NEW YORK (360Dx) – Vermillion reported today a 44 percent rise in first quarter revenues.
For the three months ended March 31, the Austin, Texas-based cancer diagnostics firm said that total revenues rose to $726,000 from $505,000 in the year-ago quarter.
Product revenues were $678,000, up from $505,000 in Q1 2016. Service revenues were $48,000. The company posted no service revenues in the year-ago quarter as it had not yet launched its Aspira IVD service business.
Product revenue for the recently completed quarter was derived from 2,293 OVA1 tests performed, up slightly from 2,265 OVA1 tests performed in Q1 2016, the firm said, noting that revenue per test performed was up 33 percent year-over-year.
On a conference call following release of the earnings results, President and CEO Valerie Palmieri said that the company was now planning an expansion of its sales force as it tries to drive an increase in OVA1 sales. While revenues per test have risen since the company ended its licensing agreement with Quest Diagnostics, sales volumes have remained essentially flat following an initial drop-off.
"We plan to expand our sales force in two key areas so that our reps can reach more providers and accelerate OVA1 sales growth in key geographic areas," she said. She added that the company would be adding two new sales reps in areas with payor coverage for OVA1 and large metro area populations.
She noted that during Q1, territories where sales representatives were present saw OVA1 sales grow 23 percent year over year, while sales in non-covered territories decreased 20 percent year over year.
Palmieri also said the company plans to drive sales through relationships with outside laboratories. "There are several strategic partners that are interested in our technology," she said. "We are looking to complement our sales force in regions where we either don't have sales coverage but there is a large metro base or where we have significant payor contracts."
"We have partnerships that are in process right now and we have partnerships that are actually [about] to start," she said.
Palmieri also discussed Vermillion's Aspira IVD service business, noting that the company had recently signed a deal for its first enrolling trial, a two-year trial for a companion diagnostic.
"This is a significant trial," she said. "Once you put your tentpole in with that first enrolling trial, you [get] on the radar screen with the other pharma companies."
Palmieri said, however, that slower-than-expected trial enrollment could delay revenues from the deal. "The issue is the enrollment ramp or traction, which we don't have control over," she said.
Regarding the Aspira IVD business, Eric Schoen, Vermillion's senior vice president of finance and chief accounting officer, noted that the company "realized that the timing of contracts and revenues will initially be lumpy. And that has tempered expectations for significant growth in the second and third quarters of 2017."
For Q1 2017 Vermillion had a net loss of $2.7 million, or $.05 per share, compared to a net loss of $4.9 million, or $.09 per share, in Q1 2016.
Its R&D expenses fell 76 percent year over year to $225,000 from $934,000, while its SG&A spending was down 38 percent to $3.4 million from $3.9 million.
The company finished the quarter with $7.9 million in cash and cash equivalents, which included $5.1 million netted from a private placement of common stock and warrants in February.
In Thursday morning trading on Nasdaq, Vermillion shares were down 1 percent to $1.76.