Valerie Palmieri - President and CEO Eric Schoen - VP, Finance and CAO Donald Munroe - SVP, Business Development and CSO

Mark Massaro - Canaccord Genuity Mary Kate Gorman - Canaccord Genuity Adam Evertts - LifeSci Capital George Cafocaru - Private Investor

Good afternoon, ladies and gentlemen and welcome to this First Quarter 2016 Vermillion’s Earnings Conference Call. My name is Rebecca and I'll be your coordinator for the call today. With me today are Valerie Palmieri, President and Chief Executive Officer; Eric Schoen, Vice President of Finance and Chief Accounting Officer; and Dr. Donald Munroe, Senior Vice President of Business Development and Chief Scientific Officer; This afternoon they’ll recap first quarter 2016 performance and discuss key accomplishments and priorities in 2016. Before we get started, I would like to point out that there will be a replay of this conference call available via telephone and Internet. Please refer to today’s press release for replay information. This presentation contains and answers to today’s questions may contain forward-looking statements. Including statements regarding Vermillion’s plans relative to trial services business as Vermillion’s plans to commercialize Overa and anticipated use of proceed for Vermillion’s loan from the State of Connecticut, Vermillion’s plan with respect to launching a pelvic mass registry, including its stability to finalize a grand contract with the Cancer Prevention and Research Institute of Texas to help fund the registry, anticipated tests and in future periods, expected progress with respect to Vermillion’s strategic plan. Vermillion’s ability to recapture clients as part of its sales initiatives and Vermillion’s ability to establish in the case of Overa and continue to improved in the case of the OVA1 payer coverage for its test including though additional clinical utility and help economic publication. You are cautioned not to place undue reliance on forward-looking statements. Vermillion is providing its information as of the date of the 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 except as required by law. 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 of Vermillion’s products, Vermillion’s ability to commercialize Overa inside and outside of the United States, Vermillion’s ability to enter into a new line of business with ASPiRA IDB incorporated, Vermillion’s ability to develop and commercialize additional diagnostic products and achieve market acceptance with respect to those products, changes in government regulations, Vermillion’s ability to obtain and maintain required regulatory approvals, payer reimbursement and other factors as described in the Vermillion annual report on Form 10-K of 2015 and Vermillion’s quarterly report on the Form 10-Q for the first quarter ended March 31, 2016. Following the Vermillion’s teams remarks, we will open the call for your questions. Now I would like to turn the call over to Ms. Palmieri. Please go ahead.

