Sian Capital, LLC (together with its affiliates, “Sian” or “we”), a
sizable stockholder with beneficial ownership of approximately 3%
of OPKO Health, Inc.'s (NASDAQ: OPK) (“OPKO” or the “Company”)
outstanding common stock, today sent a letter to OPKO’s Board of
Directors highlighting the urgent need for the Company to act
swiftly to distribute Rayaldee – an effective drug shown to help
treat COVID-19 – across the U.S. and Europe.
Over the past week, we have had conversations
with members of the United States Congress, those living in
European countries, and the world’s foremost infectious disease
specialists. We look forward to sharing more information regarding
how you can encourage your Congressperson to help your loved ones.
In the meantime, visit www.SianCapital.com/Resources to learn more
about OPKO and Rayaldee.
The full text of the letter is included
below.
***
VIA E-MAIL
November 20, 2020
The Board of DirectorsOPKO Health, Inc.4400
Biscayne Blvd. Miami, Florida 33137
Dear Chairman Frost and Members of the Board of
Directors (the “Board”):
As of this week, a quarter of a million people
have died in the U.S. from COVID-19. New York City is closing
public schools amid rising cases, hospitals and first responders
across the country are overwhelmed with sick patients, and experts
predict that the U.S. could soon be reporting more than 2,000
deaths per day – matching or exceeding our spring peak.1 As Dr.
Anthony Fauci recently commented, “we are in for a world of
hurt.”
With more than 11.5 million confirmed cases in
the U.S., we find our entire nation focused on a singular question:
when will we be able to effectively treat patients with the deadly
virus?
Sian Capital, LLC (together with its affiliates,
“Sian” or “we”) was extremely dismayed to learn that OPKO Health,
Inc. (“OPKO” or the “Company”) has a viable solution at its
fingertips, yet for reasons unclear to us, has withheld its science
from millions of afflicted citizens in the U.S. and abroad. As a
substantial investor in OPKO, we believe the Board has not only a
fiduciary duty, but a humanitarian duty to distribute Rayaldee to
those in need. There is no reason that so many Americans should
continue dying without having the opportunity to access potential
curative drugs. In this letter, we outline how Rayaldee could save
countless lives while also unlocking tremendous revenues for OPKO
right away.
How Rayaldee Could Save
Countless Lives Amidst the COVID-19
Pandemic
As early as 2008 and as recently as 2016,
leading scientists predicted that our population’s widespread
deficiency in vitamin D could lead to a global pandemic. There is
growing evidence today that COVID-19 patients who are deficient in
vitamin D are more likely to experience serious illness, severe
complications and increased risk of death. Unfortunately, raising
your vitamin D levels is not as easy as taking over-the-counter
supplements from your local drug store.
Instead, evidence shows we can fight and prevent
COVID-19 through the administration of a vitamin D prohormone,
Calcifediol, which naturally interacts with the body to create the
necessary levels of pure 25(OH)D serums. Calcifediol is the active
ingredient in OPKO’s homegrown drug Rayaldee, which is typically
used to treat Chronic Kidney Disease. When treating patients
afflicted with both Chronic Kidney Disease and COVID-19, it was
discovered that Rayaldee was fighting the virus, as well. This
discovery and additional anecdotal evidence led the Food and Drug
Administration (“FDA”) to give Rayaldee a high safety indication
and fast-track Rayaldee’s phase 2 trial on June 1, 2020 for
treatment of mild to moderate COVID-19.2 The FDA required only a
4-week trial and 160 participants to be treated with the drug, in
stark contrast to Pfizer’s vaccine trial, which required nearly
45,000 participants. Further, the FDA required that just two
primary endpoints be met to pass the trial: 1) Rayaldee raise
25(OH)D levels to between 50ng/ML and 100 ng/ML, and 2) Rayaldee
outperform the placebo group.
Rayaldee quickly proved to be effective, with
treatment indicating that a daily dose of 60 mcg of Rayaldee is the
only one of the four treatment regimens tested that reliably raises
25(OH)D serum totals to the range of 50 to 100 ng/ML passing the
first FDA endpoint. In a separate simultaneous trial in Spain,
patients in the Calcifediol (Rayaldee) group had a 96%
effectiveness rate, with just 2% of patients hospitalized with zero
fatalities – compared to those in the placebo group where 50% were
hospitalized with a death rate of 7.7%.3
In spite of Rayaldee’s encouraging trial
evidence and the highest safety indication the FDA can give, OPKO’s
Board and management team are seemingly withholding this effective
drug from the U.S. and European populace. Because Calcifediol is an
American drug owned by OPKO, both U.S. and European governments
cannot utilize Rayaldee unless OPKO sells it to them.4 This is
especially troubling given that our European neighbors have already
passed legislation requiring the distribution of ~15 million doses
of a crude, less effective alternative to Rayaldee, in an attempt
to replicate Rayaldee’s protective benefits, to millions of their
most vulnerable populations next month. It is well known that the
elderly, the sick and those in nursing homes are disproportionately
dying at high mortality rates. We believe European countries would
likely administer many prescriptions if OPKO were to offer Rayaldee
to them instead of obfuscating its benefits and failing to reach
out to England, Scotland and many other countries who have already
approved millions of doses.
