Vermillion (VRML) Q2 2012 Earnings Call August 14, 2012 4:30 pm ET Executives Gail S. Page - Chief Executive Officer and President Eric Schoen - Chief Accounting Officer William Creech - Vice President of Sales & Marketing Donald G. Munroe - Chief Scientific Officer and Vice President of Research & Development Analysts Trey Cobb - Stephens Inc., Research Division Kevin DeGeeter - Ladenburg Thalmann & Co. Inc., Research Division Presentation Operator
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Eric SchoenThank you, Gail. Today, we filed our Form 10-Q with the Securities and Exchange Commission, as well as released our second quarter financial results in a3 press release, both of which will be available for download via the Investors section of our website at www.vermillion.com. Total revenue for the 3 months ended June 30, 2012, was $321,000, $208,000 from product sales of OVA1 and $113,000 from license revenue. Total revenue for the 6 months ended June 30, 2012, was $633,000, $406,000 from product sales of OVA1 and $227,000 from license revenue. OVA1 revenue in the first half of 2012 included only a $50 fixed portion of revenue per test from the OVA1 tests performed. The variable portion of OVA1 revenue is expected to be recognized in the fourth quarter of the year, consistent with 2011. Operating expenses for the 3 and 6 months ended June 30, 2012, were approximately $4 million and $6.4 million, respectively. Operating expenses included approximately $0.4 million of noncash stock-based compensation expense in the second quarter and $0.6 million in the first half of 2012. This compares with operating expenses of $5.9 million and $10.7 million for the same 3- and 6-month periods in 2011. Operating expenses in the prior year included $1.3 million and $2.5 million of noncash, stock-based compensation expense in the same 3- and 6-month periods. Along with the noncash stock-based compensation changes, the year-over-year decreases were due primarily to lower clinical trial and collaboration costs, as well as the ongoing execution of our reorganization announced in January 2012. Total net loss for the second quarter was approximately $2 million or $0.13 per share on weighted average shares outstanding of $15 million. Total net loss for the 6 months ended June 30, 2012, was approximately $3.8 million or $0.25 per share based upon weighted average shares outstanding of $14.9 million.
Net loss for the 3 and 6 months ended June 30, 2012, included a nonoperating $1.8 million gain on sale of instrument business from the release of the escrow account established in the sale of our tools business back in 2006. We used $700,000 of the escrow proceeds to pay the Bio-Rad settlement and returned the balance of $1.1 million to our balance sheet in April 2012.Cash and cash equivalents at June 30, 2012, were $18.3 million. We utilized $2.7 million in cash during the second quarter before considering the receipt of $1.1 million from the Bio-Rad escrow account. We expect $2.5 million to $3.5 million of cash utilization during the third quarter of 2012. Now I'll turn it back to Gail for a discussion on various corporate initiatives. Gail S. Page Thank you, Eric. Vermillion has become a known and respected pioneer in the diagnostics industry over the past 2 years. OVA1 was the first proteomic nIVDMIA to be cleared by the FDA, creating an entirely new approach to biomedical testing. Second, OVA1 achieved Medicare approval in record time and most recently was awarded a Category 1 CPT code working with the AMA under the new class of multi-marker codes referred to as the MAAA. Crossing these 3 major hurdles demonstrates the vision and passion of the team and our collaborators. Over the past few quarters, we have discussed the need and progress in the following areas: physician education, reimbursement, establishing clinical utility, publication and the importance of guidelines and enlisting key opinion leaders. The team at Vermilion continues to keep these initiatives as their priority as they are the cornerstones of driving market adoption and making OVA1 the standard of care. It is the convergence of these efforts that traditionally create an inflection point in the market for a new diagnostic test such as OVA1. Read the rest of this transcript for free on seekingalpha.com