Aspira Women's Health Inc (AWH) 2012 Q1 法說會逐字稿

Good afternoon, everyone, and thank you for participating in today's conference call to discuss Vermillion's first quarter ended March 31, 2012. Joining us today are Gail Page, the President and Chief Executive Officer of Vermillion; Eric Schoen, the Company's Chief Accounting Officer; and James Burns, the Chairman of the Board. Following their remarks, we will open up the call for your questions. Then, before we conclude today's call, I will provide the Company's Safe Harbor Statement, with important cautions regarding forward-looking statements made during this call. Before we begin, I would like to remind everyone that this call is being recorded, and will be available for replay through May 29, 2012, starting later this evening, via the link provided in today's press release, as well as on the Company's website.

Now, I would like to turn the call over to the President and CEO of Vermillion, Ms. Gail Page.

Thank you, Suzanne. Good afternoon, everyone, and thanks for joining us.

Today, we are going to talk about some of the advancements we've made and milestones we've crossed during the first quarter. This, of course, includes OVA1, our flagship diagnostic test designed to differentiate benign from malignant ovarian masses. Now, before we get into more detail, I would like to turn the call over to our Chief Accounting Officer, Eric Schoen, who will take us briefly through the financial details for the quarter. I will then return to talk more about the quarter, and provide an update on some exciting recent developments, as well as our outlook for 2012. We will then open up the call for your questions.

So, now to Eric.

Thank you, Gail.

Today, we filed our form 10-Q with the Securities and Exchange Commission, as well as released our first quarter financial results in a press release, both of which will be available for download to investors in our investors section of our website at www.vermillion.com.

Total revenue for the three months ended March 31, 2012 was $312,000, with $198,000 from product sales of OVA1, and $114,000 from license revenue. OVA1 revenue in the first quarter of 2012 included only the $50 fixed-fee portion of revenue per test from the OVA1 tests performed. The variable portion of OVA1 revenue is expected to be recognized in the fourth quarter of the year, consistent with 2011.

Operating expenses for the three months ended March 31, 2012 were approximately $2.4 million. Operating expenses included approximately $140,000 of non-cash, stock-based compensation expense. This compares with operating expenses of $4.8 million for the same three-month period in 2011. Operating expenses in the prior year included $1.3 million of non-cash, stock-based compensation expense.

Along with non-cash, stock-based compensation expense changes, the year-over-year decrease was primarily due to lower clinical trial and collaboration costs, the one-time reversals of accrued expenses in excess of the settlement amounts for the Bio-Rad and Molecular Analytical Systems litigation, as well as the ongoing execution of our reorganization announced in January 2012.

Total net loss for the first quarter was approximately $1.8 million, or $0.12 per share, on weighted average shares outstanding of 14.9 million. Cash and cash equivalents at March 31, 2012 were $19.9 million. We used $2.6 million in cash in operating activities during the first quarter, including the receipt of $400,000 from settlement of our gain contingency litigation. We expect $1.5 million to $2.5 million of cash used in operating activities during the second quarter of 2012, including the receipt of the Bio-Rad escrow account funds.

I would like to add some context around our recent litigation settlements. These represent positive outcomes for the Company, in terms of adding non-dilutive cash our balance sheet, while at the same time relieving liability and uncertainty, as well as stemming the legal costs spent in defense. For Molecular Analytical Systems, we had accrued $100,000 of liability on our balance sheet at December 31, 2011.

We believe our final exposure is a one-time payment of $35,000, and thus reversed the excess amount accrued at March 31, 2012. As a point of reference, the original claim in that litigation was in excess of $5 million. For Bio-Rad, we had accrued approximately $1.1 million of liability at December 31, 2011. We have settled the dispute with Bio-Rad for $700,000, and have reversed the amount accrued in excess of the settlement at March 31, 2012 into general and administrative expense.

The successful settlement of the Molecular Analytical Systems and Bio-Rad disputes allowed us to secure the release of the $1.8 million held in escrow from our 2006 sale of our Instrument business. We will recognize the $1.8 million gain on sale of Instrument business as non-operating income in the second quarter of 2012. We used $700,000 of escrow proceeds to pay the Bio-Rad settlement, and returned the balance of $1.1 million to our balance sheet in April 2012.

