Vermillion Reports First Quarter 2014 Results

                Vermillion Reports First Quarter 2014 Results

PR Newswire

AUSTIN, Texas, May 15, 2014

AUSTIN, Texas, May 15, 2014 /PRNewswire/ -- Vermillion, Inc. (NASDAQ: VRML), a
multivariate diagnostics company focused on gynecologic cancers and women's
health, reported on its results for the quarter ended March 31, 2014.

Q1 2014 Key Developments

  oFormed ASPiRA LABS, Inc., a clinical laboratory which will specialize in
    applying biomarker-based technologies that address critical needs in the
    management of gynecologic cancers. ASPiRA LABS will provide diagnostic
    processing and results using a state-of-the-art biomarker-based diagnostic
    algorithm that aids in clinical decision making and advances personalized
    treatment plans.
  oSubstantially increased U.S. field sales presence in order to increase the
    utilization of OVA1® and support the launch of ASPiRA LABS.
  oAnnounced the publication by The American Journal of Obstetrics &
    Gynecology of a new clinical study titled, "The Effect of Ovarian Imaging
    on the Clinical Interpretation of a Multivariate Index Assay," which
    addresses the relationship between imaging and OVA1 in assessing risk of
    ovarian cancer and provides additional evidence that helps physicians and
    health care providers understand the clinical value of OVA1.
  oAppointed Vermillion's chairman of the board, James LaFrance, as the
    company's president and chief executive officer, effective as of April 23,
    2014, as Vermillion transitions to a phase where commercial build out and
    execution is of paramount importance. Mr. LaFrance has had a highly
    successful track record that spans 30 years of diagnostic experience,
    predominantly in sales, marketing and general management.

Management Commentary
"During the quarter, we advanced our OVA1 commercialization strategy on
multiple fronts," said James LaFrance, Vermillion's chairman, president and
CEO. "We formed ASPiRA LABS, our own national CLIA laboratory.

"We believe ASPiRA will enable us to control the entire customer experience
and allow us direct access to payers. We believe this new lab, coupled with an
increased sales presence in the field, represents a tremendous opportunity to
increase adoption and awareness of OVA1.

Q1 2014 Financial Results
Total revenue in the first quarter of 2014 was $305,000, as compared to
$328,000 in the same year-ago period. First quarter 2014 revenue was comprised
of $191,000 in OVA1 product revenue and $114,000 in license revenue.

The product revenue in the first quarter of 2014 was derived from 3,817 OVA1
tests performed at the fixed $50 per test as reported by Quest Diagnostics,
which compares to product revenue in the first quarter of 2013 that was
derived from 4,274 OVA1 tests. The decrease in test volume was primarily due
to Vermillion's reorganization of its sales staff prior to the launch of
ASPiRA LABS. The company expects ASPiRA LABS activity to increase product
revenue in the second half of 2014 and as supported by an expanded sales team.

OVA1 product revenue in both the first quarter of 2014 and the year-ago period
does not include the additional royalty component of revenue based on 33% of
Quest Diagnostics gross margin. Vermillion will recognize 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

Total operating expenses in the first quarter of 2014 increased to $4.2
million from $2.9 million in the year-ago quarter. The increase was primarily
due to greater research and development headcount and increased collaboration
costs with Johns Hopkins University to advance Vermillion's platform migration
and next-generation test, as well as costs attributed to the formation and
branding of ASPiRA LABS.

Net loss for the first quarter was $4.0 million or $(0.11) per share, as
compared to a net loss of $2.6 million or $(0.17) per share in the year-ago

As of March 31, 2014, cash and equivalents totaled $26.0 million. The company
used $3.5 million in cash for operations in the first quarter of 2014, and
expects to utilize $3.3 million to $3.8 million in cash in the second quarter
of 2014.

Conference Call and Webcast
Vermillion will hold a conference call to discuss its first quarter results
later today, Thursday, May 15, 2014, at 4:30 p.m. Eastern time. Vermillion's
Chairman, President and CEO James LaFrance will host the call, followed by a
question and answer period.

Date: Thursday, May 15, 2014
Time: 4:30 p.m. Eastern time (3:30 p.m. Central time)
Dial-in number: 1-800-772-3714
International dial-in number: 1-212-231-2920
Conference ID: 21715661

The conference call will be webcast live and available for replay via the
investor section of the company's website at

Please call the conference telephone number five 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
until May 29, 2014.

