Full Press Release Details
Vermillion Reports Second Quarter 2015 Financial Results and Business Update
Conference Call at 4:30 p.m. ET Today
AUSTIN, Texas, August 13, 2015 -- Vermillion, Inc. (NASDAQ: VRML), a bio-analytical solutions company focused on gynecologic disease, reported financial results for the second quarter ended June 30, 2015 and provided a business update.
Valerie Palmieri, President and CEO of Vermillion, Inc., stated, We are on track with our Q2 2015 milestone plan which includes marked progress on our OVA2 FDA submission and two substantial OVA2 posters presented at the American Society of Clinical Oncology (ASCO) annual meeting. On the commercialization front, ASPiRA Labs received its clinical laboratory permit for New York state in 13 months of opening the lab, which expedites our testing in all 50 states. The ASPiRA Labs Sales Team established 118 new accounts in Q2 versus 19 accounts in Q1. This translated into a 60% increase in kits released by ASPiRA Labs in Q2 versus Q1. We believe these are key early indicators of potential growth with new ordering physicians and sites. We also started Q3 with a successful $18.8M underwritten public offering of our common stock to fund our domestic and international commercialization and bioinformatics platform investments.
Key Recent Developments
Q2 2015 Financial Results
Total product revenue in the second quarter of 2015 was $535,000, as compared to $211,000 in the same year-ago period. This increase is attributable to Vermillion's March 11, 2015 commercial agreement with Quest Diagnostics, which now facilitates recognition of all product revenue at the time an OVA1 test is performed by Quest Diagnostics rather than deferring some revenue as in prior periods.
Product revenue in the second quarter of 2015 was derived from 4,103 OVA1 tests which was consistent with the 4,223 OVA1 tests performed in the same year-ago quarter. Volume in the second quarter of 2015 included 274 tests performed at ASPiRA Labs, Vermillion's wholly owned national CLIA-certified laboratory.
Cost of revenue in the second quarter of 2015 increased to $574,000 compared to $88,000 in the prior year due to costs associated with ASPiRA Labs. ASPiRA Labs opened in June 2014, so second quarter 2014 cost of revenue included only one week of ASPiRA Labs' costs.
Total operating expenses in the second quarter of 2015 decreased to $4.8 million from $5.8 million in the year-ago quarter. The decrease was primarily due to certain one-time expenses from 2014 not being repeated in 2015, including severance, and ASPiRA Labs pre-opening costs and branding.
Net loss for the second quarter of 2015 was $4.8 million or $(0.11) per share, as compared to a net loss of $5.6 million or $(0.15) per share in the year-ago quarter.
As of June 30, 2015, cash and equivalents totaled $10.9 million. This excludes the estimated net proceeds of $17.5 million from Vermillion's July 2015 stock offering. Vermillion utilized $5.1 million in cash in the second quarter of 2015 and paid an additional $1.3 million to repurchase common stock from Quest Diagnostics. Vermillion expects to utilize $4.7 million to $5.5 million in cash in the third quarter of 2015.
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.
