OPKO Health, Inc. (NASDAQ:OPK), reports
financial and operating results for the three months ended
September 30, 2016.
Financial Highlights
- Consolidated revenues for the three months ended September 30,
2016 increased to $298.0 million from $143.0 million for the
comparable period 2015. The 2016 period includes revenue from
BioReference, acquired in August 2015.
- Net loss for the three months ended September 30, 2016 was
$15.0 million compared with net income of $128.2 million for the
2015 period. Net (loss) income during the three month periods
include significant non-recurring and non-cash activities:
- The 2015 period includes a non-recurring income tax benefit
related to the release of a valuation allowance against our
deferred tax assets as a result of the BioReference acquisition;
and
- Other income and (expense) was ($10.5) million and $47.0
million in the 2016 and 2015 periods, respectively, primarily
related to the change in fair value of derivative instruments. The
change in fair value is principally related to an embedded
derivative in OPKO’s January 2013 convertible senior notes due in
2033. The 2015 period also includes a non-recurring gain of $17.3
million related to our deconsolidation of SciVac Therapeutics
Ltd. The three months ended September 30, 2016 includes $3.9
million of other than temporary impairment expense for two of our
strategic investments as a result of a decrease in share
price.
- Cash, cash equivalents and marketable securities were $144.6
million as of September 30, 2016.
Business Highlights
- RAYALDEE launch scheduled for late
November 2016: The U.S. Food and Drug Administration
(FDA) approved RAYALDEE for the treatment of secondary
hyperparathyroidism (SHPT) in adults with stage 3 or 4 chronic
kidney disease (CKD) and serum total 25-hydroxyvitamin D levels
less than 30 ng/mL. RAYALDEE is a patented product containing 30
mcg of a prohormone called calcifediol (25-hydroxyvitamin D3).
OPKO has now completed hiring and training a highly
specialized marketing and sales team, which is ready for the
November 2016 launch.
- Transition Therapeutics: The acquisition
of Transition Therapeutics Inc., a Toronto-based biotechnology
company, closed in August 2016. Transition Therapeutics has two
drugs in mid-stage clinical development; TT401, a long acting
GLP-1/glucagon dual agonist for the treatment of type 2 diabetes
and obesity, and TT701, an orally administered selective androgen
receptor modulator (SARM) being developed for the treatment of
patients who will benefit from its effects on increasing muscle and
bone strength and decreasing body fat mass.
- 4Kscore test utilization continues to
grow; reimbursement in place with many payors, coverage
negotiations continue with others: Reimbursement of
the 4Kscore test is progressing; pricing agreements are already in
place with several payors, and the Company is working to obtain
positive coverage by its local Medicare administrator. During
the quarter ended September 30, 2016, approximately 16,000 4Kscore
tests were performed, a 9% increase from the quarter ended June 30,
2016 and a 365% increase over the comparable period of 2015.
- Topline data for three long acting biologic programs
anticipated
- Long acting hGH-CTP topline Phase 3 data in adults in
4Q 2016: OPKO expects to report topline results from its
Phase 3 trial evaluating the safety and efficacy of once weekly
injections of hGH-CTP with a primary endpoint of superiority
compared to placebo in decreasing fat mass in adults with growth
hormone deficiency (GHD) in the fourth quarter of 2016. The trial
is a randomized, double-blind, placebo controlled, multicenter,
global study in adults with GHD.
- Long acting Factor VIIa-CTP safety data from the first
in human Phase 2a trial expected in early 2017: This
is a dose escalation study to determine safety for OPKO's
long-acting version of coagulation Factor VIIa (Factor VIIa-CTP)
for the treatment of bleeding episodes in hemophilia A or B
patients with inhibitors to Factor VIII or Factor IX.
- Long acting oxyntomodulin first in human Phase 1 safety
data expected early 2017: OPKO's Phase 1 single dose
escalation study to evaluate the safety and pharmacokinetics of our
long acting oxyntomodulin (MOD-6031) in healthy subjects was
successful in determining the maximum tolerable dose, indicating
activity, as expected.
