OPKO Health Reports Second Quarter 2023 Business Highlights and Financial Results
August 03 2023 - 4:05PM
OPKO Health, Inc. (NASDAQ: OPK) reports business
highlights and financial results for the three and six months ended
June 30, 2023.
Second quarter business highlights included the
following:
- U.S. FDA
approved NGENLA™ for pediatric growth hormone deficiency; OPKO
earned a $90 million milestone payment from its commercial partner,
Pfizer. In June 2023, the U.S. Food and Drug
Administration (FDA) approved NGENLA (somatrogon), a once-weekly,
human growth hormone analog indicated for the treatment of
pediatric patients aged three years and older with impaired growth
due to insufficient growth hormone. Pfizer, OPKO’s commercial
partner, expects NGENLA to become available for U.S. prescribing
this month. In addition to the $90 million milestone payment earned
upon receipt of FDA approval, OPKO is entitled to profit sharing
based on regional, tiered gross profit for both NGENLA and
Genotropin®, Pfizer’s daily human growth hormone.
- NGENLA has now been
approved in 44 markets including the U.S., Japan, EU Member States,
Canada and Australia; sales are underway by Pfizer in over 18
countries with expectations to launch in all priority international
markets by year-end. NGENLA is the first once-weekly
product approved for the treatment of pediatric growth hormone
deficiency in Japan, Canada, Australia, the United Kingdom, Taiwan,
United Arab Emirates and Brazil. OPKO is entitled to gross profit
sharing in all global markets based on regional, tiered gross
profit for both NGENLA and Genotropin, with the U.S. region
commencing gross profit sharing in August 2023.
- OPKO Health’s ModeX
Therapeutics, Inc. (ModeX) advanced its antiviral and
immune-oncology product
pipeline. ModeX continued to advance its pipeline
of antiviral and immune-oncology programs utilizing its
next-generation multispecific antibodies, and anticipates
initiating a Phase 1 clinical trial for certain cancers next year.
In addition, ModeX’s collaboration with Merck to develop MDX-2201,
its vaccine for Epstein-Barr virus, is progressing. As part of its
ongoing business strategy, ModeX is pursuing additional licensing
and collaboration opportunities with strategic partners for certain
other pipeline candidates.
- BioReference Health
continued on its path to profitability with cost reductions,
improved operational efficiencies and enhanced
productivity. BioReference continued to implement
initiatives to reduce costs and rationalize its business in line
with current testing volumes. Additionally, BioReference is focused
on improving productivity and enhancing innovation of its higher
value specialty testing segments. Other efforts to return this
business to profitability include expanding into new market
segments, such as providing information for the pharmaceutical
market.
Second Quarter Financial
Results
- Pharmaceuticals:
Revenue from products in the second quarter of 2023 increased to
$43.5 million from $35.9 million in the second quarter of 2022,
driven by sales in OPKO’s international operating companies and an
increase in sales of Rayaldee to $7.7 million from $6.2 million in
the prior-year period. Revenue from the transfer of intellectual
property was $94.9 million in the second quarter of 2023,
reflecting revenue of $90.0 million triggered by the FDA approval
of NGENLA, compared with $87.2 million in the 2022 period, which
included an $85.0 million milestone payment related to the
commencement of NGENLA sales in Europe and Japan. Total costs and
expenses were $74.7 million in the second quarter of 2023, up from
$67.7 million in the prior-year period. The increase was mainly due
to an increase in cost of revenue and a full quarter of research
expenses at ModeX, which was acquired in May 2022. Operating income
was $63.6 million in the second quarter of 2023, compared with
$55.4 million in the second quarter of 2022.
- Diagnostics:
Revenue from services in the second quarter of 2023 was $127.0
million compared with $186.8 million in the prior-year period.
