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Vermillion Q3 Revenues Up 89 Percent

NEW YORK (GenomeWeb) ­­– Vermillion reported after the close of the market on Thursday an 89 percent jump in its first quarter revenues

For the three months ended Sept, 30, the Austin, Texas-based cancer diagnostics firm said that total revenues rose to $623,000 from $330,000 in the year-ago quarter.

Product revenues were $581,000, up from $330,000 in Q3 2015. Service revenues from the company's Aspira IVD business was $42,000. Vermillion had no service revenues in Q3 2015 as Aspira IVD was not yet operating.

Product revenue for the recently completed quarter was derived from 2,257 OVA1 tests performed, down from 3,183 OVA1 tests performed in Q3 2015. Revenue per test performed was up to $257, compared to $104 in the year-ago period.

On a conference call following release of the earnings results, Senior Vice President, Finance and Chief Accounting Officer Eric Schoen attributed this rise to the fact that billing through Vermillion's Aspira Labs subsidiary allows it to recognize more revenue per test than did its previous licensing agreement with Quest Diagnostics, under which Vermillion received a royalty on each test sold.

Also on the call, President and CEO Valerie Palmieri provided an update on the development of the company's recently launched service business, Aspira IVD. The $42,000 in revenues from the business was down from $155,000 in Q2 2016, but Palmieri said the company is "on track to start multiple IVD studies in the first quarter of 2017."

Palmieri also discussed Vermillion's ongoing targeted launch of Overa, its second-generation ovarian cancer test. The company's sales team is "actively converting selected targeted accounts to Overa," she said, noting that the ultimate goal of the targeted launch is to drive adoption in areas where OVA1 has not gained traction, as well as establish evidence of clinical utility to support payor coverage.

Palmieri introduced the company's new Chief Medical Officer, Mara Francis, who noted a forthcoming peer-reviewed publication investigating the use of a symptom index to improve the sensitivity of biomarkers for detecting ovarian malignancies. The study was accepted last month by the International Journal of Gynecological Cancer.

Francis also highlighted the American College of Obstetricians and Gynecologists' decision to include OVA in its Level B guidelines for management of adnexal masses. This means OVA1 is among the procedures recommended by the organization in cases where a mass cannot be confidently assessed using only transvaginal ultrasound.

Vermillion had a net loss for the quarter of $3.5 million, or $.07 per share, compared to a net loss of $5.1 million, or $.10 per share, in Q3 2015.

Its R&D expenses were down 58 percent to $370,000 from $874,000, while its SG&A spending fell 24 percent to $2.9 million from $3.8 million.

The company finished the quarter with $8.1 million in cash and cash equivalents.

In early Friday trading on the Nasdaq, shares of Vermillion were up 3 percent to $1.16.