- Clinical trials for Claros point of care (POC) PSA test
to begin in late 2016; PMA filing anticipated in 1H 2017; Claros
POC testosterone test clinical trials and 510(k) filing to follow
in 2017: OPKO intends to commence a multi-center clinical
study of OPKO's POC diagnostic test for prostate specific antigen
(PSA) utilizing its proprietary diagnostic platform in late 2016.
OPKO intends to submit its application to the FDA for approval of
the assay in mid-2017. OPKO expects to commence an additional
multi-center clinical study for its POC testosterone test in 2017
followed by a 510(k) submission in late 2017.
“We are finalizing the details of our commercial launch of
RAYALDEE and have completed the selection and hiring of a very
talented commercial team, all of whom bring deep relationships in
the nephrology and specialty pharmaceutical sales market,” stated
Phillip Frost, M.D., Chairman and Chief Executive Officer of
OPKO. “RAYALDEE will be an important medicine for a large
number of chronic kidney disease patients suffering from SHPT and
vitamin D insufficiency. We are working closely with the
Vifor Fresenius Medical Care Renal Pharma team to bring RAYALDEE
to market outside the U.S. and are presently planning the
start of a Phase 3 trial in dialysis patients which
represents the first potential line extension for RAYALDEE in
addition to its currently approved indication.
“With the Transition Therapeutics acquisition, we now have two
additional important drugs in Phase 2 development; one for patients
who could benefit from its effects on increasing bone and muscle
strength while decreasing fat mass; the other for type 2 diabetes
and obesity. Each drug has already been studied and shown to
be safe in approximately 400 patients. We are also very
pleased to now have the benefit of an experienced Transition
Therapeutics team led by its CEO, Tony Cruz.
“Our BioReference Laboratories and its GeneDx unit continue to
grow and the utilization of our innovative 4Kscore test for
predicting the probability of aggressive prostate cancer remains
strong. Last, we have made great progress on our Claros point of
care diagnostic system and anticipate starting clinical trials for
our PSA and testosterone tests in the coming months,” continued Dr.
Frost.
CONFERENCE CALL & WEBCAST INFORMATION:
OPKO’s senior management will provide a business update and
discuss results in greater detail in a conference call and
live audio webcast at 4:30 p.m. Eastern time today.
The conference call dial in information is listed below. To
access the webcast, please log on to the OPKO website at
www.opko.com.
WHEN: Monday, November 7, 2016, 4:30 p.m. ET DOMESTIC DIAL-IN:
(866) 634-2258 INTERNATIONAL DIAL-IN: (330) 863-3454 PASSCODE:
12830677
For those unable to participate in the conference call or
webcast, a replay will be available beginning November 7, 2016 at
7:30 p.m. ET for a period of time. To access the replay, dial (855)
859-2056 or (404) 537-3406. The replay passcode is: 12830677.
The replay can also be accessed for a period of time on OPKO’s
website at www.opko.com.
About OPKO Health, Inc.
