OPKO Health, Inc. (NASDAQ:OPK), reports financial
and operating results for the three months ended December 31, 2016.
Financial Highlights
- Consolidated revenues for the three months ended December 31,
2016 of $275.5 million were consistent with the comparable period
of 2015 revenue of $276.2 million. The 2016 period benefited from
increased revenue from services at BioReference of $12.8 million,
which was offset by a non-recurring $15.0 million milestone payment
that was received during the comparable period of 2015 related to
Varubi™.
- Net loss for the three months ended December 31, 2016 was $13.7
million compared with net income of $1.6 million for the 2015
period. The three months ended December 31, 2016 included the
launch related activities for RAYALDEE, including the 50 person
commercial organization. Net (loss) income during the three
month periods include significant non-recurring and non-cash
activities:- During the three months ended December 31, 2015,
revenue included a $15.0 million milestone payment related to the
first commercial sale of Varubi™ by TESARO.- Other income and
(expense) was $7.7 million and ($15.9) 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
included a ($7.3) million temporary impairment charge of
an available for sale investment.
- Cash, cash equivalents and marketable securities were $168.7
million as of December 31, 2016.
Business Highlights
- U.S. commercial launch of RAYALDEE began in late
November: RAYALDEE was launched with a highly
specialized commercial team with deep experience in nephrology and
specialty pharmaceuticals. Since the launch, substantial
progress has been made obtaining formulary access for RAYALDEE with
approximately 60% of U.S. patients already covered. Obtaining
broad reimbursement coverage is critical to the adoption of
RAYALDEE.
- 4Kscore test utilization continued to
grow; Level 1 CPT code and CMS pricing is in place, negotiations
with payors continue: Level 1 CPT code and CMS
pricing became effective on January 1, 2017, and the Company is
working to secure coverage and favorable pricing with additional
payors. During the quarter ended December 31, 2016,
approximately 18,000 4Kscore tests were ordered which represents
growth of more than 12% compared to the quarter ended September 30,
2016. During 2016, the Company obtained positive coverage and
pricing with a number of payors including a national healthcare
plan. Novitas, the Company’s Medicare administrator, continues to
pay for a majority of 4Kscore tests performed.
- Phase 3 clinical trial for hGH-CTP in pediatric
patients initiated; outlier analyses of data for adult study
continues; preparations for BLA submission for the adult indication
underway: The phase 3 clinical trial for pediatric growth
hormone deficient patients is underway. OPKO has begun a
statistical outlier analysis of its Phase 3 trial data from the
adult study, and OPKO and Pfizer have begun the preparation of a
BLA.
- Clinical trials for Claros point of care (POC) PSA test
commenced in January 2017; PMA filing anticipated in 1H 2017;
Claros POC testosterone test clinical trials and 510(k) filing to
follow: OPKO has commenced a multi-center clinical
study of its POC diagnostic test for prostate specific antigen
(PSA) utilizing its proprietary diagnostic platform. OPKO intends
to submit its application to the U.S. Food and Drug Administration
for approval of the assay in mid-2017. OPKO expects to begin
an additional multi-center study of its POC testosterone test in
2017 followed by a 510(k) submission.
- Initiation of three Phase 2 clinical trials anticipated
in 2H 2017 and early 2018- RAYALDEE
line extension in dialysis patients with SHPT:
OPKO is developing RAYALDEE for Stage 5 CKD patients with SHPT
undergoing dialysis with its partner, Vifor Fresenius. The
Company anticipates initiating a Phase 2 clinical trial during the
second half of 2017.- TT701, an orally administered
SARM: The Company plans to initiate a Phase 2b
dose-ranging study in the second half of 2017 to evaluate the
selective effects of TT701 to reduce prostate size and provide
other therapeutic benefits such as increase in muscle mass
and bone strength and decreased fat mass in men with BPH (enlarged
prostate).- TT401, a once-weekly
oxytomodulin dual GLP1/Glucagon agonist for diabetes and
obesity: We plan to initiate a Phase 2b study in early
2018 involving a stepwise increase in dose to treat type II
diabetes and obesity.