Those items are separate from the gain on litigation settlement announced previously on our fourth-quarter call. We settled that litigation for $1 million, with expected proceeds of $700,000 net of legal expenses and costs. We received $400,000 in cash in March 2012, with the balance due to be paid in September.

Now, I will turn it back to Gail for a discussion on various corporate initiatives.

Thanks, Eric.

Let me begin with an update on the sales front. Our expectation for Q1 was 4,000 to 4,300 tests, and our partner, Quest, performed an estimated 3,952 OVA1 tests during the quarter, a 28% increase over our volume in Q1 2011. That said, the test volume is about 1% under our expected range. We are not satisfied, and have implemented several initiatives that will lead to regaining our growth trajectory.

On our prior conference call, we indicated that this quarter was likely to be flat, as the Company was going through the process of re-engineering our sales force. This included the elimination of 4 of our 14 territory development managers, a 28% reduction. Our challenge during the quarter was to maintain the testing volumes and increase our sales force productivity to position the Company to regain its growth trajectory. We are happy to report that our sales force productivity per rep has regained its momentum, preserving a fairly flat sequential quarter. Notably, OVA1 has now been used by 12% of the gynecologists in the US since launch.

In addition, we continue to face normal market development challenges. Reimbursement and physician adoption are the key areas of focus for our plan. To address these, our territory development managers have been giving four strategic initiatives. They are focusing our KOLs to engage with regional and national payers in support of including OVA1 in positive coverage decisions; developing case studies that demonstrate the excellent sensitivity, broad range of ovarian cancer detection, and negative predictive value of OVA1; working with our reimbursement team to assist clinicians in the appeals process for patients; and continuing the medical education program that drives the change of practice management patterns for individual prescribing physicians.

We expect these initiatives to result in new physician orders, as well as re-orders from our existing customers. We continue to focus on gynecologic oncologists' support. In March, we attended the Society of Gynecologic Oncologists meeting here in Austin. The SGO meeting is attended by many of our KOLs, and we were very successful at obtaining support for payer coverage from numerous attendees. This is in line with our strategic sales initiatives, and is expected to show results in the coming quarters.

We expanded payer coverage during the quarter, including the addition of the US Department of Defense contract effective January 1, 2012. We are now actively working with Quest Diagnostics to target each of the 45 key medical centers in the US, and maximize the testing opportunity for the 1.4 million uniformed service members. This program opens up a new market segment.

Now that we have addressed the strategic sales initiatives that are currently underway, we will turn to our forward guidance. We expect 4,100 to 4,400 OVA1 test to be performed in Q2 of 2012. Our guidance always takes into account the normal market conditions during the quarter, as well as the expected impact of initiatives we mentioned above.

During our last call, we mentioned the engagement of Lehman Millet to refine the OVA1 marketing strategy. The campaign positions OVA1 as a tool that helps the ovaries speak to the physician. This new campaign highlights the exemplary sensitivity of OVA1 to identify a broad range of ovarian cancers, regardless of sub-type or stage, including early stage ovarian cancer. This new campaign was launched at the recent SGO and ACOG annual meetings. The launch included new marketing pieces, highlighting product performance and case studies from physicians nationwide who have incorporated OVA1 into their clinical practice. Not only are these examples influential among physicians, we expect that they will be well received by the private payer community.

The new campaign will be seen in our print materials, advertising, product website, and social media platforms, all of which will be in place by the end of the current quarter. Establishing a top-of-mind position with physicians for OVA1 as a standard of care for women with ovarian masses facing surgery is key to our success. Therefore, we will maintain a strong presence at industry events, print publications via physician articles, and targeted advertising, all of which lead to increased awareness and adoption.

On our last call, we described three key elements of our reimbursement plan. Working closely with our partner, Quest Diagnostics, we've made strong progress with coding, claims processing, and payer adoption. We would like to update you on each of these areas. First, let's discuss coding. Since our last call, we announced that the American Medical Association panel approved a unique Category 1 would CPT Code for the OVA1 test.

