Vermillion's (VRML) CEO Valerie Palmieri on Q4 2015 Results - Earnings Call Transcript

| About: Vermillion, Inc. (VRML)

Vermillion, Inc. (NASDAQ:VRML)

Q4 2015 Earnings Conference Call

March 24, 2016 8:30 AM ET

Executives

Valerie Palmieri – President and Chief Executive Officer

Eric Schoen – Vice President-Finance and Chief Accounting Officer

Donald Munroe – Senior Vice President-Business Development and Chief Scientific Officer

Analysts

Mark Massaro – Canaccord Genuity

Operator

Good morning, ladies and gentlemen and welcome to the Fourth Quarter and Full Year 2015 Vermillion’s Earnings Call. My name is Tina and I'll be your coordinator for the call today.

With me today are Valerie Palmieri, President and Chief Executive Officer; Eric Schoen, Vice President of Finance and Chief Accounting Officer; and Dr. Donald Munroe, Senior Vice President of Business Development and Chief Scientific Officer; This morning they’ll recap their Q4 and full year 2015 performance and discuss key accomplishments in 2015 and 2016 priorities.

Before we get started, I would like to point out that there will be a replay of this conference available via telephone and Internet. Please refer to today’s press release for replay information. Some of the commentary and answers to today’s questions may contain forward-looking statements. You are cautioned not to place undue reliance on forward-looking statements.

Vermillion is providing this information as of the date of this conference call and does not undertake any obligation to update any forward-looking statements contained on this call as a result of new information, future events or otherwise except as required by law. Forward-looking statements reflect management’s current estimates, projections, expectations or beliefs and involve risks and uncertainties that could cause actual results and outcomes to be material differently.

Risks and uncertainties that may affect the future results of the company include, but are not limited to the competitive environment, the speed of the market adoption of Vermillion’s products, Vermillion’s ability to commercialize over or outside the United States, changes in government regulations, Vermillion’s ability to obtain and maintain required regulatory approvals, payer reimbursement and other factors as described in the Vermillion quarterly report on Form 10-Q for the third quarter ending September 30, 2015. Following the Vermillion’s teams remarks, we will open up the call for questions.

And now I would like to turn the call over to Ms. Palmieri. Please go ahead.

Valerie Palmieri

Thank you, Tina. Good morning, everyone and welcome. Today we’ll be discussing our milestones, which marked Vermillion’s continued progress in 2015. These milestones include the following. Number one, a detailed review of our 510(k) marketing clearance from the U.S. Food and Drug Administration for the successor of our OVA1 test Overa; number two, an update on our overall strategic plan in growth channels; and number three, a review of our Q4 and full year 2015 financials.

Let me first start with our strategic plan, as mentioned on prior earnings calls, we have completed the first phase, the transition phase of our strategic plan. We are now focusing on the last two phases. Number one, the transformation phase, which began in 2015 and will continue through 2016; and number two, the domestic and international market expansion in growth phase, which we believe will demonstrate meaningful results in 2016 and beyond.

Let me first address, the transformation phase of our strategy. This phase includes changing our focus from solely a technology licensor company to licensing plus a diagnostic service company through ASPiRA. In addition, we will be launching a new research services line via ASPiRA, which we will discuss further. The transformation phase includes five major milestones which we recently completed or will be completed.

First and foremost, our 510(k) marketing clearance from the U.S. Food and Drug Administration for Overa; second the continued and methodical development and publication of strong health economics and clinical utility publications to continue to drive positive medical policy coverage and guidelines. Third the creation of two new ASPiRA awareness and distribution channel. Number one, the initiation of international distribution partnership and number two, the creation of our direct-to-women campaign OVA1 awareness program.

Our fourth milestone is the kickoff of a first in kind pelvic mass registry to support development of diagnostics and predictive analytics for diseases that lead to pelvic masses in women. And last but not least, we will be launching a new service offering within the ASPiRA channel strategy and ASPiRA research and partnership program. In terms of the first milestone, I’m excited to report that we received FDA clearance of Overa, our next generation OVA1 product last Friday March 18 2016. The FDA clearance of Overa represents a major achievement in a Vermillion’s mission to vastly improve pre-surgical assessment of the likelihood of malignancy for ovarian cancer.

