Vermillion, Inc., a molecular diagnostics company, has reported financial results for the first quarter ended March 31, 2011. Key milestones we have achieved since the last quarterly conference call include:
Performed an estimated 3,080 OVA1® tests during the first quarter of 2011, representing volume growth of 5% over the fourth quarter of 2010.
Expanded payer coverage for OVA1 with additional independent Blue Cross Blue Shield plans issuing positive coverage policies. In all, 17 independent Blue Cross Blue Shield plans, representing approximately 33.5 million lives, are covering OVA1. Including Medicare and other regional plans, total coverage for OVA1 is now approximately 80 million lives.
OVA1 was included in the recently published American College of Obstetricians and Gynecologists (ACOG) and Society of Gynecologic Oncologists (SGO) updated committee opinion on the role of the obstetrician-gynecologist in the early detection of epithelial ovarian cancer.
Signed an agreement with Quest Diagnostics to make OVA1 available in India with the official launch beginning on May 4th. This represents an incremental revenue opportunity over time as the companies begin to educate the market.
Presented two studies demonstrating the high sensitivity of OVA1 during the 42nd Annual Meeting on Women's Cancer of the Society of Gynecologic Oncologists (SGO).
Presented data at the International Gynecologic Cancer Society (IGCS) regional meeting held in New Delhi that demonstrated the high sensitivity for ovarian malignancy of OVA1 in combination with ultrasound. OVA1 had sensitivity for malignancy of 97% when used in conjunction with ultrasound.
Announced positive preliminary data from our collaboration with the Johns Hopkins University School of Medicine to identify biomarkers that improve on the specificity of CA125 for the identification of malignant ovarian tumors.
Commenced enrollment of subjects in the PAD intended use study being performed in collaboration with the Colorado Prevention Center. The study remains on track to result in top-line data during the third quarter of 2011.
Strengthened our balance sheet by completing an underwritten follow-on public offering of our common stock, resulting in approximately $20.2 million net proceeds to the Company.
"We continued to make progress in multiple areas during the first quarter. We grew OVA1 sales as well as had several presentations highlighting the benefit of OVA1 as an aid for physicians in the assessment of adnexal masses. On the clinical development front, our PAD and OVA2 programs moved forward and remain on track to generate data later this year. We also strengthened our balance sheet, which affords us the flexibility to help accelerate our current initiatives as well as opportunistically act on potential new growth drivers," said Gail S. Page, Chair of the Board of Directors and CEO.
For the second quarter of 2011, we expect 3,200 to 3,500 OVA1 tests to be performed. This forward guidance takes into consideration numerous factors including the number of days in the quarter, continued limited coverage by the larger payers, and the ability to expand the number of diagnosis codes currently approved by Medicare.
Total revenues for the first quarter of 2011 were $431,000 compared to $73,000 for the first quarter of 2010. Revenues for the first quarter of 2011 included $317,000 from product sales of OVA1 and $114,000 of license revenue related to the Company's achievement of certain milestones under the Strategic Alliance Agreement with Quest Diagnostics. As of March 31, 2011, the Company's cash and short-term investments totaled $40.2 million.
On February 18, 2011, we completed a sale of 4,000,000 shares of our common stock in an underwritten follow-on public offering at a price of $5.45 per share. Net proceeds of the offering were approximately $20.2 million. The Company utilized $3.4 million in cash and cash equivalents during the first quarter and expects $4-$5 million cash utilization during the second quarter.
Total operating expenses increased in the first quarter of 2011 to $4.8 million from $3.1 million in the same period last year. These increases were primarily due to the addition of personnel subsequent to the Company's emergence from Chapter 11 bankruptcy protection, investments in sales and marketing to establish the adoption of and reimbursement for OVA1, as well as an increase in clinical trial and collaboration costs for the ongoing development of the Company's ovarian cancer program and PAD blood test, VASCLIR™.
The Company had 25 employees at March 31, 2011 compared to 10 employees at March 31, 2010. Operating expenses included $1.3 million and $0.9 million in non-cash stock-based compensation expense in the three months ended March 31, 2011 and 2010, respectively.
Net loss for the first quarter of 2011 decreased to $4.3 million, or $0.34 per share, compared to $11.6 million, or $1.14 per share, for the same period in 2010. Other income and expense for the three months ended March 31, 2010 included $8.3 million in reorganization items.