Stock Preacher

Vermillion Inc. (OTCPK: VRMLQ)

Vermillion Inc. (VRMLQ) is involved in the discovery, development and commercialization of diagnostic tests that help physicians diagnose, treat and improve outcomes for patients. The Company uses the process of utilizing advanced protein separation methods to identify and resolve variants of specific biomarkers (known as translational proteomics) for developing a procedure to measure a property or concentration of an analyte (known as an assay) and commercializing diagnostic tests. Vermillion has focuses in the areas of oncology, hematology, cardiology and women’s health. Vermillion’s focus on translational proteomics enables it to address the market for diagnostic tests that measure multiple protein biomarkers. In April 2009, the Company announced that it has filed a voluntary petition for reorganization relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in Wilmington, Delaware.

The Company was founded as Abiotic Systems in 1993 and changed its name to Ciphergen Biosystems Inc. in 1995. It further changed its name to Vermillion, Inc. in 2007. The Company is based in Fremont, California.

Share Statistics (13-Nov-09)			FY 2007	FY 2008	% Chg	Q3 2008	Q3 2009	% Chg
Symbol	VRMLQ	Revenue, $Mn	.04M	—	n/a	0.1M	—	n/a
Current price	$22.70	Gross marg.	36.4%	n/a	n/a	100%	—	n/a
52wk Range:	$0.01-$23.53	Oper. margin	-48250	n/a	n/a	-3000	—	n/a
Avg Vol (3m):	265,712	Net margin	-53250	n/a	n/a	-4700	—	n/a
Market Cap.	141.7M
Dil. Shares Outst.	n/a	EPS, $	-4.47	—	n/a	-0.74	—	n/a

Source: Reuters.com, SEC Filings, http://www.vermillion.com/

Financial Summary

Financial Strength (11-Nov-2009)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	0.48	1.85	2.56	0.83
Current Ratio (MRQ)	0.48	2.43	3.06	0.98
Long-Term Debt to Equity(MRQ)	–	17.68	26.98	131.04
Total Debt to Equity (MRQ)	–	31.26	34.80	202.25

Source: Reuters.com, SEC Filings.

Analyst Consensus

Chart not available.

Source: www.ft.com

No consensus analysis data available.

Source: http://www.reuters.com/finance/stocks/estimates?symbol=VRMLQ.PK

Investment Highlights

The U.S. Food and Drug Administration (FDA) recently cleared the OVA1(TM) Test, the first blood test that, prior to surgery, can help physicians determine if a woman is at risk for a malignant pelvic mass. OVA1 is the first FDA-cleared laboratory test that can indicate the likelihood of ovarian cancer with high sensitivity prior to biopsy or exploratory surgery, even if radiological test results fail to indicate malignancy. The test was developed by VRMLQ in cooperation with Quest Diagnostics, the world’s leading provider of cancer diagnostics. Quest Diagnostics, which is a long-time investor in research and development of the OVA1 technology, has exclusive rights to offer the test to the clinical reference laboratory market in the U.S. for three years. The OVA1 Test is an in vitro diagnostic multivariate index (IVDMIA) test that combines the results of five immunoassays using a proprietary unique algorithm to produce a single numerical score indicating a women’s likelihood of malignancy. The OVA1 Test provides a new option in the pre-operative evaluation to help physicians assess if a pelvic mass is benign or malignant in order to help determine whether to refer a woman to a gynecologic oncologist for surgery. Numerous clinical practice guidelines recommend that women with ovarian cancer be under the care of a gynecologic oncologist. However, only an estimated one third of women who undergo surgery for possible ovarian cancer are referred to these specialist surgeons for their surgery.

VRMLQ recently announced that the U.S. Patent Office has issued patent number 7,605,003 titled “Use of biomarkers for detecting ovarian cancer” to the Company for the discovery of biomarkers for ovarian cancer. The patent covers biomarker combinations for both the diagnosis and management of ovarian cancer and covers measurement of the markers by a variety of methods, including mass spectrometry and immunoassay approaches.

Source: http://ir.ciphergen.com/preview/phoenix.zhtml?c=121814&p=irol-news&nyo=0

Technical Analysis

VRMLQ is trading above its 50 day moving average. This is considered to be the sign of a bullish trend. There is added weight to this indication because the moving average is rising and suggests that there has been buying interest in this stock.

VRMLQ has been relatively stable recently. This is evidenced by the width of its Bollinger Bands which are tighter than normal. Additionally, VRMLQ is trading above its upper Bollinger Band. Relative to recent price action, the stock is currently overextended and due for either a pause or retracement.

The MACD for VRMLQ currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9day moving average. Second, the MACD is above 0 which implies that the underlying moving averages are trending higher.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Nov-13-2009	symbol	Share, $	$ Mn	2009	2010	2009	2010
Abbott Laboratories	ABT	53.08	82.12B	14.38	n/a	2.75	n/a
Celera Corp.	CRA	6.29	514.64M	n/a	n/a	2.93	n/a
Bio Rad Laboratories	BIO	98.91	2.2B	n/a	n/a	n/a	n/a
Sci&TechManufacturers Median		52.76	27.28		n/a	2.84	n/a
Vermillion Inc.	VRMLQ	22.70	141.7M	n/a	n/a	963.8	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHSE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	n/a	0
Sales	n/a	0
Net Shares Purchased (Sold)	n/a	0
Total Insider Shares Held	3.33M	n/a
% Net Shares Purchased (Sold)	0.0%	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	(510,470)
% Change in Institutional Shares Held	103.9%

Source: Yahoo Finance

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