The same week Ciphergen Biosystems Inc. changed its name to Vermillion Inc., the diagnostics firm agreed to sell about 24.4 million shares in a private placement to raise $20.5 million

Under the terms, the company also is issuing warrants for the purchase of an additional 19.5 million shares priced at 92.5 cents apiece. Vermillion's shares, which are expected to begin trading Monday morning on Nasdaq under "VRML," closed at 77 cents Friday, up 3 cents.

A spokeswoman for Vermillion said the firm could not comment at this time, though in its press release, said proceeds will be used for general working capital needs.

The financing, expected to close on or about Aug. 29, also could help the company regain compliance with the Nasdaq listing requirements, specifically the minimum $35 million in market value of listed securities. Vermillion has until Sept. 14 to show compliance.

The Fremont, Calif.-based company, which has focused solely on diagnostics since divesting its proteomics instrument business to Hercules, Calif.-based Bio-Rad Laboratories Inc. in November for about $20 million in cash, said on its web site that the name change to Vermillion is intended to reflect "health, life and passion," as well as its focus on developing diagnostics.

Vermillion's approach involves applying multiple biomarkers - since diseases such as cancer and heart disease can be traced to several different causes, depending on the individual - to identify associations between genes, proteins and diseases and to create diagnostic tests that can help doctors predict disease risk, choose appropriate treatment regimens and monitor disease progression.

Vermillion's most advanced program is an ovarian tumor triage test, which aims to distinguish between benign and malignant pelvic masses.

The company said the test would enable women with malignancies to be referred to specialists sooner in the diagnostic process, thereby increasing their chances of survival. Clinical data previously collected by the firm have demonstrated that the test correctly identified 84 percent of ovarian cancer cases, compared to 33 percent identified using standard diagnostic methods without the test.

The company is collaborating with the Johns Hopkins School of Medicine, the University of Texas M.D. Anderson Cancer Center, the University College of London and the University of Kentucky on the ovarian tumor triage test. It also is working to develop a test that predicts ovarian cancer recurrence, along with tools to monitor women who are identified as high risk for the disease.

Vermillion has partnered commercialization rights to the test with Quest Diagnostics Inc., of Lyndhurst, N.J., as part of the companies' July 2005 collaboration deal, and said it hopes to seek FDA clearance for the in vitro ovarian tumor diagnostic test by the end of this year. (See BioWorld Today, July 25, 2005.)

Beyond ovarian cancer, Vermillion is working with the Ohio State University Research Foundation on a diagnostic test for thrombotic thrombocytopenic purpura, and is collaborating with Stanford University on a blood-based assay to detect peripheral arterial disease (PAD). The PAD test also is partnered with Quest.

Last month, the firm licensed more than 25 patents from Health Discovery Corp., of Savannah, Ga., covering support vector machine technology, which it uses with its SELDI technology. Under that deal, Vermillion gets worldwide, royalty-free nonexclusive rights to the intellectual property for life sciences and diagnostic applications, in exchange for $600,000 to be paid over a two-year period.

In other financings news:

• Carrington Laboratories Inc., of Irving, Texas, entered definitive agreements with certain institutional investors for the second tranche of an $8 million private placement of convertible debentures and common stock warrants. The first tranche totaled about $4.4 million and closed April 26, 2007, and the second tranche totaled about $3.6 million. As part of the transaction, Carrington also issued additional warrants that are exercisable to purchase 4.5 million shares of common stock at 80 cents each. The company potentially could raise an additional $6 million from the issue of the warrants if all the investor warrants are exercised in full. Net proceeds will be used to further develop the drug and vaccine delivery technologies of its DelSite subsidiary and for general corporate purposes. Carrington's stock (Pink Sheets:CARN) closed at 66 cents Friday, up 5 cents.

• Cortex Pharmaceuticals Inc., of Irvine, Calif., is raising about $14.2 million in a registered direct offering. The company expects to sell about 7.1 million shares of stock, plus warrants to purchase about 2.83 million shares at an exercise price of $2.64 each. The offering is expected to close Aug. 29. Cortex intends to use the net proceeds to accelerate development of its Ampakine technology, as well as for licensing activities, working capital, capital expenditures and other general corporate purposes. JMP Securities LLC acted as lead placement agent, and Rodman & Renshaw LLC served as co-placement agent. Shares of Cortex (AMEX:COR) fell 28 percent, or 74 cents, Friday to close at $1.90.