MANAGEMENT COMMENTARY:
“OPKO reached a number of important milestones during 2016,”
stated Phillip Frost, M.D., Chairman and Chief Executive Officer of
OPKO. “We launched RAYALDEE, the first new medicine we have
developed and launched ourselves. The commercial team is
making great strides in the early days of the launch and has so far
secured formulary access for 60% of all U.S. insured patients.”
“Use of our innovative 4Kscore test for predicting the
probability of aggressive prostate cancer increased to nearly
18,000 tests ordered in the fourth quarter. We have now set
the stage for continued, profitable growth at BioReference with a
revenue cycle management program that is expected to improve
financial results on an ongoing basis.
“We have a number of important initiatives ahead of us in 2017
and early 2018. We will complete the recently initiated
clinical trial for our Claros POC diagnostic test for PSA and plan
to file a PMA as quickly as possible upon completion. Along
with our partner, Vifor Fresenius, we plan to initiate a Phase 2
trial in dialysis patients with SHPT. We also plan to
initiate a Phase 2b trial for our SARM for the treatment of BPH, a
condition that affects approximately 50 million men in the U.S., as
well as a Phase 2 dose escalation study for TT401 to treat obesity
and type II diabetes.
“We are diligently working to complete analysis of the data from
our Phase 3 clinical trial for hGH-CTP in adults and are
aggressively advancing our pediatric Phase 3 clinical trial for
hGH-CTP,” Dr. Frost concluded.
CONFERENCE CALL & WEBCAST INFORMATION:
OPKO’s senior management will provide a business update and
discuss the 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: Wednesday, March 1, 2017, 4:30 p.m. Eastern time.DOMESTIC
DIAL-IN: (866)
634-2258
INTERNATIONAL DIAL-IN: (330)
863-3454
PASSCODE: 80392791WEBCAST: http://investor.opko.com/events.cfm
For those unable to participate in the live conference call or
webcast, a replay will be available beginning March 1, 2017 two
hours after the close of the conference call. To access the replay,
dial (855) 859-2056 or (404) 537-3406. The replay passcode is:
80392791. The replay can be accessed for a period of time on OPKO’s
website at http://investor.opko.com/events.cfm.
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 400-person sales and marketing
team 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 (launched in November 2016),
VARUBI™ for chemotherapy-induced nausea and vomiting (oral
formulation launched by partner TESARO and IV formulation pending
FDA approval), 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 to treat men
with BPH. Our biologics portfolio includes hGH-CTP, a once weekly
human growth hormone injection (in phase 3 and partnered with
Pfizer), and a long-acting Factor VIIa drug for hemophilia (in
phase 2a). We also have production and distribution assets
worldwide, multiple strategic investments and an active business
development strategy. More information 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, whether we will experience
continued, profitable growth at Bio-Reference, whether our revenue
cycle management program will improve financial results, our
product development efforts and the expected benefits of our
products, including whether our ongoing and future clinical trials
will be successfully 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, whether the data
for the hGH-CTP study in adults will support approval of a BLA, 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, 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, TT-401, TT-701, 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.
