Vermillion Reports First Quarter 2013 Results

                Vermillion Reports First Quarter 2013 Results

Building Upon Early Success of OVA1, Recent Funding Sets Stage for 2013-2015
Strategic Plan

PR Newswire

AUSTIN, Texas, May 15, 2013

AUSTIN, Texas, May 15, 2013 /PRNewswire/ -- Vermillion, Inc. (NASDAQ: VRML), a
molecular diagnostics company focused on gynecologic cancers and women's
health, reported on its financial results for the first quarter ended March
31, 2013.

Q1 2013 Financial Results
Total revenue in the first quarter of 2013 was $328,000, compared to $312,000
in the same year-ago quarter. First quarter 2013 revenue was comprised of
$214,000 in OVA1 product sales and $114,000 in license revenue, as compared to
$198,000 of OVA1 product sales and $114,000 in license revenue in the year-ago
quarter.

First quarter of 2013 product revenue was derived from 4,274 OVA1 tests
performed at the fixed $50 per test as reported by the company's OVA1
marketing partner, Quest Diagnostics. This was an 8% increase from 3,952 OVA1
tests performed at the fixed $50 per test in the year-ago quarter.

The OVA1 product revenue in both periods does not include the additional
royalty component of revenue based on 33% of Quest Diagnostics gross margin.
Vermillion recognizes this portion of revenue when it is reported by Quest
Diagnostics in an annual 'true-up' after the end of the calendar year. The
true-up is based on reimbursed and unreimbursed tests for which Quest
Diagnostics considers the payment status as final. For the full year of 2012,
the true-up provided $816,000 in revenue to Vermillion or an additional $60
per test.

Total operating expenses in the first quarter of 2013 were $2.9 million as
compared to $2.4 million in the same year-ago quarter. The increase is
primarily due to one-time items, including costs related to the delayed 2012
annual shareholder meeting held in March 2013, a proxy contest and CEO
transition, partially offset by lower sales and marketing costs. Net loss for
the first quarter was $2.6 million or $(0.17) per share, as compared to $1.8
million or $(0.12) per share in the same year-ago quarter.

As of March 31, 2013, cash and equivalents totaled $5.8 million. Following the
private placement completed on May 13, 2013, Vermillion had approximately
$16.6 million in cash and equivalents. The company plans to use the cash on
hand and the expected proceeds from exercise of the warrants to accelerate its
research, clinical and commercialization programs. As a result, guidance for
2013 cash-based operating expenditures is being increased to a range of $12
million to $13 million versus the previous guidance of $9.5 million to $10
million.

2013-2015 Objectives
The recently completed investment transaction was structured to provide
funding for the company's 2013-2015 strategic plan."This investment in
Vermillion positions us to improve the quality of care for women with ovarian
cancer," said Thomas McLain, Vermillion's president and CEO. "It provides both
strategic and financial resources to build on our early success with OVA1 as
the first FDA-cleared multi-biomarker blood test to aid in the diagnosis and
treatment of ovarian cancer."

"Our experience in growing the OVA1 market with Quest Diagnostics has defined
the key factors for building market awareness and expanding its use,"
continued McLain. "In 2013 and 2014 we will focus on positioning the patient
outcome and cost advantages of the on-label usage ofOVA1versus off-label
usage of CA-125 for the pre-surgical triage of suspicious ovarian masses."

Proceeds from the transaction will support the generation of additional
clinical and economic data aligned with the company's efforts to secure
treatment guideline support and expanded insurance coverage. These studies
will also be essential to building understanding of the benefits of
integrating OVA1 with current clinical practice and showing how OVA1 can
greatly reduce the percentage of women who receive substandard care. 

The funding will also support two important strategic initiatives:

  oThe company will migrate OVA1 to a state-of-the-art clinical testing
    platform commonly available around the world. This will expand the market
    for the test to more laboratories and hospitals and enable licensing OVA1
    in non-U.S. markets. It will require the successful execution of
    validation and clinical studies to support submission of a 510-K and FDA
    clearance. The company targets launch on this new platform by the end of
    2014.

  oThe company will also use the funding to accelerate the development of a
    next generation ovarian cancer diagnostic. This test will utilize a
    combination of current and novel biomarkers in a new algorithm to increase
    specificity and positive predictive value, while significantly reducing
    false positives. The company expects to announce proof of concept results
    during the second quarter and targets the launch of a next generation test
    in 2015.

