NEW YORK (Genomeweb News) – Posting yet another quarter of flat revenues, Vermillion this week detailed a series of initiatives the company hopes will drive sales of its OVA1 ovarian cancer test.
Perhaps most notably, Vermillion Chairman, President, and CEO James LaFrance said on a conference call following the release of the company's Q2 results that it hopes to move up the launch of a second-generation OVA1 test to the second half of 2015, six months earlier than planned.
Elaborating, Donald Munroe, Vermillion's senior vice president of business development and chief scientific officer, said that the company and its collaborators at Johns Hopkins University have nearly completed development work on the test and "will soon be ready to start the validation phase."
He added that the company plans by the end of this year to submit an abstract describing the development work for publication in early 2015.
The primary aim of the second-generation OVA1 panel is to increase the test's specificity. OVA1's relatively low specificity has in the past raised concerns among some physicians, as it likely leads to patients being passed on unnecessarily to gynecological oncologists. This, they have said, could make gynecologists wary of using the test for fear of losing their patients based on inaccurate results.
In order to speed development of the test, Vermillion plans to halt its work on migrating its current OVA1 panel to a new test platform and instead combine US Food and Drug Administration submissions for the new platform and improved version of OVA1, Munroe said.
He added that the company has selected the Roche Cobas system as the new platform for the test.
"Roche is one of the top IVD automation companies worldwide and currently offers all five OVA1 analytes," he said. "In addition, Roche offers a wide range of other assets and the ability to automate custom assays and panels on board."
"Development work to migrate OVA1 to the Cobas platform was completed earlier this quarter, successfully meeting all development objectives," he added. "This included requirements from our pre-submission meeting [regarding the platform migration] with FDA last quarter."
Vermillion has not yet had a pre-submission meeting with FDA regarding the second-generation OVA1 test, Eric Schoen, the company's vice president of finance and chief accounting officer, told ProteoMonitor this week.
Schoen added that Vermillion expected that because the original OVA1 test exists as a predicate device that the company will not have to conduct new clinical trials as part of its 510(k) submissions for the new platform and second-generation version of the test.
While Vermillion preps new versions of OVA1, the company has also continued its efforts to drive adoption of the original test. On this week's earnings call, LaFrance said that the firm had tripled the size of its direct sales force at the beginning of the quarter.
This increase in staff had little immediate affect on the company's OVA1 sales, however. In the second quarter revenues were essentially flat year over year at $324,000 versus $323,000 in Q2 2013. Product revenue was $211,000, flat with $210,000 in Q2 2013. That revenue was based on 4,223 OVA1 ovarian cancer tests performed in Q2 2014 versus 4,184 tests performed in the year-ago period. (For details on the company's second quarter financial results, see this article published on GenomeWeb).
LaFrance said that Vermillion expects to see "improved test volumes in the second half of the year."
The company also during the quarter launched its Aspira Labs CLIA lab facility, out of which it plans to begin offering OVA1 testing.
Prior to Aspira's opening, Quest Diagnostics has been running all OVA1 tests as per the licensing agreement between the two companies. In August 2013, Vermillion said that it had terminated this agreement, and LaFrance has since characterized termination of the agreement as a key part of Vermillion's strategy for improving OVA1 sales.
Quest has disputed the effectiveness of this termination, however, and, through Q2, Quest remained the sole provider of OVA1. Aspira Labs began accepting test samples on June 23, but Vermillion did not recognize revenue from any tests run by Aspira in the second quarter.
On this week's earnings call, Schoen said that the company is "now regularly processing tests through the lab and [will] begin to provide volume and other metrics once volume reaches meaningful levels."
Under the two companies' agreement, Quest holds exclusive commercialization rights to OVA1 in the clinical reference lab marketplace in the US, India, Mexico, and the UK, as well as non-exclusive rights to commercialize OVA1 globally outside these countries. Quest's exclusive commercialization rights run through September 2014, with the company then having the option to extend the exclusivity period for an additional year.
It remains to be seen whether Quest will challenge Vermillion's termination of their agreement once the company begins to report revenue from tests run through Aspira. This week LaFrance referred to "negotiations which will redefine our strategic relationships with Quest Diagnostics," but did not provide details on these negotiations.
In addition to the sales process, Vermillion also aims to take over reimbursement efforts from Quest. LaFrance said that as part of this shift the company had created "the newly established executive management role of vice resident of sales and managed markets," which will lead reimbursement. He said Vermillion expected to fill this position in the near future.
Vermillion also announced the hiring of David Jansen to the newly created position of vice president of marketing. Jansen previously held senior marketing roles at Myriad Genetics. The company eliminated the role of chief commercial officer, LaFrance said. Marian Sacco, who joined Vermillion in that capacity in December, is leaving the company, he added.