Company OPKO Health, Inc. Tara Mackay,
305-575-4100 Investor Relations or Media Rooney
& Associates Terry Rooney, 212-223-0689 trooney@rooneyco.com or
Marion Janic,
212-223-4017mjanic@rooneyco.comorInvestorsLHAAnne
Marie Fields, 212-838-3777afields@lhai.comorBruce Voss,
310-691-7100bvoss@lhai.com
OPKO Health, Inc. and SubsidiariesCondensed
Consolidated Balance Sheets (in millions) |
|
As of |
|
December 31, 2016 |
|
December 31, 2015 |
Assets: |
|
|
|
Cash, cash
equivalents and marketable securities |
$ |
168.7 |
|
$ |
193.6 |
Other current
assets |
|
314.9 |
|
|
260.5 |
Total Current
Assets |
|
483.6 |
|
|
454.1 |
In-process Research and
Development and Goodwill |
|
1,349.3 |
|
|
1,535.6 |
Other assets |
|
933.7 |
|
|
809.5 |
Total Assets |
$ |
2,766.6 |
|
$ |
2,799.2 |
|
|
|
|
Liabilities and
Equity: |
|
|
|
Current
liabilities |
$ |
263.3 |
|
$ |
251.9 |
2033 Senior
Notes, net |
|
43.7 |
|
|
49.0 |
Deferred tax
liabilities |
|
165.3 |
|
|
226.0 |
Other long-term
liabilities, principally deferred revenue and contingent
consideration |
|
202.5 |
|
|
292.5 |
Total
Liabilities |
|
674.8 |
|
|
819.4 |
Equity |
|
2,091.8 |
|
|
1,979.8 |
Total Liabilities and Equity |
$ |
2,766.6 |
|
$ |
2,799.2 |
|
|
|
|
OPKO Health, Inc. and SubsidiariesCondensed
Consolidated Statements of Operations (in millions, except per
share data) |
|
For the three months ended December 31, |
|
For the years ended December 31, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Revenue from
services |
$ |
234.6 |
|
|
$ |
221.8 |
|
|
$ |
1,012.1 |
|
|
$ |
329.7 |
|
Revenue from
products |
|
20.2 |
|
|
|
21.1 |
|
|
|
83.5 |
|
|
|
80.1 |
|
Revenue from
transfer of intellectual property |
|
20.7 |
|
|
|
33.3 |
|
|
|
126.1 |
|
|
|
81.9 |
|
Total revenues |
|
275.5 |
|
|
|
276.2 |
|
|
|
1,221.7 |
|
|
|
491.7 |
|
Costs and expenses |
|
|
|
|
|
|
|
Cost of
revenues |
|
159.3 |
|
|
|
143.1 |
|
|
|
611.5 |
|
|
|
235.2 |
|
Selling, general
and administrative |
|
120.5 |
|
|
|
102.9 |
|
|
|
490.9 |
|
|
|
196.6 |
|
Research and
development |
|
27.6 |
|
|
|
25.5 |
|
|
|
111.2 |
|
|
|
99.5 |
|
Contingent
consideration |
|
1.4 |
|
|
|
(1.4 |
) |
|
|
17.0 |
|
|
|
5.0 |
|
Amortization of
intangible assets |
|
17.1 |
|
|
|
14.0 |
|
|
|
64.4 |
|
|
|
28.0 |
|
Grant
repayment |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
25.9 |
|
Total Costs and expenses |
|
325.9 |
|
|
|
284.1 |
|
|
|
1,295.0 |
|
|
|
590.2 |
|
Operating (loss)
income |
|
(50.4 |
) |
|
|
(7.9 |
) |
|
|
(73.3 |
) |
|
|
(98.5 |
) |
Other income and
(expense), net |
|
7.7 |
|
|
|
(16.0 |
) |
|
|
(0.2 |
) |
|
|
(39.5 |
) |
(Loss)
income before income taxes and investment losses |
|
(42.7 |
) |
|
|
(23.9 |
) |
|
|
(73.5 |
) |
|
|
(138.0 |
) |
(Provision for) benefit
from income taxes |
|
31.5 |
|
|
|
26.5 |
|
|
|
56.1 |
|
|
|
113.7 |
|
(Loss)
income before investment losses |
|
(11.2 |
) |
|
|
2.6 |
|
|
|
(17.4 |
) |
|
|
(24.3 |
) |
Loss from investments
in investees |
|
(2.5 |
) |
|
|
(1.0 |
) |
|
|
(7.7 |
) |
|
|
(7.1 |
) |
Net
(loss) income |
|
(13.7 |
) |
|
|
1.6 |
|
|
|
(25.1 |
) |
|
|
(31.4 |
) |
Less: Net loss
attributable to non-controlling interests |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(1.4 |
) |
Net (loss) income attributable to common shareholders |
$ |
(13.7 |
) |
|
$ |
1.6 |
|
|
$ |
(25.1 |
) |
|
$ |
(30.0 |
) |
Basic income (loss) per share |
$ |
(0.02 |
) |
|
$ |
0.00 |
|
|
$ |
(0.05 |
) |
|
$ |
(0.06 |
) |
Diluted income (loss) per share |
$ |
(0.04 |
) |
|
$ |
0.00 |
|
|
$ |
(0.05 |
) |
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
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