Aspira Women's Health Inc.

Aspira Women's Health Inc.

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Medical - Diagnostics & Research

Aspira Women's Health Inc. (AWH) Q3 2016 Earnings Call Transcript

Published at 2016-11-11 19:45:22
Executives
Valerie Palmieri - President and CEO Dr. Marra Francis - CMO Eric Schoen - VP, Finance and Chief Accounting Officer
Operator
Good afternoon, ladies and gentlemen. Welcome to the Third Quarter 2016 Vermillion Earnings Conference Call. My name is Matt and I’ll be your coordinator for the call today. With me today are Valerie Palmieri, President and Chief Executive Officer; Dr. Marra Francis, Chief Medical Officer; Eric Schoen, Vice President of Finance and Chief Accounting Officer. This afternoon, they’ll recap their third quarter 2016 performance and discuss key accomplishments and priorities for the remainder of 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 research trial services business, ASPiRA IVD, Vermillion’s plans to commercialize Overa, including its targeted launch program, anticipated test volumes in future periods, expected progress with respect to Vermillion’s strategic plan, expected results from Vermillion’s sales initiatives, Vermillion’s ability to establish in the case of Overa and continue to improve in the case of OVA1, payer coverage for its test including through additional clinical utility and help economics publication, the impact of scientific publications on expanding use of and access to OVA1 and Overa, the ability of our public mass data repository facilities to develop in the development of future algorithms for a early detection, symptom management, diagnosis and prognosis of gynecologic diseases, the effects of anticipated outputs from Overa clinical utility studies, anticipated cash utilization, global commercialization plans, and the anticipated FX thereof, anticipated effects of agreements with strategic lab partners and trends with respects to OVA1 testing volumes. You are cautioned not to place undue reliance on forward-looking statements. Vermillion is providing this information as of the date of this 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 successfully enter into a new line of business with ASPiRA IVD, Inc., 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 for 2015 and Vermillion quarterly report on the Form 10-Q for the third quarter ended September 30, 2016. Following the Vermillion’s teams remarks, we will open up the call for your questions. Now I would like to turn the call over to Ms. Palmieri.
Valerie Palmieri
Thank you, Matt. 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 third quarter 2016 financials. I would also like to introduce the newest member of our team, Dr. Marra Francis, our new Chief Medical Officer. Dr. Francis is a board certified OB/Gyn with over 13 years of clinical experience in both Private Practice and working in several positions in the women’s health diagnostic industry. She has presented on hundreds of educational programs around the country teaching her peers about the importance of cord blood banking, hereditary cancer genetic testing, as well as the optimal clinical management of the pelvic mass including CME Programs, Grand Rounds, Natural Society Meeting programs, as well as Risk Management conferences. She’ll be leading our efforts regarding guideline development and the adoption of key strategic publications. First, I would like to start with a recap of our strategic plans. For 2016, we have two phases to our plan. The two phases are, number one, a transformation phase, which is focused on changing our business from solely a technology licensing company to licensing plus two diagnostic service companies ASPiRA LABS and ASPiRA IVD. Second, a domestic and international OVA1 and Overa market expansion and growth phase, which is designed to demonstrate meaningful results in 2016 and beyond. I’ll now move on to the first phase. The first phase, this transformation phase is complete and we are executing on ASPiRA LABS and ASPiRA IVD, which is also in vitro diagnostic offerings. The transformation phase for 2016 includes five major objectives. First, the diversification of our revenue channels as well as the improvement of our operating infrastructure. We will report on ASPiRA LABS and ASPiRA IVD revenue in our financial section. Second objective is the continued development and publication of strong health economics and clinical utility studies to drive positive medical policy coverage as well as guidelines supporting our products. Third, the evaluation and incorporation of our direct-to-consumer channel, better known as direct-to-women marketing with our OVA1 awareness team. Fourth is the creation of our pelvic mass specimen and data repository to support the development of new products and predictive analytics in ovarian cancer as well as the differential diagnosis of debilitating benign diseases that also present as a pelvic mass. And lastly, the execution of our targeted launch program for Overa. Now, I’ll go into detail on the first objective of our information phase. It will be an update on our new service within the ASPiRA channel strategy ASPiRA IVD. As stated previously, formed in April 2016, ASPiRA IVD is a specialized laboratory service provider dedicated to meeting the unique testing needs of IVD manufacturers commercializing high-complexity assays. We offer IVD clinical trial services to third-party customers and have continued to recognize revenue in the third quarter of 2016. 