OPKO Health is a diversified healthcare company that seeks to
establish industry-leading positions in large, rapidly growing
markets. Our diagnostics business includes Bio-Reference
Laboratories, the nation's third-largest clinical laboratory with a
core genetic testing business and a 420-person sales force to drive
growth and leverage new products, including the 4Kscore® prostate
cancer test and the Claros® 1 in-office immunoassay platform. Our
pharmaceutical business features RAYALDEE, an FDA-approved
treatment for SHPT in stage 3-4 CKD patients with vitamin D
insufficiency, VARUBI™ for chemotherapy-induced nausea and vomiting
(oral formulation launched by partner TESARO and IV formulation
PDUFA date: January 2017), TT401, a once or twice weekly
oxyntomodulin for type 2 diabetes and obesity which is a clinically
advanced drug candidate among the new class of GLP-1 glucagon
receptor dual agonists, and TT701, an androgen receptor modulator
for androgen deficiency indications. Our biologics business
includes hGH-CTP, a once-weekly human growth hormone injection (in
phase 3 and partnered with Pfizer), a long-acting Factor VIIa drug
for hemophilia (in phase 2a) and a long-acting oxyntomodulin for
diabetes and obesity (in phase 1). We also have production and
distribution assets worldwide, multiple strategic investments and
an active business development strategy. More information is
available at www.opko.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking statements," as
that term is defined under the Private Securities Litigation Reform
Act of 1995 (PSLRA), which statements may be identified by words
such as "expects," "plans," "projects," "will," "may,"
"anticipates," "believes," "should," "intends," "estimates," and
other words of similar meaning, including statements regarding
expected financial performance, our product development efforts and
the expected benefits of our products, including whether our
ongoing and future clinical trials will be completed on a timely
basis or at all and whether the data from any of our trials will
support approval, validation and/or reimbursement for our products,
the expected timing for launch of our products in development,
including RAYALDEE, the expected timing of commencing and
concluding our clinical trials, enrollment in clinical trials, and
disclosure of results for the trials, the timing of our regulatory
submissions, our ability to market and sell any of our products in
development, expectations about developing RAYALDEE for dialysis
patients, our ability to obtain broad reimbursement coverage for
the 4Kscore test, increased adoption rates for the 4Kscore, our
expectations about the Transition Therapeutics products in
development, as well as other non-historical statements about our
expectations, beliefs or intentions regarding our business,
technologies and products, financial condition, strategies or
prospects. Many factors could cause our actual activities or
results to differ materially from the activities and results
anticipated in forward-looking statements. These factors include
those described in our Annual Reports on Form 10-K filed and to be
filed with the Securities and Exchange Commission and in our other
filings with the Securities and Exchange Commission, as well as
integration challenges for Bio-Reference, EirGen, Transition, and
other acquired businesses, the risks inherent in funding,
developing and obtaining regulatory approvals of new,
commercially-viable and competitive products and treatments, that
earlier clinical results of effectiveness and safety may not be
reproducible or indicative of future results, that the 4Kscore,
RAYALDEE, Varubi™, hGH-CTP, and/or any of our compounds or
diagnostic products under development may fail, may not achieve the
expected results or effectiveness and may not generate data that
would support the approval or marketing of products for the
indications being studied or for other indications, that currently
available over-the-counter and prescription products, as well as
products under development by others, may prove to be as or more
effective than our products for the indications being studied. In
addition, forward-looking statements may also be adversely affected
