OPKO Health Reports 2020 Second Quarter Business Highlights and Financial Results
July 30 2020 - 4:05PM
OPKO Health, Inc. (NASDAQ: OPK) reports business
highlights and financial results for the three months ended June
30, 2020.
Second Quarter Business
Highlights
- BioReference Laboratories increased COVID-19 testing
nationwide: During the second quarter, BioReference
Laboratories (BRL) announced numerous partnerships and testing
agreements with states, cities, professional sports associations
and healthcare organizations, including the New York State
Department of Health, New York City Health and Hospital Corporation
and MagnaCare. Further, BRL provided testing services for
more than 500 drive-thru and retail testing sites around the
country. In July 2020, the Company announced that the Centers
for Disease Control and Prevention (CDC) awarded BRL an Indefinite
Delivery Indefinite Quantity contract to provide Commercial Surge
Capacity Testing for COVID-19, under which BRL will perform
antibody testing to determine COVID-19 seroprevalence and other
testing with key demographic data for the next four months.BRL
processed approximately 2.2 million COVID-19 molecular tests during
the second quarter and currently has a capacity of more than 50,000
daily. Since late April, when BRL began offering COVID-19 serology
testing to measure SARS-CoV-2 specific antibody levels, it has
performed approximately 331,600 tests with a significantly greater
capacity.
- Successful 4Kscore® Medicare appeal for tests performed
during 2019: As previously announced, Novitas
Solutions issued its final Local Coverage Determination for
Medicare payments for the 4Kscore test with defined coverage
criteria, effective December 30, 2019. The Company received a
favorable Medicare appeal decision from Novitas for previously
denied Medicare claims for 4Kscore tests performed in 2019.
The COVID-19 pandemic impacted utilization of 4Kscore during the
second quarter as many urology practices were either closed or
operating at reduced capacity. More than 8,400 tests were
performed during the quarter despite fewer patient visits and
access to physicians. The volume of 4Kscore tests has been
increasing in recent weeks with the gradual re-opening of the
economy and patients resuming visits to their physicians.
- Positive somatrogon topline results reported from Japan
pediatric Phase 3 efficacy and safety study: In
June, OPKO announced that its Japan Phase 3 clinical trial met its
primary and secondary objectives, and demonstrated that the
efficacy and safety of somatrogon administered once-weekly were
comparable to GENOTROPIN® (somatropin) administered once-daily as
measured by annual height velocity after 12 months of treatment in
treatment-naïve Japanese pre-pubertal children with growth hormone
deficiency. The findings were consistent with the results
previously reported from the Company’s global Phase 3
study.
- Somatrogon abstracts presented at Endocrine Society’s
ENDO Online 2020: Two abstracts regarding the
somatrogon global Phase 3 trial were presented at ENDO Online 2020
by Cheri Deal, PhD, MD, FRCPC, Chief of Pediatric Endocrinology and
Diabetes at CHU Sainte-Justine and Tenured Professor of Pediatrics
at Université de Montréal, the Principal Investigator of the
study. The two abstracts, “Somatrogon Growth Hormone in the
Treatment of Pediatric Growth Hormone Deficiency: Results of
the Pivotal Phase 3”, and “Interpretation of Insulin-like Growth
Factor (IGF-1) Levels Following Administration of Somatrogon (a
long-acting Growth Hormone-hGH-CTP),” were published online in the
April-May supplemental issue of the Journal of Endocrine Society.
Dr. Deal’s presentation included data demonstrating that somatrogon
administered once weekly, met its endpoint of non-inferiority to
daily GENOTROPIN® (somatropin) in height velocity and height
standard deviation score (SDS). In addition, Dr. Deal
presented new data demonstrating that over 95% of patients had mean
IGF-1 SDS levels within the normal range. IGF-1 SDS is a biomarker
to evaluate efficacy and safety of human growth hormone replacement
therapy.
- Somatrogon global regulatory
submissions: The somatrogon Biologics License
Application (BLA) submission in the U.S. is anticipated to occur in
the fall of 2020. In Europe, the Company’s open-label study
demonstrating benefit and compliance with reduced treatment burden
will be completed this quarter, enabling Pfizer to submit for
regulatory approval in Europe early next year. The somatrogon
regulatory submission in Japan is expected during the first half of
2021.
- RAYALDEE total prescriptions reported by IQVIA
increased 45% in the second quarter of 2020 compared with the
second quarter of 2019: Total prescriptions for the
three months ended June 30, 2020 increased to approximately 18,400,
compared to approximately 12,700 for the second quarter of
2019. During the second quarter of 2020, demand for RAYALDEE
remained strong but prescription growth was impacted by limited
access to physician offices by both patients and OPKO’s sales
representatives.
