2008-08-14 06:30:00
FREMONT, Calif., Aug. 14 /EMWNews/ -- Vermillion, Inc. (Nasdaq: VRML), a molecular diagnostics company, today announced financial results for the second quarter ended June 30, 2008, and provided an update on recent corporate and clinical developments. Vermillion continues to demonstrate significant clinical and commercialization progress in each of its diagnostic programs and, with the recent retention of ThinkPanmure, an Investment Bank, the Company is working to maximize its strategic options to bring its proteomic tests to the market. In June 2008, the Company filed a 510(K) Application for the OVA1(TM) Test for ovarian tumor triage with the U.S. Food and Drug Administration (FDA). Additionally, Vermillion is working on clinical studies and building market awareness of its PAD risk assessment blood test, now named VASCLIR(TM) the PAD test. Throughout the remainder of 2008, the Company will focus on commercializing these tests. Second Quarter 2008 Financial Results Total operating expenses decreased in the second quarter of 2008 to $3.4 million, from $5.9 million in the same period last year. The decrease was due primarily to restructuring of the company and reduced general and administrative expenses. The Company's net loss for the second quarter of 2008 was $4.5 million, compared to $6.8 million for the same period in 2007. Basic and diluted net loss for the second quarter of 2008 was $0.70 per share based on 6.38 million total shares outstanding, compared to a basic and diluted net loss of $1.74 per share based on 3.93 million total shares outstanding for the same period in 2007. Earnings per share calculations are on a post reverse stock split basis. At June 30, 2008, the Company's cash, short- and long-term investments totaled $9.9 million, compared to $20.4 million at December 31, 2007. Net cash used in operating activities in the second quarter of 2008 was $4.2 million. Vermillion continues to conscientiously manage expenses and cash utilization. Recent Highlights and Accomplishments During the first half of 2008, Vermillion achieved the following milestones in its diagnostic programs and continued to progress in its corporate development efforts. -- Ovarian Cancer Diagnostic Program: -- Submitted data to the FDA from its OVA1 prospective clinical trial. The trial met its primary endpoint of improved sensitivity for malignant ovarian tumors. -- Hosted a roundtable teleconference focusing on Vermillion's ovarian cancer diagnostic program and the need for tools that can better triage women with ovarian tumors. The teleconference featured keynote speaker Fred Ueland, M.D., Associate Professor of Gynecologic Oncology at the University of Kentucky, who is the Principal Investigator in Vermillion's OVA1 clinical trial. -- Presented data at the annual meeting of the American Society of Clinical Oncology (ASCO) demonstrating that Vermillion's markers, in conjunction with CA125, improved detection of early stage ovarian cancer. -- PAD Diagnostic Program: -- Established a clinical steering committee to provide advice on studies to support registration of VASCLIR with the FDA and to further potential market adoption. -- Engaged the Colorado Prevention Center as its academic research organization for assistance in designing its prospective clinical trial to support clearance of its VASCLIR test. -- Presented data from a study providing further confirmation that the Company's test may aid in the diagnosis of PAD. The research, which was presented at the annual meeting of the Society of Vascular Medicine and Biology (SVMB), suggests that such a test may be useful in helping determine a patient's risk for developing PAD. -- Hosted a roundtable teleconference focusing on Vermillion's PAD diagnostic program and the need for improved detection of this life- and limb- threatening condition. The teleconference featured keynote speaker John Cooke, M.D., Ph.D., Professor of Medicine at Stanford University, whose research forms the basis of Vermillion's VASCLIR test. -- Conducted market-development activities, including working with the PAD Coalition and implementing an online physician survey to gather market- based information, helping to define the Company's commercialization strategy and broaden future clinical use of VASCLIR. -- Corporate Developments: -- Retained ThinkPanmure LLC., a global growth-company investment bank, to assist the Company in identifying and evaluating strategic alternatives to advance our commercialization strategies. -- Appointed John F. Hamilton, former Vice President and Chief Financial Officer of Depomed, Inc., to the Vermillion Board of Directors.
About Vermillion
Vermillion, Inc. is dedicated to the discovery, development and
commercialization of novel high-value diagnostic tests that help physicians
diagnose, treat and improve outcomes for patients. Vermillion, along with
its prestigious scientific collaborators, has diagnostic programs in
oncology, hematology, cardiology and women's health. Vermillion is based in
Fremont, California. Additional information about Vermillion can be found
on the Web at http://www.vermillion.com.
