Vermillion raising $31.5M for cancer Dx

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Vermillion has inked an equity deal that will bring in $31.5 million, money the company will use to expand sales and reimbursement for its ovarian cancer diagnostic.

Under the deal, Vermillion ($VRML) will sell 8 million shares to Oracle Investment Management and other backers for an initial $13.2 million. Once that deal closes, the company will issue another $12.5 million warrants and, when the warrants are exercised, haul in another $18.3 million.

With the cash, Vermillion wants to scale-up sales and lock down reimbursement for OVA1, the company's flagship diagnostic test. OVA1 works to help physicians decide whether ovarian masses are malignant or benign before surgery, measuring the levels of 5 proteins in patients' blood to guide treatment decisions.

Since winning FDA clearance and a CE mark in 2010, Vermillion has partnered with Quest Diagnostics ($DGX) and others to get OVA1 distributed in the U.S., India and around the world.

Some of the money will also go to fund the development of OVA2, Vermillion's next-gen test. The company is working with researchers at Johns Hopkins to evaluate biomarkers for the test, which also incorporates intellectual property Vermillion bought from Correlogic Systems for $435,000 in 2011.

The company is also teaming up with Stanford University to develop Vasclir, a blood test to stratify an individual's risk of peripheral artery disease.

Last year, Vermillion increased its revenue by 9% to $2.1 million, with OVA1 sales accounting for $1.6 million.

- read the announcement

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