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Vermillion Reports Flat Q3 Revenues, First Peer-Reviewed Publication on Vasclir PAD Test


Vermillion this week reported essentially flat revenues for the third quarter of 2012 compared to the year-ago period.

The company also announced that the journal Vascular Medicine last month published a study on its protein biomarker test for peripheral artery disease, Vasclir, marking the first such publication concerning the test.

Vermillion reported total third-quarter revenues of $319,000 compared to $320,000 a year ago. Product revenues – all from sales of its OVA1 ovarian cancer test – dipped to $205,000 from $206,000 in the third quarter of 2011. Licensing fees from Quest Diagnostics were flat at $114,000.

Vermillion's R&D costs for the quarter dropped to $429,000 from $1.4 million a year ago.
Its SG&A expenses of $2.2 million were down 37 percent from $3.5 million a year ago.

The company's net loss in the quarter narrowed to $2 million, or $.13 per share, from a net loss of $4.7 million, or $.31 per share, a year ago.

It ended the third quarter with $16.3 million in cash and cash equivalents.

Sales of OVA1 were in line with the firm's forecast of about 4,100 tests in the quarter, Vermillion said. During the fourth quarter, the company expects to sell between 4,100 and 4,400 OVA1 tests, Vermillion president and CEO Gail Page said on a conference call following the release of the earnings results.

Page added that with sales of OVA1 having plateaued over the last year, Vermillion has embarked on a series of efforts to increase adoption, including a joint program with Quest Diagnostics to identify physicians who are not reordering the test; a claims assistance program; and a webinar to educate physicians about the test.

Quest Diagnostics is also developing its own OVA1 webinar, which it will launch later this month, Page said. Although the companies ended their loan agreement last month, with Vermillion paying back the outstanding $5.9 million from the $10 million line of credit it had received from Quest, Quest retains rights to OVA1 and the two companies continue to partner on selling the test (PM 10/19/2012).

Vermillion also continues development of Vasclir, the second product in its pipeline, with the Vascular Medicine publication marking a key milestone for the test. In a phase II clinical study examining 979 patients, the test, which measures levels of the proteins beta-2-microglobulin, cystatin-C, and hs-C-reactive protein, identified PAD sufferers with a receiver operating characteristic of .73, including 17 out of 20 patients judged to be low to moderate risk by conventional clinical assessment based on the Framingham Risk Score.

This performance suggests the test could prove clinically useful, said William Hiatt, professor at the University of Colorado School of Medicine and president of CPC Clinical Research, the clinical research organization Vermillion hired to lead the study.

"The ROC [determined in the study] I think is an acceptable ROC," he told ProteoMonitor, adding that the next step – assuming Vermillion wished to move forward – would be a phase III trial to gather data for a US Food & Drug Administration 510(k) submission.

A test like Vasclir could face challenges carving out a space in the clinic, however, cautioned Michael Criqui, a professor at the University of California, San Diego, School of Medicine whose research focuses on cardiovascular epidemiology and preventive cardiology.

Currently, many physicians only check patients for PAD when they exhibit symptoms like painful legs or weak or missing pulses, Criqui, who is not connected to Vermillion or the Vascular Medicine study, told ProteoMonitor. However, he said, because the disease is present in many asymptomatic people and greatly increases a person's risk of heart attack or stroke, physicians would ideally screen for it in a wider swath of patients.

"The strongest risk factors by a long shot are diabetes and cigarette smoking … and then for people over 70, the risk is very high for everyone," Criqui said, noting that his team has published recommendations that smokers and diabetics over 50 and all patients over 70 be screened for the disease.

The current gold standard for PAD diagnosis is the ankle-brachial index test, in which a physician compares the blood pressure in a patient's ankles to that in their arms. Although the procedure is fairly simple and requires little equipment, it is time- consuming, taking at least ten to fifteen minutes to perform – a significant chunk of time for a primary care physician.

Additionally, Criqui notes, the test is typically reimbursed as a blood pressure measurement, meaning doctors receive little payment for doing it. "Basically, there are a number of disincentives to measuring it," he said.

With this problem in mind, one of the most obvious niches for Vasclir is as a test to determine which patients within the high-risk group identified by Criqui should receive an ABI.

"We think it's clear [that doctors should perform ABIs on this cohort]," Hiatt said. "But convincing people to do an unreimbursed test that takes ten minutes is a hard thing to do."

"You have this [Vasclir] biomarker score. If the score gave you a high value that would tell you to do an ABI, and if it gave you a low value that would tell you not to do it," he said. "So we thought that could generate a more selective strategy for [when to do] the ABI."

Given the fact that the ABI is more accurate and almost certainly cheaper than the Vasclir panel, however, the question arises, Criqui said, of why not just do the ABI in the first place?

"The biomarker panel probably costs more than the ABI, so why don't you just do the ABI?" he said.

The attraction for physicians is clear – sending in blood work would take less time and expertise than performing an ABI and could offer doctors more money in reimbursement. For payors, however, the appeal is less obvious, given that the biomarker panel – at least as currently constituted – is less accurate and more expensive than the ABI.

Like Criqui, Hiatt noted that "in an ideal world, there's no reason to do a biomarker test and an ABI. If you're planning to do an ABI, you should just do it directly."

Given that physicians aren't performing ABIs as widely as recommended, however, an economic case can be made for a biomarker panel like Vasclir, he said.

"You could argue that part of the PAD risk is that [these patients] are undertreated," Hiatt said, adding that Vaslcir testing could lead to more ABIs performed on appropriate patients, which could in turn lead to better treatment of PAD sufferers and an overall reduction in healthcare costs.

In an email to ProteoMonitor this week, Vermillion offered a similar argument in support of the test.

"Generally speaking payers will pay for a test if it provides better outcomes and/or overall savings to the health care system," the company said. "Today, many patients are under-diagnosed because the ABI is not readily available in many primary care offices. It has been documented that the ABI has low adoption due to the complexity associated with it versus the ease of use and adoption of a blood test."

A widely adopted blood test, the company suggested, could ultimately save payors money "by preventing the need for costly PAD treatments, likely improving the outcome and lowering serious downstream costs for claudication, amputation, stroke, heart attack, and death."

Vasclir is the second test Quest Diagnostics accepted from Vermillion as part of the partners' three-test strategic alliance agreement. Page said during this week's earnings call, however, that ending the companies' loan agreement "returns that intellectual property back to Vermillion."

She said that Vermillion was looking for partners that could help the company effectively market the Vasclir test, particularly in terms of getting it in the hands of primary care physicians.

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