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Vermillion Q3 Revenues Up 2 Percent

NEW YORK (GenomeWeb) – Vermillion reported after the close of the market on Monday a 47 percent decline in first quarter revenues

For the three months ended March 31, the Austin, Texas-based cancer diagnostics firm said that total revenues fell to $505,000 from $951,000 in the year-ago quarter.

Product revenues were $505,000, down from $635,000 in Q1 2015. As Vermillion noted, product revenue in Q1 2015 included the one-time recognition of $163,000 in deferred product revenue upon the signing of its commercial agreement with Quest Diagnostics in March 2015.

The company posted no license revenues in Q1 2016 compared to $316,000 in license revenue in Q1 2015.

Product revenue for the recently completed quarter was derived from 2,265 OVA1 tests performed, down from 3,783 OVA1 tests performed in Q1 2015, the firm said.

Vermillion has struggled to recapture customers lost as it transitioned sales of OVA1 from Quest to its own Aspira Labs subsidiary. On a conference call following releases of its Q1 results, Vermillion President and CEO Valerie Palmieri acknowledged that the company had seen slower than anticipated conversion of previous clients and is working to address the issue, focusing first on its largest accounts.

Eric Schoen, Vermillion's chief accounting officer, said on the call that the company expected OVA1 sales volume in Q2 to exceed 2,300 tests. Vermillion sold 4,103 OVA tests in Q2 2015.

With OVA1 sales trending downward, Vermillion is looking to new products and potential income streams, most notably its second-generation ovarian cancer test, Overa, which it released this week in a targeted launch announced at the American Congress of Obstetrics and Gynecology annual meeting.

Discussing the Overa release, Donald Munroe, Vermillion's chief scientific officer and SVP of business development, said the company hoped through the initial limited launch to target settings where OVA1 has struggled to gain traction as well as to generate prospective clinical utility data to help with gaining national payor coverage for the test.

Palmieri also announced that the company has signed a distribution agreement with South Korean distributor Biomedical Science to offer Overa in that country.

In addition to the Overa launch, Palmieri announced the creation of a new services business within Aspira called Aspira IVD, which, she said, would be "dedicated to meeting the unique testing needs of IVD manufacturers commercializing high complexity assays."

The company plans to "leverage [its] existing specimen bank, database, FDA experience, and laboratory informatics to provide high-quality IVD testing services, while potentially enhancing our pipeline of future technologies," Palmieri said.

For Q1 2016 Vermillion had a net loss of $4.9 million, or $.09 per share, compared to a net loss of $4.1 million, or $.10 per share, in Q1 2015.

Its R&D expenses narrowed 15 percent year over year to $934,000 from $1.1 million, while its SG&A spending rose 9 percent to $3.9 million from $3.6 million.

The company finished the quarter with $13.1 million in cash and cash equivalents.

In early Tuesday trade on the Nasdaq, shares of Vermillion were up 3 percent to $1.17.

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