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Vermillion, Quest Extend, Amend Ovarian Cancer Test Deal

NEW YORK (GenomeWeb) – Vermillion and Quest Diagnostics have agreed to extend and amend their commercialization and services agreement for Vermillion's OVA1 ovarian cancer test.

In a March 7, 2017 filing with the US Securities and Exchange Commission, Vermillion said it had amended the agreement to extend the initial term from March 11, 2017 to March 11, 2018 while also providing an option for an additional one-year renewal.

The amendment also provides for new processes to confirm the number of OVA1 tests performed under the agreement. Specifically, Vermillion must provide Quest each month the number of specimens received through Quest, the list of Quest sites sending these specimens, the amount owed to Quest for servicing these specimens, and payment for these services.

Additionally, Vermillion must once a year give an accountant chosen and paid by Quest access to records required for determining that the reports provided by Vermillion are correct. If the audit finds Vermillion has underpaid by more than 5 percent, Vermillion must pay the cost of the audit, while Quest will pay the cost if the underpayment is less than 5 percent.

Vermillion and Quest originally signed the agreement in March of 2015 after terminating their original licensing agreement for OVA1. Under the agreement, Vermillion pays Quest a royalty of 2 percent on net sales and an annual minimum royalty of $25,000.

Quest has continued to provide specimen collection and logistics services for OVA1 and may provide the same for future Vermillion tests.

Additional terms of the deal stipulate that Quest may offer tests competing with OVA1, but with certain restrictions on how these tests may be marketed. Vermillion, meanwhile, cannot sell OVA1 materials or authorize performance of OVA1 testing by any entity whose gross annual revenue exceeds $2 billion in the US, which precludes, for instance, Quest competitor Laboratory Corporation of America, from offering the test.

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