As it is the first in this class to receive a second generation 510(k) clearance. Overa’s proven diagnostic technology running on the Roche Cobas 6000 lays a solid foundation for worldwide product in portfolio development to enable more women to benefit from our technology. We would also like to extend a congratulations to the Vermillion and Johns Hopkins team for this incredible accomplishment. Dr. Donald Munroe, our Chief Scientific Officer will go into more depth on the new design and early access program for Overa in just a few minutes.

Our second milestone includes laying a delivered foundation for the completion of peer-reviewed publications for dossier which includes several clinical utility studies of 360-degree review of health economics and a number of validation studies for Overa. We’re also pleased to announce today the acceptance of our Overa clinical publication in the American Journal of Obstetrics and Gynecology. The corresponding author was Dr. Judy Wolf, the CMO of Vermillion and first author Dr. Robert Coleman, Professor and Deputy Chair of Gynecologic Oncology at The University of Texas MD Anderson Cancer Center.

Donald Munroe will discuss this in detail during his presentation. Keep in mind this dossier should not only drive payer acceptance, but also drives supporting data from regional and national guidelines. Regarding guidelines, we continue to have very positive progress with key regional professional societies on updating the guidelines for pelvic mass diagnosis and management. As a result of the meetings, we’re actively working with two professional societies on guideline updates.

A third milestone is a creation of two new ASPiRA distribution in awareness channel. The first distribution channel, we’re creating as a regional focus international distribution network.

Since the publication of the CE Mark in October 2015, we have seen keen interest from various potential international partners and we are in active discussions with several of them now. We also have now received the FDA clearance of Overa, which we believe will be able to progress potential partnership even more rapidly in greater numbers, we are planning for the initial international volume in the second half of the year.

The second distribution channel is the creation of our OVA1 awareness team. This includes Shannon Miller, the most decorated gymnast of all time and ovarian cancer survivor. And the team of NASCAR Sprint Cup driver, Martin Truex and his partner Sherry Pollex, an ovarian cancer thriver. Our awareness team has been instrumental and just a few short weeks with magnifying our efforts to raise patient, family and caregiver awareness on ovarian cancer.

Our goal is to educate not only women, but the people who love them and the medical community through the stories in meaningful multimedia campaign. Here’s a recent examples of the results we’re seeing. On March 11, we launched our KnowPelvicMass awareness program in the USA Today. It was a full page ad. The expected reach for this one ad was over 750,000 readers. We measure our interaction through this actual quiz traffic pre and post the ad.

For instance, our vermillion.com website, the quiz traffic prior to the ad was 10 per day, after the ad it was 161 per day. For our knowpelvicmass.com website the quiz traffic was eight per day prior to the 11 and 76 per day after the 11. So far we’re up to 950 patient quizzes taken. In addition we held our two first Twitter chat which touched close to 450,000 people. We are in the process of measuring the impact in conversion of the overall program.

The fourth milestone is the kickoff of our first in kind pelvic mass registry to support the development of new products and predictive analytics in ovarian cancer and the debilitating benign diseases that result in pelvic masses. Key foundational elements of the pelvic mass registry are underway. First, the investment in our IT infrastructure supporting big data and clinical informatics; second the forming of a Steering Committee for the Registry comprised of multidisciplinary team of thought leaders in women’s health.

Our first milestone in this phase is the creation of our IT infrastructure to house not only our ASPiRA Lab services. But also our informatics database supporting a new IRB consented ASPiRA clinical database an addition to the pelvic mass registry clinical informatics. Our goal to build a continuously expanding data engine for deeper understanding of both benign and malignant masses as responding ground for our new algorithms for the high risk early detection, symptom management, diagnosis and prognosis of gynecologic diseases. Inputs to this array of databases will include patient-reported symptom surveys, physicians’ assessments, imaging information, current diagnostics as well as new technology from a variety of specimen matrices including DNA, RNA, proteomic markers, et cetera.

