Glass Lewis Recommends Vermillion Stockholders Vote the WHITE Proxy Card to
Elect Dissident Nominee at Upcoming Annual Meeting
PHILADELPHIA, March 18, 2013
PHILADELPHIA, March 18, 2013 /PRNewswire/ -- Robert S. Goggin, Gregory V.
Novak, and George Bessenyei, stockholders of Vermillion, Inc. ("Vermillion" or
the "Company") acting together as the "Concerned Vermillion Stockholders" or
the "Group", today announced that Glass Lewis, a leading independent proxy
voting advisory firm, has recommended that Vermillion stockholders vote on
Concerned Vermillion Stockholder's WHITE proxy card to elect highly qualified
nominee, Robert S. Goggin. Glass Lewis recommended that Vermillion
shareholders "DO NOT VOTE" on the Company's blue proxy card.
The recommendation makes Glass Lewis the second independent proxy advisory
firm to advise shareholders to vote on the Concerned Vermillion Stockholders'
WHITE proxy card.
In reaching its conclusion, Glass Lewis performed a detailed analysis of both
sides' positions in the election contest and, in particular, carefully
considered, among other things, the Company's total stockholder return,
financial performance and corporate governance.
Glass Lewis concluded that shareholders should vote for Mr. Goggin on the
WHITE proxy card.
Excerpts from Glass Lewis Analysis & Recommendation
"[The] significant reduction in the Company's trailing sales multiple since
2010 suggests to us that investors have either lost confidence in the
potential value of the Company's OVA1 product and development pipeline, in
management's ability to realize the potential value of those assets, or, more
likely, a combination of the two."
"The Company has also demonstrated an inability to make reasonable sales
projections, which further serves to erode investor confidence in management
and the board, in our view. Notably, the Company projected fiscal year 2011
revenue from OVA1 sales of approximately $34.05 million and fiscal year 2010
revenue from OVA1 sales of approximately $9.70 million, compared with actual
fiscal year 2011 product sales of approximately $1.47 million and actual
fiscal year 2010 product sales of approximately $0.31 million. Here, while we
believe a fairly wide margin of error should be expected in forecasting
emerging product sales, we nevertheless agree with the Dissident that
management and the board should be held accountable for actual sales that
represent just 4.3% and 3.2% of forecast sales in fiscal years 2011 and 2010,
"We believe the Dissident raises a number of valid concerns regarding
corporate governance at the Company. In particular, we believe shareholders
should be concerned by the board's failure to call an annual meeting in 2012
despite having a window of opportunity following a court ruling on November
16, 2012 that allowed the Company to proceed with calling an annual meeting.
Instead, the board received a notice of delisting from the Nasdaq and legal
action from the Dissident before finally announcing a meeting in January
From Glass Lewis' CONCLUSION:
"Given the Company's poor financial and operational performance under the
current board, we believe shareholders could benefit from new, outside
perspective. While we believe removing the Company's CEO was a positive step
by the board, it appears to be a reactionary measure taken only after
investors voiced concerns to the board. We further question the board's
decision to approve a lucrative consulting agreement with the departed CEO in
particular given Mr. Huebner's assignment as interim CEO."
"Given a number of corporate governance concerns and actions by the existing
board that appear contrary to the interests of shareholders, we believe
additional independent oversight is warranted and that the Dissident's request
to fill a single vacant seat on the board is reasonable. If elected, the
Dissident Nominee would constitute a minority of the board (one out of six
directors or 16.7%) and would not be able to adopt any measures without the
support of other board members.
Thus, we expect Mr. Goggin will work proactively with the incumbents if he is
to effect long-term change."
If you have any questions, require assistance with submitting your WHITE proxy
card or need additional copies of the proxy materials, please contact:
Patrick McHugh/ Geoffrey Sorbello
(212) 297-0720 or (877) 566-1922 (toll-free)
SOURCE Concerned Vermillion Stockholders
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