Corporate Presentation. October 2012

Transcription

1 Corporate Presentation October 2012

2 Forward-Looking Statements The following information contains certain forward-looking statements relating to the company s business, which can be identified by the use of forward-looking terminology such as estimates, believes, expects, may, are expected to, will, will continue, should, would be, seeks, pending, anticipates, the negative version of these words and other similar expressions, or by discussions of strategy, plans or intentions. Such statements include descriptions of the company s investment and research and development programs and anticipated expenditures in connection therewith, descriptions of new products expected to be introduced by the company and anticipated customer demand for such products and products in the company s existing portfolio. Such statements reflect the current views of the company with respect to future events and are subject to certain risks, uncertainties and assumptions, including those described in the company s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Many factors could cause the actual results, performance or achievements of the company to be materially different from any future results, performances or achievements that may be expressed or implied by such forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. This presentation is copyright 2012 by Vermillion, Inc. 1

3 Company Highlights ATTRACTIVE MARKET OPPORTUNITY Estimated 1M potential OVA1 tests per year $650 list price with $ Medicare reimbursement FIRST MOVER ADVANTAGE First FDA cleared test for aiding in the presurgical evaluation of ovarian masses for cancer Significant market lead time over competing products SIGNIFICANT UNREALIZED OPPORTUNITY OVA1 launched in March 2010 Early stage of commercialization Growing awareness and adoption Europe and ROW untapped PIPELINE WITH SIGNIFICANT POTENTIAL VALUE Diagnostic for women at high risk of developing ovarian cancer In development with Johns Hopkins University Market opportunity significantly larger than OVA1 Goal is to develop an Ovarian Franchise Diagnostic for Peripheral Artery Disease (PAD) Intended use study completed (~1,000 subjects) Developed biomarker panel that identifies approximately 85% of PAD patients who are missed by the Framingham Risk Score 2

4 Key Stats: VRML (NASDAQ GM) Stock Key Stats (1) Stock Price (9/24/2012) $1.68 Financial Highlights (6/30/12) Cash (mrq) $18.3M 52 Week Low/High $0.97-$3.10 Avg. Daily Vol. (3 mo.) 73,208 Shares Outstanding 15.0M Public Float, est. 13.4M Inst. Holdings, est. (mrq) 16.0% Insider Holdings, est. 5.0% Revenue (ttm) Total Assets (mrq) Total Debt (mrq) (2) Total Liabilities (mrq) Total Equity (mrq) $1.8M $18.9M $7.0M $11.8M $7.2M Market Cap. Enterprise Value $25.3M $14.0M EV/Revenue (TTM) 7.7x mrq = most recent quarter; ttm = trailing twelve months Note: Institutional holdings includes non-filers and 860,000 shares held by Quest Diagnostics. (1) Data Source: S&P Capital IQ & Company Management (2) $7M development loan with Quest Diagnostics 3

5 Company Overview Headquartered in Austin, TX, Vermillion is a commercial stage company that discovers, develops, and commercializes value added proteomicbased diagnostic tests. Current focus: Gynecologic Oncology and Vascular Medicine. First commercialized product OVA1 : Best-in-class, pre-surgical triage test that stratifies women at risk of ovarian cancer to the appropriate surgical specialist. Strategic alliance with Quest Diagnostics, Inc. (Quest). Collaborations with leading academic and research institutions: 4

6 Core Assets Vermillion s Attractive and Highly Scalable Diagnostic Tests Focus on Large, Under Served Markets Status FDA cleared September 2009 Launched March 2010 List Price $650 Market Size & Value Proposition ~1 million tests p/a ~$500+ million market opportunity Comments Early phase of commercialization Growing adoption CPT 1 code effective January 2013 Guidelines key milestone for ,600 test p/a run rate for 2Q 2012 Gynecologic Oncology High Risk Triage Vascular Medicine PAD Evergreen discovery ongoing Five new biomarkers identified Finalizing feasibility of new algorithms Intended use study completed Positive top line data released October 2011 Established clinical feasibility ~10+ million tests p/a Premier clinical collaborations Leading sample bank Biomarker discovery engine Unique algorithm capability Comprehensive patent portfolio ~59.3 million tests p/a No PAD blood-based diagnostic test currently available Clinical data from intended use study validates biomarkers Large market opportunity Strong patent protection p/a = patients annually 5

7 Diagnostic Patent Portfolio Disease area # of Patent Families Patents Issued / Allowed U.S. Non-U.S. Ovarian cancer PAD Alzheimer's disease Breast cancer Other TOTAL new patents granted or allowed since January new biomarker patent families acquired from Correlogic 6