Thursday, August 13, 2015 at 4:30 pm Eastern/1:30 pm Pacific
Domestic:888-430-8691
International:719-457-2083
Conference ID:8708565
Webcast:Conference Call Link: http://public.viavid.com/player/index.php?id=115357
Replay Available through August 27, 2015
Domestic:877-870-5176
International:858-384-5517
Conference ID:8708565
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, has diagnostic programs in gynecologic disease. 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, 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 the speed with which Vermillion is able to transition OVA1 testing from Quest Diagnostics to ASPiRA Labs, Vermillion's expected use of proceeds from the July 2015 offering and Vermillion's expected use of cash during the third quarter of 2015. 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 commercialize OVA1 outside the United States; (5) Vermillion's ability to develop and commercialize additional diagnostic products and achieve market acceptance with respect to these products; (6) Vermillion's ability to compete successfully; (7) Vermillion's ability to obtain any regulatory approval for its future diagnostic products; (8) Vermillion's or its suppliers' ability to comply with FDA requirements for production, marketing and post market monitoring of its products; (9) additional costs that may be required to improve Vermillion's manufacturing operations; (10) Vermillion's ability to maintain sufficient or acceptable supplies of immunoassay kits from its suppliers; (11) Vermillion's ability to generate sufficient demand for ASPiRA Labs' services to cover its operating costs; (12) Vermillion's ability to comply with the additional laws and regulations that apply to it in connection with the operation of ASPiRA Labs (13) 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 and (14) other factors that are described in Vermillion's Form 10-Q for the quarter ended June 30, 2015 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)
| June 30, | December 31, | ||||
| 2015 | 2014 | ||||
| Assets | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 10,878 | $ | 22,965 | |
| Accounts receivable | 165 | 167 | |||
| Prepaid expenses and other current assets | 667 | 526 | |||
| Total current assets | 11,710 | 23,658 | |||
| Property and equipment, net | 535 | 508 | |||
| Other Assets | 90 | 8 | |||
| Total assets | $ | 12,335 | $ | 24,174 | |
| Liabilities and Stockholders' Equity | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 533 | $ | 1,123 | |
| Accrued liabilities | 2,581 | 2,201 | |||
| Short-term debt | 1,106 | ||||
| Deferred revenue | 489 | ||||
| Total current liabilities | 3,114 | 4,919 | |||
| Commitments and contingencies | |||||
| Stockholders' equity: | |||||
| Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and | |||||
| outstanding at June 30, 2014 and December 31, 2013, respectively | |||||
| Common stock, $0.001 par value, 150,000,000 shares authorized at June 30, 2015 | |||||
| and December 31, 2014; 42,271,192 and 43,115,790 shares issued and | |||||
| outstanding at June 30, 2015 and December 31, 2014, respectively | 42 | 43 | |||
| Additional paid-in capital | 369,638 | 370,685 | |||
| Accumulated deficit | (360,459) | (351,473) | |||
| Total stockholders' equity | 9,221 | 19,255 | |||
| Total liabilities and stockholders' equity | $ | 12,335 | $ | 24,174 |
Consolidated Statements of Operations
(Amounts in Thousands, Except Share and Per Share Amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||
| Revenue: | |||||||||||
| Product | $ | 535 | $ | 211 | $ | 1,170 | $ | 402 | |||
| License | - | 113 | 316 | 227 | |||||||
| Total revenue | 535 | 324 | 1,486 | 629 | |||||||
| Cost of revenue: | |||||||||||
| Product | 574 | 88 | 1,065 | 143 | |||||||
| Total cost of revenue | 574 | 88 | 1,065 | 143 | |||||||
| Gross profit | (39) | 236 | 421 | 486 | |||||||
| Operating expenses: | |||||||||||
| Research and development (1) | 919 | 1,057 | 2,024 | 2,210 | |||||||
| Sales and marketing (2) | 2,559 | 2,766 | 4,776 | 4,870 | |||||||
| General and administrative (3) | 1,331 | 1,971 | 2,731 | 2,959 | |||||||
| Total operating expenses | 4,809 | 5,794 | 9,531 | 10,039 | |||||||
| Loss from operations | (4,848) | (5,558) | (9,110) | (9,553) | |||||||
| Interest income | 6 | 12 | 15 | 26 | |||||||
| Other income (expense), net | (7) | (9) | 109 | (15) | |||||||
| Net loss | $ | (4,849) | $ | (5,555) | $ | (8,986) | $ | (9,542) | |||
| Net loss per share - basic and diluted | $ | (0.11) | $ | (0.15) | $ | (0.21) | $ | (0.27) | |||
| Weighted average common shares used to compute basic and diluted net loss per common share | 42,985,954 | 35,853,027 | 43,050,872 | 35,840,491 | |||||||
| Non-cash stock-based compensation expense included in operating expenses: | |||||||||||
| (1) Research and development | $ | 32 | $ | 31 | $ | 63 | $ | 71 | |||
| (2) Sales and marketing | 36 | 44 | 73 | 69 | |||||||
| (3) General and administrative | 131 | 290 | 228 | 359 |