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(415) 856-7049

robertpurcell@paulhastings.com

October 30, 2007

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549

Attn: Mr. Tim Buchmiller

    Re:

    SEC Comments of October 15, 2007

Dear Mr. Buchmiller:

On behalf of Vermillion, Inc. (the “Company”), set forth below are the responses to the comments in
the letter dated October 15, 2007 from the staff of the Division of Corporation Finance (the
“Staff”) of the Securities and Exchange Commission (the “Commission”) relating to the Company’s
Registration Statement on Form S-1 (file no. 333-145354) (the “Registration Statement”) relating to
the registration under the Securities Act of 1933, as amended (the “Securities Act”), of up to
43,935,269 shares of common stock (the “Shares”), par value $.001 per share, which includes
18,716,709 shares of common stock underlying warrants.

The Company is submitting this letter prior to filing Amendment No. 1 to the Registration Statement
(“Amendment No. 1”) in order to respond to the Staff’s comments and supplementally provide the
Staff with information it has requested. The Company plans to file Amendment No. 1 at a later
date.

For ease of reference, the Staff’s comments are repeated below in bold face type before each of the
Company’s responses.

General

    1.

    Given the nature and size of the transactions being registered, together with the nature and
size of the transactions registered in your registration statement on Form S-3 (file no.
333-139416) involving an identical selling stockholder, please advise the staff of the company’s basis for determining that the
transactions are appropriately characterized as transactions that are eligible to be made on a
shelf basis under Securities Act Rule 415(a)(1)(i).

October 30, 2007

Page 2

The Company respectfully acknowledges the Staff’s comment and submits that the sales by the selling
stockholders named in the Registration Statement (the “Selling Stockholders”) are appropriately
characterized as a secondary offering that is eligible to be made on a shelf basis under Rule
415(a)(1)(i) and does not constitute an indirect primary offering. Rule 415(a)(1)(i) permits
securities to be registered for an offering to be made on a continuous or delayed basis in the
future as long as the registration statement pertains only to “securities which are to be offered
or sold solely by or on behalf of a person or persons other than the registrant, a subsidiary of
the registrant or a person of which the registrant is a subsidiary.” The Shares are not being
registered on behalf of the Company, but rather on behalf of the Selling Stockholders, none of
which is a subsidiary of the Company, or of which the Company is a subsidiary. Applying the
specific circumstances of the transactions in which the Shares were issued to the factors
identified by the Division of Corporation Finance in Section D, Interpretation Number
29 (1) of its 1997 Manual of Publicly Available Telephone Interpretations (the “Telephone
Interpretations”) as factors it considers in determining whether a secondary offering is in
substance an indirect primary offering by an issuer, the Company believes, given the totality of
the circumstances, that the registration of the Shares complies with Rule 415(a)(1)(i).

As disclosed under the caption “Selling Stockholders” in the Registration Statement, the majority
of the Selling Stockholders acquired the Shares in a private placement which closed on August 29,
2007 (the “Private Placement”). In the Private Placement, the Company issued 24,513,092 shares of
its common stock and warrants to purchase an additional 19,610,470 shares of its common stock. The
Registration Statement proposes to register all of the shares of common stock and the shares of common stock underlying the warrants
issued in the Private Placement except for 2,380,952 shares of common stock and 1,904,761 shares of
common stock underlying warrants issued to Quest Diagnostics, Incorporated (“Quest”). The
Registration Statement also proposes to register 3,176,420 shares of common stock, including 90,000
shares of common stock issuable upon the exercise of warrants, all of which are being offered for
resale for the accounts of Selling Stockholders who acquired such Shares in various transactions
consummated in the fall of 2006. Such Shares are being registered
pursuant to the exercise of “piggy back” registration rights by certain of the Selling
Stockholders.

(1) The Section D.29 Interpretation states, in relevant part, as follows:

“The question of whether an offering styled a secondary one
is really on behalf of the issuer is a difficult factual one, not
merely a question of who receives the proceeds. Consideration
should be given to how long the Selling Stockholders have held the shares, the circumstances under which they received them, their
relationship to the issuer, the amount of shares involved, whether
the sellers are in the business of underwriting securities, and
finally, whether under all the circumstances it appears that the
seller is acting as a conduit for the issuer.”

