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Earnings 8K just filed
$Opko Health (OPK.US)$ OPKO Health Reports Second Quarter 2024 Business Highlights and Financial Results
Conference call begins at 4:30 p.m. Eastern time today
MIAMI (August 7, 2024) – OPKO Health, Inc. (NASDAQ: OPK) reports business highlights and financial results for the three and six months ended June 30, 2024.
Highlights from the second quarter and recent weeks include the following:
●
Enrollment underway in the MDX2001 Phase 1 trial for the treatment of solid tumor cancers. MDX2001, a tetraspecific antibody, is designed to optimize T-cell function to stimulate tumor regression while minimizing the likelihood of antigen escape. This Phase 1 open-label trial is expected to enroll 45 cancer patients with a variety of solid tumors at six clinical trial sites, and to evaluate safety, tolerability, pharmacokinetics and early evidence of anti-tumor activity.
●
The global commercial launch of NGENLA® is ongoing by OPKO’s partner, Pfizer. NGENLA has been launched in all major markets. OPKO is entitled to gross profit sharing based on sales of both NGENLA and Pfizer’s daily growth hormone product, Genotropin®. In addition, OPKO is entitled to an additional $100 million in potential milestone payments associated with approvals for an adult indication for growth hormone deficiency and additional pediatric indications.
●
Entered into a $250 million note purchase agreement with HealthCare Royalty secured by profit share payments related to NGENLA. Under the terms of the agreement, OPKO retains a significant portion of the profit share payments from Pfizer received pursuant to its license agreement relating to NGENLA in the near term with upside over the long term, as well as the full $100 million of remaining potential milestone payments.
●
OPKO’s Board of Directors authorized a $100 million share repurchase program. Under the program, OPKO may repurchase shares of its common stock from time to time through open market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions and/or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements. The Company had approximately 697 million shares outstanding as of June 30, 2024. This new authorization represented approximately 10.1% of shares outstanding at the stock price at the time of the announcement.
●
Sale of select assets of BioReference Health expected to close toward the end of the third quarter. OPKO entered into an agreement in March 2024 to sell BioReference Health’s laboratory testing businesses focused on clinical diagnostics and women’s health, excluding operations in New York and New Jersey, for $237.5 million. BioReference Health will continue to offer oncology and urology diagnostic services nationwide, as well as maintain its full operations in New York and New Jersey. Continuing operations accounted for net sales of more than $400 million in 2023. This transaction is expected to streamline BioReference Health’s laboratory services business while retaining its core operations to better position the division for sustained growth and profitability.
Second Quarter Financial Results
●
Pharmaceuticals: Revenue from products in the second quarter of 2024 was $40.5 million compared with $43.5 million in the second quarter of 2023, reflecting lower sales in OPKO’s international operating companies primarily due to foreign currency exchange fluctuations. Revenue from sales of Rayaldee was $7.2 million compared with $7.7 million in the same period in 2023. Revenue from the transfer of intellectual property and other was $12.3 million in the second quarter of 2024, which included $5.0 million from the BARDA contract, compared with $94.9 million in the 2023 period, which included milestone revenue of $90.0 million triggered by the FDA approval of NGENLA. Gross profit share and royalty payments for NGENLA and Pfizer's Genotropin was $6.3 million in the 2024 quarter compared with $3.8 million in the same period for 2023. Total costs and expenses increased to $77.6 million in the second quarter of 2024 from $74.7 million in the prior-year period primarily due to higher research and development expenses related to increased activity within the ModeX development programs. Operating loss was $24.8 million in the second quarter of 2024, which included $17.9 million of depreciation and amortization expense, compared with operating income of $63.6 million in the second quarter of 2023, after giving effect to the $90.0 million milestone payment as described above and also included $17.8 million of depreciation and amortization expense.
●
Diagnostics: Revenue from services in the second quarter of 2024 was $129.4 million compared with $127.0 million in the prior-year period, with the increase primarily due to higher clinical test reimbursement partially offset by lower clinical test volume. Total costs and expenses were $156.0 million in the second quarter of 2024 compared with $171.3 million in the second quarter of 2023, reflecting continued progress with cost-reduction initiatives. Included in second quarter 2024 results were revenue from services of approximately $25.5 million and total costs and expenses of approximately $32.5 million related to assets being acquired by Labcorp. Operating loss was $26.6 million in the second quarter of 2024 compared with $44.3 million in the 2023 period and included $6.2 million and $8.6 million of depreciation and amortization expense, respectively.
●
Consolidated: Consolidated total revenues for the second quarter of 2024 were $182.2 million compared with $265.4 million for the comparable period of 2023. Operating loss for the second quarter of 2024 was $61.7 million compared with operating income of $7.0 million for the 2023 quarter, with the 2023 quarter benefiting from the $90.0 million milestone payment described above. The second quarter of 2024 included non-cash other income of $60.5 million compared with non-cash other expense of $19.9 million in the year-ago quarter related to the change in the fair value of the GeneDx Holdings investment. As a result, net loss for the second quarter of 2024 was $10.3 million, or $0.01 per share, compared with net loss of $19.6 million, or $0.03 per share, for the 2023 quarter.
●
Cash and cash equivalents: Cash and cash equivalents were $40.6 million as of June 30, 2024 and OPKO’s Investments included liquid equity securities which had a market value of $101.5 million, primarily from the ownership interest in GeneDx. Subsequent to the end of the second quarter, OPKO entered into a $250 million note purchase agreement secured by OPKO’s profit share payments to be received from Pfizer relating to NGENLA. OPKO is also entitled to receive $237.5 million upon closing of the Labcorp transaction anticipated toward the end of the third quarter of 2024.
