-

Product volume increased 82% to 3,602 units up from 1,981 in the third quarter of last year

-

Product revenue increased 68% to $1,241,433 up from $738,870 in the third quarter of last year

-

Total number of customers increased by 66% compared to the third quarter of last year 

-

New customers increased 59% compared to the third quarter of last year

-

Product volume increased 59% to 9,044 units up from 5,683 units in the first nine months of 2018

-

Product revenue increased 58% to $3,120,197 up from $1,978,721 in the first nine months of 2018

-

Total number of customers increased 47% compared to the first nine months of 2018

-

New customers increased 55% compared to the first nine months of 2018

-

Received earned media coverage with four publications, Medscape article in July, Reuters Health in September and in the last 2 weeks, National Ovarian Cancer Coalition and BlackDoctor.org.  The number of subscribers we touched are estimated to be 3.6 million, 55 million, 1.5 million, and 19 million respectively, not including social media.

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October 2019- Initial 3rd Generation Technology Validation published in Future Oncology, Publication title:  Adnexal mass risk assessment: a multivariate index assay for malignancy risk stratification. A 2092 retrospective patient study of 3rd generation algorithm. Key

conclusion: 3rd generation technology has highly differentiating risk stratification capabilities across histological subtypes and stages. It is potentially applicable to patients with adnexal masses to assist deciding whether immediate surgery is recommended. 

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3rd generation “Watch and Wait Technology” abstract accepted and presented at European Society of Gynecologic Oncology in Greece in November.

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2nd manuscript submitted for publication- 596 retrospective patient study

·

Product revenue increased 68% to $1.2 million for the third quarter 2019, compared to $739 thousand for the same period in 2018. The increase is due to an increase in the number of our tests performed. We expect revenue to increase over the remainder of the year as the sales team continues to execute on its strategy. Service revenue was $44 thousand for the third quarter 2019 compared to $35 thousand for the same period in 2018.

·

The number of OVA1 tests performed increased 82% to 3,602 during the third quarter 2019 compared to 1,981 for the same period in 2018. We expect the test volume to improve over the remainder of the year as we continue to realize returns from our sales and marketing investments.

·

Revenue on a per test performed basis was $345 in the third quarter of 2019 compared to $351 in the second quarter of 2019 and $373 in Q3 of 2018, driven by patient pay in specific geographies.

·

Gross profit on OVA1 product revenue was $653 thousand or 53% margin for the third quarter 2019 compared to $263 thousand for the same period in 2018, or 35.5% margin, a 50% increase in the rate and a more than doubling in absolute value. We anticipate the gross profit percent will increase as volumes continue to increase.

·

Research and development expenses for the third quarter 2019 increased by $211 thousand or 164%, compared to the same period in 2018. This increase was primarily due to the third generation serial monitoring product development expense.

·

Sales and marketing expenses for the third quarter 2019 increased $1.1 million, or 81%, compared to the same period in 2018. This increase was primarily due to the increased investment in headcount and personnel-related expenses compared to those in the same period in 2018.

·

General and administrative expenses for the third quarter 2019 increased by $252 thousand, or 22%, compared to the same period in 2018. This increase was primarily due to an increase in headcount and personnel-related expenses in the third quarter of 2019 compared to those in the third quarter of 2018.

·

The cash balance at September 30, 2019 was $14.6 million, which reflects proceeds from the common stock offering during the second quarter. On July 2, 2019, the Underwriter exercised its option to purchase 2,812,500 shares of Vermillion common stock at a price of $0.80 per share and resulted in net proceeds to the Company of $2.1 million.





September 30,

December 31,



2019

2018

Assets

Current assets:

Cash and cash equivalents

$

$

Accounts receivable, net

Prepaid expenses and other current assets

Inventories

Total current assets

Property and equipment, net

Other assets

Total assets

$

$



Liabilities and Stockholders’ Equity

Current liabilities:

Accounts payable

$

$

Accrued liabilities

Short-term debt

Other current liabilities

 -

Total current liabilities

Non-current liabilities:

Long-term debt

Other non-current liabilities

 -

Total liabilities

Commitments and contingencies

Stockholders’ equity:

Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding at September 30, 2019 and December 31, 2018

 -

 -

Common stock, par value $0.001 per share, 150,000,000 shares authorized at September 30, 2019 and December 31, 2018; 97,238,427 and 75,501,394 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively

Additional paid-in capital

Accumulated deficit

Total stockholders’ equity

Total liabilities and stockholders’ equity

$

$





Three Months Ended September 30,

Nine Months Ended September 30,



2019

2018

2019

2018

Revenue:

Product

$

$

$

$

Service

Total revenue

Cost of revenue:(1)

Product

Service

Total cost of revenue

Gross profit (loss)

Operating expenses:

Research and development(2)

Sales and marketing(3)

General and administrative(4)

Total operating expenses

Loss from operations

Interest income (expense), net

Other income (expense), net

Net loss

$

$

$

$

Net loss per share - basic and diluted

$

$

$

$

Weighted average common shares used to compute basic and diluted net loss per common share

Non-cash stock-based compensation expense included in cost of revenue and operating expenses:

(1)  Cost of revenue

$

$

$

$

(2)  Research and development

 -

(3)  Sales and marketing

(4)  General and administrative