October 30, 2007

Page 3

The Company believes that this offering is not by or on behalf of the Company for the following
reasons:

• The Selling Stockholders acquired their respective Shares in arms’ length
transactions and have assumed the risk of loss in connection with their investment;

• The majority
 of the Selling Stockholders are not broker dealers or in the business
of underwriting securities; and the shares offered by Selling Stockholders who are broker
dealers are less than 25% of the total Shares;

• Substantially all of the Selling Stockholders are large institutional investors who
do not need the proceeds from the resale of the common stock subject to the Registration
Statement in order to fund the exercise of the warrants;

• The Shares are held by ten distinct unaffiliated Selling Stockholders (or selling
stockholder groups);

• The Company will not receive any additional proceeds from the resale of the Shares
by the Selling Stockholders; and

• The Shares were issued at a fixed price and do not include variable provisions or
other toxic aspects that could lead to significant additional dilution.

Below is a discussion of each of these points which the Company believes supports its conclusion
that the offering should be characterized as a traditional secondary offering, rather than an
indirect primary offering. The Company’s information regarding the Selling Stockholders is
limited, and consists primarily of the information supplied by each Selling Stockholder to the
Company in a questionnaire (“Questionnaire”) that such Selling Stockholder was required to complete
in order to be named in the Registration Statement. The Questionnaire was customary for resale
shelf transactions and included, among other things, the amount of the Company’s securities
beneficially owned by the Selling
Stockholder, whether the Selling Stockholder or any of its affiliates is a broker dealer, and
relationships between the Selling Stockholder and the Company, etc. The form of Questionnaire is
attached to the securities purchase agreement relating to the Private Placement which was filed as
Exhibit 10.57 to the Registration Statement.

The Selling Stockholders have undertaken significant economic risk in the initial purchase
transactions and are not merely acting as a conduit for the Company. The majority of the Selling
Stockholders purchased their respective Shares in the Private Placement on August 27, 2007,
approximately two months ago. One of the Selling Stockholders, Bio-Rad

October 30, 2007

Page 4

Laboratories, Inc. (“Bio-Rad”), acquired its Shares on November 13, 2006 in connection with its purchase of the
Company’s protein research tools and collaborative services business (the “Instrument Business”)
and related establishment of an on-going strategic partnership. Unlike an underwritten public
offering in which securities are not sold to the underwriters until a registration statement
covering the sale of the securities has been declared effective, the Selling Stockholders have been
subject to economic risk on their investment for an extended period of time. All of the Shares,
other than the Shares underlying warrants, have been fully paid for by the Selling Stockholders.
As discussed below, the prices paid for the Shares and warrants exercisable for Shares were at or
above the market price of the Company’s common stock on the respective dates that the Company
priced such securities, and do not reflect a discount or commission typical of an underwritten
offering.

The purchase price for each Share issued in the Private Placement was $0.74 per share, the closing
sale price of the Company’s common stock on the Nasdaq Capital Market on August 23,
2007.(2) The warrants issued in the Private Placement have an exercise price of $0.925
per share (a premium of 25% over the market price of the underlying common stock on August 23,
2007) and contain a cashless exercise feature that may only be used when the resale of the shares
issued upon exercise of the warrants is not covered by an effective registration statement.
Consequently, following the effectiveness of a registration statement covering the shares of common
stock underlying the warrants issued in the Private Placement (and assuming such registration
statement continues to be effective), the Company will receive additional proceeds in the form of
the exercise price, when and if a Selling Stockholder makes a second, independent investment
decision to exercise any of such warrants. In addition, the Selling Stockholders were required to
purchase the warrants issued in the Private Placement for $0.125 per warrant share, effectively
increasing the exercise price thereof and the related premium over the market
price of the underlying common stock. The Shares issued to Bio-Rad in November 2006 were also sold
at the then-current market price. The purchase price of $0.972 per share was based on the average
closing price for the five trading days preceding August 14, 2006, the date of the related stock
purchase agreement. As discussed in more detail in the Company’s response to the Staff’s comment
4, the warrants issued to Oppenheimer & Co. Inc. (“Oppenheimer”) as partial payment for its
services as the placement agent in connection with the Private Placement and as the financial
advisor in connection with the Company’s issuance of 7.0% Convertible Senior Notes due September 1,
2011 (the “7.0% Notes”), also have exercise prices that are at or above the market price of the
underlying

    (2)

    The Board of Directors of the Company
approved the Private Placement on August 23, 2007 and authorized the pricing
committee of the Board of Directors of the Company (the “Pricing Committee”) to
approve the final terms of the securities purchase agreement and the warrants,
including the price per share of common stock, price per warrant share, and the
exercise price of the warrants to be sold in the private placement. On the
morning of August 24, 2007, the Pricing Committee, in consultation with the
placement agent, approved the final terms of the transaction.

