OPKO Health Reports Second Quarter 2017 Business and Financial Results
August 08 2017 - 4:15PM
OPKO Health, Inc. (NASDAQ:OPK) (“OPKO” or “the
Company”), reports business and financial results for the three and
six months ended June 30, 2017.
Business Highlights
• Sales force expansion for RAYALDEE
underway. OPKO has made substantial progress in
obtaining formulary access for RAYALDEE, with more than 68% of
potential patient lives now covered under insurance plans.
With the more extensive insurance coverage available, OPKO is
continuing to expand its field-based sales force to 70
representatives from the original 35.• Phase 2a trial for
intravenously administered Factor VII-CTP and Phase 1 trial for
subcutaneously administered Factor VII-CTP ongoing.
These long-acting forms of Factor VII utilizing OPKO’s CTP
technology are expected to better support prophylaxis, provide
easier administration and decrease dosing frequency for hemophilia
patients.• Enrollment for global pediatric Phase 3
hGH-CTP clinical trial continues and a Japanese pediatric
registration trial for hGH-CTP is now
underway.• Clinical trials of Claros
point-of-care (POC) prostate specific antigen (PSA) test completed
and Premarket Approval (PMA) filing anticipated this fall.
Analytic and clinical validation studies of OPKO’s
proprietary POC diagnostic test for PSA have been completed; PMA
application to the FDA is planned for 4Q 2017. OPKO expects
to begin an additional multicenter study of its POC testosterone
test in late 2017 or early 2018, followed by a 510(k) submission to
FDA.• Initiation of five Phase 2 clinical trials
anticipated in 2H 2017 and early 2018.
- RAYALDEE line extension in dialysis patients with SHPT:
Together with its partner, Vifor Fresenius, OPKO is developing
RAYALDEE for Stage 5 chronic kidney disease (CKD) patients with
secondary hyperparathyroidism (SHPT) undergoing dialysis and
anticipates initiating a Phase 2 trial during 4Q 2017.
- OPK88004, orally administered selective androgen receptor
modulator (SARM): OPKO plans to initiate a Phase 2b dose ranging
study in 4Q 2017 to evaluate its use to treat men with benign
prostate hyperplasia (BPH or enlarged prostate). It is
expected to improve symptoms of BPH by reducing prostate size and,
on the basis of data from a previous trial in 350 men, increase
muscle mass and bone strength and decrease fat mass.
BPH affects approximately 50 million men in the U.S.
- OPK88003, once weekly oxyntomodulin dual GLP1-Glucagon agonist
for type 2 diabetes and obesity: In a 420-patient type 2
diabetes trial, OPK8804 reduced HbA1c levels similar to those
achieved with exenatide extended release (Ex ER). The drug also
showed a statistically significant improvement in weight loss,
cholesterol and triglycerides compared to once-weekly Ex ER. The
drug has a good safety profile and is expected to enter a Phase 2b
dose-escalation study in early 2018.
- OPK88002, NK-1 antagonist to treat pruritus (severe itching) in
Stage 5 CKD patients undergoing dialysis: Approximately 50%
of renal dialysis patients experience difficult-to-control
pruritus. An Investigational New Drug application was
approved for a Phase 2a trial of OPK88002 and OPKO expects to
initiate this study later this year.
- OPK88001, an oligonucleotide based AntagoNAT for the treatment
of Dravet Syndrome: OPK88001 has received orphan drug designation
in the U.S. and Europe. OPKO plans to file an IND for a Phase
2 clinical trial in 2H 2017 and plans to initiate that study by the
end of the year. Currently, there is no globally approved
treatment for Dravet Syndrome. AntagoNAT, anti-Natural
Antisense Transcripts, is an in-house developed OPKO platform
technology in which single strand oligonucleotide molecules are
designed to interfere with regulatory gene expression in order to
enhance production of endogenous functional proteins.
• BioReference Laboratories is well positioned to
accelerate revenue growth and expand operating margins through the
second half of 2017 and 2018.
- Continued investment in new systems provides better financial
data and more information about customers, products and sales.
- New leadership team introducing new programs that are expected
to benefit all aspects of the business.
- GeneDx, BioReference’s genetic testing unit, continues to
actively expand its innovative tests and services offerings and to
further develop its relationships with health care providers and
systems. - Expanded relationship with the University
of California Health System to offer genetic, genomic and molecular
testing services. - Implemented a unique
clinician-focused test ordering portal to provide better management
and tracking of data.
Financial Highlights
- Revenue for the three months ending June 30, 2017 was $314.2
million, which included a $10.0 million milestone payment from
TESARO related to the commercial launch of VARUBY® in Europe.
This compares with revenue of $357.1 million for the comparable
2016 period, which included a $50 million payment related to a
RAYALDEE license to Vifor Fresenius.
- During the three months ended June 30, 2017, operating expenses
included significant investment in the activities supporting the
commercial launch of RAYALDEE®, as well as continued investment in
the Company’s pharmaceutical pipeline.
- For the three months ending June 30, 2017, net loss was $17.5
million compared with net income of $15.5 million for the
comparable 2016 period, which benefited from a $50 million payment
for RAYALDEE from Vifor Fresenius.
- Cash, cash equivalents and marketable securities were $130.5
million as of June 30, 2017.
