April 2013
NASDAQ:VRML
Forward-Looking Statements
NASDAQ:VRML
The following information contains certain forward-looking statements relating to the companys 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 companys 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 companys 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 companys 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 forwardlooking 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 2012-2013 by Vermillion, Inc. All Rights Reserved.
All logos, trademarks and brand names used in this presentation are the property of Vermillion or belong to their respective owners.
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Corporate Vision
NASDAQ:VRML
To become a recognized leader in the advancement of womens health by providing innovative methods that detect, monitor and manage the treatment of gynecologic cancers
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We collaborate with prestigious research institutions to advance our product development programs in gynecologic oncology diagnostics We work with physician champions to conduct studies focused on quality of care and health economics benefits, to enable positive coverage decisions and inclusion in medical guidelines We promote utilization of our products by advancing from CLIA-LDT to FDA clearance, securing Category I CPT codes and driving favorable state and national coverage decisions Leveraging these core competencies, our flagship product, OVA1, is the first FDA-cleared, multibiomarker blood test for pre-surgical diagnosis of ovarian cancer. OVA1 represents a new class of software-based diagnostics
Collaborators
Strategic Partner
NASDAQ:VRML
52 Week Low/High
Avg. Daily Vol. (3 mo.) Shares Outstanding Public Float, est. Inst. Holdings, est. (mrq) Insider Holdings, est. Market Cap.
$1.13-$2.79
64,308 15.2M 13.5M 15.0% 3.9% $18.4M
Enterprise Value
EV/Revenue (TTM)
$11.5M
5.5x
1. Data Source: S&P Capital IQ & Company Management Note: Institutional holdings includes non-filers and 860,595 shares held by Quest Diagnostics.
OVA1 Addresses Unmet Clinical Need for Better Diagnosis of Ovarian Cancer
NASDAQ:VRML
Lifetime risk of developing ovarian cancer: 1 in 71 Ovarian cancer is called the Silent Killer since it often goes unnoticed, making early detection key to survival3
More than 1 million adnexal masses (aka tumors or cysts) detected annually in the U.S. Estimated 300,000 adnexal surgeries/yr of which about 22,000 result in finding cancer Only 19% are diagnosed as malignant before the cancer spreads (metastases) 15,000 US deaths annually deadliest gynecologic cancer and 5th leading cause of cancer death in women
Adnexal Mass
Key to Survival: Early Detection
Stage I II III IV
Source: American Cancer Society
Only 1 in 3 women with ovarian cancer are initially treated by a gynecologic oncologist, in part due to inadequate diagnostic tests and procedures
Overall 5-year survival rates lag far behind other cancers, despite well-documented survival advantage for those operated by a gynecologic oncologist
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3. Surveillance, Epidemiology, and End Results, Stage Distribution and 5-year Relative Survival by Stage at Diagnosis for 2001-2007,
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Transvaginal Ultrasound/Imaging
Unreliable: evaluation not standardized, too subjective Variable: Results dependent on the varying skill & experience of the Ultrasound operator
Misleading: Elevated levels can be caused by other conditions (i.e., benign ovarian tumors, endometriosis)
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Widespread Flaws Found in Ovarian Cancer Care - NY Times front page, Mar. 11, 2013
Inadequate Treatment of Ovarian Cancer - NY Times editorial, Mar. 13, 2013
This news coverage focused on a clinical study of patient access to optimal care in ovarian cancer by Dr. Robert Bristow, who also led our OVA500 pivotal study (sl. 18, 19) Key findings:
If we could just make sure that women get to the people who are trained to take care of them, the impact would be much greater than that of any new chemotherapeutic
Of 13,000 ovarian cancer patients treated between 1999 - 2006, only 37% received the care recommended by NCCN, an alliance of 21 major cancer centers across the USA Women who received the recommended NCCN standard of care were 30% less likely to die
Even with advanced cancer, recommended treatment allowed 35% of patients to survive at least 5 years, compared with 25% when the standard was not followed
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OVA1 is an FDA-cleared blood test to help physicians assess the probability that ovarian masses are malignant or benign prior to surgery
With 96% sensitivity, OVA1 may help refer cancers to oncology specialists, while 95% negative predictive value (NPV) helps ensure benign cases are treated in a local setting.4
OVA1 is the first FDA-cleared, protein-based, In Vitro Diagnostic Multi-Variate Index Assay (aka multi-biomarker test) and represents a new class of software-based diagnostics AMA assigned a unique Category 1 CPT Code to OVA1 effective January 1, 2013
As physicians who are expert in the care of women with gynecologic cancers, members of the SGO are supportive of scientific advances such as OVA1 that may help healthcare providers better detect when referral to a gynecologic oncologist is indicated.
