Vermillion ($VRML) has raised $10.5 million with the prospect of bumping that total up to $18.9 million, if investors exercise warrants that are part of the deal. That's a pretty impressive feat given that the company has only a $55 million market valuation.
The company will use the funds to aid the launch of its next-generation OVA2 diagnostic test; it already markets an earlier iteration--the FDA-cleared OVA1 to assess the risk of ovarian cancer prior to surgery. For higher-risk patients, gynecologic oncologists are usually involved. Vermillion expects to release OVA2 during the second half of 2015.
Both tests are based on the company's OvaCalc algorithm that combines five biomarker results to create a single numerical evaluation of risk; the test stratifies patients into higher or lower risk based on this.
In clinical testing, OVA1 reduced the portion of malignancies missed to 4% from 25%. It also improved the diagnosis of early-stage cancers; with the OVA1 test only 5% of them were missed, while 31% were missed with clinical evaluation alone.
About 65,000 OVA1 tests have been ordered. Ovarian cancer is rarely diagnosed early and has the highest mortality rate of all gynecological cancers, the company noted, adding that 500,000 to 1 million U.S. women experience ovarian masses annually and 150,000 to 300,000 of these women have suspicious ovarian tumors removed every year.
The funds will also support the company's adnexal mass registry that tracks women with ovarian masses.
In the financing, Vermillion sold 6.9 million shares at a price of $1.44 per share with warrants to purchase up to an additional $4.2 million shares at a price of $2 per share that become exercisable after 6 months. Investors in the financing include Oracle Investment Management and the Birchview Fund.
Vermillion was up 7% to $1.59 in early trading on the financing news.
- here is the release