FREMONT, Calif., Nov. 14 /PRNewswire-FirstCall/ -- Vermillion, Inc.
(OTC Bulletin Board: VRML), a molecular diagnostics company, today reported
financial results for the third quarter ended September 30, 2008, and provided
an update on recent clinical and corporate developments.
Third Quarter 2008 Financial Results
Total operating expenses decreased in the third quarter of 2008 to $3.1
million, from $4.8 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 third quarter of 2008 was $4.7 million,
compared to $5.1 million for the same period in 2007. Basic and diluted net
loss for the third quarter of 2008 was $0.74 per share based on 6.38 million
total shares outstanding, compared to a basic and diluted net loss of $1.06
per share based on 4.81 million total shares outstanding for the same period
in 2007. Earnings per share calculations are based on a post reverse stock
split which occurred in March 2008.
At September 30, 2008, the Company's cash, short- and long-term
investments totaled $5.4 million, compared to $20.4 million at December 31,
2007. Net cash used in operating activities in the third quarter of 2008 was
$3.7 million.
2008 Third Quarter Highlights and Accomplishments
Vermillion is pleased to report the following developments in its clinical
and commercialization diagnostic programs:
- Ovarian Cancer Diagnostic Program:
-- Vermillion's OVA1(TM) 510(k) pre-market notification application
for its ovarian tumor triage test is currently pending before the
FDA. The OVA1 clinical trial was one of the largest ovarian cancer
studies ever conducted and assessed more than 550 women across 27
clinical sites in the United States.
-- Dr. Zhen Zhang, Associate Professor of Pathology at Johns Hopkins
University School of Medicine presented preliminary data from
Vermillion's OVA1 prospective clinical trial at the International
Gynecologic Cancer Society's 12th Biennial meeting in Bangkok,
Thailand, on October 27, 2008.
- PAD Diagnostic Program:
-- Vermillion and Stanford Scientists received the "Best Clinical
Research Award" from the PAD Coalition for their discovery of
novel biomarkers for peripheral artery disease ("PAD") at its
Annual Meeting in Washington DC on September 8, 2008.
-- Results from Vermillion's 540-subject validation study were
published in the peer-reviewed journal, Vascular Medicine, in
August 2008.
- Corporate Developments:
-- Vermillion extended the base term of its strategic alliance
agreement with Quest Diagnostics through September 2009. This
extension allows both parties to continue focusing on the market
launch of Vermillion's two lead products -- OVA1 "the ovarian
cancer test" and VASCLIR "the PAD test."
-- Vermillion retained an Interim Chief Financial Officer and an
Interim Vice President of Sales & Marketing.
"We continue to diligently manage expenses and cash utilization while
focusing on our OVA1 clinical trial submission. With the renewal of our
strategic alliance, we look forward to working with Quest Diagnostics to bring
both OVA1 and VASCLIR to the market," said Gail Page, President and CEO of
Vermillion.
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
ovarian cancer or PAD 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 ovarian cancer or PAD
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 ovarian cancer or PAD
diagnostic products; (4) uncertainty as to whether Vermillion will be able to
obtain any required regulatory approval of its ovarian cancer or PAD
diagnostic products; (5) uncertainty of market acceptance of its ovarian
cancer or PAD 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
Consolidated Balance Sheets
(Amounts in Thousands, Except Share and Par Value Amounts)
(Unaudited)
September 30, December 31,
2008 2007
Assets
Current assets:
Cash and cash equivalents $1,877 $7,617
Short-term investments, at fair value - 8,875
Accounts receivable 31 19
Prepaid expenses and other current assets 814 1,064
Total current assets 2,722 17,575
Property, plant and equipment, net 742 1,938
Long-term investments, at fair value 3,552 3,902
Other assets 134 638
Total assets $7,150 $24,053
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable $1,126 $2,975
Accrued liabilities 2,056 3,595
Current portion of convertible senior notes,
net of discount 2,500 2,471
Total current liabilities 5,682 9,041
Long-term debt owed to related party 10,000 10,000
Convertible senior notes, net of discount 16,333 16,196
Other liabilities - 278
Total liabilities 32,015 35,515
Stockholders' deficit:
Common stock 6 6
Additional paid-in capital 228,402 227,895
Accumulated deficit (253,193) (239,142)
Accumulated other comprehensive loss (80) (221)
Total stockholders' deficit (24,865) (11,462)
Total liabilities and stockholders' deficit $7,150 $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
Consolidated Statements of Operations
(Amounts in Thousands, Except Share and Per Share Amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2008 2007 2008 2007
Revenue:
Products $5 $- $10 $-
Services 66 - 114 21
Total revenue 71 - 124 21
Cost of revenue:
Products 2 - 4 -
Services - - 20 15
Total cost of revenue 2 - 24 15
Gross profit 69 - 100 6
Operating expenses:
Research and development 1,135 2,181 4,262 6,390
Sales and marketing 388 517 1,784 1,347
General and administrative 1,581 2,090 5,062 8,626
Total operating expenses 3,104 4,788 11,108 16,363
Loss on sale of instrument
business - - - (382)
Loss from operations (3,035) (4,788) (11,008) (16,739)
Interest income 79 169 360 458
Interest expense (508) (596) (1,561) (1,727)
Loss on investments in
auction rate securities (1,124) - (1,748) -
Other income (expense), net (142) 95 (128) 17
Loss before income taxes (4,730) (5,120) (14,085) (17,991)
Income tax benefit (expense) (14) 3 34 1
Net loss $(4,744) $(5,117) $(14,051) $(17,990)
Loss per share
- basic and diluted (1) $(0.74) $(1.06) $(2.20) $(4.26)
Shares used to compute
basic and diluted loss
per common share (1) 6,382,166 4,805,658 6,381,290 4,221,424
(1) Adjusted for March 4, 2008, 1 for 10 reverse stock split.
SOURCE Vermillion, Inc.
- 11/14/2008
CONTACT:
Investors, Sue Carruthers of Vermillion, Inc.,
+1-510-226-2811
Web site: http://www.vermillion.com
