Vermillion (VRML) Announces $10.5M Private Placement; Ends ATM Program

Vermillion (NASDAQ: VRML) announcd that investors including Oracle Investment Management, Jack W. Schuler, Birchview Fund LLC and several Vermillion directors have agreed to purchase approximately $10.5 million of unregistered shares of Vermillion's common stock and warrants to purchase unregistered shares of Vermillion common stock in a private placement.

Under the terms of the private placement, Vermillion has agreed to sell an aggregate of 6,944,445 shares of its common stock at the price of $1.44 per share, the closing price quoted on NASDAQ on December 18, 2014. In addition, the investors will receive warrants to purchase up to an aggregate of 4,166,659 shares of Vermillion common stock at an exercise price of $2.00 per share. The warrants become exercisable six months after the closing of the private placement and have a term of three years from the date of issuance. If and when the warrants are exercised, the company will realize an additional $8.3 million in proceeds, bringing the total investment to approximately $18.9 million, before transaction costs.

In connection with the transaction, Vermillion agreed to use commercially reasonable efforts to file as soon as reasonably practicable but no later than 60 days after the closing a registration statement with the Securities and Exchange Commission to register the resale of both the shares and the shares underlying the warrants issued at the closing.

The private placement is expected to close on or about December 23, 2014, subject to customary closing conditions. The proceeds will be used for working capital and general corporate purposes.

"We are pleased with the success of this capital raise. It will provide the funds necessary to propel our commercial transition," said James LaFrance, Chairman, President and Chief Executive Officer of Vermillion. "With this additional round of financing, we are also suspending our at-the-market offering."

"I am very excited about the year we have in front of us. This investment represents a commitment from our current investors in our 'new' team and five year strategy. It is a recognition of our skills and expertise to become a leader in proprietary diagnostic and bio-analytical solutions for the gynecological disease. Our goal is to improve the quality of life one patient at a time, and there are significant unmet clinical needs in gynecologic disease, starting with ovarian cancer," said Valerie Palmieri, incoming President and Chief Executive Officer of Vermillion.

The funds will enable Vermillion to expedite its Ova2 launch, as well as build our Adnexal mass registry, which is the foundation for portfolio and market expansion.

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