Tuesday, 17 August 2010 13:59
Vermillion, Inc. (VRML : Nasdaq) engage in the discovery, development, and commercialization of diagnostics tests that help physicians to diagnose and treat patients.
The company develops novel diagnostic tests in the fields of oncology, hematology, cardiology, and women’s health with the initial focus on ovarian cancer. Its lead product includes the OVA1 ovarian tumor triage test (the ‘OVA1 Test’), which addresses presurgical identification of women who are at high risk of having a malignant ovarian tumor.
Ovarian cancer is an uncontrolled growth of abnormal cells in the ovary or ovaries of the female reproductive system. Ovarian cancer, also called cancer of the ovary, is a very serious cancer and one of the leading causes of death from cancer in women. The estimated new cases and deaths from ovarian cancer in the United States in 2010 is 21,880 new cases and 13,850 deaths according www.cancer.gov, Globally the numbers are approximately 204,000 new cases and 125,000 deaths.
On September 11, 2009 Vermillion's lead product the OVA1 ovarian tumor triage test (the OVA1 Test) was cleared by the United States Food and Drug Administration. It went from penny stock to being to a $5+ stock in less than 3 weeks. Over the course of time it went all the way up to $34 and has fallen since then and now is $6+. At its highs Adam Feuerstein from thestreet.com criticized it for being so expensive and i agree with him that it was way to high at the time without showing any results. It was also going through bankruptcy. I thought it was quite dangerous to invest in a bio stock that was so high and filing for bankruptcy even with an FDA approval. In January 2010 it emerged from bankruptcy.
They recently came out with their 8k and 10Q which had some interesting positive news.
- Revenues for the second quarter of 2010 were $344,000 compared to none for the second quarter of 2009, remember they are just starting and Ovarian Cancer is a leading cancer killer in women with over 200,000 new cases every year and 125,000 deaths a year.
- In the US Medicare will cover the test at $516 per test.
- In the US they have a partnership with Quest Diagnostics (DGX) (One of the leading Medical testing companies) and according to their recent conference call they are in discussions for European licensing and commercialization of their products.
- European Patent office granted Vermillion two patents. One for "use of bio markers for detecting Ovarian cancer" and another for "Biomarkers for Alzheimer's Disease"
- As of June 30, 2010, the Company's cash and short term investments totaled $29 million.
- It was upgraded to hold by Biologic Equity on 8/13/2010
- It was also started as OUTPERFORM by Webush on 8/17/2010
Currently the outstanding shares are approximately 10.3 million which is considered an extremely low float. It also means that the market cap currently is less than $70 million while the company has $29 million in cash and short term investments. This leaves approx $40 million for what their product is worth? You be the judge but i have seen many Bios that don't have an FDA approval, a major partner, and a great product with a larger market cap. VRML is also waiting for their product to launch in Europe.
The fundamentals speak for themselves but a heavy short interest in a low float stock makes this even more interesting and a greater probability of a short squeeze and ceiling is pretty high here.
Disclosure: Long VRML
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