Vermillion Reports Fourth Quarter and Full Year 2012 Results
AUSTIN, Texas, Feb. 20, 2013
AUSTIN, Texas, Feb. 20, 2013 /PRNewswire/ -- Vermillion, Inc. (NASDAQ: VRML),
a molecular diagnostics company focused on gynecologic cancers and women's
health, reported results for the fourth quarter and full year of 2012.
Q4 Financial and Operational Highlights
oIn Q4, the volume of OVA1®, the company's flagship diagnostic test
designed to help differentiate benign from malignant ovarian masses, was
in line with management's forecast at approximately 4,260 tests. This
brought the total tests performed in 2012 to 16,460, an increase of 8%
oGynecologic Oncology, the prestigious medical journal of the Society of
Gynecologic Oncology, published the second prospective clinical study of
OVA1®, which demonstrated the positive performance of the multi-biomarker
test in the triage of early-stage ovarian cancer.
oVascular Medicine, the online peer-reviewed journal, published
Vermillion's PAD study.
oBruce A. Huebner was appointed interim chief executive officer after
serving on a special Vermillion board committee that evaluates marketing
strategies for OVA1. Mr. Huebner brings to the position more than 37 years
of medical diagnostic industry experience and leadership.
Q4 and Full Year 2012 Financial Results
Total revenue in the fourth quarter of 2012 increased 32% to $1.1 million from
$868,000 in the same year-ago quarter. Total revenue in the fourth quarter of
2012 was comprised of $1.0 million from product sales of OVA1 and $113,000 of
license revenue related to the company's achievement of certain milestones
under its amended strategic alliance agreement with Quest Diagnostics.
Fourth quarter of 2012 product-related revenue was comprised of $213,000 from
4,260 OVA1 tests performed (at the fixed $50 per test) and $816,000 from the
variable 33% royalty for 13,709 OVA1 tests reported by Quest Diagnostics which
were resolved in 2012 (at $60 per resolved test). The resolved tests include
both reimbursed and unreimbursed tests for which Quest Diagnostics considers
the payment status as final.
By comparison, revenue in the fourth quarter of 2011 included $206,000 of
product revenue from 4,118 OVA1 tests performed (at the fixed $50 per test),
and $549,000 for the variable 33% royalty from 11,708 OVA1 tests reported by
Quest Diagnostics as resolved in 2011 (at $47 per resolved test).
Total revenue for the full year 2012 increased 9% to $2.1 million from $1.9
million in 2011. Total revenue in 2012 was comprised of $1.6 million in
product sales of OVA1 and $454,000 in license revenue. Product sales of OVA1
in 2012 include $824,000 from 16,460 OVA1 tests performed (at the fixed $50
per test) and $816,000 from the 33% royalty reported by Quest Diagnostics for
By comparison, revenue in 2011 included $1.5 million from product sales of
OVA1 and $454,000 of license revenue. Product sales of OVA1 in 2011 were
comprised of $761,000 from 15,225 OVA1 tests performed (at the fixed $50 per
test), $549,000 from the 33% royalty reported by Quest Diagnostics for 2011,
and $159,000 from the 33% royalties reported by Quest Diagnostics for 2010.
The 2010 royalty was reported by Quest Diagnostics and recorded by the company
in the first quarter of 2011.
Total operating expenses in the fourth quarter of 2012 decreased to $2.4
million from $3.9 million in the same year-ago quarter. Operating expenses for
the full year 2012 decreased to $11.4 million from $19.4 million in 2011,
primarily due to lower clinical trial costs for the ongoing development of the
company's ovarian cancer franchise and PAD program, as well as lower overall
headcount and stock-based compensation charges compared to the prior year.
Research and development expenses for the prior year also included $435,000
for the Correlogic asset acquisition.
Fourth quarter 2012 operating expenses included $496,000 in non-cash
stock-based compensation expense, as compared to $314,000 in the same year-ago
quarter. For the full year 2012, non-cash stock-based compensation expense was
$1.3 million as compared to $3.3 million in 2011.
Net loss for the fourth quarter was $1.4 million or $(0.09) per share, as
compared to $3.1 million or $(0.21) per share in the same year-ago quarter.
Net loss for 2012 was $7.1 million or $(0.48) per share, as compared to $17.8
million or $(1.25) per share in 2011.
As of December 31, 2012, cash and cash equivalents totaled $8.0 million. The
company utilized $2.4 million in cash in the fourth quarter in addition to the
$5.9 million debt payment to Quest Diagnostics. The company expects cash
utilization of $2.0 million to $2.5 million in the first quarter of 2013, and
to incur cash-based operating expenses of approximately $9.5 million to $10
million for the full year 2013, or slightly less than the $10.1 million
incurred in 2012.