8 Company Accomplishments September March September October January March May June September October November December March June July OVA1 cleared by FDA OVA1 launched and Medicare issued coverage CE Mark for OVA1 OVA1 high sensitivity data presented at IGC PAD biomarker patent granted OVA1 high sensitivity data presented at SGO Ovarian Cancer biomarker data presented at SGO OVA1 referenced in updated ACOG/SGO committee opinion Notice of allowance for PAD biomarker panel patent and Alzheimer patent Two OVA1 peer reviewed articles published in Green Journal Issuance of Lung cancer patent Data highlighting improved sensitivity when imaging is combined with OVA1 Positive top-line data from intended use study for PAD Notice of allowance for 5th PAD biomarker patent Acquired assets of Correlogic Received Category 1 CPT code for OVA1 PAD poster presented at SVM Positive results announced on OVA500 study by Dr. Bristow 7

9 OVARIAN CANCER FRANCHISE / OVA1

10 Ovarian Cancer Unmet Medical Need Known as the silent killer low prevalence, but high mortality rate 1 15,000 deaths per year 22,000 new diagnoses per year Early detection is key to survival 1 5 year survival rate of 43.8% 92.5% if detected in stage I, <30% if detected in later stages Currently only 19% of ovarian cancer patients are diagnosed before metastasis Treatment by a gynecologic oncologist is critical to improving survival rate Fewer complications and longer survival rates Only 1 in 3 women with ovarian cancer are initially treated by a gynecologic oncologist, in part due to inadequate diagnostic tests and procedures Traditional diagnosis techniques are unsatisfactory Limited Number of Gynecologic Oncologists 100,000 Family Practitioners 50,000 General Surgeons 50,000 Internists 35,000 OB/GYNS ~800 GO s Less than 800 gynecologic oncologists in the U.S. Proper Treatment Is Vital to Patient Survival CA125 blood test is inadequate 50% false negatives for early ovarian cancers Elevated levels can be caused by other conditions (benign ovarian tumors, endometriosis) Transvaginal ultrasound/imaging is subjective Dependent on skill / experience of operator Physical exam not conclusive 1.) Surveillance, Epidemiology, and End Results, Stage Distribution and 5-year Relative Survival by Stage at Diagnosis for , All Races, Females. 9

11 OVA1 Test OVA1 is a blood test used to help evaluate an abnormal mass of ovarian tissue for malignancy prior to planned surgery Using OvaCalc, Vermillion s FDA-cleared software device, OVA1 evaluates 5 biomarkers found in the blood and combines them into a single numerical result As the first FDA-cleared, protein-based In Vitro Diagnostic Multi-Variate Index Assay (IVDMIA), it represents a new class of software-based diagnostics Launched in March 2010 Using OVA1 to better triage women with a pelvic mass may lead to improved outcomes and more streamlined care with possible cost savings if that referral is not necessary. - Dr. Beth Y. Karlan, Former President (2005), Society of Gynecologic Oncology 10

12 OVA1 Diagnostic Pathway Patient with Ovarian Adnexal Mass Higher Probability of Malignancy Refer to Gynecologic Oncologist Clinical Assessment to Identify Mass Surgery Planned Lower Probability of Malignancy OB/Gyn 11

13 OVA1 : FDA Clearance Data OVA1 RESULTS BETTER THAN ACOG/SGO GUIDELINES OVA1 IS SUPERIOR TO CA125-II Sensitivity NPV Current ACOG/SGO guidelines 77% 87% Modified ACOG/SGO guidelines ACOG/SGO guidelines (replacing CA125-II w/ OVA1 ) 80% 88% 94% 93% OVA1 PERFORMANCE BY STAGE OF PROGRESSION 90% 100% 100% Subjects OVA1 CA125-II All cancer (n=161) 96% 69% All epithelial ovarian cancer ( EOC ; n=94) 99% 83% Early stage EOC (n=40) 98% 68% Premenopausal women with early stage EOC (n=14) 93% 36% OVA1 identified 99% of all EOC and 98% of all early stage EOCs OVA1 had 93% sensitivity for premenopausal early stage EOC vs. 36% for CA125-II Stage I Stage II Stage III The combination of OVA1 and physician's pre-surgical assessment identified primary ovarian malignancies in 90% of Stage I cancers and 100% in Stage II and Stage III patients 12

14 OVA1 Reimbursement Highmark Medicare coverage announced March 2010 List price: $650 Medicare coverage: $ Department of Defense coverage announced Q Coverage at $650 LIVES COVERED INCREASING BCBS COVERAGE (Millions) 27 Blue Cross Blue Shield (BCBS) 47 million Medicare / Medicare Advantage 45 million 30.4 Department of Defense Other payors contracted with Quest 1.4 million 1.5 million Total 94.9 million Q Q3 Q4 Q Q2 Q3 Q4 Q Q2 13