Collectively, we’re completed with the registry, plus the addition of our current and daily specimen bank, which we will have the largest non-screening and risk cohort of benign and malignant pelvic mass patients. We expect the registry to develop enterprise assets not only for our present focus in ovarian cancer, but also allow to address the benign care pathway dilemmas for a very large potential market of 20 million patients, including women who have endometriosis, polycystic ovarian disease and other gynaecologic disease.

We're also close to finalizing the contract for $7.5 million grant from the Cancer Prevention and Research Institute of Texas with MD Anderson as the primary investigator. We’re actively in process of finalizing the study protocol in contract terms. Please note that we see of any CBER fund is subject to the successful negotiation of the contracts between the parties and may include the payment of future royalties to CPRIT by Vermillion.

The fifth and last milestone of our transformation phase is a creation of a new service within the ASPiRA channel strategy and ASPiRA research in partnership program. In this program we are leveraging existing infrastructure as well as maximizing the expansion of our pipeline of future technologies by fostering relationships with IVD companies developing new diagnostics including providing a potential entrance into companion diagnostics.

Recent acquisitions have disrupted existing marketplace creating opportunity for both customer and talent acquisition. As you know precision medicine and companion diagnostics are the fastest growing segments with 50% of the biopharma drug pipeline having an associate biomarker. We believe this will allow us to continue to be innovative and evaluating potential companion diagnostics.

Our goal is the addition of this line of business is to invest in our short-term and long-term enterprise value by leveraging our specimen bank database, FDA experience, laboratory informatics and operating efficiency. This concludes my introduction. So let's now turn to the financials.

I’ll hand the call over to Eric Schoen, our Chief Accounting Officer and Vice President of Finance to review our Q4 and full year 2015 financials. Eric?

Eric Schoen

Thanks, Valerie. Today, we issued our fourth quarter and full year 2015 financial results in a press release, which is available for download via the Investor section of our website at www.vermillion.com. Our 10-K will be filed with this SEC, before the end of March. Total revenue for the full year of 2015 was $2.2 million, compared to $2.5 million in the prior year. Total revenue in 2015 was comprised of $1.9 million in product revenue from OVA1 and $316,000 in license revenue.

Total revenue in 2014 included $2.1 million in product revenue from OVA1 and $454,000 in license revenue. Total OVA1 volume was 13,598 tests for 2015; this was comprised of 8,937 tests performed by Quest Diagnostics and 4,661 tests performed by ASPiRA LABS. Our total OVA1 volume was 16,839 for 2014. This was comprised of 16,427 tests performed by Quest Diagnostics and 412 OVA1 tests performed by ASPiRA LABS. The overall decrease in volume from 2014, 2015 was due primarily to the transition of OVA1 testing from Quest Diagnostics to ASPiRA LABS.

Revenue decreased in 2015, compared to 2014, due to the decrease in OVA1 volume during the year, as well as the delay in revenue recognition for some OVA1 tests being recognized on the cash basis of accounting at ASPiRA LABS. Total revenue in the fourth quarter of 2015 was $361,000 compared to $1.6 million in the same year ago quarter. The OVA1 product revenue in the prior year included $1.2 million additional royalty component of revenue from Quest Diagnostics, which is recorded once annually and is thus not comparable to 2015. Substantially all fourth quarter 2015 revenue was recognized from product sales of OVA1 by ASPiRA LABS.

OVA1 tests performed in the fourth quarter of 2015 decreased 43% to 2,529 tests, compared to 4,474 tests performed in the prior year quarter. Again the decrease in volume in 2015, compared to 2014 was due primarily to the transition of OVA1 testing from Quest Diagnostics to ASPiRA LABS. We have been working diligently to address the volume drop off, after the Quest transition, last August. And we have noted that volumes have stabilized on a per day basis over recent months.