Thank you, Rebecca. Good afternoon everyone and welcome. Our update today will include a review of our progress on our strategic plan as well as a review of our first quarter 2016 financials and results. Let me start with our strategic plan. For 2016 we have two phases of our plan. The two phases are number one, a transformation phase, which begin in 2015 and plans to continue through 2016. And number two, a domestic and international market expansion and growth phase, which we believe will demonstrate meaningful results in 2016 and beyond. Let me first address the transformation phase of our strategy. This phase changes our focus from solely a technology license company to a licensing plus a diagnostic service company through ASPiRA Lab. In addition, we've formed a brand new IVD researches -- research services lines of business known as ASPiRA IVD, which we plan to meet the unique research needs of the in vitro diagnostics or IVD manufacturers studying high complexity tissue and genetic assays. I will discuss this new line of business in greater detail later in today’s call. Our transformation phase for 2016 includes five major objectives, first and foremost, our 510(k) marketing clearance from the U.S. Food and Drug Administration for Overa; as well as our targeted product Overa. Second, the continued development and publication of strong health economics and Clinical Utility Study Publications to continue to drive deposit medical policy coverage and guidelines for our products. Third, the creation of two new ASPiRA awareness and distribution channels. Number one, the initiation of international distribution arrangement and number two, the creation of our direct-to-women campaign otherwise known as the OVA1 awareness program. Fourth is the kickoff of a first in kind pelvic mass registry to support the development of new products and predictive analytics in ovarian cancer as well as a differential diagnosis of debilitating benign diseases that also present at pelvic masses and lastly, the diversification of our revenue channels and maximization of our operating infrastructure. Last month, we formed a new wholly owned subsidiary within the ASPiRA channel strategy called ASPiRA IVD. We plan to offer IVD clinical trial services to third party customers through ASPiRA IVD. Our goal for ASPiRA IVD is to become a leader in IVD trial services and to enhance our pipeline of future technologies by fostering relationships with the IVD companies that use ASPiRA IVD services. I will now go into detail on the first objective. As reported in our last earnings call, we received FDA clearance of Overa, our next generation OVA1 product on March 18, 2016. While as of our last earnings call, we were considering launching Overa only through an early access clinical study. We are now pleased to report that we will now be launching Overa as part of a targeted launch program. This targeted launch program will allow Overa to be used in clinical practice as well as allow us to build for the testing unlike the early access approach, which would have been limited to a perspective clinical study it will not include a reimbursement component. I’m also happy to report that we've [opened now] a targeted launch program at the Annual American Congress of Obstetrics and Gynecology Conference on May 14, where we introduced Overa for use in specific markets. We are committed to commercializing Overa in a phased approach that will provide broad coverage, value-based payments as well as access to an improved pelvic mass risk assessment tool. The first phase of our plan is to commercialize Overa as a targeted launch program, which we just described, which will be ongoing over the next 12 to 18 months. Our targeted launch program or TLP is focused on driving protocol and practice integration with select strategic customers and healthcare systems. Dr. Donald Munroe, our Chief Scientific Officer will offer some comments about the targeted launch program of Overa in a few minutes. Our next objective is the publication of foundational peer reviewed papers for OVA1 and Overa peer dossier including clinical utility studies, a 360 degree review of health economics, our validation studies for Overa as well as several scientific and clinical publications. At March 2016, we published the results from OVA1 clinical study as a peer-reviewed Journal Current Medical Research and Opinion or CMRO. This study is titled the Clinical Utility of an Elevated Risk Multi-Variant Index Assay Score in ovarian cancer patients. This study led by Dr. Ramez Eskander, at the University of California at Irvine found that pre-surgical identification of high risk patients using OVA1 prior surgery led to nearly all patients who had primary ovarian malignancies being referred to the specialist at the OVA1 at Gyn oncologist. These findings demonstrate, the primary clinical utility of OVA1 since initial treatment by gynecologic oncologist who is associated with a 30% survival benefit due to their specializing. We plan to add additional clinical utility and health economic publications as part of a robust payer dossier reporting the value and economics of OVA1 and Overa clinical practice. Dr. Munroe will discuss this in detail during his presentation. Please keep in mind this evidence is also important for inclusion in regional and national guidelines. Regarding guidelines we have continued to see progress with key regional professional societies on updating the guidelines for pelvic mass diagnosis and management. As a result of recent meetings, we are actively working with two professional societies on guideline update. Our third objective is a creation of two new ASPiRA distribution and awareness channels. The first distribution channel, which we're in the process of creating is a focused international distribution network. Since we received the CE Mark in Europe for Overa in October 2015, we have seen interest from various potential international distributors and we are in active discussions with several of them. We are very happy to announce our first international agreement with a South Korean distributer Biomedical Science or BMS. This agreement serves to both bring Overa to Korean patients and expand Overa’s reach outside of the U.S. as a component of our growth strategy. The new agreement to distribute Overa in South Korea would be a mass will serve as a model for additional agreements with distributors and laboratories in select global market. We believe that Overa’s proven diagnostic technology running on the Roche Cobas 6000 Platform lays a solid foundation for global commercialization, so women worldwide can more easily benefit from our technology. Keep in mind that about 90% of the ovarian cancer worldwide are outside of the U.S. and we have just started to enter that market. The second distribution channel is the creation of our patient awareness and education channel through our OVA1 awareness team. This team includes Shannon Miller, the most decorated American Gymnast of all time and ovarian cancer survivor and the team of NASCAR Sprint Driver, Martin Truex Jr. and his partner Sherry Pollex, an ovarian cancer thriver. We have made many options in choosing spokespersons to help us promote OVA1 and Overa and chose Shannon and Sherry not only because they are both ovarian cancer survivors, but also because they are very active in the community advocating for ovarian cancer awareness and understand just how OVA1 can potentially help women can better care, which may result in improved survivorship. With assistance from Shannon and Sherry, our awareness team has been instrumental in Q1 and enhancing our efforts to raise patient, family and carry of our awareness regarding ovarian cancer as awareness is still a major void. Our primary goal is to educate women, the people who love them and the overall medical community through their patient experiences and journeys using meaningful multimedia campaigns to build awareness. In March, we launched our awareness campaign called nopevicmass.com. To date we have reached over 700,000 people through our print, digital and social channel. We measure our success as follows, number one, increased traffic to our ovarian cancer risk quiz. Number two, the number of people reach through live and digital life sessions with our OVA1 awareness team members. And number three media coverage in our major markets. I would like to share with you some of the results. Since the load of our nopelvicmass.com campaign traffic to our ovarian cancer quiz on our website has increased seven fold. The question is what has increased, increase in custom orders. Today we've had a few orders that we believe have been directed by the claims, but are early in the process of measuring the overall impact. Second, as Shannon Miller has been featured in news coverage in local markets for Florida, Texas and Philadelphia. these broadcasts according to the news exposure statistics have reached over 700,000 viewers in total. And last in January Martin Truex Junior and life partner Sherry Pollex were featured and discussed at OVA1 on the Fax Sports Pre Race Show for the Daytona 500. This broadcast in Martin's article published in Players Tribune according to the news exposure statistics have reached a combined audience of over one million people. Our next objective is the kickoff of a first in kind pelvic mass registry to support the development of new products, predictive analytics in ovarian cancer and the differential diagnostic of debilitating benign conditions that also present as pelvic masses. There are two foundational elements of the pelvic mass registry that are underway. First the investment in our IT infrastructure to support large amounts of data and clinical informatics and second, finalizing our three year study protocol and setting up our initial registry sites in the second half of 2016. Our first milestone in this phase is the creation of our IT infrastructure to house our ASPiRA Lab in IVD services, informatics capability supporting the pelvic mass registry and a new IRB consented ASPiRA clinical testing registry. Our goal is to build a continuously expanding data engine for deeper understanding of both benign and malignant pelvic masses as responding grounds for future algorithms for early detection, system management, diagnosis and prognosis of gynecologic diseases. Inputs to this array of databases will include patient-reported symptom surveys, physicians’ assessments, imaging information, current diagnostics as well as new biomarkers from a variety of [NOAs] such as DNA, RNA, proteomic markers etcetera. Once we have this foundation in place, data collection with our hardware instrument system should be actionable. We believe that the future data registry with our current specimen bank and our daily specimen acquisitions will together comprise the largest non-screening and rich collection of data from benign and malignant pelvic masses. We expect the registry to develop enterprise assets not just for our present focus in ovarian cancer, but also allow us to identify biomarkers which may address benign care pathway dilemmas for a very large potential market of 20 million patients, including women who have endometriosis, polycystic ovary syndrome and other gynecologic diseases. We are also close to finalizing a contract for a $7.5 million grant from the Cancer Prevention and Research Institute at Texas with MD Anderson as our primary clinical partner. We are now finalizing the study protocol, working through the IRB approval and negotiating key contracts with a goal of enrolling the first patient in the registry the second half of this year. Please note that receipt of any CPRIT funds is subject to successful negotiation of a contract between the parties and may include the payment of future royalties to CPRIT by Vermillion. The fifth and last objective of our transformation phase is the creation of a new service within the ASPiRA channel strategy known as ASPiRA IVD. We formed ASPiRA IVD in April 2016. ASPiRA IVD will be a specialized laboratory service provider dedicated to meeting the unique testing needs of IVD manufacturers commercializing high complexity assays. We planned for ASPiRA IVD to leverage Vermilion’s existing specimen bank database, FDA experience and laboratory informatics to provide high quality IVD testing services, while potentially enhancing our pipeline of future technologies. Recent acquisitions have disrupted the existing IVD services marketplace, creating opportunity for both customer and talent acquisition. Precision Medicine and Companion Diagnostics is the fastest growing segment with 50% of the biopharma drug pipelines having an associated biomarker. We intend to vest in infrastructure in for now to become leaders in precision medicine in the area of women’s health and we believe this new service line will also enhance our pipeline of innovated diagnostic technologies. Also as a part of fulfilling this transformation base we received a $2 million in proceeds from a loan up to $4 million from the State of Connecticut Department of Economics and Community Development. We anticipate that proceeds from the loan will be primarily utilized to fund the build out of our new Trumbull, Connecticut facility including investment in ASPiRA IVD’s new laboratory services as well as the information technology infrastructure. This concludes my introduction. So let's now turn to the financials. I’ll hand the call over to Eric Schoen, our Chief Accounting Officer and Vice President of Finance for review of our first quarter 2016 financials. Eric?