Conference Call and 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: Tuesday, August 8, 2017, 4:30 p.m. Eastern time.DOMESTIC
DIAL-IN: (866)
634-2258
INTERNATIONAL DIAL-IN: (330) 863-3454PASSCODE: 65755948WEBCAST:
http://investor.opko.com/events.cfm
For those unable to participate in the live conference call or
webcast, a replay will be available beginning August 8, 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:
65755948. 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), OPK88003, 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 OPK88004, 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), 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 and expectations regarding the
market for and sales of our products, whether 4Kscore test
utilization will continue to grow, 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 submission or approval, validation and/or
reimbursement for our products, the expected timing for launch of
our products in development, whether the data for hGH-CTP 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, expectations regarding revenue growth and
operating margins for BioReference for the remainder of 2017 and
2018, 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, OPKO88003, OPK88004, 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. David Malina, 305-575-4100 Investor
Relationsdmalina@opko.com LHA Anne Marie Fields, 212-838-3777
afields@lhai.com or Bruce Voss, 310-691-7100 bvoss@lhai.com
Tables to Follow
OPKO Health, Inc. and SubsidiariesCondensed
Consolidated Balance Sheets(unaudited) (in millions) |
|
As of |
|
June 30, 2017 |
|
December 31, 2016 |
Assets: |
|
|
|
Cash,
cash equivalents and marketable securities |
$ |
130.5 |
|
$ |
168.7 |
Other
current assets |
|
342.0 |
|
|
314.9 |
Total Current
Assets |
|
472.5 |
|
|
483.6 |
In-process Research and
Development and Goodwill |
|
1,358.0 |
|
|
1,349.3 |
Other assets |
|
938.2 |
|
|
933.7 |
Total
Assets |
$ |
2,768.7 |
|
$ |
2,766.6 |
|
|
|
|
Liabilities and
Equity: |
|
|
|
Current
liabilities |
$ |
283.1 |
|
$ |
263.3 |
2033
Senior Notes, net |
|
34.8 |
|
|
43.7 |
Deferred
tax liabilities |
|
142.2 |
|
|
165.3 |
Other
long-term liabilities, principally deferred revenue and contingent
consideration |
|
201.8 |
|
|
202.5 |
Total
Liabilities |
|
661.9 |
|
|
674.8 |
Equity |
|
2,106.8 |
|
|
2,091.8 |
Total
Liabilities and Equity |
$ |
2,768.7 |
|
$ |
2,766.6 |
|
|
|
|
OPKO Health, Inc. and SubsidiariesCondensed
Consolidated Statements of Operations(unaudited)(in millions,
except share and per share data) |
|
For the three months ended June 30, |
|
For the six months ended June 30, |
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
Revenue
from services |
$ |
256.7 |
|
|
$ |
266.0 |
|
|
$ |
512.0 |
|
|
$ |
518.5 |
|
Revenue
from products |
|
29.0 |
|
|
|
22.8 |
|
|
|
51.2 |
|
|
|
42.7 |
|
Revenue
from transfer of intellectual property |
|
28.5 |
|
|
|
68.3 |
|
|
|
47.1 |
|
|
|
86.9 |
|
Total
revenues |
|
314.2 |
|
|
|
357.1 |
|
|
|
610.3 |
|
|
|
648.1 |
|
Costs and expenses |
|
|
|
|
|
|
|
Cost of
revenues |
|
157.4 |
|
|
|
153.4 |
|
|
|
312.2 |
|
|
|
301.0 |
|
Selling,
general and administrative |
|
128.3 |
|
|
|
117.5 |
|
|
|
265.0 |
|
|
|
245.5 |
|
Research
and development |
|
32.6 |
|
|
|
31.3 |
|
|
|
58.6 |
|
|
|
59.1 |
|
Contingent consideration |
|
4.4 |
|
|
|
10.8 |
|
|
|
6.7 |
|
|
|
12.5 |
|
Amortization of intangible assets |
|
18.0 |
|
|
|
15.8 |
|
|
|
35.9 |
|
|
|
29.2 |
|
Total
Costs and expenses |
|
340.7 |
|
|
|
328.8 |
|
|
|
678.4 |
|
|
|
647.3 |
|
Operating
income (loss) |
|
(26.5 |
) |
|
|
28.3 |
|
|
|
(68.1 |
) |
|
|
0.8 |
|
Other income and
(expense), net |
|
3.6 |
|
|
|
5.1 |
|
|
|
9.4 |
|
|
|
2.5 |
|
Income
(loss) before income taxes and investment losses |
|
(22.9 |
) |
|
|
33.4 |
|
|
|
(58.7 |
) |
|
|
3.3 |
|
(Provision for) benefit
from income taxes |
|
11.0 |
|
|
|
(15.9 |
) |
|
|
17.9 |
|
|
|
4.6 |
|
Income
(loss) before investment losses |
|
(11.9 |
) |
|
|
17.5 |
|
|
|
(40.8 |
) |
|
|
7.9 |
|
Loss from investments
in investees |
|
(5.6 |
) |
|
|
(2.0 |
) |
|
|
(7.7 |
) |
|
|
(4.3 |
) |
Net
income (loss) |
$ |
(17.5 |
) |
|
$ |
15.5 |
|
|
$ |
(48.5 |
) |
|
$ |
3.6 |
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
Earnings
(loss) per share, basic |
$ |
(0.03 |
) |
|
$ |
0.03 |
|
|
$ |
(0.09 |
) |
|
$ |
0.01 |
|
Earnings
(loss) per share, diluted |
$ |
(0.04 |
) |
|
$ |
0.02 |
|
|
$ |
(0.10 |
) |
|
$ |
0.00 |
|
Weighted average common
shares outstanding, basic |
|
559,347,540 |
|
|
|
547,558,800 |
|
|
|
558,892,375 |
|
|
|
546,691,117 |
|
Weighted average common
shares outstanding, diluted |
|
564,163,808 |
|
|
|
557,040,435 |
|
|
|
563,617,274 |
|
|
|
556,735,862 |
|
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