Society of Gynecologic Oncology, Sept 2009 5
4. Ueland FR, DeSimone CP, Seamon LG, et al. Obstet Gynecol. 2011;117(6):1289-1297. 5. http://www.sgo.org/newsroom/position-statements-2/ova1/
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The OvaCalc algorithm combines the 5 results into a single numerical test value that expresses the probability of malignancy
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Ob/Gyn
Ovarian Mass
Clinical Impression
Surgery Planned
Higher Probability of Cancer
Specialist Involved
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75% 96%
88% 95%
The combination of OVA1 and physician's presurgical assessment identified primary ovarian malignancies in 90% of Stage I cancers and 100% in Stage II and Stage III patients
All cancer (n=161) All epithelial ovarian cancer (EOC; n=94) Early stage EOC (n=40)
OVA1 identified 99% of all EOC & 98% of all early stage EOCs OVA1 had 93% sensitivity for premenopausal early stage EOC vs. 36% for CA125-II
4. Ueland FR, DeSimone CP, Seamon LG, et al. Obstet Gynecol. 2011;117(6):1289-1297.
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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
Principal Investigator for the second OVA1 study, Dr. Bristow has authored four books and published numerous research articles on ovarian cancer
Thanks to diagnostic advances like OVA1, there is real hope that the majority of women with ovarian cancer will undergo surgery by a qualified gynecologic oncologist, which is one of the most powerful determinants of survival.
Dr. Robert E. Bristow Director of Gynecologic Oncology Services UC Irvine Healthcare
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Overall
Premenopausal Population Early Stage Ovarian Cancer (Stage I & II)
96%
94%
98%
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Bristow 24.8%
(N=494)
Combined 25.3%
(N=1,100)
4.3%
(N=516)
4.3%
(N=494)
4.3%
(N=1,100)
363 71.9%
(261/363)
57.2%
(203/355)
46.5%
(187/402)
51.5%
(390/757)
65.4%
(232/355)
49.3%
(198/402)
56.8%
(430/757)
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47M
Department of Defense coverage initiated Q1 2012 at list price: $650 per test
2010
2011
2012
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OVA1 partnership economics: Quest Diagnostics pays Vermillion $50 per test plus 33% of Quest Diagnostics gross profit per test Exclusive rights through 2014 with option for 2015 Development phase of alliance being closed out
Paid back development loan in 2011 In negotiations to close out development phase and define future relationship
Hospital Labs 5055%
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16,460 15,227
Increasingly supported by positive coverage decisions, i.e., Medicare and Blue Cross Blue Shield
Positive statements by ACOG & SGO OVA500 study published by Gynecologic Oncology in February 2013 Granted unique CPT code, effective Jan. 2013
2010 2011 2012
6,192
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Product
OB/GYN
Estimated Launch
Launched 2013 2014 2015 2015*
X X X X X X
Strategic imperative: give the Gyn-Onc a reason to require OVA1 in patient workup #1 Gyn-Onc request is release of CA125 result as baseline for post-operative
monitoring for recurrence of a malignancy
Importance of re-launch on a top-4 platform discussed in a later slide Aid in diagnosis claim enables Gyn-Onc to use OVA1 score to estimate likelihood of
cancer, in conjunction with imaging or other factors
OVA2: Platform for entry into high-risk monitoring, prognosis and other indications
*Assumes fast-track option with licensing is successful
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Strategic Goal: Dramatically expand OVA1 commercial reach with a top-tier IVD laboratory systems partner, leveraging their worldwide installed base of instruments and customers.