Revenue for ASPiRA LABS contractual client is recognized, when the OVA1 test is performed. All other ASPiRA revenue is being recognized on a cash basis and thus for non-contractual clients there was a lag period between performing the test and being able to recognize ASPiRA revenue for that test. We are continuing the conversion from a licensing company to a diagnostic services company. However, since we are a new billing entity, we experienced client denials and delays on receiving most payments in parallel with building our contracted payer network. The payer contracts did not come over with the Quest specimen, so ASPiRA is in the process of obtaining its own payer contract. Thus we will continue to experience a timing issue with recognizing revenue.

Also, although we do have a local coverage determination related to Medicare, we are receiving a significant number of client denials for Medicare claims. We are working through this issue with a local MAC Novitas Solutions to attempt to rectify the situation.

Cost of revenue for the three months ended December 31, 2015 and full year 2015 totaled $0.5 million and $2.3 million respectively. Cost of revenue for the three months ended December 31, 2014 and the full year 2014 totaled $0.5 million and $1.2 million respectively. The costs for the fourth quarter were consistent for 2015 and 2014. ASPiRA LABS opened in June 2014, thus full year 2015 cost of revenue increased from 2014, as 2015 included a full year costs compared to half-year costs in the prior year.

Operating expenses for the three months ended December 31, 2015 and the full year 2015 were approximately $4.9 million and $19.1 million respectively. This compared to the operating expenses of $5.2 million and $20.5 million for the same three months and full year period 2014.

Operating expenses included $0.3 million of non-cash stock-based compensation expense in the fourth quarter and $1.2 million for the full year for both 2015 and 2014. The overall decrease in expense was due primarily the lower collaborations, clinical trials and consulting, as the development work on Overa was substantially completed in 2014, as well as start-up costs for ASPiRA LABS included in 2014 prior to the June 2014 opening of ASPiRA LABS, not being repeated in 2015.

Net loss for the fourth quarter was $5 million or $0.10 per share on weighted average shares outstanding of $52 million. Net loss for the full year 2015 was $19.1 million or $0.41 per share on weighted shares outstanding of $47.1 million. Our total outstanding shares at December 31, 2015 were $52.1 million. Cash and cash equivalents at December 31, 2015 were $18.6 million. The company utilized $5.3 million in cash in the fourth quarter of 2015 including approximately $700,000 primarily related to an information technology infrastructure investment. We expect cash utilization to decrease after the first quarter of 2016 as a result of the restructurings that we announced this February of 2016. Our goal is to reduce operating expense by approximately 20% from our 2015 run rate.

Now, I’ll turn it back to Valerie.

Valerie Palmieri

Thanks, Eric. I would like to discuss the sales strategy and performance for Q4 and all of 2015. Q4 volume was significantly down to planned and unplanned attrition due to the volume transition. As a Q4 2015 our daily volume was 38 specimens per day. As reported on the Q3 earnings call, as of the August transition there was approximately 50 specimens per day.

We anticipated a loss of 15% versus the loss of 24% our transition. The majority of the loss was due to slower than anticipated conversion of client bill contracts, which we are actively pursuing. Keep in mind we’re also focused on larger patient accounts. So 100% of these accounts will not be transitioned. In 2015, approximately 1,145 accounts transitioned, of the accounts which transitioned 950 of them grew by 28%. In other words comparing the average volume per month, pre and post transition we received 28% more volume per account.

This is also a combination of focusing on large accounts and increasing the number of physicians ordering within an account, giving the losses to the client bill account so all gains were offset. We are also finalizing large regional lab agreement which will sell OVA1 as a differentiator with their OB/GYN relationships. The targeted effort of ASPiRA sales and these commercial teams will stage OVA1 as a part of a pelvic mass workup, and to expand our current base of physicians.

As part of these arrangements we were implementing specialized training programs as these commercial teams will be the pelvic mass product expert. Regarding the Overa launch, an anticipation of the launch, we have began building the commercial building blocks, which include applying for a new Category I CPT code and offering Overa to a separate early access program via clinical utility study program. Donald will be discussing this in greater detail during his section of the call.