This step on the part of the AMA supports our deliberate, strategic approach for this application process, as with all our reimbursement actions. Since our CPT code approval is supported by several peer reviewed publications, and positive coverage decisions, it also represents an acknowledgment of OVA1 as an important triage test for ovarian cancer. The new code is a critical step in the Company's commercialization effort, and we look forward to this code becoming effective January 1, 2013.

Now, let me focus on the claims process. As I mentioned earlier, our territory development managers are working with physicians' offices across the country to assist with the payment appeals process. We are using these claims to educate payers, and create awareness about the medical necessity of our tests. This action has been well received, and is seen as a proactive response by our physicians. The steps also contribute to physicians staying involved with the product, rather than suspending their orders, physicians becoming a local key opinion leader for the payer, and payer awareness.

We have also started working with individual Quest Diagnostic business units to assist with claims and appeals. This has served to minimize disruption of the ordering pattern of the generalists due to patients receiving bills. This physician engagement process has generated case studies which are also being used with payers, as previously described. The key opinion leader program with physicians and our territory development managers has resulted in numerous letters of support to both national and regional payers, which we believe is a key step towards coverage. In conjunction with these letters and the technology assessment package mentioned previously, we are currently in coverage discussions with six new regional payers.

We have also stepped up our dialogue with two national payers. The actions outlined above are important to advancing these discussions at this early stage of market development. While it is difficult for us to predict when we will receive a positive coverage decision, we understand the importance of this event, and are working hard to achieve a successful outcome.

Turning to our product pipeline, on our last call we described steps that we are taking to publish the intended use study on VASCLIR, our test for the detection of peripheral artery disease. We are pleased to announce that a poster titled Results of a Biomarker Screen to Identify Peripheral Artery Disease has been accepted for presentation at the upcoming Society For Vascular Medicine's 2012 annual meeting and scientific sessions June 14 through 16, 2012 in Minneapolis, Minnesota. As to the manuscript, we have submitted for publication in a peer-reviewed vascular medicine journal, and expect to report on this during the next quarterly call.

In regard to OVA2, our next-generation test for ovarian cancer, our product design efforts continue on two fronts. First, our testing of the biomarkers for OVA2 progresses with our academic partners at Johns Hopkins, assessing design options to address incremental product opportunities within our ovarian cancer franchise.

Second, we conducted a lively and successful focus group with over a dozen nationally recognized gynecological oncologists at the recent SGO annual meeting in Austin. We were extremely pleased with the level of creativity and enthusiasm shown by the participants. Their feedback will assist us in assessing numerous options for product line extensions targeting patient segments not included in today's OVA1 label. These are expected to feed our pipeline and expand the ovarian franchise, in which we already enjoy a leadership position.

We are very pleased to report progress on our second multi-center clinical validation study of OVA1. Enrollment and sample testing has now been completed for the cohort of about 500 patients, and pathology reports are undergoing final review. Led by Dr. Robert Bristow, Director of Gynecologic Oncology Services at UC-Irvine, the database will soon be locked, and data analysis can begin. We look forward to updating you on our progress, and await a potential publication later this year. We are also very encouraged by physician interest in our Vermillion-assisted independent clinical research program. Discussions are underway with several field leading gynecologic oncologists. We expect successful applications to catalyze new research publications on OVA1's clinical utility, cost effectiveness, and potential line extension.

In summary, it was a busy first quarter, and the pace has only increased as we near the end of the first half. So with all of the legacy litigation and recent restructuring now behind us, we are able to give full attention to improving our operations, and advancing our product pipeline. With a healthy cash balance, a Category 1 CPT code, payer discussions underway, supportive KOLs, and a creative marketing campaign, Vermillion today is a Company that is well positioned for the future.

Lastly, I want to touch upon the succession plan for the President and CEO position at Vermillion. As indicated in the press release, the Board of Directors and I remain committed to a smooth transition for the Company. I will continue to serve diligently in my capacity until September 3 or earlier, should the Company identify my replacement. Vermillion is in a period of growth, with a strong balance sheet and a bright future. I am confident that the Board's succession committee will identify a new successor, who will lead Vermillion to continued commercial success.