Thanks, Valerie. Today, we furnished our first quarter 2016 financial results in a press release and filed our Form 10-Q with the Securities and Exchange Commission which is available for download via the Investor section of our website at www.vermillion.com. Total revenue in the first quarter of 2016 was $505,000 compared to $951,000 in the same year ago quarter. All first quarter 2016 revenue was recognized from product sales of OVA1 by ASPiRA Labs. First quarter revenue in 2015 was comprised of $635,000 in OVA1 product revenue, primarily from Quest Diagnostics sales of OVA1 and $316,000 in license revenue. We do not expect to recognize any license revenue in future quarters. Also product revenue in the first quarter of 2015 included the one-time recognition of $163,000 in deferred product revenue upon the signing of our commercial agreement with Quest Diagnostics in March 2015. Thus the quarters are not directly comparable. Product revenue in the first quarter of 2016 was derived from 2,265 OVA1 tests, all performed by ASPiRA Labs. ASPiRA Labs performed a total of 216 tests in the first quarter of the prior year in addition to the 3,567 OVA1 tests performed at Quest Diagnostics. We estimate that OVA1 volume for the second quarter of 2016 will exceed 2.300 tests. Revenue for ASPiRA Labs contractual clients is recognized when OVA1 test is performed. All other ASPiRA Labs revenue is being recognized on a cash basis and thus for non-contractual clients there is a lag period between performing the test and being able to recognize revenue for that test. Cost of product revenue in the first quarter of 2016 totaled $528,000 and was consistent with the comparable prior year quarter. Total operating expenses in the first quarter of 2016 increased to $4.9 million compared to $4.7 million in the same year ago quarter. The increase was due primarily to cost related to establishing the laboratory needed to launch ASPiRA IVD and severance costs related to our February 2016 restructuring. In order to improve operating efficiencies, we took steps to reduce go forward operating expenses by approximately 20% from our 2015 quarterly run rate. Net loss for the first quarter of 2016 was $4.9 million or $0.09 per share on weighted average shares of $52.1 million. This compares to a net loss of $4.1 million or $0.10 per share in the first quarter of 2015 on 43.1 million shares outstanding. Cash and cash equivalents at March 31, 2016, were $13.1 million. The company utilized $5.6 million in cash in the first quarter of 2016 including $600,000 of capital expenditures primarily for IT infrastructure and ASPiRA IVD’s laboratory build out. Subsequent to March 31, 2016, we received million in disbursements, a loan up $4 million from the State of Connecticut Department of Economics and Community Development. The remaining $2 million will be disbursed if and when the company achieved certain future milestones. Including the $2 million received from the State of Connecticut, the company expects net cash utilization of $2 million to $3 million in the second quarter of 2016. Now I will turn it back to Valerie.

