Vermillion, Inc., has reported financial results for the second quarter ended June 30, 2011. Key milestones we have achieved since the last quarterly conference call include:
Performance of an estimated 3,920 OVA1® tests during the second quarter of 2011, exceeding the guidance range of 3,200-3,500 tests and representing volume growth of 27% over the first quarter of 2011.
Publication of two articles in the June issue of Obstetrics & Gynecology, which is the official publication of the American College of Obstetricians and Gynecologists (ACOG), showing OVA1's value in evaluating women with an adnexal mass for the likelihood of ovarian cancer prior to surgery.
Expanded payer coverage for OVA1 with additional independent Blue Cross Blue Shield plans issuing positive coverage policies. In all, 22 independent Blue Cross Blue Shield plans, representing approximately 36 million lives, are covering OVA1. Including Medicare and other regional plans, total coverage for OVA1 is estimated to be roughly 82.5 million lives.
Signed an exclusive distribution agreement with Pronto Diagnostics Ltd. to make OVA1 available in Israel and related territories as we continue to expand OVA1 into international markets.
Progressed our peripheral arterial disease (PAD) intended use study being performed in collaboration with the Colorado Prevention Center. The study remains on track to yield top-line data during the third quarter of 2011.
Enhanced our patent portfolio by announcing receipt of a notice of allowance for four patents: three for PAD and one for Alzheimer's disease.
Appointed Bruce Huebner, an industry veteran with 35 years of senior management experience in the diagnostic industry, to our Board of Directors.
Joined the Russell Microcap Index on June 24, providing an opportunity to increase exposure to the broader institutional investment community and help improve stock liquidity.
"We are very pleased with the acceleration of volume growth for OVA1 tests in the second quarter. The 27% quarter-over-quarter increase in test volume is evidence of the increasing importance of this test as an aid for physicians in the assessment of adnexal masses," said Gail S. Page, Chair of the Board of Directors and CEO.
Page continued, "The recent publications of two important peer review papers and on-going expansion of payor coverage give us confidence in our ability to continue to increase awareness among the clinical community and position us well to capture the long-term market opportunity."
For the third quarter of 2011, we expect 4,000 to 4,300 OVA1 tests to be performed. This forward guidance takes into consideration numerous factors including the number of days in the quarter, the impact of summer holidays, 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 second quarter of 2011 were $304,000 compared to $344,000 for the second quarter of 2010. Revenues for the second quarter of 2011 included $191,000 from product sales of OVA1 and $113,000 of license revenue related to the Company's achievement of certain milestones under the Strategic Alliance Agreement with Quest Diagnostics.
Revenues for the second quarter of 2010 included $45,000 from product sales of OVA1 and $299,000 of license revenue. As of June 30, 2011, the Company's cash and cash equivalents totaled $36.3 million. The Company utilized $4.2 million in cash from operations during the second quarter and expects $4-$5 million of cash utilization from operations during the third quarter.
Total operating expenses increased in the second quarter of 2011 to $5.9 million from $4.1 million in the same period last year. Operating expenses increased to $10.7 million for the six months ended June 30, 2011, compared to $7.2 million during the same period of 2010. These increases were primarily due to the increased payroll expenditures relating to hiring, investments in sales and marketing to accelerate 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 29 employees at June 30, 2011 compared to 17 employees at June 30, 2010. Operating expenses included $1.3 million and $2.5 million in non-cash stock-based compensation in the three and six months ended June 30, 2011, respectively. Non-cash stock-based compensation included in operating expenses in the three and six months ended June 30, 2010 was $1.2 million and $2.1 million, respectively.
Net loss for the second quarter was $5.7 million, or $0.39 per share, compared to $698,000, or $0.07 per share, for the same period in 2010. Other income and expense for the second quarter of 2010 included approximately $3.5 million of non-cash gains resulting from the fair value revaluation of common stock warrants.
Weighted average shares outstanding were 14.7 million for the second quarter of 2011, compared to 10.3 million weighted average shares outstanding for the same period in 2010.
For the six months ended June 30, 2011, net loss was $10.0 million, or $0.73 per share, compared to $12.3 million, or $1.20 per share, for the same period in 2010. Other income and expense for the six months ended June 30, 2010 included approximately $8.5 million in reorganization items and $3.4 million of non-cash gains resulting from the fair value revaluation of common stock warrants. Weighted average shares outstanding were 13.6 million and 10.2 million for the six months ended June 30, 2011 and 2010, respectively.