Now, with that, I would like to open up the call to questions.

Thank you.

(Operator Instructions)

Our first question is from the line of Matt Dolan with ROTH Capital Partners. Please go ahead.

Hi, Gail, good afternoon.

Good afternoon.

First question is just on the CEO succession plan, just to be clear, where are you in searching for a replacement, and why was the early September date selected?

Okay. The succession plan, as you know, is quite normal for a company of this size, and the length, in talking to the search committee, they felt like this is a time period that they would need to look for a suitable replacement, and there are many things that we have in the process right now. We are a small company, and we certainly want to make sure that we have a very smooth transition for our collaborators, for our employees, for everyone involved. And Jim, would you like to comment on that?

Sure. We think the normal succession process in recruiting a growth oriented CEO will probably take about three months, so we figure that from here on out, June, July, and August, we should be in pretty good position to have a new CEO in place come September. So that was the thinking behind the timing.

Okay. And then secondly on test volume, Gail, I think when you gave us the guidance for Q1, you were almost done with two months of the quarter, so what happened in March, specifically? I know you talked about sales force productivity, and why are you seeing a rebound in Q2? Does that relate to shows like ACOG and SGO? Maybe a little more color there?

I think it's a combination of both. I think when we down-sized our whole sales effort in the beginning of the year, we down-sized considerably. For a company that had a team of about 15 people, when you start taking away 4 or 5, you do see an immediate impact. We really needed that time to sort of re-calibrate, focus on those territory where we had some depth and breath. But I do believe that the two meetings that we've had, the new marketing campaign, the interaction we've had with the physicians lately, that's where we see some rebound.

Okay. And then on the reimbursement front, the physician metrics are strong, and the volume is kind of flat, which implies the re-order rates continue to drop. Is there any thought to holding back on your account expansion initiatives, to make sure that reimbursement is a little bit cleaner in order to keep these physicians happy on the billing side? And along those lines, can you walk us through what the Category 1 does to these discussions? Can we expect some private pay contracts in 2012, or do we have to wait until the CPT code is in effect?

Okay, so let me just address the first part of it. That was a long question, by the way, Matt. I needed to take notes there.

So, what I would say is that we have pulled back considerably, and that is one of the things that I think, as any CEO of a small company, when you're out in the first year, you've got to go out, and you've got to put your feelers out, and you've got to figure out where you are going to get some traction, and where you don't. And after you get a certain amount of data, then you can make sort of changes in your navigation or your course, and that's what we did. And what we are really focusing on, now, are those areas of the country where we do have significant coverage, we do have adoption, and we do have quite a bit of penetration, if you will.

Now as far as the Category I CPT code, I think what that does is it gives us a lot -- a new conversation piece, as we go back into talk to clients, and also to doctors. And it's very encouraging to them to help us, and that's where we were trying to reiterate in the script, getting that code has a lot of impact to us in that it gives the doctors the wherewithal to say, look, I really do need to work with this company, because they've got this code, I need to start writing those letters, I need to start really pushing back on the insurance companies. So there will be what I would call a lot of soft impact at this point in time, with the full impact being when the code is actually put in place.

Okay. And the last one is on spend. I know you gave us the guidance for burn. Just to confirm, so on an adjusted basis, the quarterly burn going forward is $2.5 million to about $3.5 million, maybe a little higher than that, and is the OpEx that we are seeing in this P&L a good base to model off of using Q1 and going forward?

The spend for Q2, you are right on there. The OpEx for this quarter is going to be lower than we expect going forward. We had a couple of the one-time reversals from the litigation that won't repeat, and we also know that we've just got some items that were naturally lower in the first quarter than going forward. But we do reiterate our guidance that we expect our cash spend to be approximately $12 million for the year.

All right, thanks for the time.

Our next question is from the line of Laura McGuigan with B Riley. Please go ahead.

Hi, guys. Thanks for taking my call. Gail, a question for you with respect to the resignation or transition to new CEO. How will that affect the Board seats that are up for reelection at the annual shareholders meeting coming up?