- RAYALDEE authorized for Phase 2 clinical trial in
patients with mild-to-moderate COVID-19: On June 1,
2020, OPKO announced that the U.S. Food and Drug Administration
(FDA) authorized the Company to undertake a Phase 2 trial with
RAYALDEE as a treatment for patients with mild-to moderate
COVID-19. The trial, entitled “A Randomized, Double-Blind
Placebo-Controlled Study to Evaluate the Safety and Efficacy of
RAYALDEE (calcifediol) Extended-release Capsules to Treat
Symptomatic Patients Infected with SARS-CoV-2 (REsCue),” will
enroll approximately 160 subjects, including many with stage 3 or 4
chronic kidney disease. The REsCue trial will have four weeks of
treatment with RAYALDEE or placebo and two weeks of
follow-up. There are two primary efficacy endpoints:
time to resolution of COVID-19 symptoms; and consistent attainment
of serum total 25-hydroxyvitamin D levels greater than or equal to
50 ng/mL during the last week of treatment. The trial is expected
to begin enrolling subjects later this quarter.
Second Quarter Financial
Results
- Consolidated revenues for the second quarter of 2020 were
$301.2 million compared with $226.4 million for the comparable
period of 2019. Net income for the second quarter of
2020 was $33.7 million, or $0.05 per diluted share, compared with a
net loss of $59.8 million, or $0.10 per share, for the comparable
period of 2019.
- Diagnostics: Revenue from services in
the second quarter of 2020 was $251.0 million compared with $178.5
million in the prior-year period, primarily due to increased
COVID-19 testing volumes, partially offset by reduced clinical and
genomic test volumes due to physician office closures and
stay-at-home orders relating to the pandemic. In addition, the
Company received a $6.2 million grant from the CARES Act in the
second quarter. Total costs and expenses were $216.2 million in the
second quarter of 2020 compared with $206.5 million in the second
quarter of 2019. Operating income was $40.9 million in the
second quarter of 2020 compared with an operating loss of $28.0
million in the prior-year period, an improvement of $68.9
million.
- Pharmaceuticals: Revenue from products in the
second quarter of 2020 was $29.3 million compared with $28.7
million in in the second quarter of 2019, with the increase
primarily attributable to higher sales of RAYALDEE of $8.6 million
in the second quarter of 2020 compared with $5.7 million in the
prior-year period. Revenue from licensing and intellectual property
was $14.7 million in the second quarter of 2020 compared with $19.2
million in the second quarter of 2019, with the reduction primarily
due to a decrease in the amortization of payments received from
Pfizer, OPKO’s commercial partner for its long-acting human growth
hormone product, somatrogon. Total costs and expenses were $50.0
million in the second quarter of 2020 compared with $56.5 million
in the prior-year period, with the decline primarily attributable
to lower research and development expenses due to the completion of
the pediatric Phase 3 trial. The operating loss was $6.0 million in
the second quarter of 2020 compared with $8.6 million in the second
quarter of 2019.
- Cash and equivalents: Cash, cash equivalents
and marketable securities were $21.6 million as of June 30,
2020. In addition, the Company has availability under its
line of credit with JP Morgan of $15.3 million and an unutilized
$100 million credit facility that provides access to incremental
capital on a non-dilutive basis.
CONFERENCE CALL & WEBCAST
INFORMATION
OPKO’s senior management will provide a business
update and discuss results in greater detail during a conference
call and live audio webcast at 4:45 p.m. Eastern time today, July
30, 2020. Participants are requested to pre-register for the
conference call using the link here, or dialing (888) 869-1189 or
(706) 643-5902 and using conference ID 6946539. Upon registering,
participants will receive dial-in numbers, an event passcode and a
unique registrant ID to gain immediate access to the call and
bypass the live operator. Participants may pre-register at any
time, including up to and after the start of the call.
To access the live call via webcast, please
click on the link OPKO 2Q20 Results Conference Call. Individual
investors and investment community professionals who do not plan to
ask a question during the call’s Q&A session are encouraged to
listen to the call via the webcast.
For those unable to listen to the live
conference call, a replay can be accessed for a period of time on
OPKO’s website at OPKO 2Q20 Results Conference Call. A
telephone replay will be available beginning approximately two
hours after the close of the conference call. To access the replay,
please dial (855) 859-2056 or (404) 537-3406, and use conference ID
6946539.
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, expectations about COVID-19
testing, the demand for testing, our capacity for testing and
expected turnaround time, the impact of COVID-19 on all of our
businesses, positively and negatively, our ability to expand our
capacity should there be additional demand, the availability of
resources, including labor, equipment and supplies, to meet demand
for testing and the potential impact on us should these resources
be constrained, whether our turnaround time be extended or our
performance quality decline, our product development efforts and
the expected benefits of our products, whether our products in
development will be commercialized, the possibility of unfavorable
new clinical data and further analyses of existing clinical data,
the risk that clinical trial data are subject to differing
interpretations and assessments by regulatory authorities, whether
regulatory authorities will be satisfied with the design of and
results from our clinical studies, whether we will be able to make
the expected regulatory submissions for somatrogon during the
expected time periods or at all, whether the applicable regulatory
agencies will accept our submissions, whether the Rayaldee
study for patients with mild-to moderate COVID-19 will initiate or
begin enrolling subjects later this quarter or be completed at all,
whether our other ongoing and future clinical trials will be
successfully enrolled or 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, whether
RAYALDEE prescriptions will continue to increase, our ability to
market and sell any of our products in development, whether the
volume of 4Kscore tests will increase 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 ongoing effects of the COVID-19 pandemic, the continuation
and success of our relationship with Pfizer and our other partners,
liquidity issues and 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 somatrogon, the 4Kscore, RAYALDEE, 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.