October 30, 2007

Page 5

common stock on the date of determination. The warrants issued to Oppenheimer were part
of fees paid for services provided to the Company by Oppenheimer.

The terms and conditions of all of the transactions in which Selling Stockholders obtained the
Shares were fully negotiated at arms’ length by Oppenheimer, in
its capacity as placement agent, the Selling Stockholders and/or their respective
counsel. Among other things, each of the Selling Stockholders who acquired Shares in the Private
Placement has represented to us in writing that such Selling Stockholder (i) acquired the Shares
for its own account and not with a current view toward resale or distribution within the meaning of
the Securities Act and (ii) at the time it acquired the Shares, it had not offered or sold the
Shares acquired nor did such Selling Stockholder have any present intention of selling,
distributing or otherwise disposing of such Shares either currently or after the passage of a fixed
or determinable period of time or upon the occurrence or non-occurrence of any predetermined event
or circumstance in violation of the Securities Act.(3) Bio-Rad made similar
representations in the stock purchase agreement pursuant to which it acquired its Shares.
Oppenheimer orally made similar representations.

The Company supplementally advises the Staff that OppenheimerFunds, Inc. is the investment adviser
to Baring Global Opportunities Fund, OFI Institutional Global Opportunities Fund, Oppenheimer
Global Opportunities Fund, Russell Alpha Global Opportunities Fund and Russell Global Opportunities
Fund (collectively, the “Oppenheimer Funds”). Each of the Oppenheimer Funds is an affiliate of
OppenheimerFunds Distributor, Inc. which is a limited purpose registered broker dealer. In
addition, Oppenheimer is a registered broker dealer and Mr. Frank Kee Colen is a managing director
of Oppenheimer. It is the Company’s understanding that the Oppenheimer Funds and Oppenheimer are not affiliated with each other. Other than the Oppenheimer Funds, Oppenheimer and
Mr. Colen, none of the Selling
Stockholders are broker dealers or affiliates of broker dealers. The number of Shares offered on
behalf of Selling Stockholders that are either broker dealers or affiliates of broker dealers is
9,798,427 or approximately 22.3% of the total number of Shares.

The Company respectfully advises the Staff that, to the Company’s knowledge, the remaining nine
Selling Stockholders are not broker dealers and are not affiliated with each other or the Company
other than (i) Fort Mason Master, L.P. and Fort Mason Partners, L.P., which are affiliates of each
other, (ii) Falcon Technology Partners L.P. (“Falcon”), the general partner of which is Executive Chairman
of the Company’s Board of Directors (James L.

    (3)
    In addition, many of the Shares are not
immediately available for sale by the Selling Stockholders due to the
contractual limitations on exercise of the warrants exercisable for such
Shares. These limitations generally provide that the warrants may not be
exercised if the holder would beneficially own more than 4.99% of the Company’s
outstanding common stock following such exercise. All of the warrants issued
in the Private Placement, other than the warrant for 921,000 Shares issued to
Oppenheimer, contain such limitation.

October 30, 2007

Page 6

Rathmann) and (iii) Phronesis Partners, L.P.
(“Phronesis”), which currently beneficially owns more than 10% of the outstanding securities of the
Company, and may therefore be deemed to be an affiliate of the Company. Phronesis, however, was
not an affiliate when it acquired its Shares in the Private Placement. As discussed above, the
Company’s largest single stockholder, Quest, which may be deemed to be an affiliate by virtue of
its beneficial ownership of more than 10% of the outstanding
securities of the Company, also
participated in the Private Placement, but has elected not to include the shares or warrants
exercisable for shares which it purchased in the Registration Statement. Consequently, the only
Shares being offered by Selling Stockholders who were affiliates of the Company at the time such
Shares were originally acquired are those purchased by Falcon in the Private Placement, which
Shares represent approximately 7.3% of the total number of Shares.

Although certain of the Selling Stockholders are or may be deemed to be affiliates of the Company,
the Staff has stated that the inclusion of an affiliate as a selling stockholder does not prevent a
registered resale offering from being considered a valid secondary offering under Rule
415(a)(1)(i). Item D.38 of the Telephone Interpretations states, “Aside from parents and
subsidiaries, af