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Vermillion Laying Groundwork for Renewed OVA1 Sales Push in 2019

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This story has been corrected to reflect that OVA1 is a risk assessment test, not a rule-out test. Also, Vermillion shifted to a focus on OVA1's negative predictive value in 2016, and the list price of CA125 is around $200. We apologize for the errors.

NEW YORK (360Dx) –Vermillion is eyeing 2019 as a breakout year for its OVA1 ovarian cancer test, as the company continues piecing together the pricing, payor, and publication elements it hopes will lay the ground work for a successful renewed sales push.

OVA1 is a blood-based proteomic test intended to help physicians assess whether a detected pelvic mass is likely cancerous. Since launching the test in 2010, Vermillion has struggled to grow sales, with volumes flatlining at levels well below initial expectations.

In recent years, the company's revenues have grown modestly as its decision to end its commercial agreement with Quest Diagnostics has led to a rise in revenues captured per test. Volume, however, has plateaued at around 2,000 OVA1s per quarter, low even compared to the test's historically sluggish sales figures.

Company President and CEO Valerie Palmieri said, though, that the company is setting the stage for sales growth in coming years by refining its sales message and adding to the clinical and health economic data supporting use of the test, as well as establishing favorable pricing and insurer coverage.

"As a small company, we have put all of our rocks into publications and getting payor coverage," she said. "We have a very small sales force. We could double our sales force and it would still not be very big. But we are being very mindful of our commercialization dollars and putting them into markets where we have payor coverage."

"We didn't want to start fueling the sales engine until we had the papers to line up the payors and the pricing," Palmieri said. But, she added, developments over the last year have moved the company closer to its planned sales push.

One key was the Centers for Medicare & Medicaid Services decision to give OVA1 a significant price bump for 2018. The test had been priced by CMS at $225. That price will go up to $897 next year.

The establishment of this new, higher price clears the way for Vermillion to pursue coverage deals with larger national payors, something Palmieri said the company has been postponing until the new CMS rates came through.

"We didn't want to negotiate too early with a large national and negotiate based on a Medicare price of $225, because that could hurt us in the end," she said.

On the publication front, Vermillion-sponsored researchers also recently published a health economic analysis in American Health & Drug Benefits showing that use of OVA1 instead of CA125 to evaluate the likelihood of a pelvic mass malignancy could lead to savings for Medicare plans of $.01 per-member per-month and savings for private payors of $.05 per-member per-month.

The significance of those savings is debatable. Palmieri said in her conversations with payors, they have characterized any PPMM of $.01 or more as notable. However, the authors of the AH&BD study characterized the potential savings they identified as "modest."

Randy Vogenberg, an adjunct assistant professor of health economic research at the University of Illinois College of Pharmacy, said that the economic value of the test as demonstrated in the study was "very marginal." Vogenberg was not part of the study but did write a commentary accompanying the AH&BD paper.

There is also the question of how the new pricing for OVA1 would impact the findings. Palmieri said the study was done using the previous CMS reimbursement rate of $225 and a commercial rate of $552. The almost fourfold increase in price would likely alter the projected savings on the Medicare side. On the commercial side the change would perhaps be less significant given that, as Palmieri noted, while the company will push for a reimbursement rate similar to the $897 Medicare rate, it expects it will probably only recoup around half that amount per test from its commercial payors.

In any case, Vermillion has made significant headway with payors in 2017. Last month the company announced it added 14 new managed care providers totaling more than 26 million lives, bringing the total number of US lives covered for OVA1 to 123 million as of January 2018.

Palmieri noted that for many of the deals Vermillion still has to get the actual contracts implemented, which will take time, but, she said, between the price bump, the increase in payor coverage, the recent publications, and developments like the inclusion in 2016 of OVA1 in the American College of Obstetricians and Gynecologist guidelines for management of ovarian adnexal masses, the company is building a foundation for future sales.

"I would say that 2018 is still a transformation year, and 2019, in my mind, is where we will have all of our dominos lined up," she said.

The question is, will it matter?

Over the last eight years, Vermillion has been through several OVA1 sales "relaunches" with each aimed at correcting the misguided approaches of previous commercialization strategies. This, naturally, raises the question of whether the company's problem has been its execution, or whether the market for the test simply isn't as strong as projected.

Palmieri noted that in areas where the company has placed its sales force, which are largely spots where at least 8 out of 10 lives are covered for OVA1, sales volume is growing in the double digits. Past Vermillion CEOs, however, have cited similar observations during previous, ultimately unsuccessful, sales pushes. For instance, in a 2013 earning call, then CEO Thomas McClain noted that in regions covered by company sales representatives, OVA1 test volumes were up 15 percent year-over-year.

Palmieri cited as one reason she is optimistic about the current effort, is that the company has begun marketing the test with a focus on its high negative-predictive value.

The test was always designed as a risk assessment test with strong negative predictive value, she said, but was marketed with a focus on its positive predictive value until the end of 2016.

"The test's strength is its sensitivity, but it has not been sold that way," she said.

She added that sales figures for CA125, which is used off-label to aid in evaluating pelvic masses, indicate that there is demand among physicians for a tool like OVA1 that can add molecular information to standard clinical measures.

She estimated that around 1.2 million CA125 tests are ordered each year for this purpose. She arrived at this figure by taking the roughly 200,000 women in the US with ovarian cancer in a given year and assuming each is given a quarterly CA125 to monitor their disease status. That would make around 800,000 tests ordered for CA125's on-label indication. Subtracting that from the 2 million CA125 tests ordered in total each year gives 1.2 million tests used off-label, mostly for evaluating ovarian adnexal masses.

"CA125 is truly what we are displacing," Palmieri said. Thus far, however, the company has not managed to cut into the market for this marker in a significant way. Vermillion has published a number of studies showing the superiority of OVA1 to CA125 for evaluating pelvic masses, but that improved performance has not driven doctors toward OVA1 to date.

In a 2014 study, the company found that OVA1 plus clinical assessment could rule out cancer with a negative predictive value of 97 percent, compared to 91 percent for clinical assessment (which could include CA125) alone. A 2011 study found that ACOG guidelines with CA125 had NPV of 94 percent in early stage patients and 100 percent in late stage patients, versus NPV of 98 percent in early stage and 100 percent in late stage for ACOG plus OVA1.

In both cases, OVA1 had somewhat higher NPV, but the test is also significantly more expensive than CA125, which lists for around $200.

Further complicating the question is the fact that addition of the protein marker HE4 has been shown to improve the performance of CA125. The two markers are sold by Fujirebio as the Risk of Ovarian Malignancy Algorithm (ROMA) test, which, like OVA1, is cleared by the US Food & Drug Administration for evaluating pelvic masses.

In a comparison of ROMA and OVA1 cited on Vermillion's website, ROMA has an NPV of 94.4 percent compared to an NPV of 96.8 percent for OVA1. Vermillion has highlighted, in particular, the ROMA test's poorer performance in early-stage patients. However, in a 2016 study published in Gynecologic Oncology, the ROMA test plus clinical assessment ruled out ovarian cancer in 498 patients, including early-stage patients, with negative predictive value of 100 percent. Other studies have found the ROMA test in combination with clinical measures to have NPVs in the range of 98 percent to 99 percent.