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 IVD manufacturers as well as pharmaceutical companies that will utilize our services. We have continued to make steady progress including achieving two major milestones. Number one, the completion of our first sponsor directed site qualification visit; number two, the completion of new studies that generated revenue into Q3. More details will be shared in the financial section. Now with a fully trained staff of technical and pathology experts, we are on track to start multiple IVD studies in the first quarter of 2017 We are now moving on to our second objective, which is the publication of foundational peer reviewed papers for our OVA1 and Overa peer dossier including clinical utility studies, a 360 degree review of health economics as well as several scientific and clinical publications. I would like to now hand the call over to Dr. Marra Francis, our new Chief Medical Officer to provide this update. Dr. Marra Francis: Thank you, Valerie. It is my pleasure to be working with everyone at Vermillion and I hope to meet everyone on this call soon. First, we have some exciting news regarding the November 2016, ACOG update to its Practice Bulletin on the management of the adnexal mass. As indicated in our press release last night, OVA1 is now a level B, recommendation for the evaluation and workup of the pelvic mass, putting up the parity in the guideline to the biomarker CA125. Additionally, this further supports our belief that our FDA cleared test, when used in practice is superior to the off label non-FDA cleared use of CA125. We’re very excited about reaching this milestone. In October of 2016, the manuscript entitled, evaluation of a validated biomarker test MIA in combination with symptom index to predict a ovarian malignancy was accepted for publication in the International Journal of Gynecological Cancer. The lead author is Dr. Renata Urban, a gynecologic oncologist and Assistant Professor at the University of Washington. The study enrolled 218 women, all who had blood drawn for tumor biomarkers and completed a symptom index. Study results found that the symptom index improved the sensitivity of all tumor biomarkers to detect malignancy. We believe the combination of the symptom index in OVA1 will allow for a superior and personalized approach to assessing the risk of malignancy. I would also like to take a few minutes to address that in September, the FDA announced that is alerting women and healthcare providers about the risks associated with the use of testing marketed as a ovarian cancer screening test. The agency stated that it is especially concerned about delaying effective preventive treatments for women who show no symptoms but who are still at an increased risk for developing ovarian cancer. We believe this caution around the use of non-FDA cleared biomarkers for ovarian cancer screening demonstrates the need to change the management of high-risk pelvic mass patients at the on centre care with our FDA cleared testing. As the medical community knows, Vermillion’s FDA cleared technologies OVA1 and Overa are not screening tests. OVA1 and Overa are FDA cleared to assess risk of ovarian malignancy for women who present with the pelvic mass and are planned for surgery. We believe that our OVA1 and Overa tests are clinically superior to assess the risk of malignancy thus allowing clinicians to optimally manage care, which improves patient outcomes for patients and lowers overall health care costs for variant cancer treatment. I will now hand it back to Valerie.
Valerie Palmieri
Thank you, Marra. Moving on to our third objective, which is the creation of a new direct to consumer channel. This channel fosters patient awareness and education through our OVA1 awareness team. This team includes Shannon Miller, the most decorated Olympian, American Olympic Gymnast of all time and ovarian cancer survivor as well as a team of NASCAR Sprint Cup Driver, Martin Truex and his partner Sherry Pollex, an ovarian cancer survivor. In the third quarter, we also added New York Yankees manager Joe Girardi to the OVA1 awareness team. In addition to building awareness, we also recently launched our two websites, vermillion.com and nopelvicmass.com to enhance the overall customer experience and increase awareness for both the healthcare providers and patients. Some of the third quarter results are as follows: Our team kicked off ovarian cancer awareness month on September 1st, by ringing the NASDAQ closing bell with our OVA1 awareness team. In September, we launched the campaign for ovarian cancer awareness month, Everyone Knows Someone. The campaign led by New York Yankees, manager Joe Girardi, highlighted stories of people touched personally by ovarian cancer to their family members, friend or parent. Joe personally shared his personal story on a video series that reached over a 0.5 million people. It was featured at Yankee studio and through our digital channels. Also as part of the campaign Martin Truex and his life partner Sherry Pollex were invited to joining Joe Girardi at Yankees stadium for his pre-game press conference where they shared their stories and the staggering statistics on ovarian cancer survivorship. The press conference footage was also broadcasted during the game in early September. In total, we continue to gain momentum from their efforts and have reached over 12.5 million people, since February 2016. In Q1, we reached approximately 600,000 and in Q2 our reach extended to 6.2 million and as of Q3 we reached an additional 6.3 million. These campaigns have also resulted in a total of 300,000 web interactions to-date. While the interactions and responses have been overwhelming we are revisiting the timing of these efforts in coordinating with payer and guideline updates, more to come later in the call. Moving on to the fourth objective, the fourth objective which is core to our data and bioinformatics [ph] strategy is the creation of a first in kind pelvic mass specimen bank and data repository to support the