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Vermillion Q4 Revenues Down Just Under 1 Percent

NEW YORK (360Dx) – Vermillion reported after the close of the market on Tuesday that its fourth quarter revenues fell just under 1 percent year over year.

The company reported Q4 revenues of $798,000, down from $805,000 in Q4 2016.

Vermillion posted $658,000 in product revenues from sales of its OVA1 ovarian cancer test, down 3 percent from $680,000 in the prior-year quarter. Service revenue from its Aspira IVD business was up 12 percent to $140,000 from $125,000 in Q4 2016.

The company performed 1,910 OVA1 tests in Q4 2017, down 15 percent from 2,258 in Q4 2016, but generated $345 per test, compared to $301 per test in the year-ago period.

The firm's Q4 net loss attributable to common shareholders was $3.0 million, or $.05 per share, compared to $2.8 million, or $.05 per share, a year ago.

While both revenues and OVA1 test volumes were down year over year, Valerie Palmieri, Vermillion's president and CEO, said on a conference call following the release of the earnings results that several factors bode well for the company's fortunes in 2018.

She noted that OVA1 is included in the American College of Obstetricians and Gynecologists guidelines for the management of adnexal masses, a decision the organization announced in 2016. She also cited what she called "a critical mass of payors" now covering OVA1, as well as the fact that the test has received "clinical policy endorsement from a leading national benefits assessment company," though she did not name the company specifically. She added that 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 looking ahead to 2018, Vermillion aims to "obtain additional regional and national payors" for OVA1; drive top-line growth, including through "alternative revenue channels" such as international expansion and the company's Aspira IVD services business; and expand its portfolio into other pelvic mass conditions.

Regarding the company's plans for international expansion, Palmieri said the company has begun a prospective study for Overa in the Philippines and an Overa validation study in Israel. Marra Francis, Vermillion's chief medical officer, added that the company was planning a study in Israel that would look at the use of OVA1 and Overa in place of CA125 for routine monitoring of women at high-risk of ovarian cancer due to a BRCA1/2 mutation. This move into the monitoring space represents a potentially significant shift in Vermillion's ambitions for these tests.

Vermillion's R&D spending fell 50 percent in Q4 2017 to $152,000 from $304,000 in Q4 2016, while its SG&A spending was up 12 percent year over year to $2.9 million from $2.6 million in the year-ago period.

For full-year 2017, the company posted revenues of $3.1 million, up 19 percent from $2.6 million in 2016.

Product revenues were up 26 percent to $2.9 million from $2.3 million the previous year, while service revenues were $268,000 in 2017, down 17 percent from $322,000 in 2016.

For full-year 2017, Vermillion's net loss attributable to common shareholders narrowed to $11.4 million, or $.20 per share, from $15.0 million, or $.29 per share, a year ago.

The company's R&D costs in 2017 were down 62 percent year over year to $837,000 from $2.2 million, while its SG&A costs were down 23 percent to $9.8 million from $12.7 million.

Vermillion finished 2017 with $5.5 million in cash and cash equivalents.

Vermillion shares were down around 1 percent to $1.40 on Wednesday morning trade on Nasdaq.