To round-up the commercial update, I will be reporting on our managed markets effort. As you know we have focused at the regional and national level. At the regional level, we gain positive medical policy coverage in December 2015 for Medi-Cal, California’s, a total of close to 13 million lives. Also in California, we recently achieved positive medical policy coverage for an additional 1.8 million lives, which included safety medical, federal health, scripts and the heritage network lives collectively. In Florida, we also picked the positive medical policy coverage with AvMed for an additional 300,000 lives. At the national level, we’re in constant dialogue as we wait the acceptance of our first clinical utility peer-reviewed publication. Our goal is to obtain our first national payer in 2016.

Now, let’s review the progress on our second generation test Overa, I’m going to turn it over to Donald Munroe, our Chief Scientific Officer. Donald?

Donald Munroe

Thanks, Valerie. Today, I’ll be updating you on the Overa clearance as well as our go-forward plans for early access in Overa publication. Last, I’ll update you on our plan pelvic mass registry progress. As a reminder, we undertook the design of second generation OVA1 product respond to physician feedback of our OVA1. Critical features they like about OVA1 are as high sensitivity and negative predictive value across all stages in subtypes of ovarian cancer.

Specificity of positive predictive value on the other hand are features they wanted just to improve. Some also expressed concern about patients with ambiguous menopausal status and the need for separate pre and post-menopausal cutoff. And finally international interest in large reference labs have indicated that they prefer all the biomarkers if you run on a single integrated clinical chemistry platform rather than the two legacy OVA1 instruments.

We responded by replacing two OVA1 biomarkers with two new markers and moving all five assays of the Roche Cobas 6000 a globally recognized IVD platform. We then reengineer the algorithm to harvest added specificity and integrate the determination of menopause into the assay. As a result the doctor simply orders the test, prepares the score to a single cutoff of five years effective of menopause and counsel the patient based on low or high risk far simpler and less error-prone and existing three hours test.

Last Friday we received clearance under the K150588. Overa is the first time the FDA has cleared the second generation IVDMIA. We announce clearance on Monday just in time to hang a banner on the last day at the Annual SGO Meeting, which we were attending in San Diego. Now we're ready to move on to commercialization readiness which I’ll describe next.

In this industry everyone knows that if you can't get paid, you don't have a business. Overa like any new product has a work to do in order to win coverage, value pricing, acceptance, and widespread adoption. While we maintain commercial focus on OVA1, where we have a Category I CPT code in growing base of covered lives. We plan to implement a separate Overa early access program to satisfy the readiness checklist, validation publications, health economics and clinical utility.

In 2016, we plan for Overa to be available only through an early access program offer just select customers. Selection will be based on their commercial appeal, institutional prestige and commitment to accelerate clinical utility publications and local guideline. We expect validation to come through a series of papers, we already have in progress.

In fact, the first and most important of these has already been accepted by The Gray Journal. The American Journal of Obstetrics and Gynecology and is available in preprint form on their website. Its title, it’s validation of the second generation multivariate index assay for malignancy risk of adnexal mass, external authors includes Dr. Rob Coleman from MD Anderson, and Dr. Tom Herzog from the University of Cincinnati. The study compared performance of Overa under its generic name MIA2G head to head against OVA1, as well as overall physician assessment CA 125 and modified ACOG referral guidelines, using germ samples from the previously published perspective OVA500 trial.

Key results we’re announced last year when a poster on validation was presented at the American Society of Clinical Oncology, so I’ll only highlight a couple of findings. First Overa retained the key features of OVA1, when combined with clinical assessment, sensitivity was 94% overall. Overa by itself detected 95% of epithelial cancers, 89% of all early stage and 100% of late stage malignancy. And negative predictive value was 97.2 on its own and 97.7 when add to clinical assessment. Statistically, Overa sensitivity and NPV were equivalent to OVA1 supporting the retention of these critical features.