development of our new products and predicted analytics in ovarian cancer as well as the differential diagnosis of debilitating benign pelvic conditions which is a much larger market need and opportunity. We have a specimen repository in data base, which has close to 5,000 specimens with known pathology and addition to a newly approved internal directed bank of 7,000 plus specimens, we will have a total of 12,000 plus specimens when complete. We have started collecting patient consent on 7,000 IRB cases. This will allow us to receive additional clinical and diagnostics data as well as pathology reports which are the gold standard in diagnostics. As well all know, ovarian cancer remains one of the most challenging diagnosed disease to make early in the disease process. We believe that harnessing this data will be key to truly understanding the origin, contributing factors, prevention and successful treatment of this disease through the development of future bioinformatics solutions. The end goal of our program will be the incorporation of our data and specimens as well as the collaboration of top academic institutions to share clinical, epidemiological, genetic, and proteomic data on various types of benign malignant pelvic mass conditions. I’m now moving on to the fifth and last primary objective, which is the commercialization of Overa, our next generation OVA1 product. The first stage of our plan is to commercialize Overa with our targeted launch program, better known as TLP. This launch has began and our sales team is actively converting selected targeted accounts to Overa. Keep in mind, our targeted launch program is focused on driving protocol and practice integration with select strategic customers and healthcare systems and has three primary goals. Number one to enhance our commercial opportunity and settings where OVA1 has not gained traction or has not been commercialized. Number two to pilot customized local practice protocols which may improve care with Overa. And number three to develop prospective evidence of Overa clinical utility targeted to demonstrating improved patient outcomes and more efficient research utilization to support national payer endorsement. The first goal will be tackled with commercialization efforts focused on strategic accounts and healthcare systems. We now have select accounts established and are now offering Overa in its limited launch. Keep in mind, we are limited this as we need to secure TPT code as well as establish reimbursement and clinical utility. These accounts are participating in supporting these efforts. The second group will be used for Overa clinical utility studies. We have several health care systems and partners available with patient volume and proven ability to manage physician participation in compliance. We anticipate that study outputs will support payer messaging and reinforce Overa’s value in healthcare system. 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 Senior Vice President of Finance. Eric?
Eric Schoen
Thanks Valerie. Today, we furnished our third 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 Investors section of our website at www.vermillion.com. Total revenue in the third quarter of 2016 was $623,000 compared to $330,000 in the same year ago quarter. The third quarter 2016 revenue included $581,000 from product sales OVA1 by ASPiRA LABS and $42,000 of service revenue from ASPiRA IVD. As ASPiRA IVD began operations in the second quarter of 2016, there was no comparable service revenue in the prior year. Third quarter revenue in 2015 was comprised of $190,000 in OVA1 product revenue from sales by Quest Diagnostics and $140,000 in OVA1 product revenue from ASPiRA LABS. Product revenue in the third quarter of 2016 was derived from $2,257 OVA1 tests performed by ASPiRA LABS. ASPiRA LABS performed a total of 1,665 tests in the third quarter of the prior year in addition to the 1,518 OVA1 tests performed at Quest Diagnostics. Revenue on a per test performed basis increased to $257 in the third quarter of 2016 compared to $104 per test in the third quarter of 2015 because billing through ASPiRA LABS allows us to recognize more revenue per test than the royalty rates we previously received from Quest Diagnostics. Revenue on a per test basis performed increased 9% quarter-over-quarter, up from $236 per test in the second quarter of 2016. Revenue for ASPiRA LABS’ contractual clients is recognized when the 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 for the third quarter of 2016 totaled $461,000 compared to $757,000 in the comparable prior year quarter. The decrease was attributed primarily to onetime items as we transitioned testing from Quest Diagnostics to ASPiRA in August 2015, not being reviewed in 2016, cost of service revenue totaled $356,000 for ASPiRA IVD services. Total operating expenses in the third quarter of 2016 decreased to $3.3 million compared to $4.7 million in the same year ago quarter. The decrease was due primarily to lower sales personnel and personnel-related expenses following our February 2016 restructuring as well as lower research and development collaboration costs, as partially offset by pre-opening costs related to establishing the laboratory for ASPiRA IVD services. Net loss for the third quarter of 2016 was $3.5 million or $0.07 per share on a weighted average shares outstanding of 52.2 million. This compares to a net loss of $5.1 million or $0.10 per share in the third quarter of 2015 on 50.3 million shares outstanding. Cash and cash equivalents at September 30, 2016, were $8.1 million. The Company utilized a net $3.0 million in cash in the third quarter of 2016 and expect net cash utilization to be less than $3 million in the fourth quarter of 2016. Now, I will turn it back to Valerie.
