash equivalents.

Shares of Vermillion were up more than 4 percent to $1.37 in Wednesday morning trading on the Nasdaq.

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