With over 1.34 million deaths globally and the
death toll steadily rising, we question what could possibly
motivate OPKO to sit on science that could potentially save so many
lives?
How OPKO Could Unlock
Significant Value for Shareholders by Distributing
Rayaldee
It is painfully obvious to Sian that in addition
to disregarding its ability to save lives, OPKO is squandering an
incredible value opportunity by withholding Rayaldee. In 2019, OPKO
sold only ~55,000 scripts of Rayaldee for ~$30 million. If OPKO
allowed European countries to purchase the already approved ~15
million doses, even at a
90% discount to
its selling price, OPKO could receive over $850 million. Much more
importantly, at the current death rate, it could save
100,000 lives over the four-month program enacted
by European countries.
Despite the current dysfunction of our political
climate, it’s our view that the U.S. should follow Europe’s lead by
ordering doses for 12 million of our most vulnerable citizens.
Though just 1% of U.S. citizens live in nursing homes, nursing home
deaths account for over 20% of our daily death rates. We believe
OPKO should similarly discount its selling price of Rayaldee by
90%, which could unlock $3 billion in value and save tens of
thousands of American lives.
Beyond selling Rayaldee to the U.S. government,
we believe OPKO has a humanitarian duty to distribute Rayaldee
across the pond, where a European citizen is dying every 17 seconds
from COVID-19.5 When lending assistance to the Europeans during
World War II, FDR famously said that when your neighbor’s house is
on fire, you don’t haggle over the price of a garden hose. Putting
aside economics, from a humanitarian perspective, it is apparent to
us that OPKO should move quickly to distribute its valuable drug on
an international scale, even if it is at an 90% discount.
Over the last few weeks, the governments of
England, Spain, Scotland, Wales and Ireland have all committed to
helping their most vulnerable, citing studies that indicate
Rayaldee is the best way to do that. We urge you to share one of
the only drugs that appears to help treat COVID-19. We believe
you have a humanitarian
and fiduciary duty to do
so.
“If there's a child on the south side of Chicago
who can't read, that matters to me, even if it's not my child.
If there's a senior citizen somewhere who can't pay for
their prescription, who has to choose between medicine and the
rent, that makes my life poorer - even if it's not my
grandparent. If there's an Arab-American or
Mexican-American family being rounded up by John Ashcroft without
benefit of an attorney or due process, I know that that threatens
my civil liberties. And I don't have to be a woman to be concerned
that the Supreme Court is trying to take away a woman's right,
because I know that my rights are next. It is that
fundamental belief - I am my brother’s keeper, I am my sister’s
keeper - that makes this country work.”
-- Barack Obama, 2004
Sincerely,Anish MongaSian Capital LLC
***
About Sian Capital
Founded by veteran portfolio manager Anish
Monga, Sian Capital, LLC is a New York-based asset management firm
that employs a focused, event-driven investment approach. Sian’s
unique mix of cross-sector experience and activism expertise
enables it to identify and invest in what are often overlooked or
under-covered investment opportunities.
Contacts
ProfileGreg Marose / Charlotte
Kiaiegmarose@profileadvisors.com / ckiaie@profileadvisors.com
1 The New York Times: A quarter of a million people have died in
the U.S. from Covid-19. (November 19, 2020).2
https://www.opko.com/investors/news-events/press-releases/detail/394/fda-authorizes-opko-health-clinical-trial-evaluating.
3 Journal of Steroid Biochemistry and Molecular Biology; The
Guardian: Covid: UK government requests guidance on vitamin D use
(November 14, 2020).4 To be clear, we are not implying that Vifor
Pharma (SWX: VIFN), the holder of the license to sell Rayaldee in
Europe in exchange for royalties to OPKO, has not already begun
negotiations with these European countries. Our letter references
only OPKO, who ultimately makes the decision, regardless if Vifor
were (hypothetically) negotiating with these countries.5 The
Washington Post: Someone in Europe is dying every 17 seconds from
covid-19, WHO says (November 19, 2020).
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