Valerie Palmieri
Thank you, Eric. I would like to now discuss our sales strategy and performance for Q3 2016. Our sales efforts continue to focus on stabilization and truly understanding how our physicians use our technology through our customer retention program. Our retention program has seen positive impact on repeat ordering physicians as well as specimens per physician. This should continue to result in improved sales efficiency in test utilization over time. The most significant change we have made is the re-launch of our OVA1 report. As you know, our report is our product. After interviewing hundreds of customers, post the Quest transition through June, we have determined specifically several missing elements on our report, which of course confusion on how to interpret and utilize the OVA1 risk assessment. The goal of the report is to provide a risk assessment which bridges existing technology, i.e. CA125 and transvaginal ultrasound with new technology such as OVA1. The report allows physicians to have multiple modality data in one summary report to access a pelvic mass. There are two new core components to the report. We have added a tool to allow the healthcare provider to determine the patient’s risk of malignancy by combining the OVA1 score with the patient’s ultra sound result in a comparison graph. This further allows for personalization of the risk assessment and improved clinical management. The new OVA1 report also includes the CA125 results for each patient. The purpose of adding the CA125 is to provide updated volume values for those patients who are ultimately diagnosed with ovarian cancer. Keep in mind, CA125 is the component of OVA1 and we recognize that the CA125 score is not approved for diagnostic screening or risk assessment for ovarian cancer. Lastly, we would like to report on some significant updates on our fourth sales adoption drivers, which include payer coverage, positive clinical guidelines, international expansion and new regional commercialization partners. On the managed care reimbursement front, we’re happy to report two updates. Number one, we now have an agreement with CareFirst BlueCross BlueShield for OVA1. CareFirst serves over 3 million patients throughout Maryland, and DC as well as Virginia. This is our fourth recent announcement of the new managed care contract, as we continue to expand our reach in key strategic markets. In addition, payers are now seeing our technology improve care, not only by identifying elevated risk but also confirming low risk patients. This low risk confirmation supports reducing referrals and service utilization as well as improving care, particularly given that the majority of cases are benign. This keeps the patients vocal as well as has major cost improvement outcome. We have several publications in the works to highlight the OVA1 benefits to identifying low risk as well as high risk patients. This negative predictive value benefit was not a value to customers understood previously. In addition to managed care impact, we’ve also recently updated our Novitas billing criteria for coverage as of October 2016. Since receiving a book of business from Quest, we’ve had issues of patient criteria, i.e. the need for surgery date. We’ve succeeded in having Novitas recognize that a surgery date is not feasible prior to receiving and OVA1 test result as the provider does not know when the surgery will be performed or which surgeon is the most appropriate to perform this surgery. We are finally happy to report that the surgery date is no longer necessary for successfully billing OVA1. I’m now moving on to guidelines. As Marra mentioned, we learned this week that OVA1 now carries a level B recommendation in the latest ACOG Practice Bulletin in adnexal mass. This is a significant and very positive milestone for the Company as with adnexal masses, there are no guidelines and Practice Bulletins are the mechanisms for communicating recommendations for change to clinical management. The prior version was created in 2007 when OVA1 was not even a diagnostic option. Additionally, we are continuing to work closely with prominent medical societies to include the use of OVA1 in additional clinical guidelines and as well as educational materials which will be disperse to their providers. I’m now moving on to the third adoption driver. This adoption driver which we are in the process of finalizing and implementing is partnerships focused in international distribution networks. As we mentioned in our previous earnings call, we continue to see strong interest from potential international partners, on our new Overa testing and we are rolling out two Overa international models, one centralized and one decentralized designed to meet the unique needs of each international market. We believe we will be ready operationally to support these two business models before the end of calendar year 2016. In the near-term, the impact of our initial international contracts will be minimal as we work through market and regulatory and payer issues in the local jurisdictions but we expect to see positive impact to volume and revenue in 2017 and beyond. We believe that Overa is proven diagnostic technology with the ability to run Overa on all three Roche cobas platform. We have now updated IFU [ph] and will allow us to offer Overa in a small, mid and large laboratory environment. This installed base 