OPKO Health Reports 2022 Second Quarter Business Highlights and Financial Results
05 August 2022 - 6:05AM
OPKO Health, Inc. (NASDAQ: OPK) reports business
highlights and financial results for the three and six months ended
June 30, 2022.
Business highlights for the second quarter of
2022 and subsequent weeks include the following:
- Acquired ModeX
Therapeutics, Inc. (ModeX), gained proprietary
immunotherapy technology, seasoned scientific team, new executives
and Directors. ModeX is focused on developing uniquely
designed multi-specific immune therapies for cancer and infectious
diseases. In connection with the acquisition, Dr. Elias Zerhouni
joined OPKO as President and Vice Chairman of the Board of
Directors, Dr. Gary Nabel joined as Chief Innovation Officer and a
member of OPKO’s Board of Directors, and Alexis Borisy joined
OPKO’s Board. The company acquired ModeX for $300 million in OPKO
common stock.
- Pfizer launched NGENLA®
(somatrogon) in Germany, Japan and additional global
markets. NGENLA treats pediatric patients with decreased
growth due to insufficient secretion of growth hormone and it
reduces the frequency of required injections from once daily to
once weekly. In the second quarter, OPKO received $85 million
in milestone payments from Pfizer, OPKO’s global commercial
partner, related to the launching of NGENLA in Europe and
Japan.
- Completed sale of GeneDx
LLC (formerly GeneDx, Inc.) to Sema4 Holdings Corp.
(Sema4). Sema4 acquired GeneDx for an upfront
cash payment of $150 million, subject to adjustments, plus 80
million shares of Sema4 Class A common stock, with up to an
additional $150 million in revenue-based milestones over the next
two years (payable in cash or Sema4 shares at Sema4’s
discretion). Based on the closing price of Sema4’s Class A
common stock on April 29, 2022, the date the transaction closed,
the total upfront consideration was approximately $322 million and
the total aggregate consideration including potential milestones
was approximately $472 million.
- BioReference Laboratories’
(BRL) Scarlet Health® announced a collaboration with Teladoc
Health. Under the collaboration with Teladoc Health, a
global leader in whole-person virtual care, BRL will offer in-home,
on-demand phlebotomy service from Scarlet Health. The collaboration
removes barriers to access and increases convenience through a
seamless, comprehensive experience that meets people at their
location. With Scarlet’s at-home, on-demand phlebotomy service,
Teladoc Health saw laboratory order completion rates increase by
22.5% in an initial trial.
Second Quarter Financial
Results
- Pharmaceuticals:
Revenue in the second quarter of 2022 increased to $35.9 million
from $35.7 million in the second quarter of 2021, primarily
attributable to higher RAYALDEE sales, partially offset by a
decrease in OPKO’s pharmaceutical business in Chile, due to foreign
exchange fluctuations. Revenue from sales of RAYALDEE in the second
quarter of 2022 was $6.2 million compared with $5.0 million in the
prior-year period. Revenue from the transfer of intellectual
property was $87.2 million in the second quarter of 2022 compared
with $9.5 million in the 2021 period. During the second quarter of
2022, OPKO received $85.0 million in milestone payments from Pfizer
related to the commencement of NGENLA sales in Europe and Japan.
The second quarter of 2021 included a $5.0 million non-refundable
upfront payment under the license agreement with Nicoya
Therapeutics. Total costs and expenses were $67.7 million in the
second quarter of 2022 compared with $58.9 million in the
prior-year period. This increase was primarily attributable to
higher amortization expense related to the reclassification of
NGENLA’s in-process research and development upon its approval in
Europe and Japan during the first quarter of 2022 and spending
related to the ModeX acquisition, partially offset by lower
RAYALDEE cost per unit and foreign exchange fluctuations at OPKO’s
international operating companies. Operating income was $55.4
million in the second quarter of 2022 compared with an operating
loss of $13.7 million in the second quarter of 2021.
- Diagnostics:
Revenue from services in the second quarter of 2022 was $186.8
million compared with $397.2 million in the prior-year period, the
decrease primarily due to lower COVID-19 testing volume. BRL
processed approximately 0.9 million COVID-19 PCR tests in the
second quarter of 2022 versus 2.8 million in the second quarter of
2021. Total costs and expenses were $244.3 million in
the second quarter of 2022 compared with $367.2 million in the
second quarter of 2021, resulting in an operating loss of $57.5
million compared with operating income of $30.0 million in the 2021
period. Significant investments in growth initiatives, principally
our digital health platforms and non-traditional COVID lines of
business negatively impacted operating margins at BRL. Operating
loss for the second quarter of 2022 includes a $15.4 million gain
on the sale of GeneDx, partially offset by $5.8 million of
operating losses prior to closing in April 2022.
- Consolidated:
Consolidated total revenues for the second quarter of 2022 were
$309.9 million compared with $442.4 million for the comparable
period of 2021. Operating loss for the second quarter of 2022 was
$10.7 million compared with operating income of $5.6 million for
the 2021 quarter. Net loss for the second quarter of 2022 includes
non-cash expense of $71.2 million related to a decrease in Sema4’s
stock price at June 30, 2022. After giving effect to
this non-cash expense, net loss for the three months ended June 30,
2022 was $101.7 million, or $0.14 per share, compared with net loss
of $16.2 million, or $0.03 per diluted share, for the 2021
quarter.
- Cash and
equivalents: Cash and cash equivalents were $210.5 million
as of June 30, 2022. In addition, OPKO has $53.1 million available
under its line of credit with JP Morgan.