Top 4: Siemens, Roche, Abbott and Beckman Coulter (Danaher)
Key Objectives:1
Why Partner?
Instruments Adds
Phase 1
Prioritize based on market share/OVA1 menu Initiate Bus Devt discussions Platform migration algorithm optimization Validation with Ueland/Bristow study samples 510(k) showing substantial equivalence
common to most US Clin Chem reference labs and hospitals OVA1 to their oncology/repro menu & simplify OVA1 test ordering, execution, QC & results reporting
Automate
Strong
WW
Phase 2
OVA1 ordered directly from LIS, reported to LIS 5-component tests automatically generated
Strategic
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Strategic Goal: Improve specificity and PPV without sacrificing current OVA1 strengths, as a technology foundation supporting OVA1 adoption as a standard of care. Will also support expanded claims and new line extensions as an aid in ovarian cancer diagnosis and patient management.
Key Objectives1:
Protect IP and publish results of Biomarker Bakeoff completed in 2012 Complete Freedom to Operate diligence and engage licensing partners as needed Fast-Track Option (goal: EOY 2014-2015)
License only IVD-cleared components Lower Devt cost & risk; far less Devt work
Validate
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Dedicated Technical Support for Patients and Providers Guidelines Driven by New Clinical and Economic Data, Conferences and Publications Coverage from National Plans and Improved Payment Experience Re-Launch OVA1 on Major Automated Platform with Strategic Partner
Expand the addressable market into hospital based testing Increased lab placements
Improve specificity and PPV drive market penetration & expanded claims With KOL support, pursue Gyn-Onc use as aid in diagnosis & surgical planning CLIA-LDT followed by new FDA submission for high risk patient monitoring
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Management Team
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Proven success in delivering value for investors through expertise in diagnostic test development and commercialization Title Thomas McLain President and CEO Donald Munroe, Ph.D. William Creech Eric Schoen SVP Business Development and Chief Scientific Officer VP, Sales & Marketing Chief Accounting Officer Experience Claro Scientific, Nabi Biopharmaceuticals, Bausch & Lomb, Ernst & Young 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
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Board of Directors
Established Board of Directors with proven expertise in diagnostic test development and commercialization Title Bruce Huebner James Burns Robert Goggin Chairman of the Board Director Director Experience
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Hybritech, Gen-Probe, Nanogen, Osmetech Molecular Diagnostics AssureRX, Entremed, MedPointe, Osiris Therapeutics Keller & Goggin, P.C. Pain Therapeutics, COR Therapeutics, MCM Laboratories, Hewlett-Packard, Price Waterhouse Tecan Americas, American Monitor Corporation
Peter Roddy
Carl Severinghaus
Director
Director Director
Company Accomplishments
2009 2010
OVA1 cleared by FDA OVA1 launched and Medicare issued coverage CE Mark for OVA1 OVA1 high sensitivity data presented at IGCS PAD biomarker patent granted OVA1 high sensitivity data & OVA2 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 Obstetrics & Gynecology
2011
September
November December March May October November January March
2012
2013
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Complementary Diagnostics
Focus on delivering combination of improved quality, cost saving and differentiation to healthcare providers
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Key Takeaways
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Vermillion is an industry leader in Multi Marker IVD and Gynecologic Cancer Demonstrated success with first commercial product:
Nearly 40k tests ordered through 2012
Unique strengths and firsts equip Vermillion with a re-usable biomarker translation playbook Broad patent portfolio supports corporate strategy
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Contact Information
NASDAQ:VRML
Corporate Headquarters
Vermillion, Inc. 12117 Bee Caves Rd. Austin, TX 78738 Tel: (512) 519.0400 Fax: (512) 439.6980 www.vermillion.com
Investor Relations
Ron Both Liolios Group, Inc. (949) 574.3860 vrml@liolios.com
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APPENDIX
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NASDAQ:VRML
Year Ended December 31, 2012 2011 1,640 454 2,094 131 131 1,963 2,216 4,653 4,508 11,377 (9,414) 28 (206) 1,830 710 88 (182) (7,146) (7,146) (0.48) 15,010,868 $ $ $ 1,469 454 1,923 129 129 1,794 5,387 5,539 8,509 19,435 (17,641) 64 (396) 378 (96) (99) (17,790) (17,790) (1.25) 14,249,570
96 36 182
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Dr. J. Cooke (Stanford) & Dr. W. Hiatt (U. Colorado) PAD studies
Robert Bristow (UC Irvine) OVA500 and follow-on publications
VRML offers FOC testing and biomarker/algorithm support in return for 1st right of refusal on IP licensing and product opportunities
PRs & publications further drive Vermillion brand recognition & credibility
Current or proposed collaborations on expanded claims, novel patient management protocols, BRCA patient monitoring, prognosis & recurrence
(1)
Estimated. Expected milestones are not placed in any specific order within years.