"We finished a productive year for Vermillion with Gynecologic Oncology
publishing our OVA500 clinical study and thereby providing further strong
validation of OVA1," said Bruce A. Huebner, Vermillion's interim chief
executive officer. "We are using this publication to increase product
awareness with gynecologists, ob/gyns and key thought leaders. Based upon our
ongoing efforts, we expect the number of OVA1 tests performed will range
between 4,250 and 4,550 in the first quarter of 2013.
"To further build awareness, we plan to submit two or three abstracts to
various scientific meetings and peer-reviewed journals over the next two
quarters. We are very excited by these new analyses, especially the strong
performance we have observed in pre-surgical triage of early-stage ovarian
cancer and premenopausal women. In our opinion, the new publications will
offer solid evidence that tests like OVA1 should be considered as a standard
of care, in an update to professional guidelines by groups such as SGO and
"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. Our biomarker panel helps to assess
the likelihood of malignancy of an ovarian tumor before proceeding to surgery,
and therefore facilitates decisions about referral to a gynecologic
oncologist. While better diagnosis of ovarian cancer improves patient
outcomes, it also lowers costs to insurance providers by minimizing or
eliminating patient time spent in a hospital.
"Our long-anticipated CPT code became effective in January, with the test
priced in the first year by CMS using their gap-fill process. CMS uses the
gap-fill method when no comparable molecular diagnostic exists. 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.
"We are receiving considerable interest from major hospitals and cancer
centers that are looking to add OVA1 to their standard of care, and we are
exploring the potential of implementing OVA1 testing in selected hospital
"On the broader scope, we are seeking partners to develop current and new
biomarker combinations to aid in the differential diagnosis and management of
several gynecologic cancers, like ovarian, endometrial, cervical and uterine.
Our strong clinical results, along with these unique opportunities, make
Vermillion an attractive partner for IVD platform players or women's health
diagnostic franchises considering biomarker-based products."
CEO Succession Plan
As previously announced, the company's board has formed a succession committee
of independent directors to oversee the process of identifying and selecting a
permanent CEO. It has also retained a leading executive search firm with
experience in CEO transitions to advise the board on potential candidates.
Conference Call and Webcast
Vermillion will hold a conference call to discuss its fourth quarter and full
year financial results later today, Wednesday, February 20, 2013 at 4:30 p.m.
Eastern time. Vermillion's interim CEO Bruce A. Huebner will host the call,
followed by a question and answer period.
Date: Wednesday, February 20, 2013
Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)
Dial-In Number: 1-800-909-4761
Conference ID#: 21648726
The conference call will be webcast live and available for replay via the
investor section of the company's website at www.vermillion.com.
Please call the conference telephone number 5-10 minutes prior to the start
time. An operator will register your name and organization. If you have any
difficulty connecting with the conference call, please contact Liolios Group
A replay of the call will be available approximately two hours after the call
through March 6, 2013.
Toll-free replay number: 1-800-633-8284
International replay number: 1-402-977-9140
Replay pin number: 21648726
OVA1 is a blood test for pre-surgical assessment of ovarian tumors for
malignancy, using a unique multi-biomarker approach. In a published clinical
trial, OVA1 achieved 99% sensitivity in detecting epithelial ovarian cancers
(EOC). This included 96% sensitivity for stage I EOC, the earliest and most
curable EOC stage, compared with 57% for the conventional biomarker CA125.(1)
In addition, OVA1 found 70% of malignancies missed by non-specialist
pre-surgical assessment,(1) and it increased detection of malignancy over ACOG
guidelines from 77% to 94%.(2) As the first protein-based, In Vitro Diagnostic
Multi-Variate Index Assay (IVDMIA) cleared by the FDA, OVA1 also represents a
new class of software-based diagnostics.
1) Ueland, FR, et al. Obstet Gynecol 2011:VOL 117, NO. 6, June 2011
2) Miller R, et al. Obstet Gynecol 2011:VOL 117, NO. 6, June 2011
Vermillion, Inc. (NASDAQ: VRML) is dedicated to the discovery, development and
commercialization of novel high-value diagnostic tests that help physicians
diagnose, treat and improve outcomes for patients. Vermillion, along with its
prestigious scientific collaborators, has diagnostic programs in oncology,
vascular medicine and women's health. Additional information about Vermillion
can be found at www.vermillion.com.