15 Quest Diagnostics Alliance Quest has the option to develop and exclusively commercialize three products via reference laboratories in partnership with Vermillion OVA1 partnership economics: Quest pays Vermillion $50 per test plus Vermillion receives 33% of Quest s gross profit per test Agreement runs through September 2014 with ability to extend exclusivity for additional year at Quest s option POTENTIAL OVA1 TESTING LOCATIONS Reference Labs, e.g. Quest, LabCorp ~30% Physicians Offices 10-20% Hospital Labs 50-60% 14

16 OVA1 CLINICAL & COMMERCIAL SUCCESS PRESENTS SIGNIFICANT GROWTH OPPORTUNITY Test volumes indicate growing adoption >30 Key Opinion Leaders in the speaker bureau 2 peer review publications in June 2011 Supported by positive coverage decisions: i.e. Medicare and Blue Cross Blue Shield Positive statements by ACOG & SGO Granted unique CPT code: effective Jan 2013 OVA500 Study top-line data released in July 2012 and submitted for publication Growing Test Volumes Demonstrate OVA1 s Potential Number of OVA1 Tests Performed 3,918 4,108 4,118 3,952 4,150 4,100-4,400 2,935 3,081 1,973 1, Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12E

17 OVA1 : OVA500 Multi-Center Intended Use Study Announced July 2012 OVA1 CONFIRMS AND EXTENDS CLINICAL TRIAL DATA OVA1 AS RISK STRATIFICATION TEST Combined w/ Physician Assessment Sensitivity NPV Overall 96% 98% Premenopausal Population 94% Stand Alone (w/o Physician Assessment) OVA1 Sensitivity Overall 92% Early Stage Disease 91% Early Stage Ovarian Cancer (Stage I & II) 91% Premenopausal Patients 94% Premenopausal in early stage w/ specificity of 61% 91% 16

18 OVA1 : OVA500 Multi-Center Study KEY TAKEAWAYS Outstanding performance reported in earlystage ovarian cancer and across a broad range of malignancy subtypes >1,000 patients in combined OVA1 clinical studies with a total of 259 malignancies Overall both studies identified 93% (78/84) early-stage ovarian malignancies Principal Investigator for the second OVA1 study, Dr. Bristow has authored four books and published numerous research articles on ovarian cancer Confirms the unrivaled sensitivity of OVA1 for early-stage adnexal malignancies in the critical population of premenopausal women Manuscript submitted for publication 17

19 Recent Industry Endorsement Category 1 CPT Code OVA1 Test Approved by American Medical Association (AMA) Current Procedural Terminology (CPT ) Panel AMA disclosed the new code on its website, which will become effective January 1, 2013 Approval supported by several peer-reviewed publications and positive coverage decisions, including Medicare The new CPT code represents a major step in advancing the commercialization of OVA1 Streamlines claims processing and accelerate further coverage and adoption by private payers CPT codes are published by the American Medical Association, which provides uniform language that accurately describes medical, surgical, and diagnostic services. 18

20 OVA1 Competition: Fujirebio s ROMA Sensitivity OVA1 98% 100% 75% 100% 91% 66% 96% 81% ROMA Early Stage EOC Late Stage EOC All Non-EOC All Combined Cancers OVA1 (1) (n=) 39/40 54/54 61/67 154/161 ROMA (2) (n=) 9/12 36/36 27/41 72/89 Dual marker test using HE4 biomarker in addition to CA125 Used in conjunction with an algorithm called ROMA (Risk of Ovarian Malignancy Algorithm) Same indication as OVA1 identify patients prior to surgery with a high or low likelihood of ovarian malignancy ROMA received FDA clearance September 2011 OVA1 vs. ROMA sensitivity data from separate published papers (1)(2) (1) F.R. Ueland et al, Obstet Gynecol. 2011; 117: (2) Moore RG, et al. Obstet Gynecol. 2011; 118(2):

21 VASCULAR MEDICINE PROGRAM / PERIPHERAL ARTERY DISEASE

22 PAD Market Opportunity Prevalence of PAD is high in the diabetic and elderly populations, both of which are expected to grow in coming years Obese people aged 50+ are another atrisk group who could also benefit from a blood-based PAD diagnostic test Early diagnosis and treatment of PAD could prevent disability and save lives (1) Currently no blood test for PAD In the next five years, 1 in 4 patients with PAD will suffer a heart attack, stroke, amputation or death. (2) At Risk Group (3) Men 3% 3% PAD Prevalence By Age 22% 21% Women 18% 8% 2% 12% 12% U.S. Population (Millions) Diabetics aged Smokers aged Elderly aged (Less Overlap) (11.5) TOTAL % (1) Steg et al, JAMA, 2007 Mar 21; 297 (11): (2) PAD Coalition 1Q 2008 (3) American Heart Association Recommended Testing <60 yrs yrs yrs yrs >75 yrs 21