Toll-free replay number: 1-800-633-8284
International replay number: 1-402-977-9140
Replay ID: 21715661

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 gynecologic
oncology and women's health.

The company's lead diagnostic, OVA1®, is a blood test for pre-surgical
assessment of ovarian tumors for malignancy, using an innovative algorithmic
approach. As the first FDA-cleared, protein-based In Vitro Diagnostic
Multivariate Index Assay, OVA1 represents a new class of software-based
diagnostics. For additional information, including published clinical trials,

Forward-Looking Statements
This press release contains forward-looking statements, as that term is
defined in the Private Litigation Reform Act of 1995, that involve significant
risks and uncertainties, including statements regarding the activities of
ASPiRA LABS, Inc., Vermillion's future revenue and Vermillion's expected cash
outlay. Words such as "may," "expects," "intends," "anticipates," "believes,"
"estimates," "plans," "seeks," "could," "should," "continue," "will,"
"potential," "projects" and similar expressions are intended to identify
forward-looking statements. The forward-looking statements contained in this
press release are based on Vermillion's expectations as of the date of this
press release. 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 from those projected in such forward-looking
statements 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 or
otherwise comply with applicable laws and regulations; (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 regarding Vermillion's
ability to generate sufficient demand for ASPiRA LABS' services to cover the
laboratory's operating costs; (7) uncertainty whether the trading in
Vermillion's stock will become significantly less liquid; and (8) other
factors that are described in Vermillion's Form 10-K for the year ended
December 31, 2013 and Vermillion's Form 10-Q for the quarter ended March 31,
2014 filed with the Securities and Exchange Commission (the "SEC"). Vermillion
expressly disclaims any obligation to update, amend or clarify any
forward-looking statements to reflect events, new information or circumstances
occurring after the date of this press release, except as 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

Investor Relations Contact:
Liolios Group, Inc.
Ron Both
Tel 1-949-574-3860

Vermillion, Inc.

Consolidated Balance Sheets

(Amounts in Thousands, Except Share and Par Value Amounts)

                                                     March 31,   December 31,
                                                     2014         2013
Current assets:
Cash and cash equivalents                           $ 25,991     $  29,504
Accounts receivable                                   169           373
Prepaid expenses and other current assets             728           372
Total current assets                                  26,888        30,249
Property and equipment, net                           384           391
Total assets                                         $ 27,272     $  30,640
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable                                    $ 620        $  541
Accrued liabilities                                   1,523         1,283
Short-term debt                                        1,106         1,106
Deferred revenue                                       897           628
Total current liabilities                             4,146         3,558
Deferred revenue                                       202           316
Total liabilities                                     4,348         3,874
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares
authorized, none issued and outstanding at March 31,   —             —
2014 and December31, 2013, respectively
Common stock, $0.001 par value, 150,000,000 shares
authorized at March 31, 2014 and December31, 2013;
35,831,776 and 35,825,673 shares issued
andoutstanding at March 31, 2014 and December 31,     36            36
2013, respectively
Additional paid-in capital                            359,139       358,994
Accumulated deficit                                   (336,251)     (332,264)
Total stockholders' equity                             22,924        26,766
Total liabilities and stockholders' equity           $ 27,272     $  30,640

Vermillion, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(Amounts in Thousands, Except Share and Per Share Amounts)

                                                  Three Months Ended March 31,
                                                  2014            2013
Product                                           $  191          $ 214
License                                              114            114
Total revenue                                        305            328
Cost of revenue:
Product                                              55             37
Gross profit                                         250            291
Operating expenses:
Research and development^(1)                         1,153          484
Sales and marketing^(2)                              2,104          1,072
General and administrative^(3)                       988            1,337
Total operating expenses                             4,245          2,893
Loss from operations                                 (3,995)        (2,602)
Interest income                                      14             2
Other income (expense), net                          (6)            29
Loss before income taxes                             (3,987)        (2,571)
Income tax benefit (expense)                         —              —
Net loss                                          $  (3,987)      $ (2,571)
Net loss per share - basic and diluted            $  (0.11)       $ (0.17)
Weighted average common shares used to compute       35,827,886     15,201,616
basic and diluted net loss per common share
Non-cash stock-based compensation expense
in operating expenses:
(1) Research and development                     $  40           $ 20
(2) Sales and marketing                             25             54
(3) General and administrative                      69             107

SOURCE Vermillion, Inc.

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