Full Press Release Details
Vermillion Reports First Quarter 2016 Results
Conference Call at 4:30 p.m. ET Today
AUSTIN, Texas May 16, 2016 Vermillion, Inc. (NASDAQ: VRML), a bio-analytical solutions company focused on gynecologic disease, reported on its financial results for the first quarter ended March 31, 2016.
Valerie Palmieri, President and CEO of Vermillion, Inc., stated, The first quarter marked a number of accomplishments, and we are on track with our 2016 commercial plan. The FDA's clearance of Overa and the publication of our peer-reviewed clinical utility study regarding OVA1 were two of our major accomplishments in the first quarter. In addition, we launched our Direct-to-Women education campaign and started to identify key strategic international distribution partners. We also took steps to improve our operating efficiency by reducing our go-forward operating expenses by approximately 20%, while at the same time making key investments in both our new in vitro diagnostic trial services line of business, which we refer to as ASPiRA IVD, and our overall information technology infrastructure. We believe these accomplishments are all key indicators of growth and will set the foundation for growth in 2016 and beyond
Recent Corporate Developments:
Q1 2016 Financial Results
Total revenue in the first quarter of 2016 was $505,000 compared to $951,000 in the same year-ago quarter. All first quarter 2016 revenue was recognized from product sales of OVA1 by ASPiRA LABS. First quarter revenue in 2015 was comprised of $635,000 in OVA1 product revenue primarily from sales by Quest Diagnostics and $316,000 in license revenue. Also, product revenue for the first quarter of 2015 included the one-time recognition of $163,000 in deferred product revenue upon the signing of our commercial agreement with Quest Diagnostics in March 2015. Thus, the quarters are not directly comparable.
Product revenue in the first quarter of 2016 was derived from 2,265 OVA1 tests performed by ASPiRA LABS. In the first quarter of the prior year, ASPiRA LABS performed a total of 216 OVA1 tests in addition to the 3,567 OVA1 tests performed at Quest Diagnostics. We estimate that OVA1 volume for the second quarter of 2016 will exceed 2,300 tests.
Cost of product revenue for the first quarter of 2016 totaled $528,000 and was consistent with the comparable prior year quarter.
Total operating expenses in the first quarter of 2016 increased to $4.9 million compared to $4.7 million in the same year-ago quarter. The increase was due primarily to costs related to establishing the laboratory for launching ASPiRA IVD services as well as severance costs relating to our February 2016 restructuring. The goal of the restructuring was to reduce go-forward operating expense by approximately 20% from our 2015 run rate.
Net loss for the first quarter of 2016 was $4.9 million or $(0.09) per share, as compared to a net loss of $4.1 million or $(0.10) per share in the same year-ago quarter.
As of March 31, 2016, cash and equivalents totaled $13.1 million. We utilized $5.6 million in cash in the first quarter of 2016 including $600,000 of capital expenditures primarily for IT infrastructure and ASPiRA IVD's laboratory build out. Subsequent to March 31, 2016, we received $2.0 million in disbursements from a loan of up to $4.0 million from the DECD. The remaining $2.0 million will be disbursed if and when the Company achieves certain future milestones. Including the $2.0 million received from the State of Connecticut, we expect net cash utilization of $2.0 million - $3.0 million in the second quarter of 2016.
Conference Call and Webcast
Vermillion's President and CEO Valerie Palmieri will host a call today to discuss results followed by a question and answer period.
Monday, May 16th @ 4:30pm Eastern Time
Domestic:888-417-8465
International:719-457-2627
Replay, available through May 30th:
Domestic:877-870-5176
International:858-384-5517
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 Vermillion at (512) 519-0400.
Vermillion, Inc. is dedicated to the discovery, development and commercialization of novel high-value diagnostic and bio-analytical solutions that help physicians diagnose, treat and improve gynecologic health outcomes for women. Vermillion, along with its prestigious scientific collaborators, discovers, develops, and delivers innovative diagnostic and technology tools that help women conquer serious diseases. The company's initial in vitro diagnostic test, OVA1 , was the first FDA-cleared, protein-based In Vitro Diagnostic Multivariate Index Assay, and represented a new class of software-based liquid biopsy in vitro diagnostics. In March 2016 Vermillion received FDA clearance for Overa , a second generation OVA1 test with significantly improved specificity and ease of use. For additional information, including published clinical trials, visit www.vermillion.com.