Thanks, Eric. I would like to discuss our sales strategy and performance for Q1 2016. As reported on our annual earnings call, Q4 2015 volume was down. Based on late Q1 and early Q2 trends we believe that OVA1 testing volumes have now stabilized. Our volume per day was 38 per day in Q4 2015, 36 in Q1 and 38 per day thus far in Q2. As explained in the last earnings call, we believe as the major cost in the reduction in testing volume in Q4 was due to a slower than anticipated conversion of the client build contract, which we are actively pursuing. Keep in mind; we’re also focused on large accounts so that all contracts will be transitioned. Based on focusing on large efficient accounts, the goal of our client recapturing program is to gain approximately 25 specimens per day. To date we have contacted 100% of all former customers and we have recaptured 7% of the goal volume over the last 60 days. In addition to the client recapturing program, we have done a 360 degree review of our sales analytics and physician ordering protocol for repeat volume senders as well as those not sending after their first specimen. We have identified several ways in which we believe we can ensure that our products is indoctrinated into the practices clinical assessment. This may result an improved sales efficiency and test utilization over time. Keep in mind since the core of our STs is integrating our products into physician’s practice in a systematic way, this includes surveying patients as their annual checkup, the assessment of other diagnostic such as identifying ultrasound criteria, which may identify high risk patients earlier in the patient journey. Lastly, we are also finalizing strategic regional lab agreements for OVA1, which will differentiate their offering within their current Obgyn practices. The goal of these agreements is to maximize their distribution efforts through strategic sales teams. The goal of the ASPiRA lab sales team and labs commercial teams is to work together to integrate OVA1 as per the physicians protocol and if successful this should expand our currency position. As part of these arrangements we will be implementing specialized training programs, designed to train these commercial teams to become pelvic mass products experts. Let's now review the progress on publications, the targeted launch program for Overa and our pelvic mass registry. I’m going to turn it over to Don Munroe, our Chief Scientific Officer. Donald?