Conference Call and Webcast
Information
OPKO’s senior management will provide a business
update, discuss second quarter financial results and answer
questions during a conference call and live audio webcast today
beginning at 4:30 p.m. Eastern time. Participants are encouraged to
pre-register for the conference call using this link. Callers who
pre-register will be given 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 may
also be accessed at OPKO’s Investor Relations page and here.
A telephone replay will be available until
August 11, 2022 by dialing (877) 344-7529 (U.S.) or (412) 317-0088
(International) and providing the passcode 5775821. 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 the acquisition of
ModeX, including the expansion of the executive management team,
will positively impact the Company, whether expectations after
completion of the merger will be met, whether we will receive
milestone payments under the Sema4 transaction, the benefits of
NGENLA, the risk of downturns and a changing regulatory landscape
in the highly competitive healthcare industry, whether our products
will launch in all the territories in which they have been approved
for sale, the timing of such launches, the ability to get
beneficial pricing approvals, whether RAYALDEE prescriptions will
increase, our product development efforts and the expected benefits
of our products, whether our products in development will be
commercialized, whether the relationship with our business partners
will be successful, whether our business partners will be able to
commercialize our products and successfully utilize our
technologies, our ability to market and sell any of our products in
development, 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, 2022 |
|
December 31, 2021 |
Assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
210.5 |
|
|
$ |
134.7 |
|
Assets held for sale |
|
0.0 |
|
|
|
315.0 |
|
Other current assets |
|
284.3 |
|
|
|
373.3 |
|
Total current assets |
|
494.8 |
|
|
|
823.0 |
|
In-process research and
development and goodwill |
|
773.8 |
|
|
|
1,110.8 |
|
Other assets |
|
1,101.0 |
|
|
|
465.9 |
|
Total Assets |
$ |
2,369.6 |
|
|
$ |
2,399.7 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
|
|
Current liabilities |
$ |
215.5 |
|
|
$ |
301.8 |
|
Liabilities associated with assets held for sale |
|
0.0 |
|
|
|
28.2 |
|
Convertible notes |
|
211.5 |
|
|
|
187.9 |
|
Deferred tax liabilities, net |
|
176.7 |
|
|
|
148.5 |
|
Other long-term liabilities, principally contract liabilities, |
|
|
|
|
|
|
|
leases, contingent consideration and lines of credit |
|
47.1 |
|
|
|
48.2 |
|
Total Liabilities |
|
650.8 |
|
|
|
714.6 |
|
Equity |
|
1,718.8 |
|
|
|
1,685.1 |
|
Total Liabilities and Equity |
$ |
2,369.6 |
|
|
$ |
2,399.7 |
|
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, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
186.8 |
|
|
$ |
397.2 |
|
|
$ |
473.4 |
|
|
$ |
904.2 |
|
Revenue from products |
|
35.9 |
|
|
|
35.7 |
|
|
|
72.5 |
|
|
|
69.6 |
|
Revenue from transfer of intellectual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
property and other |
|
87.2 |
|
|
|
9.5 |
|
|
|
93.2 |
|
|
|
13.8 |
|
Total revenues |
|
309.9 |
|
|
|
442.4 |
|
|
|
639.1 |
|
|
|
987.6 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
194.3 |
|
|
|
292.9 |
|
|
|
438.2 |
|
|
|
656.5 |
|
Selling, general and administrative |
|
101.5 |
|
|
|
113.2 |
|
|
|
219.0 |
|
|
|
225.5 |
|
Research and development |
|
17.2 |
|
|
|
18.2 |
|
|
|
35.6 |
|
|
|
37.5 |
|
Contingent consideration |
|
0.2 |
|
|
|
(0.1 |
) |
|
|
0.1 |
|
|
|
(1.1 |
) |
Amortization of intangible assets |
|
22.8 |
|
|
|
12.6 |
|
|
|
44.8 |
|
|
|
25.2 |
|
Gain on sale of assets |
|
(15.4 |
) |
|
|
0.0 |
|
|
|
(15.4 |
) |
|
|
0.0 |
|
Total costs and expenses |
|
320.6 |
|
|
|
436.8 |
|
|
|
722.3 |
|
|
|
943.6 |
|
Operating income (loss) |
|
(10.7 |
) |
|
|
5.6 |
|
|
|
(83.2 |
) |
|
|
44.0 |
|
Other expense, net |
|
(75.6 |
) |
|
|
(16.9 |
) |
|
|
(79.8 |
) |
|
|
(23.7 |
) |
Income (loss) before income
taxes and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
investment losses |
|
(86.3 |
) |
|
|
(11.3 |
) |
|
|
(163.0 |
) |
|
|
20.3 |
|
Income tax benefit
(provision) |
|
(15.1 |
) |
|
|
(4.8 |
) |
|
|
6.2 |
|
|
|
(5.3 |
) |
Income (loss) before
investment losses |
|
(101.4 |
) |
|
|
(16.1 |
) |
|
|
(156.8 |
) |
|
|
15.0 |
|
Loss from investments in
investees |
|
(0.3 |
) |
|
|
(0.1 |
) |
|
|
(0.3 |
) |
|
|
(0.1 |
) |
Net income (loss) |
$ |
(101.7 |
) |
|
$ |
(16.2 |
) |
|
$ |
(157.1 |
) |
|
$ |
14.9 |
|
Income (loss) per share, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
basic and diluted |
$ |
(0.14 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.23 |
) |
|
$ |
0.02 |
|
Weighted average common
shares |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
outstanding, basic and diluted |
|
712,548,661 |
|
|
|
646,996,891 |
|
|
|
686,597,899 |
|
|
|
644,001,280 |
|
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