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Vermillion Posts Flat Q2 2014 Revenues

NEW YORK (Genomeweb News) – Vermillion reported after the close of the market Thursday that its second quarter revenues were essentially flat year over year at $324,000 versus $323,000 in Q2 2013.

The company posted product revenue of $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.

The revenue figures, the company noted, do not include the additional royalty component of revenue based on 33 percent of Quest Diagnostics' gross margin, which Vermillion receives once a year under the two parties' licensing agreement for OVA1. In 2013, the payment from Quest provided Vermillion with $1.26 million in revenue, or an additional $75 per test.

The firm's license revenue in Q2 was flat at $113,000.

In a statement accompanying the release of the results, Vermillion Chairman, President, and CEO James LaFrance noted that the company significantly expanded its field sales team during the quarter and expects "improved test volumes in the second half of the year."

LaFrance provided more detail on a conference call following the release of the company's Q2 results, noting that Vermillion tripled the size of its direct sales force at the beginning of the quarter. The company "began to see the impact of these actions in Q2 with a 10 percent order volume increase over the prior quarter," he added.

LaFrance also provided an update on the company's effort to migrate OVA1 to a new test platform and its work on a second-generation version of the test.

Vermillion, he said, has decided to combine the two efforts into one "regulatory path" in an effort to speed the launch of the second-generation OVA1 test. This could allow the company to launch the new version of OVA1 in the second half of 2015, six months earlier than planned.

Vermillion said that it has selected the Roche Cobas system as the new platform for OVA1.

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.

Vermillion's net loss for the quarter was $5.6 million, or $.15 per share, compared to a net loss of $2.1 million, or $.11 per share, in Q2 2013.

The company's R&D expenses for Q2 were $1.1 million, up 91 percent from $554,000 in Q2 2013. Its SG&A expenses were $4.7 million, up 156 percent from $1.9 million in the same period last year.

As of June 30, Vermillion had cash and cash equivalents totaling $22.2 million.

Shares of Vermillion were up 5 percent at $2.24 in Friday morning trade on the Nasdaq.

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