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Notes From B Riley 13th Annual Investor Conference: CEMI,VRML

|Includes: CEMI, Vermillion, Inc. (VRML)

There were some excellent small cap companies presenting at the B. Riley Investor Conference in Santa Monica this week. Five tracks covered companies in healthcare, technology and energy, consumer/telecom, software and services and internet and media. Our focus within healthcare is biotechnology, tools and clinical diagnostics.

Micro-Cap Plays in Clinical Diagnostics

Chembio (CEMI.PK $0.52) Market Cap $34M Cash $2.95M

Chembio is an emerging growth player in point-of-care (POC) diagnostics with a focus in infectious disease with rapid tests for HIV 1&2, tuberculosis and syphilis with 2011 revenues of $19.4M. Total revenues for Q1 2012 of $6.65 M are on track for growth with operating income of $720k compared to a loss last year of $139k. Forecasted revenues for 2012 are $24.4M. A new "dual path" test platform called the DPP HIV 1&2 has begun a 3000 patient clinical trials that can be used with finger stick, oral whole blood or plasma. The market potential for HIV POC testing is $200M WW. Alere (ALR $18.50) is their marketing partner with revenues of $7.2M and Alere also holds an 8% equity position in the Company. Recently a competitive product from Orasure (OSUR $10.55) made headlines when the FDA recommended that their OraQuik HIV In-Home test based on a moth swab be approved. A big opportunity for the future is an HCV test with a POC potential of $250M. Over a one year period the shares are stable up 7.28%. Management holds 12.3% of the shares.

Vermillion (VRML $2.49) Market Cap $33.42 Cash $15.5M

VRML stock soared 36% today on high volume after yesterday's B. Riley presentation with no apparent news except a lot of " mentions" from small cap newsletters. Gail Page the ex-CEO presented an update of the Company with a focus on the OVA-1 FDA approved clinical biomarker test (multimarker IVDMIA) for ovarian masses that would replace a very old CA-125 test. 3952 OVA-1 tests were sold in Q1 2012 with a forecast of 4300 for Q2. The Company has a revenue sharing agreement with Quest (DGX $57) but has 10 reps of their own supporting the Quest sales effort. A second product is under development called Vasclir Ova-2 a biomarker for identifying high risk populations for PAD (peripheral arterial diseases) utilizing beta-2 microglobulin with preliminary data expected in June.

see Face-off BGMD vs VRML

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.