Contacts:
LHA Investor RelationsYvonne
Briggs, 310-691-7100ybriggs@lhai.comorBruce 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, 2020 |
|
December 31, 2019 |
Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
21.6 |
|
|
$ |
85.5 |
|
Other current assets |
|
338.4 |
|
|
|
238.5 |
|
Total Current Assets |
|
360.0 |
|
|
|
324.0 |
|
In-process Research and
Development and Goodwill |
|
1,261.8 |
|
|
|
1,262.1 |
|
Other assets |
|
701.9 |
|
|
|
723.2 |
|
Total Assets |
$ |
2,323.7 |
|
|
$ |
2,309.3 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
|
|
Current liabilities |
$ |
279.5 |
|
|
$ |
249.1 |
|
Convertible Notes |
|
216.5 |
|
|
|
211.2 |
|
Deferred tax liabilities, net |
|
119.0 |
|
|
|
118.7 |
|
Other long-term liabilities, principally contract liabilities,
contingent consideration and lines of credit |
|
120.4 |
|
|
|
115.5 |
|
Total Liabilities |
|
735.4 |
|
|
|
694.5 |
|
Total Equity |
|
1,588.3 |
|
|
|
1,614.8 |
|
Total Liabilities and Equity |
$ |
2,323.7 |
|
|
$ |
2,309.3 |
|
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, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
251.0 |
|
|
$ |
178.5 |
|
|
$ |
421.8 |
|
|
$ |
357.3 |
|
Revenue from products |
|
29.3 |
|
|
|
28.7 |
|
|
|
60.4 |
|
|
|
54.0 |
|
Revenue from transfer of intellectual property |
|
20.9 |
|
|
|
19.2 |
|
|
|
30.5 |
|
|
|
37.5 |
|
Total revenues |
|
301.2 |
|
|
|
226.4 |
|
|
|
512.7 |
|
|
|
448.8 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
162.7 |
|
|
|
144.2 |
|
|
|
302.9 |
|
|
|
288.3 |
|
Selling, general and administrative |
|
77.7 |
|
|
|
88.5 |
|
|
|
153.8 |
|
|
|
183.6 |
|
Research and development |
|
17.6 |
|
|
|
28.3 |
|
|
|
39.4 |
|
|
|
64.8 |
|
Contingent consideration |
|
1.1 |
|
|
|
(3.8 |
) |
|
|
0.3 |
|
|
|
1.0 |
|
Amortization of intangible assets |
|
14.9 |
|
|
|
16.4 |
|
|
|
29.9 |
|
|
|
33.0 |
|
Asset impairment charges |
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.7 |
|
Total Costs and expenses |
|
274.0 |
|
|
|
273.6 |
|
|
|
526.3 |
|
|
|
571.4 |
|
Operating income (loss) |
|
27.2 |
|
|
|
(47.2 |
) |
|
|
(13.6 |
) |
|
|
(122.6 |
) |
Other income and (expense),
net |
|
12.7 |
|
|
|
(11.2 |
) |
|
|
(4.3 |
) |
|
|
(14.0 |
) |
Income (loss) before income taxes
and investment losses |
|
39.9 |
|
|
|
(58.4 |
) |
|
|
(17.9 |
) |
|
|
(136.6 |
) |
Income tax provision |
|
(6.0 |
) |
|
|
(1.1 |
) |
|
|
(7.2 |
) |
|
|
(1.9 |
) |
Net income (loss) before
investment losses |
|
33.9 |
|
|
|
(59.5 |
) |
|
|
(25.1 |
) |
|
|
(138.5 |
) |
Loss from investments in
investees |
|
(0.2 |
) |
|
|
(0.3 |
) |
|
|
(0.3 |
) |
|
|
(2.1 |
) |
Net income (loss) |
$ |
33.7 |
|
|
$ |
(59.8 |
) |
|
$ |
(25.4 |
) |
|
$ |
(140.6 |
) |
Income (loss) per share, basic and diluted |
$ |
0.05 |
|
|
$ |
(0.10 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.24 |
) |
Weighted average common shares
outstanding, basic and diluted |
|
640,578,794 |
|
|
|
586,351,045 |
|
|
|
640,578,794 |
|
|
|
586,347,645 |
|
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