Really, the only comment that I have is that with the transition of myself, I will not be running for reelection on the Board at this time.

Okay. But at this time the Company is nominating just the one nomination that you announced a few weeks ago?

Yes, we will be filing an additional preliminary proxy within the next couple days. So I would just ask that you all review all of that, because we would like to keep the call today really focused on the Company. But I think we are going to be speaking on some one-on-ones, and we're happy to address that to the extent that we can.

Okay, that's great. That's all for me for now. Thank you very much.

Thank you.

Our next question is from the line of Debjit Chattopadhyay with LOM Capital. Please go ahead.

Good afternoon, Gail. While I don't think shareholders have so far appreciated the progress the Company has made over the last 12 months. So, in a way, I'm sorry to see you leave. In terms of the outlook going forward, since there is a new CEO -- or there will be a new CEO in Vermillion, and there is also a transition in Quest, so how does that impact the $7 million loan from Quest?

I don't think that we have an answer to that today. Obviously, that note is not due until October. Obviously, Quest has to have time to get their new CEO. We will be meeting with Quest. We have, per our contract, a quarterly steering committee. So we will be working with Quest on the progress that the alliance has made, and looking at what kind of opportunities there may be. But we just don't have any visibility on that at the moment.

And, as far as the succession plan goes, does the Board have kind of a set mandate as to what kind of replacement they are looking for you? There are just a handful of candidates who can actually run a woman's diagnostic business. I mean do you guys have more color on the qualifications you're looking for?

Maybe I will refer to Jim Burns, our Chairman, on that. Well, maybe Jim has got a problem with that. But what I can tell you, Debjit --

Hold on. I am here, now, Gail.

Okay. Sorry about that.

What we are looking for going forward is a CEO that can drive commercialization in the next phase of the Company's development. So doing that, moving the adoption forward, working with Quest, and working with, either independently, or with other partners to move existing and new products forward. So the focus is going to be primarily on commercialization and increasing adoption, and pushing the top line.

And in terms of the future launch of VASCLIR and OVA2, is there more clarity on to whether VASCLIR is going to be a 2013 event or a 2014 event, and OVA2 to follow VASCLIR? And does Quest still have the rights on OVA2, as well?

The Quest agreement calls for them to have the option on three tests, and of course they have OVA1, and they have selected PAD. As a Company, we have not formally presented our OVA2 program to them, but of course, we are working under the auspices of our alliance with them, so yes, they would have the purview of looking at that as one of their selections, if you will. So I don't think we are prepared today to talk about timelines. What I can tell you is that we have had such great success in the last, I would say even six to eight weeks of the interactions that we saw at these two meetings with these physicians, which have really given us a whole new perspective of what to think about our product pipeline, and how we extend it, and how we monetize it, and all those aspects. So what I can tell you is that the Company remains very committed to making a success out of OVA1. It also remains committed to balancing its cash, such that we can develop our ovarian franchise, whether that's OVA2, or some part of that product pipeline, as well as moving VASCLIR along. So I think I mentioned this on a couple of calls ago, it's a very delicate balance that you have when you are a small company in looking at your cash and what you need to do.

But, I will tell you that, from an academic standpoint and a market adoption standpoint, it is imperative that we make a success of OVA1, because that way, when we come behind that product with other generations of ovarian cancer, basically what you do is you knock down those obstacles. It's just like OVA1 and going through the FDA. I mean, we had to be pioneering to get the FDA to create this category around the IVD MIA. Once we did that, we knew that products coming behind that, we would sort of know what that path would be for the approval. The same thing in getting the code with AMA. They created a whole new category.

Now, when products come behind that, you've sort of got some idea of what you're up against. So as we break down these barriers with OVA1, our goal and our vision would be that the products coming behind it would certainly have maybe a little easier adoption in the market. I mean, this is a whole new pioneering effort in proteomics, in multi-marker testing. So that's why there seems to be some challenges, but I think the Company has done a great job of understanding those challenges, and then overcoming those challenges.

And the final question, so with your proposed departure, do you think the non-institutional shareholder lawsuits, they disappear, and Management can actually now focus on running the Company?

