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Vermillion's Q4 Revenues Rise 32 Percent on OVA1 Test Sales

NEW YORK (GenomeWeb News) – Vermillion reported after the close of the market Wednesday that its fourth-quarter revenues increased 32 percent to $1.1 million from $868,000, beating the consensus Wall Street estimate for revenues of $900,000.

The firm's product sales were $1 million for the three months ended Dec. 31, 2012, compared to $755,000 for the fourth quarter of 2011. License revenues were flat year over year at $113,000.

Vermillion said that test volume for its flagship OVA1 test, which helps differentiate benign from malignant ovarian masses, was 4,260 during the quarter, in line with management's forecast.

The firm's net loss for the quarter was $1.4 million, or $.09 per share, compared to a net loss of $3.1 million, or $.21 per share, for Q4 2011. The average analyst estimate was a loss of $.12 per share.

Vermillion's R&D spending for the quarter was $333,000, down 72 percent from $1.2 million year over year, and its SG&A expenses dropped 22 percent to $2.1 million from $2.7 million.

For full-year 2012, Vermillion reported total revenues of $2.1 million, up 11 percent from $1.9 million in 2011. Its product sales jumped to $1.6 million from $1.5 million, while its license revenues were the same as 2011 at $454,000.

The total number of OVA1 tests performed in 2012 was 16,460, up 8 percent over tests performed in 2011.

Vermillion more than halved its net loss for the year to $7.1 million, or $.48 per share, from $17.8 million, or $1.25 per share, for 2011.

Its R&D spending for the year was $2.2 million, down sharply from $5.4 million, and its SG&A costs fell to $8.2 million from $14 million.

Vermillion finished the year with $8 million in cash and cash equivalents.

Bruce Huebner, interim CEO of Vermillion, said that the firm expects the number of OVA1 tests performed in Q1 2013 will range between 4,250 and 4,550.

"In terms of increasing insurance coverage for OVA1, we are currently engaged in discussions with several national payers, including Humana, Aetna, Anthem (WellPoint), Cigna, and United Healthcare, and we expect to add at least two national payers by the end of the year," he said in a statement.

"Our long-anticipated CPT code became effective in January, with the test priced in the first year by CMS using their gap-fill process," Huebner added. "Our Medicare reimbursement rate is $516 per test and our list price is $650 per test. We believe that we now have the ability to drive reimbursement at these price levels during the gap-fill process, and having a CPT code unique to OVA1 streamlines claims processing and strengthens our reimbursement position."

On a conference call following the release of the results, Huebner added, "Another area of our 2013 sales efforts will be targeting hospital accounts where we received a growing amount of interest. Growth in this market segment is dependent upon the local site having FDA approved instrumentation to perform OVA1. We are assessing the potential of this market opportunity and plan to initiate a focused effort to those facilities that meet the necessary criteria."

Huebner took over as interim CEO in late November, following the resignation of Gail Page. Vermillion's board formed a succession committee of independent directors to oversee the process of identifying and selecting a permanent CEO and also has hired an executive search firm to advise the board on potential candidates.

In early Thursday trade on the Nasdaq, shares of Vermillion were down 4 percent at $1.32.

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