And second Overa reduced the number of false positives by one-third compared with OVA1. Positive predictive value was also significantly higher for risk stratification at 40.4%. As a result, 51 more OVA500 patients were accurately stratified with Overa for an overall total 20% higher than OVA1. To summarize, we’re very excited to maintain our advantages of triaging ovarian cancer while improving on physician experience and satisfaction with the tests. Another half dozen or so Overa publications are planned for submission in 2016.

Finally, we’re continuous on start-up and contracting for the pelvic mass registry 2016. We now have a prestigious Steering Committee under contract including representation from MD Anderson, Kaiser Permanente, Northwestern University, NCI and the Ovarian Cancer Research Fund Alliance, a leading patient efficacy and research group as well as others. We have finalized the study protocol focused on women’s journey from first identification of pelvic mass through surgery, diagnosis, the 12-month follow-up. Our goal is getting IRB approvals, enroll our first patient in the third quarter and have at least two hub sites and 100 patients enrolled by year’s end.

Now I will turn it back to Valerie.

Valerie Palmieri

Thanks Donald. In closing 2015 was truly a historic for Vermillion and transitioning our technology from Quest to ASPiRA. We have completed the rebuild phase and have hit major milestones in our transformation phase of 2015 and 2016, as we have planned. In 2016, we believe we are well positioned for our third phase, which is a market expansion and growth phase.

During 2016, we expect to complete three major foundation blocks: number one, in the U.S. consistent commercial traction with OVA1 and beginning early access clinically through the studies of Overa with regional partners and large health care organizations. Outside the U.S. we plan to initiate arrangements in key strategic countries and to maximize our ability to distribute Overa via the Roche Cobas 6000. And lastly, the delivery of our state-of-the-art informatics tools to the patient provider and payers, starting with OVA1 Plus.

With these three core foundation blocks in place, we believe that we will have the ability to be the solution for all diseases affecting women, secondly through a public mass. This impacts 20 million women in the U.S. and more than 300 million women worldwide.

In simple terms, our goal is to be a global diagnostic leader in advancing women’s health with information in new technologies. We are starting with the needle in the haystack ovarian cancer and we are well on our way to launching the most impactful software in diagnostic solutions that may truly change the outcomes to ovarian cancer and public mass management worldwide.

That concludes our presentation and we are ready to take questions.

Question-and-Answer Session

Operator

[Operator Instructions] We are going to Mark Massaro with Canaccord Genuity.

Mark Massaro

Hey guys, thanks for taking the question. Congratulations with…

Valerie Palmieri

Good morning Mark.

Mark Massaro

Good morning, congratulations with the regulatory clearance of Overa. I want to start and ask about the sales and marketing team and can you comment on how large the team is today and may be comment on the number of folks that will continue to service OVA1 value rollout the early access program for – a excuse me OVA1 while you rollout the early access program for Overa?

Valerie Palmieri

Sure, sure. So we have a combination of what I call internal team members, as well as partnerships that we are actively finalizing with large regional laboratories in addition to looking at what I call external salesforces. So in terms of our internal team members we have about 11 people on our team. And nearing key markets keep in mind we’re not nationwide we are focusing on the markets where we have KOL groundswell and that we also have positive medical policy coverage.

Mark Massaro

Got you, okay. So do you expect to increase the number of direct reps as the year progresses or how does your discussions with the some of these reps impact your position to expand the number of direct reps you have.

Valerie Palmieri

So yes, so I think there are two things, one is since we got our clearance, the interest is expedited even further to quicken the pay. And we are going to be leveraging, balancing, so if there’s key markets that we have a great partner, then we will not need to put a rep in that specific area. But we are going to be focusing on the areas that we need to backfill. So we will be adding sales force, feet on the street, from either an internal/external perspective to a large extent this year.

And part of that was last year is really getting our coverage in place, getting our guidelines, or just to say our publications in place so that we can get into guidelines. And so we want to line up basically clinical utility, health economics also getting Overa cleared. So all these blocks are now lining up for us to really, I’d say put the jet fuel on expediting the number of feet on the street whether internal or external.