Well, I think the Company always tries to stay very focused on the management of the Company. What I can say is that, obviously, a lot of these legacy issues dealing with the Bio-Rad suit that was part of the prior proceedings, and also the MAS, putting those behind us removes a lot of uncertainty, and it puts a lot of things to bed; the legal costs, the distraction of myself, obviously, it was a lot of time and energy and effort to go and make sure that the Company had a successful outcome. So I think everybody here is looking forward to a very productive summer. One of the goals of the Company will be to really be working on the value proposition of our CPT code, following through with all these clinical studies.

Dr. Monroe has done a fantastic job of interfacing with the doctors, and getting them lined up to do the things that you need, such that Carl can roll over, hopefully, one of these days in the near future, one of the larger payers. No matter what you do when you are launching diagnostic tests, these are the events, and this is how you have to make things happen. And I think here everybody is very committed to working over the summer to put our head down, and as I said, I am very committed to the task, and to help the Company make a very smooth transition.

Well, good luck with your future endeavors, Gail.

Thank you.

(Operator Instructions)

The next question is from the line of Zarak Khurshid with Wedbush Securities. Please go ahead.

Thanks, good afternoon. Hello, guys. Maybe I missed it. What was the number of covered lives at the end of the quarter?

I think approximately 86 million -- 89 million, I'm sorry. We're up, now, again.

Got it, great. And then, can you speak to any competitive headwinds that have shown up, and if that's affecting some of the business recently?

I would say that at this point, we just haven't seen a lot of impact from that. Not that we are not prepared, and not that we don't think about it, but I would say that right now, it's just all about creating a new market. We are in a market where there was no test, and it's just getting these physicians educated, and becoming a part of their daily routine, if you will.

Got it. And then kind of along that vein of creating markets, how is the average customer using OVA1 currently, and how does that differ from kind of what you had originally anticipated back when you launched the task? I think, thirdly, if you could just address maybe what the addressable market is in your view today, in terms of potential tests annually? Thank you.

Let me just talk about, we still stand behind what we've always thought the market to be. We've seen nothing in the marketplace relative to publications that would indicate that the market is any less or larger than what we thought. To remind everyone, there are two studies out there, one by the PLCO, and another one by the University of Kentucky, and there are some older studies. And when you look at those, what you see is about greater than probably 3 million, less than 5 million women will develop an ovarian mass each year. But we also know that a lot of those women, the masses may disappear, or they may never get healthcare. So that's why, when we worked upon the launch with Quest, and some outside consultants, we've always said that we believe that the market was greater than 1 million. As far as how people are using the tests, we don't have privy to that. We just know that doctors order it.

All we can do is to tell you that our job is to market the test within the confines of our labeling, and that's what we do. So if there is any other usage, we're not aware of it. So what we do is we stay focused on our labeling and the value that it brings. And I think, from a competitive standpoint, one of the things that we are finding that doctors are very appreciative of is the depth and breadth of our trial, how we got it approved. In other words, we didn't just focus on one segment of the cancers, what we did was we focused on a broad range of cancers. So what we need to do is to remember that OVA1 really is applicable to a broad range of cancers, so the doctors can feel very comfortable that they don't have to worry about, is it just epithelial, or just this. It's a very broad range.

Got it. Any sense for how many recurring customers there are currently?

We don't have that type of detail, because you've got to remember that we're sort of distributing this test through Quest. Our job is really about market development, that's what we're obligated to do in the alliance, is to really focus on the market develop to help them drive their sales efforts.

Right, but doesn't that detail help you to target your efforts? I mean, what kind of information are they sharing with you to move this process along?

Well, what we do is Bill meets with some of the Quest people on a bi-weekly basis, relative to what they are seeing, what are their sales activities, how are they directing, how can we support it? There is just a lot of that, though, that is very confidential to their own database, and so we have to respect that. But there is a certain amount of knowledge that, certainly, we work with them on. But it's just not something that we, as the manufacturer, if you will, are in a position to talk about at this point in time.

