Vermillion Closes $20.6 Million Equity Financing

Vermillion (formerly Ciphergen Biosystems), a Fremont, CA-based molecular diagnostics firm, has closed a $20.6 million equity financing with new and existing investors. The financing, which comes two weeks after the company received a non-compliance letter from Nasdaq, will be used to further Vermillion’s three leading development candidates.

The company’s most established development program is an ovarian tumor triage test, designed to distinguish between benign and malignant pelvic masses. Based on an analysis of over 2,500 clinical samples, the Ov CA Assay utilizes a panel of novel biomarkers to help identify women who have ovarian cancer so that they can be referred directly to a gynecologic oncologist for their initial surgery. Results from a prospective clinical trial suggest that the use of this test could more than double the ovarian cancer cases referred to the appropriate specialist for treatment.

The company is partnered with Quest Diagnostics to commercialize the Ov CA Assay in the U.S. Vermillion initiated a multi-center prospective clinical trial in February 2007 to support a submission to FDA for clearance as an in vitro diagnostic test by the end of this year. Initial steps also have been made to gain regulatory approval in other countries.

For its second development program, Vermillion is working with Stanford University on a blood-based assay for the detection of peripheral arterial disease (PAD), a serious vascular disorder that affects eight to 12 million Americans. In late 2006, this product was moved into advanced development. And in January 2007, Quest Diagnostics accepted Vermillion’s PAD program as the second (after the Ov CA Assay) of three diagnostic tests for joint development under their partnership.

Finally, Vermillion is working with The Ohio State University Research Foundation on a test for diagnosing thrombotic thrombocytopenic purpura (TTP), a blood disorder that causes abnormal clotting and carries the risk of neurological, renal and cardiac dysfunction. The disease affects approximately 1,000 people per year in the U.S. Vermillion’s test focuses on the use of mass spectrometry to help physicians to make the correct diagnosis, initiate timely treatment, evaluate response to therapy, and predict the risk of recurrence in patients with TTP.

Vermillion’s name change came after the company — still called Ciphergen Biosystems at the time — received a letter from Nasdaq, dated August 15, 2007, saying the company was not in compliance with Marketplace Rule 4310(c)(3), which requires it to have (i) a minimum of $2,500,000 in stockholders’ equity; (ii) $35,000,000 market value of listed securities; or (iii) $500,000 of net income from continuing operations for the most recently completed fiscal year or two of the three most recently completed fiscal years.

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