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 plans with respect to ASPiRA IVD, plans with respect to the commercialization of Overa, the anticipated use of proceeds from the DECD loan, the impact of recent research on Vermillion's planned pelvic mass registry, anticipated OVA1 test volumes in future periods and Vermillion's expected net cash utilization. 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) Vermillion's ability to increase the volume of OVA1 sales; (2) Vermillion's ability to market its test through sales channels other than Quest Diagnostics, including ASPiRA LABS; (3) failures by third-party payers to reimburse OVA1 or changes or variances in reimbursement rates; (4) Vermillion's ability to secure additional capital on acceptable terms to execute its business plan; (5) Vermillion's ability to commercialize Overa both within and outside the United States; (6) in the event that Vermillion succeeds in commercializing Overa outside the United States, the political, economic and other conditions affecting other countries (including foreign exchange rates); (7) Vermillion's ability to develop and commercialize additional diagnostic products and achieve market acceptance with respect to these products; (8) Vermillion's ability to compete successfully; (9) Vermillion's ability to obtain any regulatory approval for Vermillion's future diagnostic products; (10) Vermillion's or its suppliers' ability to comply with FDA requirements for production, marketing and post market monitoring of its products; (11) additional costs that may be required to make further improvements to Vermillion's manufacturing operations; (12) Vermillion's ability to maintain sufficient or acceptable supplies of immunoassay kits from its suppliers; (13) Vermillion's ability to continue to develop, protect and promote its proprietary technologies; (14) future litigation against Vermillion, including infringement of intellectual property and product liability exposure; (15) Vermillion's ability to retain key employees; (16) business interruptions; (17) legislative actions resulting in higher compliance costs; (18) changes in healthcare policy; (19) Vermillion's ability to comply with environmental laws; (20) Vermillion's ability to generate sufficient demand for ASPiRA LABS' services to cover its operating costs; (21) Vermillion's ability to comply with the additional laws and regulations that apply to it in connection with the operation of ASPiRA LABS; (22) Vermillion's ability to comply with FDA regulations that relate to its products and to obtain any FDA clearance or approval required to develop and perform laboratory developed tests; (23) ASPiRA IVD's lack of operating history; (24) ASPiRA IVD's ability to generate and maintain business; (25) fluctuations over time with respect to ASPiRA IVD's operating results; [(26) ASPiRA IVD's ability to enter into profitable contracts]; (27) ASPiRA IVD's ability to perform its services in compliance with contractual requirements, regulatory standards and ethical considerations and (28) other factors that are described in Vermillion's Annual Report on Form 10-K for the year ended December 31, 2015 and Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 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 Vermillion'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:
LifeSci Advisors LLC
Consolidated Balance Sheets
(Amounts in Thousands, Except Share and Par Value Amounts)
| March 31, | December 31, | ||||
| 2016 | 2015 | ||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 13,067 | $ | 18,642 | |
| Accounts receivable | 117 | 87 | |||
| Prepaid expenses and other current assets | 676 | 550 | |||
| Inventories | 71 | 87 | |||
| Total current assets | 13,931 | 19,366 | |||
| Property and equipment, net | 1,933 | 1,504 | |||
| Other assets | 8 | 90 | |||
| Total assets | $ | 15,872 | $ | 20,960 | |
| Liabilities and Stockholders' Equity | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 672 | $ | 988 | |
| Accrued liabilities | 2,112 | 2,208 | |||
| Other current liabilities | 156 | 155 | |||
| Total current liabilities | 2,940 | 3,351 | |||
| Lease obligation - long term | 55 | 63 | |||
| Total liabilities | 2,995 | 3,414 | |||
| Commitments and contingencies | |||||
| Stockholders' equity: | |||||
| Common stock, par value $0.001 per share, 150,000,000 shares | |||||
| authorized at March 31, 2016 and December 31, 2015; 52,116,600 and 52,113,059 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | 52 | 52 | |||
| Additional paid-in capital | 388,310 | 388,082 | |||
| Accumulated deficit | (375,485) | (370,588) | |||
| Total stockholders' equity | 12,877 | 17,546 | |||
| Total liabilities and stockholders' equity | $ | 15,872 | $ | 20,960 |
Consolidated Statements of Operations
(Amounts in Thousands, Except Share and Per Share Amounts)
| Three Months Ended March 31, | |||||
| 2016 | 2015 | ||||
| Revenue: | |||||
| Product | $ | 505 | $ | 635 | |
| License | - | 316 | |||
| Total revenue | 505 | 951 | |||
| Cost of revenue: | |||||
| Product (1) | 528 | 491 | |||
| Gross profit (loss) | (23) | 460 | |||
| Operating expenses: | |||||
| Research and development (2) | 934 | 1,105 | |||
| Sales and marketing (3) | 2,280 | 2,217 | |||
| General and administrative (4) | 1,659 | 1,400 | |||
| Total operating expenses | 4,873 | 4,722 | |||
| Loss from operations | (4,896) | (4,262) | |||
| Interest income | 3 | 9 | |||
| Other income (expense), net | (4) | 116 | |||
| Net loss | $ | (4,897) | $ | (4,137) | |
| Net loss per share - basic and diluted | $ | (0.09) | $ | (0.10) | |
| Weighted average common shares used to compute basic and diluted net loss per common share | 52,113,137 | 43,115,790 | |||
| Non-cash stock-based compensation expense included in operating expenses: | |||||
| (1) Cost of revenue | $ | 24 | $ | 9 | |
| (2) Research and development | 31 | 31 | |||
| (3) Sales and marketing | 42 | 37 | |||
| (4) General and administrative | 126 | 88 |