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 cancers worldwide are outside of the U.S. and we have just started to enter that market. Our last adoption driver, which is relatively new is the proactive demand for U.S. Overa partnership. We have initiated the decentralized strategic lab discussions domestically for Overa in the anticipation of a full Overa commercial launch at a date still to be determined. The goal of this partnerships will be to both optimize our sales distribution efforts and to allow partner labs to offer in-house a differentiated test as part of the ovarian and women’s health testing services. As a ramp up to the decentralized Overa push, in the short-term, these partnership with these strategic lab partners will include enhanced OVA1 agreements coupled with long-term rights to offer and build for OVA1 and Overa testing under their in network lab contracts as well as existing -- utilizing existing client connectivity. We anticipate this will enhance our sales and operational efficiency overall. In closing, we believe that the third quarter of 2016 has built a solid foundation for continued success throughout the remainder of the year. We believe we are ready to enter the market expansion in growth phase of our strategy as we close out this year and begin 2017. This next phase of our strategy has four core foundation blocks. Number one, in the U.S., expanding from the Overa targeted launch program to a full national launch with regional partners and large healthcare organizations, while maintaining constant commercial traction and expanded payer coverage for Overa. 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 major platform. Number three, the delivery of state-of-the art informatics tools to the patients, provider and payers as launched with our newly created OVA1 report. The number four and lastly, diversifying our revenue channels and leveraging our relationships with IVD and pharmaceutical companies through our informatics, service and repository capabilities via ASPiRA IVD. Once these core foundation blocks are in place, we believe we will have the ability to provide solutions for diseases affecting women that can lead to pelvic mass. Keep in mind, pelvic diseases 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 diagnostics leader in advancing women’s health, coupling information and new technologies. We are starting with the needle in the haystack Ovarian cancer and we are well on our way to launching software and diagnostic solutions which we believe may truly change the outcomes of Ovarian cancer and pelvic mass management worldwide. That concludes our presentation and we are ready to take questions.
Operator
Thank you. [Operator Instruction] Our first question will be from George Kafkarkou, [ph] private investor. Please go ahead.
George Cafocaru
Hi Valerie, can you hear me okay?
Valerie Palmieri
Yes, we can. There is a little echo but we can make it out.
George Cafocaru
Okay. Congratulations on the ACOG guidelines as per yesterday. Can you just talk to the impacts of that vis-à-vis how does that help us for national payers?
Valerie Palmieri
Sure, George. And we also talk about it from a payer perspective as well as clinical perspective. So, from payer perspective, as everyone knows, we have a FDA cleared product. But as you know we still have a bar from really two vantage points, one is health economics and one is clinical utility, which we now have those two publications done, one in December of 2015 and one in April 2016. But the missing piece of the payers quite frankly is justification and support from medical societies besides SGO. So, having ACOG support which as everyone knows, that is our primary customer segment, having ACOG support at a level B in their practice bulletin is truly significant. And now whether it’s a sales team from a physician’s prospective or sales team from a payer perspective, we now can bring that practice bulletin in with us, as that we’re not supported by a SGO statement, which is Gyn oncologists, but now we’re supported truly by the customer segment we serve. So that will make a huge difference for the payer dialog going forward. And typically the ACOG as well, that guideline and practice bulletin carries a lot more weight than the SGO guideline from a payer prospective.
Unidentified Analyst
Right and thank you for that. Most the national players apart from one, they kind of incorporate your items toward the end of the calendar year, is your expectation that OVA1 will now make some of those -- will enter some of those national payers end of this calendar year?
Valerie Palmieri
So George, we’re in dialog with several national players at this time, and I do anticipate that this has say weeks with them. Some of them -- as you know, it depends on where their cycle is in the process. So, I do anticipate in terms of national payers, we’re now sitting at the table with -- as I said, verification, because the prior guideline only included CA125 and that is from July 2007. And that part of our guideline was before our time. So now, we will sit at the table in parity as we noted in the script with CA125. But as everyone knows, CA125 is being used off label and we have an on label use, which is for all stages, all ages and cancer types. So certainly, this is something that we were very pleased with and we believe this is a significant milestone for those discussions.