Thanks, Valerie. Let me start with a publication update. At the Annual Meeting of the Society for Gynecologic Oncology in March, two Vermillion’s sponsored posters were presented, which should result in peer reviewed papers in the coming months. One led by Dr. [Sean] at the Moffitt Cancer Center in Tampa, Florida. Looked at the upstream quality of care among all ovarian cancer patients referred to Moffitt between 2000 and 2014. Overall only 57% of the 345 patients met minimal National Comprehensive Cancer Network or NCCN standards for pre surgical work up. In fact some ovarian cancer patients experienced referral delays of up to two to three years and over 40 different pathways were observed. In addition 11% of the patients were operated on by a non-specialist prior to referral, thus we believe that even for the most advanced cancer centers there is a great opportunity to improve the speed and efficiency of getting the patient to the right specialist. A second poster was presented by Dr. Renata Urban at the University of Washington Medical Center in Seattle, Washington. She presented results from combining the Overa algorithm under its generic name MIA2G or Multi Variant Index Assay Second Generation with a patient reported symptom index. The poster reported in intruding proof of concept for a potential future personalized risk index based on MIA2G scores and patient reported symptoms. We plan to include the symptom index in the design of our pelvic mass registry. Finally, just two days ago, another study was presented at the Annual Meeting of the American College of Obstetricians and Gynecologists here in DC led by Dr. Lee Shulman from Northwestern University School of Medicine in Chicago. The study compared Overa to the ROMA algorithm on the Roche Cobas platform using serum from almost 1,000 subjects collected in two previous OVA1 trials. ROMA is an algorithm in which list is predicted using levels of two cancer antigens CA125, C4. Overa includes these markers, but also includes three host response biomarkers; Transferon, April life approaching A1 and follicle stimulating hormone or FSH. The major finding of the study was that there were approximately 60% fewer false negatives with Overa compared with the ROMA algorithm. Remember a false negative means that a patient who has an ovarian malignancy, may end up being TRIO generalist who is not trained to deal with ovarian cancer. ROMA sensitivity was lowest for Stage 1 and non-epithelial ovarian cancers substantiating gaps in ROMA effectiveness, which have been noted in previous studies. This work will also be submitted for publication soon. Next I’ll briefly outline key elements of the Overa targeted launch program or TLP. The TLP has three primary goals; first to enhance our commercial opportunity in settings where OVA1 is not gaining traction or as not being commercialized. Second, to pilot customized local practice protocols, which optimize care with Overa and third, to develop perspective evidence of Overa clinical utilities supporting national payer coverage. The first goal will be tackled with commercialization efforts focused on strategic accounts and healthcare system. We're currently in the process of qualifying these accounts. Once qualified, these perspective accounts will be categorized into two groups. One for the Overa targeted launch program and another that will participate in Overa clinical utility studies. For the Overa Targeted Launch Program we plan to seek partners to help us customize care protocols that have measureable benefits. For example by optimizing cost and minimizing the length of stay for low risk patients. Sites will be selected based on commercial appeal and their willingness to standardize a successful care path including Overa, which will help us gain local coverage and reimbursement. The second group will help us conduct Overa clinical utility studies. We will target healthcare systems with strong champions high patient volume and a proven ability to manage physician participation and compliance. We anticipate the study outputs will support payer messaging and reinforce Overa’s value in the host healthcare system. Turning to our pelvic mass registry, we're nearing the final selection of a Clinical Contract Research Organization or CRO based in Texas but with national capabilities and experience. We expect to announce the CRO when this process is completed. In addition a clinical master protocol has been developed for the registry and we’re working on the details of electronic data capture, imaging and symptom indexes and by a biorepository. Lastly, we’re proceeding with contract and IRB discussions with MD Anderson Cancer Center and expect to open a dialogue with several other hubs in the next quarter toward our goal of two hub sites and 100 patients enrolled in the pelvic mass registry by year end. Now I’ll turn it back to Valerie.