Certain matters discussed in this press release contain forward-looking
statements that involve significant risks and uncertainties, including
statements regarding Vermillion's plans, objectives, expectations and
intentions. These forward-looking statements are based on Vermillion's current
expectations. The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for such forward-looking statements. In order to comply with the
terms of the safe harbor, Vermillion notes that a variety of factors could
cause actual results and experience to differ materially from the anticipated
results or other expectations expressed in such forward-looking statements.
Factors that could cause actual results to materially differ include but are
not limited to: (1) uncertainty as to Vermillion's ability to protect and
promote its proprietary technology; (2) Vermillion's lack of a lengthy track
record successfully developing and commercializing diagnostic products; (3)
uncertainty as to whether Vermillion will be able to obtain any required
regulatory approval of its future diagnostic products; (4) uncertainty of the
size of market for its existing diagnostic tests or future diagnostic
products, including the risk that its products will not be competitive with
products offered by other companies, or that users will not be entitled to
receive adequate reimbursement for its products from third party payors such
as private insurance companies and government insurance plans; (5) uncertainty
that Vermillion has sufficient cash resources to fully commercialize its tests
and continue as a going concern; (6) uncertainty whether the trading in
Vermillion's stock will become significantly less liquid; and (7) other
factors that might be described from time to time in Vermillion's filings with
the U.S. Securities and Exchange Commission (SEC). All information in this
press release is as of the date of this report, and Vermillion expressly
disclaims any obligation or undertaking to release publicly any updates or
revisions to any such statements to reflect any change in Vermillion's
expectations or any change in events, conditions or circumstances on which any
such statement is based, unless required by law.
This release should be read in conjunction with the consolidated financial
statements and notes thereto included in the company's most recent reports on
Form 10-K and Form 10-Q. Copies are available through the SEC's Electronic
Data Gathering Analysis and Retrieval system (EDGAR) at www.sec.gov.
Investor Relations Contact:
Liolios Group, Inc.
Consolidated Balance Sheets
(Amounts in Thousands, Except Share and Par Value Amounts)
Cash and cash equivalents $ $
Accounts receivable 137 99
Prepaid expenses and other current assets 348 317
Total current assets 8,492 22,893
Property and equipment, net 142 216
Other assets - 2
Total assets $ $
Liabilities and Stockholders' Equity
Accounts payable $ $
Accrued liabilities 1,074 2,592
Short-term debt 1,106 7,000
Deferred revenue 492 553
Total current liabilities 3,197 11,476
Long-term deferred revenue 770 1,224
Other liabilities - 52
Total liabilities 3,967 12,752
Commitments and contingencies
Preferred stock, $0.001 par value,
5,000,000 shares authorized, none issued - -
and outstanding at December31, 2012 and
Common stock, $0.001 par value, 150,000,000
shares authorized; 15,200,079 and 15 15
14,900,831 shares issued and outstanding at
December31, 2012 and 2011, respectively
Additional paid-in capital 328,097 326,796
Accumulated deficit (323,445) (316,299)
Accumulated other comprehensive loss - (153)
Total stockholders' equity 4,667 10,359
Total liabilities and stockholders' equity $ $
Consolidated Statements of Operations
(Amounts in Thousands, Except Share and Per Share Amounts)
Three months ended Year Ended December 31,
2012 2011 2012 2011
Product $ $ $ $
1,029 755 1,640 1,469
License 113 113 454 454
Total revenue 1,142 868 2,094 1,923
Cost of revenue:
Product 32 24 131 129
Total cost of revenue 32 24 131 129
Gross profit 1,110 844 1,963 1,794
Research and 333 1,168 2,216 5,387
Sales and marketing^(2) 931 1,219 4,653 5,539
General and 1,127 1,527 4,508 8,509
Total operating expenses 2,391 3,914 11,377 19,435
Loss from Operations (1,281) (3,070) (9,414) (17,641)
Interest income 5 9 28 64
Interest expense (9) (66) (206) (396)
Gain on sale of instrument - - 1,830 -
Gain on litigation - - 710 -
Change in fair value of - 4 - 378
Reorganization items - (22) 88 (96)
Other expense, net (90) 10 (182) (99)
Loss before income taxes (1,375) (3,135) (7,146) (17,790)
Income tax benefit - - - -
Net loss $ $ $ $
(1,375) (3,135) (7,146) (17,790)
Loss per share - basic and $ $ $ $
diluted (0.09) (0.21) (0.48) (1.25)
Weighted average common
shares used to compute 15,124,012 14,866,848 15,010,868 14,249,570
basic and diluted net loss
per common share
Non-cash stock-based compensation expense included in operating expenses:
(1) Research and $ $ $ $
development 28 96 127 686
(2) Sales and marketing 55 36 203 158
(3) General and 413 182 965 2,446
SOURCE Vermillion, Inc.
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