Mark Massaro

Okay, great. And thanks for the commentary on the prospects of working with large regional labs. Is there a time you’re thinking where you might be able to sign an agreement with one or more labs? And any additional color there would be helpful.

Valerie Palmieri

Yes. So there is – we’re in late-stage discussions with several of them and an agreement is eminent Mark.

Mark Massaro

Okay, excellent. Okay. So assuming there is an agreement with one lab, is it your intention to try to go exclusive with one lab, or are you casting a broader net to work with more than one?

Valerie Palmieri

No, see the strategy would be initially to start in specific markets. So for instance if one lab overseas one market we’re not going to create a competition because of course they are strong in different markets, right. So what we like to do is initially have a non-exclusive, but honestly we want to make sure that we are getting the proper traction and we’re with the right player. So we’re not looking to repeat quest. We are looking to ensure that we were the complicated sales force. And those that are more than just really pushing what I call OVA1, but really the pelvic mass disease management portfolio.

Mark Massaro

Okay. And with roughly 2,500 tests in Q4, I know it’s really early with the brand new approval of Overa. Can you comment on how you think test volume progress as we now that we’re deep into Q1 and probably more realistically looking into Q2?

Valerie Palmieri

So with Overa, as you know we mentioned we’re going to be doing is offering it via clinical utility access program. So that is we’ve got a specific institutions or healthcare systems that want to enroll in that plan. That will definitely have an impact on volumes. And also keep in mind what clinical questions we were designing to solve within Overa, we have very strong negative predicted value with OVA1, but we had margin of positive predicted values. So now we have a test that has both sides of the coin.

Mark Massaro

Okay, very good. And it is your intention to charge a premium for Overa relative to OVA1?

Valerie Palmieri

Yes. We will be charging a premium.

Mark Massaro

Okay. And this is my last question. I’ll hop off. I’m just really interested in your comments on companion diagnostics. Where are you, I would imagine that it’s early discussions, but can you frame maybe the opportunity in ovarian cancer and maybe beyond ovarian cancer in the future. And is there any type of timeframe that you’re working on to potentially sign a deal with the pharmaceutical company?

Valerie Palmieri

So it’s a little early to say, but there is just to look at what’s happening in the industry, there’s a lot of disruption in the industry today from a services perspective, as well as the fact that we are the thought leaders with ovarian cancer and in addition to that leveraging our expertise. So between our expertise being file a repository data focused an inch-wide, a mile deep in pelvic mass disease, there is a large degree of interest. So more to come on that market it’s a little too early right now but it’s been very exciting.

Mark Massaro

Thanks very much.

Valerie Palmieri

Thank you.

Operator

[Operator Instructions] It appears there are no further questions at this time. I’ll turn the call back over to Ms. Palmieri for any closing or additional remarks.

Valerie Palmieri

Thank you, Tina. To conclude, we have a steadfast execution plan to change the course of pelvic mass disease in the U.S. and worldwide. We have completed one of three major strategy phases, our rebuild phase. We’re now focusing on completing our transformation phase.

The fourth key elements are as follows: first, the successful deployment of our commercialization strategy based on focused clinical utility, and health economics to drive sales ramp and payer coverage and guidelines for both OVA1 and Overa; second, is the rolling out of a true pelvic mass disease management offering with a portfolio of test in conjunction with our partners; third, delivering key results from our new distribution channels, including international Direct to Women awareness and the ASPiRA research services. And finally, laying the foundation for our one-of-a-kind pelvic mass registries that will be the core of our big data engine in pelvic mass disease portfolio.

As we build our database, we plan to build upon our existing bio-analytics solutions platform to not only change the way ovarian cancer is managed, but also to push early detection upstream and build our proprietary portfolio to manage pelvic mass diseases, which impacts one out of every five women in the U.S. Our end goal is to serve the global market with strong proprietary science, coupled with a platform which will drive profitability and overall shareholder value.

Thank you for joining us today and thank you for your interest in Vermillion. We look forward to seeing you at the upcoming medical meetings and investor conferences.

Operator

This does conclude today’s conference. Thank you for your participation.

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