Vermillion, Inc.
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(Name of Issuer)
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Common Stock, par value $0.001
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(Title of Class of Securities)
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17252Y104
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(CUSIP Number)
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James E. Besser
Manchester Management Company, LLC
131 Charles Street, 1st Floor
Boston, Massachusetts 02114
United States of America
Tel. No.: 617-399-1741
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(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
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June 6, 2011
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(Date of Event Which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss.240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box [X].
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*The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
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CUSIP No.
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17252Y104
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1.
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NAME OF REPORTING PERSONS
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I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
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Manchester Management Company, LLC
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2.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a)
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[_]
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(b)
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[_]
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3.
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SEC USE ONLY
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4.
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SOURCE OF FUNDS
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OO
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5.
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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[_]
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6.
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CITIZENSHIP OR PLACE OF ORGANIZATION
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Delaware
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
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7.
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SOLE VOTING POWER
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0
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8.
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SHARED VOTING POWER
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551,618
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9.
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SOLE DISPOSITIVE POWER
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0
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10.
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SHARED DISPOSITIVE POWER
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551,618
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11.
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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551,618
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12.
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[_]
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13.
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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5.2%
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14.
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TYPE OF REPORTING PERSON
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IA
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CUSIP No.
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17252Y104
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1.
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NAME OF REPORTING PERSONS
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I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
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James E. Besser
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2.
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
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(a)
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[_]
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(b)
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[_]
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3.
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SEC USE ONLY
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4.
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SOURCE OF FUNDS
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PF
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5.
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)
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[_]
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6.
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CITIZENSHIP OR PLACE OF ORGANIZATION
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United States of America
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
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7.
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SOLE VOTING POWER
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431,350
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8.
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SHARED VOTING POWER
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551,618
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9.
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SOLE DISPOSITIVE POWER
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431,350
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10.
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SHARED DISPOSITIVE POWER
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551,618
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11.
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
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982,968
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12.
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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[_]
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13.
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
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9.2%
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14.
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TYPE OF REPORTING PERSON
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IN
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CUSIP No.
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17252Y104
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Item 1.
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Security and Issuer.
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No material changes from the Schedule 13D filed by the Reporting Persons on April 18, 2011.
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Item 2.
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Identity and Background.
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Item 3.
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Source and Amount of Funds or Other Consideration.
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No material changes from the Schedule 13D filed by the Reporting Persons on April 18, 2011.
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Item 4.
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Purpose of Transaction.
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The Reporting Persons have acquired their Shares of the Issuer for investment. The Reporting Persons evaluate their respective investments in the Shares on a continual basis.
The Reporting Persons believe that today's election of directors with only approximately 4 million votes reflects that over half of the shareholders disagree with the Issuer's direction and their tactics, and they do not believe that Issuer's management and board of directors are acting in the best interests of the shareholders.
The Reporting Persons reserve the right to be in contact with members of the Issuer's management, the members of the Issuer's Board of Directors, other significant shareholders and others regarding alternatives that the Issuer could employ to increase shareholder value.
The Reporting Persons reserve the right to effect transactions that would change the number of shares they may be deemed to beneficially own.
The Reporting Persons further reserve the right to act in concert with any other shareholders of the Issuer, or other persons, for a common purpose should it determine to do so, and/or to recommend courses of action to the Issuer's management, the Issuer's Board of Directors, the Issuer's shareholders and others
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Item 5.
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Interest in Securities of the Issuer.
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(a) - (e)
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As of the date hereof, Manchester Management Company, LLC, may be deemed to be the beneficial owners of 551,618 Shares, constituting 5.2% of the Shares.
As of the date hereof, Mr. Besser may be deemed to be the beneficial owners of 982,968 Shares, constituting 9.2% of the Shares.
The percentage of the class of Shares of the Issuer beneficially owned by each Reporting Person is based upon 10,657,564* Shares outstanding as of the date hereof.
Manchester Management Company, LLC has the sole power to vote or direct the vote of 0 Shares; has the shared power to vote or direct the vote of 551,618 Shares; has the sole power to dispose or direct the disposition of 0 Shares; and has the shared power to dispose or direct the disposition of 551,618 Shares.
Mr. Besser has the sole power to vote or direct the vote of 431,350 Shares; has the shared power to vote or direct the vote of 551,618 Shares; has the sole power to dispose or direct the disposition of 431,350 Shares; and has the shared power to dispose or direct the disposition of 551,618 Shares.
There have not been any transactions by the Reporting Persons in the securities of the Issuer since the Schedule 13D filed by the Reporting Persons on April 18, 2011.
*This outstanding Shares figure reflects the number of outstanding Shares at December 31, 2010, as reported in the Issuer's Form 10-K, filed on February 28, 2011.
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Item 6.
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Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.
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No material changes from the Schedule 13D filed by the Reporting Persons on April 18, 2011.
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Item 7.
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Material to be Filed as Exhibits.
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Exhibit A: Letter to shareholders dated June 6, 2011.
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June 6, 2011
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(Date)
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Manchester Management Company, LLC
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By:
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/s/ James E. Besser
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James E. Besser, Managing Member
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By:
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/s/ James E. Besser___________
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James E. Besser
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1.
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CEO Gail Page lacks the ability to operate this business plan as anything other than as a "baby Labcorp." Instead of operating as a nimble organization, Vermillion has four layers of management- the salesforce, two VPs of Sales, a VP of Sales and Marketing, and then CEO Page. Do we really need 4 managers to run 12 salespeople? The organization should be direct reports to the CEO at this point, if the sole value add of the CEO is selling tests, which is certainly true in this case.
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2.
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In addition to CEO Page's failures as CEO, I do not believe she has developed an effective management staff. Bill Creech, while a likeable guy, is another big company middle manager just like her. The Company needs a CEO (or COO) who has done this from the ground up before. Luckily, there are a lot of people out there who fit the bill.
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3.
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We have talked about this before, but the Company needs to devote a substantial amount of effort to the direct selling opportunity to hospitals, even if it means buying some equipment and offering OVA1 as a service- the potential contribution margins are just too great, and it takes the problems with the Quest relationship out of the picture until Vermillion can show pull through its own channel.
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4.
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Business development needs to be taken seriously- I have had contact with 2 companies of equal or larger size to Vermillion who have attempted to interact with Vermillion management and have been ignored, rebuffed, or treated in a highly unprofessional manner by CEO Page or her staff. This isn't a science problem, where relationships are great, it's a CEO problem. If I have stumbled across these issues as an outsider, not even in the industry, filing 13D's; apply common sense and imagine how many opportunities have been squandered. European partners would be particularly sensitive to these types of affronts, and 9 months after being granted the CE mark, there is no European or ROW commercialization strategy visible to shareholders outside of Quest. I believe that this is no coincidence.
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5.
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Despite their big company resumes, the board has not helped the sales effort or business development in any meaningful way. I believe the board should be populated by people who know how to fix sales problems and ramp product, and I don't believe that that skill set is present, or, if it is present, it has been ignored to date. The board has a couple of quality scientists on it, but that is not a weakness of the Company, with the great job done by Dr. Fung building the scientific assets. Roddy and Hamilton both have CFO backgrounds, but in light of the Company's actions over the past 12 months, its hard for me to give them a nod on corporate governance and responsiveness to the shareholders. Change is sorely needed here as well.
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