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Research has shown that as the OVA1 score increases, there is an increasing probability of ovarian malignancy
4. Ueland FR, DeSimone CP, Seamon LG, et al. Obstet Gynecol. 2011;117(6):1289-1297.
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Two prospective clinical trials >1,000 adnexal surgeries >250 various malignancies 3 separate publications
17 17
10
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4. Ueland FR, DeSimone CP, Seamon LG, et al. Obstet Gynecol. 2011;117(6):1289-1297. 6. Miller R, Smith A, DeSimone C, et al. Obstet Gynecol. 2011;117(6):1298-1306. 7. R.E. Bristow et al. / Gynecologic Oncology 128 (2013) 252259
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81%
OVA1 maintains a high level of sensitivity across a broad range of malignancy subtypes OVA1 provides a minimal rate of cancers missed of 7% compared to 17%
4. Ueland FR, DeSimone CP, Seamon LG, et al. Obstet Gynecol. 2011;117(6):1289-1297 8. ROMA (HE4 EIA + Architect CA125 II) Instructions For Use, 2011 -09, Fujirebio Diagnostics, Inc.
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CPT (Current Procedural Terminology) codes are published by the American Medical Association (AMA) They provides uniform language that accurately describes medical, surgical, and diagnostic services.
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Quest providing logistic, billing, and collection support Vermillions 9 sales reps primary drivers of sales Company planning on increasing sales reps in select territories with insurance coverage to ramp sales growth Over 5,500 physicians have ordered OVA1 Along with de-novo growth, objectives will be to increase organic growth with key initiative to drive reorder rates
Est. Market, Annual Tests Reference Labs Physician Offices Hospital Labs Current OVA1 Sales
90,000
18%
60,000
0%
Untapped market
150,000
0%
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Families 14 3 3
PAD
Other TOTAL
6
11 26
2
10 46
8
21 72
4
8 32
28 new patents (WW) granted or allowed since January 2011 4 new ovarian biomarker patent families acquired from Correlogic >65 patents pending across disease areas in U.S. and abroad
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Prevalence high in diabetic and elderly populations, both to grow in coming years
Total at-risk population totals 59+ million Early diagnosis and treatment of PAD could prevent disability and save lives12 Currently no blood test for PAD and no reliable or practical diagnostic alternatives
At Risk Group14 Diabetics aged 50+ Smokers aged 50+ Elderly aged 65+ Group Overlap
In the next five years, 1 in 4 patients with PAD will suffer a heart attack, stroke, amputation or death. 13
11. Society for Vascular Medicine, June 2012 12. PAD Coalition 1Q 2008 13. PARTNERS study (Hirsch et at, JAMA 2001) 14. American Heart Association Recommended Testing
U.S. Population
(Millions)
13 20 38 (12) 59 Million
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1,025 subjects were studied by researchers at Stanford Univ. School of Medicine and Univ. of Colorado Vermillion's biomarker test identified PAD in 17 of 20 (85%) of patients missed by using conventional clinical assessment alone
15. Hiatt W, et al, A Validated Biomarker Panel To Identify Peripheral Artery Disease Vasc Med December 2012 vol. 17 no. 6 386-393
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