by general market factors, competitive product development, product
availability, federal and state regulations and legislation, the
regulatory process for new products and indications, manufacturing
issues that may arise, patent positions and litigation, among other
factors. The forward-looking statements contained in this press
release speak only as of the date the statements were made, and we
do not undertake any obligation to update forward-looking
statements. We intend that all forward-looking statements be
subject to the safe-harbor provisions of the PSLRA.
CompanyOPKO Health, Inc.Tara Mackay,
305-575-4100Investor RelationsorMediaRooney &
AssociatesTerry Rooney,
212-223-0689trooney@rooneyco.com orMarion Janic,
212-223-4017mjanic@rooneyco.com orInvestorsLHAAnne
Marie Fields, 212-838-3777afields@lhai.com orBruce Voss,
310-691-7100bvoss@lhai.com
|
OPKO Health, Inc. and Subsidiaries |
Condensed Consolidated Balance Sheets |
(unaudited) |
(in millions) |
|
As of |
|
September 30, 2016 |
|
December 31, 2015 |
Assets: |
|
|
|
Cash, cash
equivalents and marketable securities |
$ |
144.6 |
|
|
$ |
193.6 |
|
Other
current assets |
|
357.4 |
|
|
|
260.5 |
|
Total Current Assets |
|
502.0 |
|
|
|
454.1 |
|
In-process Research and
Development and Goodwill |
|
1,347.5 |
|
|
|
1,535.6 |
|
Other assets |
|
950.5 |
|
|
|
809.5 |
|
Total
Assets |
$ |
2,800.0 |
|
|
$ |
2,799.2 |
|
|
|
|
|
Liabilities and
Equity: |
|
|
|
Current
liabilities |
$ |
254.5 |
|
|
$ |
251.9 |
|
2033 Senior
Notes, net |
|
51.5 |
|
|
|
49.0 |
|
Deferred tax
liabilities |
|
184.5 |
|
|
|
226.0 |
|
Other
long-term liabilities, principally deferred revenue and contingent
consideration |
|
204.1 |
|
|
|
292.5 |
|
Total
Liabilities |
|
694.6 |
|
|
|
819.4 |
|
Equity |
|
2,105.4 |
|
|
|
1,979.8 |
|
Total
Liabilities and Equity |
$ |
2,800.0 |
|
|
$ |
2,799.2 |
|
|
|
|
|
OPKO Health, Inc. and Subsidiaries |
Condensed Consolidated Statements of Operations |
(unaudited) |
(in millions, except per share data) |
|
|
For the three months ended September 30, |
|
For the nine months ended September 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Revenue from
services |
$ |
259.0 |
|
|
$ |
103.9 |
|
|
$ |
777.6 |
|
|
$ |
107.9 |
|
Revenue from
products |
|
20.6 |
|
|
|
20.8 |
|
|
|
63.3 |
|
|
|
59.1 |
|
Revenue from
transfer of intellectual property |
|
18.4 |
|
|
|
18.3 |
|
|
|
105.3 |
|
|
|
48.5 |
|
Total
revenues |
|
298.0 |
|
|
|
143.0 |
|
|
|
946.2 |
|
|
|
215.5 |
|
Costs and expenses |
|
|
|
|
|
|
|
Cost of
revenues |
|
151.2 |
|
|
|
67.3 |
|
|
|
452.2 |
|
|
|
92.1 |
|
Selling,
general and administrative |
|
124.9 |
|
|
|
55.3 |
|
|
|
370.3 |
|
|
|
93.6 |
|
Research and
development |
|
24.4 |
|
|
|
18.9 |
|
|
|
83.6 |
|
|
|
74.0 |
|
Contingent
consideration |
|
3.1 |
|
|
|
1.6 |
|
|
|
15.6 |
|
|
|
6.5 |
|
Amortization
of intangible assets |
|
18.1 |
|
|
|
8.1 |
|
|
|
47.3 |
|
|
|
14.0 |
|
Grant
repayment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
25.9 |
|
Total Costs
and expenses |
|
321.7 |
|
|
|
151.2 |
|
|
|
969.0 |
|
|
|
306.1 |
|
Operating
(loss) income |
|
(23.7 |
) |
|
|
(8.2 |
) |
|
|
(22.8 |
) |
|
|
(90.6 |
) |
Other income and
(expense), net |
|
(10.5 |
) |
|
|
47.0 |
|
|
|
(8.1 |
) |
|
|
(23.6 |
) |
(Loss)
income before income taxes and investment losses |
|
(34.2 |
) |
|
|
38.8 |
|
|
|
(30.9 |
) |
|
|
(114.2 |
) |
(Provision for) benefit
from income taxes |
|
20.0 |
|
|
|
93.0 |
|
|
|
24.6 |
|
|
|
87.2 |
|
(Loss)
income before investment losses |
|
(14.2 |
) |
|
|
131.8 |
|
|
|
(6.3 |
) |
|
|
(27.0 |
) |
Loss from investments in
investees |
|
(0.8 |
) |
|
|
(3.6 |
) |
|
|
(5.1 |
) |
|
|
(6.0 |
) |
Net (loss)
income |
|
(15.0 |
) |
|
|
128.2 |
|
|
|
(11.4 |
) |
|
|
(33.0 |
) |
Less: Net loss
attributable to non-controlling interests |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1.4 |
) |
Net (loss)
income attributable to common shareholders |
$ |
(15.0 |
) |
|
$ |
128.2 |
|
|
$ |
(11.4 |
) |
|
$ |
(31.6 |
) |
Basic income
(loss) per share |
$ |
(0.03 |
) |
|
$ |
0.26 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
Diluted
income (loss) per share |
$ |
(0.03 |
) |
|
$ |
0.18 |
|
|
$ |
(0.02 |
) |
|
$ |
(0.07 |
) |
|
|
|
|
|
|
|
|
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