Right. Any sense for -- are there 1,000 docs ordering three tests a quarter, or is it, I don't know 500 docs ordering six tests a quarter? Any sort of metrics to help us get comfortable with the long-term viability of the business?

I think Bill is going to comment and give you as much color as he can, okay?

Hi, Zarak. We have the categories of re-ordering, and there's six various categories that we receive for re-orders and ordering volumes. But we have not divulged that, for competitive reasons, in the past.

Okay. Fair enough. Thanks.

Okay, thank you.

Our next question is from the line of Kevin DeGeeter with Ladenburg. Please go ahead.

Hi. Congratulations on all your progress. A couple quick questions. Could you provide a little more break down of the patient population for the 500 patient OVA1 study that you are enrolling? Just similar to what we saw in the first one, and just maybe kind of give us some milestones on sort of maybe timeline to submission of a manuscript. I realize that, after that, the timeline gets a little more vague.

Okay, Kevin. I think I'm going to refer to Dr. Monroe, and ask him to give you some color on that. What I am going to say is that I don't know that we can give you quite as much as you might be looking for right now, because obviously we are always positioning, giving you guys as much information as we can, and clarity, but without compromising our position relative to our competition, unveiling everything to them. So I'll ask Dr. Monroe to comment to the best that he feels like he can, fair enough?

Fair enough. Thanks so much.

Hi, Kevin. Donald, here. I think one of the advantages that Vermillion enjoys is really great access to clinical labs, relationships with doctors. In terms of kind of the breath, it's going to be a multi-center trial, a lot like the original publications. In terms of the profile of publication, we're very hopeful that it will get the attention. We basically, I think, are going to have some new things to say, based on the patient population and the way that the analysis plays out.

But it's going to be focused, really, exclusively on non-gynecologic oncologist referred patients. So it's really expanding on the intended use, and how the product performs in routine testing in that population. I think we are also really fortunate to have Dr. Rob Bristow, who is the Director of Gynecologic Oncology services at UC-Irvine; a very widely known and respected authority on ovarian cancer. So I think that's going to make it news worthy, and we're going to work to get the study out as quickly as possible, but it's really not possible to give you a timeline at this time, except that we've already said that our target is to have it out later this year, and we believe we will be able to achieve that.

Okay, terrific. Going back to the debt arrangement with Quest. Is there any timeline that, for example, there is potential forgiveness if Quest ops in for a third test, and in theory, OVA2? I'm just trying to get a little sense as to whether you have any visibility on the specific timelines or milestones that may affect whether there is a liability there or not. I think it does meaningfully change the balance sheet management questions, potentially, for the Company?

Sure. It's just unfortunate. I mean here we are in May. That is not on our agenda until October, but it is something that we think about. Obviously, if you look at the history of the Company, as each thing has come about, the Company has been very aggressive in dealing with whatever it had, whether it was a litigation, whatever it had. So all I can tell you at this point in time is that it is what it is, and we will be working with Quest to see if there are things that we can do or not do. So all I can tell you is right now, we feel very comfortable with our alliance with Quest, but we just really can't comment on that at this point in time.

Okay, fair enough. Once again, congratulations on the progress. Thanks so much.

Okay, thank you.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mrs. Page. Mrs. Page, please proceed.

Well, this is the conclusion of the call. We really appreciate everybody dialing in. We continue to think we've made great progress in moving this Company forward. As I said earlier, we think we've just cleaned up a lot of Legacy issues. This is a great time for the Company. Cash, great product out there, good pipeline, good Management Team. So with that, I'll close, thank everybody for joining us, and we look forward to our next quarterly call.

Before we conclude today's call, I would like to take a moment to read the Company's safe harbor statement. 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. 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 materially different.

Risks and uncertainties that may affect the future results of the Company include, but are not limited to, the competitive environment, the speed of market adoption, changes in government regulations, payer reimbursement, relationships with our strategic partners, and other factors, as described in the Vermilion 2010 Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Now, again, I would like to remind everyone that this call will be available for replay through May 29, starting later this evening via the link provided in today's press release, as well as available in the Investors section of the Company's website. Thank you, ladies and gentlemen, for joining us today for our presentation. You may now disconnect.