Thanks, Donald. In closing we believe that the first quarter of 2016 has built a solid foundation for continued success throughout the remainder of the year. We believe we are well positioned to enter the market expansion and growth phase of our strategy this year. This next phase of our strategy is three core foundation blocks. Number one in the U.S., starting the Overa targeted launch program with regional partners and large health organizations, while maintaining consistent commercial traction with OVA1. Number two, outside the U.S. We plan to continue our efforts to develop key strategic arrangements in specific countries aimed to maximize our ability to distribute Overa via the Roche Cobas 6000 platform and lastly, the delivery of State of the art informatics tools to the patient. provider and payers. Once these three core foundation blocks are in place, we believe we will have the ability to provide solutions for all of the diseases affecting women that can lead to pelvic mass. Keep in mind pelvic masses impact 20 million women in the U.S. and more than 300 million women worldwide. In simple terms, our vision and primary goal is to be the global diagnostic leader in advancing women’s health, coupling cutting edge information and new technologies. We are starting with the needle in the haystack ovarian cancer and we're well on our way to launching software and diagnostic solutions that we believe may truly change the outcomes of ovarian cancer and pelvic mass management worldwide. That concludes our presentation, and we’re ready to take questions.

Thank you. [Operator Instructions] And your first question will come from Mark Massaro with Canaccord Genuity.

And your next question will come from Mary Kate Gorman with Canaccord Genuity.

From LifeSci Capital we'll hear from Adam Evertts.

And that concludes our question-and-answer session. I would now like to turn -- actually we just got a question in the queue. And we will hear from George Cafocaru. He is a Private Investor.

And that does conclude our question-and-answer session. I’d now like to turn the call over to Ms. Palmieri. Ms. Palmieri please proceed.

Thank you, Rebecca. To conclude we have a steadfast execution plan to change the course of pelvic mass patient management in the U.S. and worldwide. We've completed one of the three major strategy phases our rebuilt phase. We're now focusing on completing out transformation phase. The four key elements of the transformation phase are as follows. First, the successful deployment of our commercialization strategy based on focused clinical utility and health economics to drive sales into ramp payer coverage and obtain guidelines for both OVA1 and Overa. Second is rolling out a true pelvic mass diagnostic offering with a portfolio of test in conjunction with our strategic life partners. Third, developing key results from our new distribution channels including international and direct-to-women awareness and ASPiRA IVD. And finally laying the foundation for our one of a kind public mass registry, which will be the core of our big data engine and pelvic mass portfolio. As we build our database, we plan to build upon our existing bio-analytics solutions platform to not only change the way ovarian cancer is managed, but also push early detection upstream and build the proprietary portfolio to manage pelvic mass conditions, which impact on out of every five women in the U.S. Our end goal is to serve our global market, with strong proprietary science, coupled with a platform that will drive profitability and overall shareholder value. Thank you for joining us today and thank you for your interest in Vermillion. We look forward to seeing you at the upcoming medical meeting and investor conferences.

Again I’d like to remind everyone that this call would be available for replay through May 30 starting later this evening via the link provided in today’s press release as well as available in the Investor Section of the company’s website. Thank you, ladies and gentlemen for joining us for our presentation. You may now disconnect.