Forward Looking Statements -- This news release contains
forward-looking statements that involve significant risks and
uncertainties, including statements regarding Vermillion's plans,
objectives, expectations and intentions. These forward-looking statements
are based on Vermillion's current expectations. The Private Securities
Litigation Reform Act of 1995 provides a "safe harbor" for such
forward-looking statements. In order to comply with the terms of the safe
harbor, Vermillion notes that a variety of factors could cause actual
results and experience to differ materially from the anticipated results or
other expectations expressed in such forward-looking statements. There are
no guarantees that Vermillion will succeed in its efforts to commercialize
PAD, ovarian cancer or hematology diagnostics products in 2008 or during
any other period of time. Factors that could cause actual results to
materially differ include but are not limited to: (1) uncertainty in
obtaining intellectual property protection for inventions made by
Vermillion; (2) unproven ability of Vermillion to discover, develop, and
commercialize PAD, ovarian cancer or hematology diagnostic products based
on findings from its disease association studies; (3) unproven ability of
Vermillion to discover or identify new protein biomarkers and use such
information to develop PAD, ovarian cancer or hematology diagnostic
products; (4) uncertainty as to whether Vermillion will be able to obtain
any required regulatory approval of its PAD, ovarian cancer or hematology
diagnostic products; (5) uncertainty of market acceptance of its PAD,
ovarian cancer or hematology diagnostic products, including the risk that
its products will not be competitive with products offered by other
companies, or that users will not be entitled to receive adequate
reimbursement for its products from third party payors such as private
insurance companies and government insurance plans; and (6) other factors
that might be described from time to time in Vermillion's filings with the
Securities and Exchange Commission. All information in this press release
is as of the date of the release, and Vermillion expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to
any such statements to reflect any change in Vermillion's expectations or
any change in events, conditions or circumstances on which any such
statement is based, unless required by law.
- Financial statements follow -
Vermillion, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Amounts in Thousands)
(Unaudited)
June 30, December 31,
2008 2007
Assets
Current assets:
Cash and cash equivalents $5,307 $7,617
Short-term investments, at fair value - 8,875
Accounts receivable 51 19
Prepaid expenses and other current assets 1,245 1,064
Total current assets 6,603 17,575
Property, plant and equipment, net 1,305 1,938
Long-term investments, at fair value 4,626 3,902
Other assets 149 638
Total assets $12,683 $24,053
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $1,690 $2,975
Accrued liabilities 2,542 3,595
Current portion of convertible senior notes,
net of discount 2,494 2,471
Total current liabilities 6,726 9,041
Long-term debt owed to related party 10,000 10,000
Convertible senior notes, net of discount 16,287 16,196
Other liabilities 150 278
Total liabilities 33,163 35,515
Stockholders' deficit:
Common stock 6 6
Additional paid-in capital 228,240 227,895
Accumulated deficit (248,449) (239,142)
Accumulated other comprehensive loss (277) (221)
Total stockholders' deficit (20,480) (11,462)
Total liabilities and stockholders' deficit $12,683 $24,053
(1)The condensed consolidated balance sheet at December 31, 2007, has been
derived from the audited consolidated financial statements at that date
included in the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2007.
Vermillion, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Amounts in Thousands, Except Share and Per Share Amounts)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30
2008 2007 2008 2007
Revenue:
Products $- $- $5 $-
Services - - 48 21
Total revenue - - 53 21
Cost of revenue:
Products - - 2 -
Services - - 20 15
Total cost of revenue - - 22 15
Gross profit - - 31 6
Operating expenses:
Research and development 1,252 2,219 3,127 4,209
Sales and marketing 503 353 1,396 830
General and administrative 1,654 3,339 3,481 6,536
Total operating expenses 3,409 5,911 8,004 11,575
Loss on sale of instrument
business - (382) - (382)
Loss from operations (3,409) (6,293) (7,973) (11,951)
Interest and other expense, net (1,050) (537) (1,382) (920)
Loss before income taxes (4,459) (6,830) (9,355) (12,871)
Income tax benefit (expense) (2) 4 48 (2)
Net loss $(4,461) $(6,826) $(9,307) $(12,873)
Loss per share -
basic and diluted(1) $(0.70) $(1.74) $(1.46) $(3.28)
Shares used to compute
basic and diluted loss
per common share(1) 6,381,507 3,925,623 6,380,847 3,924,466
(1)Adjusted for March 3, 2008, 1 for 10 reverse stock split.
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