NEW YORK (360Dx) – Vermillion reported after the close of the market on Monday an 11 percent year-over-year drop in first quarter revenues.
For the three months ended March 31, the Austin, Texas-based cancer diagnostics firm said that total revenues fell to $649,000 from $728,000 in the year-ago quarter.
Product revenues were $613,000, down from $678,000 in Q1 2017. Service revenues were $36,000, down from $48,000 the year before.
Product revenues for the recently completed quarter were derived from 1,818 OVA1 tests performed, down 21 percent from 2,293 OVA1 tests performed in Q1 2017. Revenue per test was up 14 percent year over year from $296 to $337.
In a statement, President and CEO Valerie Palmieri said that the company "commenced our commercialization strategy in the first quarter with the deployment of strategic sales representatives in key territories" and that it expects this will "show meaningful results in the second half of 2018."
On a conference call following release of the earnings results, Bob Beechey, Vermillion’s CFO, noted that the decline in OVA1 test volume was driven primarily by the loss of a legacy customer that the company first announced in Q3 of 2017. He said that “revenue associated with the lost client was $71,000 in the first quarter of 2018(??).”
Palmieri said on the call that Vermillion continues to build out its sales force in an effort to increase OVA1 sales. The company now has nine sales representatives, compared to an average of five throughout 2017. The company also added a regional channel partner in April, she said.
OVA1 adoption remains a struggle for Vermillion, however, as evidenced by the declining year-over-year sales numbers. Palmieri noted that at the recent American College of Obstetricians and Gynecologists national meeting, “many physicians thought OVA1 was no longer available since Quest no longer offered the test.”
The company has seen rising revenues per test, a trend Palmieri expects to accelerate in the second half of the year. Payment rates established by the Protecting Access to Medicare Act and implemented in January have set reimbursement for OVA1 at $897 per test in 2018, significantly above the previous price of $222. Palmieri said currently Medicare-covered tests make up around 12 to 15 percent of the company’s OVA1 sales volume and added that the company hopes to expand that proportion.
For Q1 2018 Vermillion had a net loss of $2.9 million, or $.05 per share, compared to a net loss of $2.7 million, or $.05 per share, in Q1 2017.
Its R&D expenses fell 37 percent year over year to $142,000 from $225,000, while its SG&A spending was up 4 percent to $2.5 million from $2.4 million.
The company finished the quarter with $3.1 million in cash and cash equivalents. That does not include funds from a $15 million stock offering Vermillion completed during the second quarter.
In Tuesday morning trading on Nasdaq, Vermillion's stock was down 2 percent to $1.24 per share.