Unidentified Analyst
Most encouraging, I must say. Okay, two more questions, and thank you for answering that. The average revenue per test for Q3 was $257 if I heard that correctly?
Valerie Palmieri
Correct.
Unidentified Analyst
Your perspectives on that perhaps going up in the future?
Eric Schoen
George, this is Eric. Absolutely, if you look, when we were with Quest, we were getting a $125 a test. The whole idea, between us taking the test back and running at ASPiRA LABS beyond being able to give better service to the customer was to corner our fair share of the revenue. So, we’re making $257 per test, and that’s we’re only getting paid about 25% to 28% of the time. So we expect one, as we get additional payer contract to get a higher percentage of those tests paid; and two, as we get contracts at proper rate to get a better result from that. So, we do expect and are working diligently to make that increase each quarter.
Unidentified Analyst
Very good. Thank you. And the final question, I know it is as of the end of September, we have cash and cash equivalents of $8.1 million; we’re projecting spending less than $3 million in Q4, but still that leads this low on cash. What are the thoughts in terms of improving the balance sheet?
Eric Schoen
Yes, George. We monitor our cash very closely. Each quarter we’ve been trying to do two to three things. We’ve been trying to hit an inflection point; we’ve been trying to increase our revenue and lower our expenses. We know that we will have to raise capital before we hit breakeven. But we think that with the plan that we have in place, our existing cash goes well into 2017, allows us to hit more inflection points. So, will be able to do that additional capital and the vehicle for raising capital at a time of our own choosing.
Unidentified Analyst
Very good. And presumably at a much higher valuation and so that’s very good. I think I’m very excited by the ACOG guidelines. It appears that helps us enormously and congratulations, great achievement. Thank you for taking my call.
Operator
Will now move forward to [Jed Fraser with Cmark.] [Ph]
Unidentified Analyst
Congrats, again on moving the ball forward on the ACOG front. I’m wondering if you could share with us your point of view on the Novitas developments and what we should be thinking in terms of how that might impact revenue per test on a go forward basis.
Valerie Palmieri
Couple of things. One is, again, and kind of taking that historically on this Vermillion [indiscernible] technology from Quest, this was not worked by Quest. So, when we started to really opening this up, what we saw was some payment issues. And we really dug into it, it was Novitas’ interpretation quite frankly of our label that we would know surgery dates. So, this is a big win for us. If you can imagine changing -- getting something like this turned around. And so the anticipation is that it will reduce the time from specimen collection to actually receiving a billing. But at the same time, I want to be totally upfront that the OVA1 price, which is again a historic from classes in the 221 to 222 range. And so what our goal is with OVA1 as well as Overa is basically to increase that price over time. So, right now, we are at as I said 221 to 222 when you round it up and the goal is actually to increase that over time via the new regulations that are now in effect with this PAMA. So, PAMA is based on, our billings from 2016 including all third party billings. So that price will -- our goal is to submit that price in 2017 and then we will be having new price in 2018. So, part of that is we are in the cross-fires of receiving this book of business back from Quest, getting the criteria right sided but also we are in the regulatory, I want to call March with PAMA right now which actually could be a potential upside for us.
Operator
This concludes our question-and-answer session. I would now like to turn the call back over to Ms. Palmieri. Ms. Palmieri, please proceed.
Valerie Palmieri
Thank you, Matt. To conclude, we have a steadfast execution plan to change the course of pelvic mass patient management in the U.S. and worldwide. We have now completed two of the three major strategy phases, our rebuild phase and are transformation phase. We are now focusing our efforts on sales efficiency, new customer retention and growth. The three key elements are as follows. First, the successful deployment of our domestic and international commercialization strategy based on focused clinical utility and health economics to drive sales, payer coverage, as well as guidelines for OVA1 and Overa. Second, delivering key results from our new distribution channels including international and our ASPiRA IVD service. And finally, laying the foundation for our one of a kind pelvic mass repository, which is intended to be the core of our big data engine and pelvic mass portfolio. As we build that database, we plan to build upon our existing platforms 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 impacts one out of every five women in the U.S. Our end goal is to serve the 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 meetings and investor conferences.
Operator
Again, I’d like to remind everyone this call will be available for replay through November 24th starting later this evening via the link provided in today’s press release, as well as available in the Investors section of the Company’s website. Thank you, ladies and gentlemen for joining us today for our presentation. You may now disconnect.