Conference call begins at 4:30 p.m. Eastern time today
MIAMI (August 7, 2024) – OPKO Health, Inc. (NASDAQ: OPK) reports business highlights and financial results for the three and six months ended June 30, 2024.
Highlights from the second quarter and recent weeks include the following:
●
Enrollment underway in the MDX2001 Phase 1 trial for the treatment of solid tumor cancers. MDX2001, a tetraspecific antibody, is designed to optimize T-cell function to stimulate tumor regression while minimizing the likelihood of antigen escape. This Phase 1 open-label trial is expected to enroll 45 cancer patients with a variety of solid tumors at six clinical trial sites, and to evaluate safety, tolerability, pharmacokinetics and early evidence of anti-tumor activity.
●
The global commercial launch of NGENLA® is ongoing by OPKO’s partner, Pfizer. NGENLA has been launched in all major markets. OPKO is entitled to gross profit sharing based on sales of both NGENLA and Pfizer’s daily growth hormone product, Genotropin®. In addition, OPKO is entitled to an additional $100 million in potential milestone payments associated with approvals for an adult indication for growth hormone deficiency and additional pediatric indications.
●
Entered into a $250 million note purchase agreement with HealthCare Royalty secured by profit share payments related to NGENLA. Under the terms of the agreement, OPKO retains a significant portion of the profit share payments from Pfizer received pursuant to its license agreement relating to NGENLA in the near term with upside over the long term, as well as the full $100 million of remaining potential milestone payments.
●
OPKO’s Board of Directors authorized a $100 million share repurchase program. Under the program, OPKO may repurchase shares of its common stock from time to time through open market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions and/or pursuant to Rule 10b5-1 plans, in compliance with applicable securities laws and other legal requirements. The Company had approximately 697 million shares outstanding as of June 30, 2024. This new authorization represented approximately 10.1% of shares outstanding at the stock price at the time of the announcement.
●
Sale of select assets of BioReference Health expected to close toward the end of the third quarter. OPKO entered into an agreement in March 2024 to sell BioReference Health’s laboratory testing businesses focused on clinical diagnostics and women’s health, excluding operations in New York and New Jersey, for $237.5 million. BioReference Health will continue to offer oncology and urology diagnostic services nationwide, as well as maintain its full operations in New York and New Jersey. Continuing operations accounted for net sales of more than $400 million in 2023. This transaction is expected to streamline BioReference Health’s laboratory services business while retaining its core operations to better position the division for sustained growth and profitability.
Second Quarter Financial Results
●
Pharmaceuticals: Revenue from products in the second quarter of 2024 was $40.5 million compared with $43.5 million in the second quarter of 2023, reflecting lower sales in OPKO’s international operating companies primarily due to foreign currency exchange fluctuations. Revenue from sales of Rayaldee was $7.2 million compared with $7.7 million in the same period in 2023. Revenue from the transfer of intellectual property and other was $12.3 million in the second quarter of 2024, which included $5.0 million from the BARDA contract, compared with $94.9 million in the 2023 period, which included milestone revenue of $90.0 million triggered by the FDA approval of NGENLA. Gross profit share and royalty payments for NGENLA and Pfizer's Genotropin was $6.3 million in the 2024 quarter compared with $3.8 million in the same period for 2023. Total costs and expenses increased to $77.6 million in the second quarter of 2024 from $74.7 million in the prior-year period primarily due to higher research and development expenses related to increased activity within the ModeX development programs. Operating loss was $24.8 million in the second quarter of 2024, which included $17.9 million of depreciation and amortization expense, compared with operating income of $63.6 million in the second quarter of 2023, after giving effect to the $90.0 million milestone payment as described above and also included $17.8 million of depreciation and amortization expense.
●
Diagnostics: Revenue from services in the second quarter of 2024 was $129.4 million compared with $127.0 million in the prior-year period, with the increase primarily due to higher clinical test reimbursement partially offset by lower clinical test volume. Total costs and expenses were $156.0 million in the second quarter of 2024 compared with $171.3 million in the second quarter of 2023, reflecting continued progress with cost-reduction initiatives. Included in second quarter 2024 results were revenue from services of approximately $25.5 million and total costs and expenses of approximately $32.5 million related to assets being acquired by Labcorp. Operating loss was $26.6 million in the second quarter of 2024 compared with $44.3 million in the 2023 period and included $6.2 million and $8.6 million of depreciation and amortization expense, respectively.
●
Consolidated: Consolidated total revenues for the second quarter of 2024 were $182.2 million compared with $265.4 million for the comparable period of 2023. Operating loss for the second quarter of 2024 was $61.7 million compared with operating income of $7.0 million for the 2023 quarter, with the 2023 quarter benefiting from the $90.0 million milestone payment described above. The second quarter of 2024 included non-cash other income of $60.5 million compared with non-cash other expense of $19.9 million in the year-ago quarter related to the change in the fair value of the GeneDx Holdings investment. As a result, net loss for the second quarter of 2024 was $10.3 million, or $0.01 per share, compared with net loss of $19.6 million, or $0.03 per share, for the 2023 quarter.
●
Cash and cash equivalents: Cash and cash equivalents were $40.6 million as of June 30, 2024 and OPKO’s Investments included liquid equity securities which had a market value of $101.5 million, primarily from the ownership interest in GeneDx. Subsequent to the end of the second quarter, OPKO entered into a $250 million note purchase agreement secured by OPKO’s profit share payments to be received from Pfizer relating to NGENLA. OPKO is also entitled to receive $237.5 million upon closing of the Labcorp transaction anticipated toward the end of the third quarter of 2024.
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