OPK Opko Health Inc

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Entered into an agreement with Labcorp to sell select assets of BioReference Health. The transaction includes the sale of 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. These assets comprise patient service centers, certain customer contracts and operating assets, which account for approximately $100 million in annualized revenue. 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. 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. The transaction is subject to customary closing conditions and applicable regulatory approvals, including under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The transaction is anticipated to close in the second half of 2024.

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The IND application for MDX2001, a tetraspecific antibody for the treatment of solid tumor cancers, received FDA clearance. MDX2001 is designed to optimize T-cell function while preventing tumor antigen escape. The first patient is expected to be enrolled in a Phase 1 trial to evaluate safety, tolerability, pharmacokinetics and anti-tumor activity in the second quarter of 2024.

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The global launch of NGENLA® is ongoing by OPKO’s partner, Pfizer.  NGENLA is approved in over 50 countries including the U.S., Japan, EU Member States, Canada and Australia. 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.

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Pharmaceuticals: Revenue from products in the first quarter of 2024 were $38.1 million compared to $40.4 million in the first quarter of 2023, resulting from lower sales in OPKO’s international operating companies and foreign currency exchange fluctuations, partially offset by an increase in sales of Rayaldee to $6.9 million from $6.6 million. Revenue from the transfer of intellectual property and other was $8.7 million in the first quarter of 2024 compared with $64.8 million in the 2023 period, which included $5.6 million in gross profit share and royalty payments for NGENLA and Pfizer's Genotropin® in the 2024 quarter compared with $3.1 million in the same period for 2023. The decrease in revenue from the transfer of intellectual property and other is primarily attributable to one-time milestone payments received in 2023 including a $50.0 million upfront payment from Merck, a $7.0 million milestone payment from Vifor Fresenius Medical Care Renal Pharma triggered by the German price approval for Rayaldee and a $2.5 million milestone payment from Nicoya Therapeutics for the submission of its IND application for Rayaldee to China's Center for Drug Evaluation. Total costs and expenses declined to $74.5 million in the first quarter of 2024 from $86.3 million in the prior-year period primarily due to a $10.6 million, or 33%, decrease in research and development expense as the 2023 period included a non-recurring payment to Sanofi related to our Merck collaboration, partially offset by increased activity within our ModeX development programs. Operating loss was $27.7 million in the first quarter of 2024 compared with operating income of $19.0 million in the first quarter of 2023, again with 2023 benefiting from over $59 million in milestones as described above.

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Diagnostics: Revenue from services in the first quarter of 2024 was $126.9 million compared with $132.4 million in the prior-year period, with the decline primarily due to lower clinical testing volume. Total costs and expenses were $161.3 million in the first quarter of 2024 compared with $172.4 million in the first quarter of 2023, reflecting the continued implementation of cost-reduction initiatives. Included in first quarter 2024 results were revenue from services of approximately $27.8 million and total costs and expenses of approximately $34.8 million related to assets being acquired by Labcorp. Operating loss was $34.4 million in the first quarter of 2024 compared with $40.0 million in the 2023 period.

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Consolidated: Consolidated total revenues for the first quarter of 2024 were $173.7 million compared with $237.6 million for the comparable period of 2023. Operating loss for the first quarter of 2024 increased to $71.5 million from $30.6 million for the 2023 quarter, with the 2023 quarter benefiting from the non-recurring license payments described above totaling $59.5 million. First quarter 2024 results included a non-cash, non-recurring expense of $26.3 million related to an embedded derivative as part of our convertible debt. In addition, both periods benefited from the increase of GeneDx’s stock price of $22.7 million and $8.3 million, respectively, for 2024 and 2023. As a result, net loss for the first quarter of 2024 was $81.8 million, or $0.12 per share, compared with $18.3 million, or $0.02 per share, for the 2023 quarter.

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Cash and cash equivalents: Cash and cash equivalents were $75.6 million as of March 31, 2024. In January, OPKO completed the sale of $230.0 million aggregate principal amount of 3.75% Convertible Senior Notes due 2029 and exchanged approximately $144.4 million of the Company’s outstanding 4.50% Convertible Senior Notes due 2025. The Company used approximately $50.0 million of the net proceeds to repurchase shares of the Company’s common stock from purchasers of the notes. Additionally, OPKO issued and sold approximately $71.1 million aggregate principal amount of its 3.75% Convertible Senior Notes due 2029 to several holders, including Company affiliates, in exchange for the outstanding 5% Convertible Promissory Notes and accrued interest. 

As of

March 31,

2024

December 31,

2023

Assets:

Cash and cash equivalents

$

75.6

$

95.9

Assets held for sale

120.3

0.0

Other current assets

195.4

213.6

Total current assets

391.3

309.5

In-process research and development and goodwill

725.6

793.3

Other assets

857.1

908.9

Total Assets

$

1,974.0

$

2,011.7

Liabilities and Equity:

Accounts payable

$

71.2

$

69.7

Accrued expenses

88.8

90.1

Liabilities associated with assets held for sale

9.7

0.0

Current portion of convertible notes

0.2

0.0

Other current liabilities

34.5

40.3

Total current liabilities

204.4

200.1

Long-term portion of convertible notes

323.1

214.3

Deferred tax liabilities, net

121.6

126.8

Other long-term liabilities, principally contract liabilities,

leases, contingent consideration, and lines of credit

72.1

81.3

Total Liabilities

721.2

622.5

Equity

1,252.8

1,389.2

Total Liabilities and Equity

$

1,974.0

$

2,011.7

For the three months ended

March 31,

2024

2023

Revenues

Revenue from services

$

126.9

$

132.4

Revenue from products

38.1

40.4

Revenue from transfer of intellectual property

8.7

64.8

Total revenues

173.7

237.6

Costs and expenses

Cost of service revenues

109.9

114.1

Cost of product revenues

21.8

24.2

Selling, general and administrative

70.2

75.7

Research and development

21.9

32.6

Contingent consideration

0.0

0.1

Amortization of intangible assets

21.4

21.5

Total costs and expenses

245.2

268.2

Operating loss

(71.5

)

(30.6

)

Other income and (expense), net

(11.7

)

13.6

Loss before income taxes and investment losses

(83.2

)

(17.0

)

Income tax benefit (provision)

1.4

(1.2

)

Net loss before investment losses

(81.8

)

(18.2

)

Loss from investments in investees

(0.0

)

(0.1

)

Net loss

$

(81.8

)

$

(18.3

)

Loss per share, basic and diluted

$

(0.12

)

$

(0.02

)

Weighted average common shares outstanding, basic and diluted

 706,882,189

 751,506,257