Conference Call and Webcast
Vermillion will hold a conference call to discuss its first quarter results
later today, Wednesday, May 15, 2013 at 4:30 p.m. Eastern time. Vermillion's
President and CEO Thomas McLain will host the call, followed by a question and
answer period.

Date: Wednesday, May 15, 2013
Time: 4:30 p.m. Eastern time
Dial-In number: 1-800-709-0218
International: 1-212-231-2915
Conference ID: 21656230
Webcast: http://www.media-server.com/m/p/mo7xofgw

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
at 1-949-574-3860.

A replay of the call will be available approximately two hours after the call
through May 29, 2013.

Toll-free replay number: 1-800-633-8284
International replay number: 1-402-977-9140
Replay ID: 21656230

About Vermillion
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.

The company's lead diagnostic, OVA1®, is a blood test for pre-surgical
assessment of 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 curable EOC stage, compared with 57% for the
conventional biomarker CA125. In addition, OVA1 found 82% of malignancies
missed by non-specialist pre-surgical assessment, and it increased detection
of malignancy over ACOG guidelines from 77% to 94%. As the first
protein-based, In Vitro Diagnostic Multivariate Index Assay (IVDMIA) cleared
by the FDA, OVA1 also represents a new class of software-based diagnostics.
Additional information about these published clinical trials is available on
Vermillion's website at www.vermillion.com.

Forward-Looking Statement
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 payers 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 Securities and Exchange Commission. 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 our 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.
Ron Both
Tel 1-949-574-3860
vrml@liolios.com

Vermillion, Inc.
Consolidated Balance Sheets
(Amounts in Thousands, Except Share and Par Value Amounts)
(Unaudited)
                                          March 31,            December 31,
                                          2013                 2012
Assets
Current assets:
Cash and cash equivalents                 $            $      
                                          5,834                8,007
Accounts receivable                       184                  137
Prepaid expenses and other current assets 359                  348
Total current assets                      6,377                8,492
Property and equipment, net               121                  142
Other assets                              8                    -
Total assets                              $            $      
                                          6,506                8,634
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                          $           $       
                                          794                 525
Accrued liabilities                       964                  1,074
Short-term debt                           1,106                1,106
Deferred revenue                          709                  492
Total current liabilities                 3,573                3,197
Deferred revenue                          656                  770
Total liabilities                         4,229                3,967
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value,
5,000,000 shares authorized, none issued  -                    -
and outstanding at March 31, 2013 and
December31, 2012, respectively
Common stock, $0.001 par value,
150,000,000 shares authorized; 15,213,246
and 15,200,079 shares issued and          15                   15
outstanding at March 31, 2013 and
December 31, 2012, respectively
Additional paid-in capital                328,278              328,097
Accumulated deficit                       (326,016)            (323,445)
Total stockholders' equity                2,277                4,667
Total liabilities and stockholders'       $            $      
equity                                    6,506                8,634

 

Vermillion, Inc.
Consolidated Statements of Operations and Comprehensive Loss
(Amounts in Thousands, Except Share and Per Share Amounts)
(Unaudited)
                                        Three Months Ended March 31,
                                        2013                 2012
Revenue:
Product                                 $            $        
                                        214                 198
License                                 114                  114
Total revenue                           328                  312
Cost of revenue:
Product                                 37                   38
Total cost of revenue                   37                   38
Gross profit                            291                  274
Operating expenses:
Research and development^(1)            484                  452
Sales and marketing^(2)                 1,072                1,518
General and administrative^(3)          1,337                468
Total operating expenses                2,893                2,438
Loss from operations                    (2,602)              (2,164)
Interest income                         2                    8
Interest expense                        -                    (65)
Gain on litigation settlement, net      -                    379
Reorganization items                    -                    88
Other income (expense), net             29                   (22)
Loss before income taxes                (2,571)              (1,776)
Income tax benefit (expense)            -                    -
Net loss                                $              $      
                                        (2,571)              (1,776)
Net loss per share - basic and diluted  $             $       
                                        (0.17)               (0.12)
Weighted average common shares used to
compute basic and diluted net loss per  15,201,616           14,903,455
common share
Net loss                                (2,571)              (1,776)
Foreign currency translation adjustment -                    (3)
Comprehensive loss                      $              $      
                                        (2,571)              (1,779)
Non-cash stock-based compensation expense included in
operating expenses:
(1) Research and development           $           $        
                                        20                   34
(2) Sales and marketing                54                   36
(3) General and administrative         107                  70



SOURCE Vermillion, Inc.

Website: http://www.vermillion.com