23 PAD Market Opportunity (cont d) ADVANTAGES OF A BLOOD TEST Potential to dramatically improve overall diagnosis of PAD Most patients are not tested for PAD PAD is asymptomatic in many patients Studies have shown that PAD has a high prevalence and many previously undiagnosed PAD sufferers exist (1) A blood-based test to aid in the early, accurate detection of PAD would benefit all parties: Patient quality of life Physician ability to diagnose PAD Save payor costs by preventing the need for costly PAD treatments CURRENT TESTING MODALITY ABI appears very easy to perform and relatively inexpensive at $125/test but managed care no longer reimbursing unless there is a printed patient result ABI test has been shown to be problematic: Results sometimes compromised by instrument failure Results can also be compromised by complexities of calculations Potential for erroneous results due to multiple readings ABI and other tests are time-consuming and require special equipment/training and are often performed incorrectly (1) Source: PARTNERS study (Hirsch et at, JAMA 2001). 22

24 Positive Initial Study Results for PAD PAD intended use study: 1,025 subjects were studied by researchers at Stanford Univ. School of Medicine and the Univ. of Colorado Identified PAD in 17 of 20 (85%) of patients that were missed by conventional clinical assessment alone Results recently presented at an annual meeting of the nation s leading vascular medicine specialist and submitted for publication in a prestigious peer-reviewed vascular medicine journal Publication would further build foundation for discussion with the FDA regarding regulatory clearance Study results were presented at the Society for Vascular Medicine 2012 Annual Meeting in June 2012 Results indicate this biomarker model is a useful adjunctive tool that adds independent value to a clinical risk score in the target population of low to moderate Framingham risk. 23

25 FINANCIAL SUMMARY

26 Historical Financial Information (Unaudited Balance Sheet, Dollars in Thousands) June 30, 2012 Assets: Cash and cash equivalents $18,290 Accounts receivable 107 Prepaids and other assets 335 Property and equipment, net 186 Total assets $18,918 Liabilities: Accounts payable $582 Accrued liabilities 2,321 Short-term debt 7,000 Deferred revenue 1,850 Total liabilities 11,753 Total stockholders equity 7,165 Total liabilities and equity $18,918 Source: Company filings and Company management. 25

27 Historical Financial Information (Unaudited Income Statement, Dollars in Thousands) Source: Company filings and Company management. 26

28 Management & Board of Directors Deep management team and Board of Directors with proven expertise in diagnostic test development and commercialization Name Title Experience James S. Burns Chairman of the Board AssureRX, Entremed, MedPointe, Osiris Therapeutics Gail S. Page Donald G. Munroe, Ph.D. William B. Creech Eric Schoen John F. Hamilton President & CEO VP, R&D, Chief Scientific Officer VP, Sales & Marketing Chief Accounting Officer Director American Monitor, Luminex Corporation, Laboratory Corporation of America Beckman Coulter, Invitrogen Corporation, Corning (Microarray Technologies), R.W. Johnson Pharmaceutical Research Institute, Allelix Biopharmaceuticals Capitol Vial, Apogent Technologies, Chiron Diagnostics, Abbott Diagnostics Borland Software, Trilogy Enterprises, Momentum SI, Alticast, PricewaterhouseCoopers Philadelphia National Bank, Crocker National Bank, Chiron Corporation, Glyko, Association of Bioscience Financial Officers Bruce A. Huebner Director Hybritech, Gen-Probe, Nanogen, Osmetech Molecular Diagnostics Peter S. Roddy Director Pain Therapeutics, COR Therapeutics, MCM Laboratories, Hewlett- Packard, Price Waterhouse Carl Severinghaus Director Tecan Americas, American Monitor Corporation William C. Wallen, Ph.D. Director IDEXX Laboratories, Bayer Healthcare, Becton Dickenson, Wampole Laboratories 27

29 Key Takeaways Industry leader in proteomics targeting large, untapped markets Category 1 CPT code for OVA1 becomes effective January 1, 2013 Positive trends for payer coverage and adoption continues The OVA500 study produced compelling data and support toward establishing OVA1 as the standard of care for Ovarian Cancer Innovative pipeline in Ovarian Cancer and Vascular Medicine continues to make substantial progress Expanding patent portfolio is key to sustaining first mover advantage 28

30 Contact Information Corporate Headquarters Vermillion, Inc Bee Caves Rd. Austin, TX Tel: (512) Fax: (512) Investor Relations Ron Both Liolios Group, Inc. (949)