Revenue decreased due to lower COVID-19 testing volume and
reimbursement. BioReference processed approximately 33,000 COVID-19
PCR tests in the second quarter of 2023, representing 1.5% of total
testing volume, versus 874,000 tests in the second quarter of 2022,
representing 31% of total testing volume. Furthermore,
revenue during the 2022 period included $12.1 million from GeneDx,
which was sold in April 2022. Total costs and expenses
were $171.3 million in the second quarter of 2023 compared with
$244.3 million in the second quarter of 2022, resulting in an
operating loss of $44.3 million compared with an operating loss of
$57.5 million in the 2022 period. The 2022 period included a $15.4
million gain on the sale of GeneDx offset by $5.8 million of
operating losses prior to closing in April 2022. BioReference
continues to implement cost-reduction initiatives as it works
toward profitability.
- Consolidated:
Consolidated total revenues for the second quarter of 2023 were
$265.4 million compared with $309.9 million for the comparable
period of 2022. Operating income for the second quarter of 2023 was
$7.0 million compared with an operating loss of $10.7 million for
the 2022 quarter. Net loss for the second quarter of 2023 included
a mark-to-market adjustment of $19.9 million compared to $71.2
million in the 2022 period related to the decrease in share price
of GeneDx, resulting in a net loss of $19.6 million, or $0.03 per
share, compared with a net loss of $101.7 million, or $0.14 per
share, for the 2022 quarter.
- Cash and cash
equivalents: Cash and cash equivalents were $108.1 million
as of June 30, 2023, which does not include the $90.0 million
milestone payment from Pfizer that is expected to be received in
August 2023.
Conference Call and Webcast
Information
OPKO’s senior management will provide a business
update, discuss second quarter financial results, provide financial
guidance and answer questions during a conference call and audio
webcast today beginning at 4:30 p.m. Eastern time. Participants are
encouraged to pre-register for the conference call here. Callers
who pre-register will receive a unique PIN to gain immediate access
to the call and bypass the live operator. Participants may register
at any time, including up to and after the call start time. Those
unable to pre-register may participate by dialing 833-630-0584
(U.S.) or 412-317-1815 (International). A webcast of the call can
also be accessed at OPKO’s Investor Relations page and here.
A telephone replay will be available until
August 10, 2023 by dialing 877-344-7529 (U.S.) or 412-317-0088
(International) and providing the passcode 7009686. A webcast
replay will be available beginning approximately one hour after the
completion of the live conference call here.
About OPKO Health
OPKO is a multinational biopharmaceutical and
diagnostics company that seeks to establish industry-leading
positions in large, rapidly growing markets by leveraging its
discovery, development, and commercialization expertise and novel
and proprietary technologies. For more information, visit
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 our products will
launch in all the territories in which they have been approved for
sale, the timing of such launches, our product development efforts
and the expected benefits of our products, whether the relationship
with our commercial and strategic partners will be successful,
whether our commercial and strategic partners will be able to
commercialize our products and successfully utilize our
technologies, our ability to attract new commercial and strategic
partners, our ability to market and sell any of our products in
development, whether BioReference’s cost-cutting initiatives and
attempts at returning to its core business will be successful, 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 under the heading “Risk
Factors” in our other filings with the Securities and Exchange
Commission, as well as the continuation and success of our
relationship with our commercial partners, liquidity issues and the
risks inherent in funding, developing and obtaining regulatory
approvals of new, commercially-viable and competitive products and
treatments. 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.
