AUSTIN, Texas, Nov. 9, 2011 /PRNewswire/ -- Vermillion, Inc. (NASDAQ: VRML), a leading molecular diagnostics company, reported financial results for the third quarter ended September 30, 2011.
Q3 2011 Highlights
- Performed an estimated 4,108 OVA1® tests during the third quarter, up 5% from the previous quarter.
- In October, released positive top-line data from intended use clinical study of the company’s peripheral artery disease (PAD) blood test. Developed a biomarker panel which identifies more than 80% of PAD patients who are missed by the Framingham Risk Score.
- In November, strengthened patent portfolio with notice of allowance received for key PAD biomarker patent, as well as issued a patent for lung cancer biomarker.
- Enhanced management team with addition of Donald Munroe, Ph.D. as chief scientific officer and vice president of research and development.
- Presented data at the European Society of Gynecologic Oncology meeting in Milan, highlighting the improvement in sensitivity when using imaging in conjunction with OVA1 to evaluate adnexal masses for disease.
- Entered into an asset purchase agreement with Correlogic Systems, Inc., whereby Vermillion has agreed to pay $435,000 in cash for substantially all of Correlogic’s assets in connection with its ovarian cancer diagnostics business, which include certain diagnostic samples, software and IP. Correlogic is in Chapter 11 proceedings in the United States Bankruptcy Court for the District of Maryland and the transaction is subject to Court approval.
Q3 2011 Financial Highlights
Revenue for the third quarter of 2011 included $206,000 from sales of OVA1, as compared to $114,000 in the same year-ago quarter. Total revenue for the third quarter of 2011 was $320,000 versus $413,000 in the same year-ago quarter. License revenue for the third quarter of 2011 totaled $114,000, as compared to $299,000 in the same year-ago quarter related to the company’s past achievement of certain milestones under the Strategic Alliance Agreement with Quest Diagnostics.
Total operating expenses increased in the third quarter of 2011 to $4.8 million from $4.0 million in the same period a year ago. The increase was due primarily to higher clinical trial and collaboration costs for the ongoing development of the company’s ovarian cancer program and VASCLIR as well as an increase in legal fees associated with our Molecular Analytical Systems, Inc. litigation. Operating expenses in the third quarter of 2011 included $0.4 million in non-cash stock-based compensation, as compared to $1.2 million in the same year-ago quarter.
Net loss for the third quarter was $4.7 million or $(0.31) per share, as compared to $2.7 million or $(0.26) per share in the same year-ago quarter. Net loss in the year-ago quarter included $1.0 million in other income resulting from the fair value revaluation of common stock warrants.
Weighted average shares outstanding were 14.8 million in the third quarter of 2011, as compared to 10.5 million weighted average shares outstanding in the same period in 2010.
As of September 30, 2011, the company’s cash and cash equivalents totaled $27.2 million. The company used $4.3 million in cash from operations during the third quarter and paid the $5 million principal amount of convertible notes which became due in September. Cash utilization from operations during the fourth quarter is expected to be $4-$5 million.
Management Commentary
“Our third quarter results demonstrated on-going progress on several fronts,” said Gail Page, the company’s president and CEO. “We grew OVA1 sales and highlighted its benefit when used in conjunction with imaging as an aid for physicians in the assessment of adnexal masses. Strategically, we are pleased to announce the agreement to purchase the ovarian cancer assets of Correlogic Systems. This acquisition allows us to gain access to their samples, IP and software, all of which could be additive to our ovarian program. Additionally, we save sample collection time and potentially gain further IP protection.
“We also advanced our pipeline this quarter with positive top-line results in our PAD intended use clinical study. This data was subsequently used to select a biomarker combination that identifies 80% of PAD patients missed by the conventional Framingham Risk Score. The availability of a simple blood test to reclassify patients missed by conventional risk assessment could greatly aid in the detection and management of this insidious disease.
“In the fourth quarter of 2011, we expect 4,000 to 4,300 OVA1 tests to be performed. This takes into consideration the impact of holidays, competition and limited coverage by the larger payers combined with the impact of direct patient bills.”
