NEW YORK (360Dx) – Vermillion reported after the close of the market on Wednesday that its second quarter revenues rose 27 percent year over year.
For the quarter ended June 30, the company reported total revenues of $898,000, up from $709,000 a year ago. Product revenues rose 55 percent to $860,000 from $554,000 in Q2 2016. The company posted $38,000 in service revenue, down 75 percent from $155,000 in the year-ago quarter.
Vermillion performed 2,418 OVA1 tests in the quarter, up 3 percent from 2,345 OVA1 tests performed in Q2 2016. Revenue per test increased 51 percent to $356 from $236 the year before.
On a conference call following the release of the Q2 results, Vermillion CEO Valerie Palmieri said the second quarter marked Vermillion's highest organic quarterly product revenue and growth since the company started performing OVA1 testing out of its CLIA laboratory.
Vermillion also saw significant improvements in payments received for tests performed in patient populations not covered for OVA1, including Medicare, Medicaid, and various commercial insurance patients, Palmieri said. The company received payments from this group of customers more than 54 percent of the time in Q2 2017, compared to less than 17 percent of the time in Q2 2016, she added.
That said, test volumes budged little year over year, and Palmieri said the company expects a Q3 decline in tests performed due to the loss of a large client bill account that was a legacy of Vermillion's former relationship with Quest Diagnostics. Vermillion Chief Accounting Officer Eric Schoen said the firm anticipates a 5 percent to 10 percent volume decline in Q3 compared to Q2.
Schoen said Vermillion was working to partially make up this volume loss by working with the affected customers directly.
Palmieri said the company has seen an increase in customer retention and "same-store growth" in the last year, with the number of tests per physician rising 33 percent. However, she added, in regions where Vermillion does not have sales rep coverage, volumes declined by 10 percent.
Palmieri also highlighted the company's Aspira IVD services business, which, she noted, recently landed its first companion diagnostic study partnership with a top ten pharmaceutical firm. The diagnostic is meant for use with an antibody-based drug being studied in ovarian cancer, triple-negative breast cancer, and non-small cell lung cancer.
However, Palmieri also noted that enrollment for this and other trials Aspira IVD is participating in is progressing more slowly than the company initially budgeted for, and this could negatively affect Q3 revenues.
Vermillion's net loss for the quarter narrowed to $2.4 million, or $.04 per share, from $3.7 million, or $.07 per share, in Q2 2016.
The company's R&D expenses for Q2 were $268,000, down 52 percent from $564,000 in Q2 2016. Its SG&A expenses fell 33 percent to $2.2 million from $3.3 million in the same period last year.
Vermillion ended the quarter with $6.0 million in cash and cash equivalents.
In Thursday morning trading on the Nasdaq, Vermillion shares were down around 6 percent to $1.30.