Contacts:LHA Investor
RelationsYvonne Briggs, 310-691-7100ybriggs@lhai.com
orBruce Voss, 310-691-7100 bvoss@lhai.com
—Tables to Follow—
OPKO Health, Inc. and SubsidiariesCondensed Consolidated Balance
Sheets(in millions)Unaudited |
|
|
|
As of |
|
June 30, 2023 |
|
December 31, 2022 |
Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
108.1 |
|
|
$ |
153.2 |
|
Other current assets |
|
325.7 |
|
|
|
241.3 |
|
Total current assets |
|
433.8 |
|
|
|
394.5 |
|
In-process research and
development and goodwill |
|
792.4 |
|
|
|
790.9 |
|
Other assets |
|
932.7 |
|
|
|
981.9 |
|
Total Assets |
$ |
2,158.9 |
|
|
$ |
2,167.3 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
|
|
Accounts Payable |
$ |
87.9 |
|
|
$ |
67.0 |
|
Accrued expenses |
|
98.6 |
|
|
|
98.3 |
|
Current portion of convertible notes |
|
0.0 |
|
|
|
3.1 |
|
Other current liabilities |
|
39.9 |
|
|
|
45.1 |
|
Total current liabilities |
|
226.4 |
|
|
|
213.5 |
|
Long-term portion of convertible notes |
|
212.3 |
|
|
|
210.4 |
|
Deferred tax liabilities, net |
|
133.0 |
|
|
|
126.4 |
|
Other long-term liabilities, principally contract
liabilities, leases, contingent consideration and lines of
credit |
|
51.9 |
|
|
|
55.4 |
|
Total Liabilities |
|
623.6 |
|
|
|
605.7 |
|
Equity |
|
1,535.3 |
|
|
|
1,561.6 |
|
Total Liabilities and Equity |
$ |
2,158.9 |
|
|
$ |
2,167.3 |
|
OPKO Health, Inc. and SubsidiariesCondensed Consolidated Statements
of Operations(in millions, except share and per share
data)Unaudited |
|
|
|
|
|
For the three months endedJune 30, |
|
For the six months endedJune 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
127.0 |
|
|
$ |
186.8 |
|
|
$ |
259.4 |
|
|
$ |
473.4 |
|
Revenue from products |
|
43.5 |
|
|
|
35.9 |
|
|
|
83.9 |
|
|
|
72.5 |
|
Revenue from transfer of intellectual property and other |
|
94.9 |
|
|
|
87.2 |
|
|
|
159.7 |
|
|
|
93.2 |
|
Total revenues |
|
265.4 |
|
|
|
309.9 |
|
|
|
503.0 |
|
|
|
639.1 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
138.9 |
|
|
|
194.3 |
|
|
|
277.3 |
|
|
|
438.2 |
|
Selling, general and administrative |
|
79.8 |
|
|
|
101.5 |
|
|
|
155.4 |
|
|
|
219.0 |
|
Research and development |
|
18.2 |
|
|
|
17.2 |
|
|
|
50.8 |
|
|
|
35.6 |
|
Contingent consideration |
|
(0.0 |
) |
|
|
0.2 |
|
|
|
0.1 |
|
|
|
0.1 |
|
Amortization of intangible assets |
|
21.5 |
|
|
|
22.8 |
|
|
|
43.0 |
|
|
|
44.8 |
|
Gain on sale of assets |
|
0.0 |
|
|
|
(15.4 |
) |
|
|
0.0 |
|
|
|
(15.4 |
) |
Total costs and expenses |
|
258.4 |
|
|
|
320.6 |
|
|
|
526.6 |
|
|
|
722.3 |
|
Operating income (loss) |
|
7.0 |
|
|
|
(10.7 |
) |
|
|
(23.6 |
) |
|
|
(83.2 |
) |
Other expense, net |
|
(23.5 |
) |
|
|
(75.6 |
) |
|
|
(9.8 |
) |
|
|
(79.8 |
) |
Loss before income taxes and
investment losses |
|
(16.5 |
) |
|
|
(86.3 |
) |
|
|
(33.4 |
) |
|
|
(163.0 |
) |
Income tax benefit
(provision) |
|
(3.1 |
) |
|
|
(15.1 |
) |
|
|
(4.4 |
) |
|
|
6.2 |
|
Loss before investment
losses |
|
(19.6 |
) |
|
|
(101.4 |
) |
|
|
(37.8 |
) |
|
|
(156.8 |
) |
Loss from investments in
investees |
|
(0.0 |
) |
|
|
(0.3 |
) |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
Net loss |
$ |
(19.6 |
) |
|
$ |
(101.7 |
) |
|
$ |
(37.9 |
) |
|
$ |
(157.1 |
) |
Loss per share, basic and diluted |
$ |
(0.03 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.5 |
) |
|
$ |
(0.23 |
) |
Weighted average common shares
outstanding, basic and diluted |
|
751,727,383 |
|
|
|
612,548,661 |
|
|
|
751,617,431 |
|
|
|
686,597,899 |
|
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