OPKO Health Reports Fourth Quarter 2023 Business Highlights and Financial Results
28 February 2024 - 8:05AM
OPKO Health, Inc. (NASDAQ: OPK) reports business
highlights and financial results for the three and 12 months ended
December 31, 2023.
Business highlights from the fourth quarter and
subsequent weeks included the following:
- ModeX advanced its
antiviral and immune-oncology product
pipeline. ModeX advanced its pipeline of antiviral
and immune-oncology programs utilizing its next-generation
multispecific antibodies, with expectations for one oncology
program to enter the clinic this year. In 2023, Modex secured two
collaborations including one with Merck to develop MDX-2201, its
vaccine for Epstein-Barr virus, and another with BARDA to develop
novel multispecific antibodies against viral infectious disease
threats.
- NGENLA®
has now been approved in over 50 countries including the
U.S., Japan, EU Member States, Canada and Australia.
Pfizer, OPKO’s commercial partner, has launched NGENLA in all
priority global markets. OPKO is entitled to gross profit sharing
in all global markets based on sales of both NGENLA and Genotropin.
NGENLA is the first once-weekly product approved for the treatment
of pediatric growth hormone deficiency in Japan, Canada, Australia,
the United Kingdom, Taiwan, the United Arab Emirates and
Brazil.
- BioReference Health
continued implementing its REACH program to improve operating
efficiencies and enhance productivity. With the goal of
achieving profitability this year, BioReference continued to
implement initiatives to reduce costs and improve productivity by
enhancing innovation of its higher-value specialty testing
segments. Other efforts to return this business to profitability
include expanding into new markets and marketing to new customer
segments, such as pharmaceutical companies.
- Approvals received for OPKO
Health-branded Storefront on Alibaba’s Tmall Global Platform in
China. NextPlat Corp., a global e-Commerce provider, is
launching an OPKO Health-branded online storefront on Alibaba's
Tmall Global e-commerce platform in China. This new online
storefront will initially list up to 40 OPKO health and wellness
products featuring an assortment of nutraceuticals for bone, joint
and eye health, as well as supplements for nutrition and immunity
defense. NextPlat intends to significantly expand the OPKO online
storefront with a wide array of veterinary and animal health
products, subject to final Chinese regulatory approval, which is
expected during the second quarter of 2024.
Fourth Quarter Financial
Results
- Pharmaceuticals:
Revenue from products in the fourth quarter of 2023 increased to
$43.0 million from $37.9 million in the fourth quarter of 2022,
driven by growing sales from our international operations,
positively impacted by foreign currency fluctuations of
approximately $1.3 million. Furthermore, sales of RAYALDEE
increased to $9.3 million from $9.1 million in the prior-year
period. Revenue from the transfer of intellectual property was
$14.7 million in the fourth quarter of 2023 compared with $8.1
million in the 2022 period, which included revenue of $12.2 million
and $3.0 million, respectively, of gross profit share payments for
NGENLA; the fourth quarter of 2023 included a catch-up payment of
$3.1 million for the U.S. for the third quarter of 2023. Total
costs and expenses were $73.8 million in the fourth quarter of 2023
compared with $68.0 million in the prior-year period. The increase
was primarily from higher cost of product revenues reflecting sales
growth from OPKO’s international operating companies, negatively
impacted by unfavorable foreign currency fluctuations of $1.1
million. Furthermore, research and development expenses increased
as we continued to invest in our pipeline of immune-oncology and
infectious disease programs. Operating loss was $16.0 million in
the fourth quarter of 2023 compared with $22.0 million in the
fourth quarter of 2022.
- Diagnostics:
Revenue from services in the fourth quarter of 2023 was $124.2
million compared with $139.4 million in the prior-year period. The
decrease reflects lower clinical test reimbursement of $9.0 million
due to the mix of testing ordered, partially offset by an increase
of $0.9 million from higher clinical test volume. COVID-19 testing
volume and reimbursement decreased by $7.1 million due to higher
utilization of antigen point-of-care diagnostic tests, as well as a
shift in customer mix. Total costs and expenses for the fourth
quarter of 2023 were $166.4 million compared with $162.5 million in
the fourth quarter of 2022. This increase is primarily due to
non-recurring employee retention and severance costs associated
with our ongoing REACH initiatives. Through these initiatives, the
Company has reduced ongoing expenses on an annualized basis by
$10.1 million. Operating loss in the fourth quarter of 2023 was
$42.3 million, including $4.7 million of non-recurring expenses and
$5.4 million of revenue adjustments, compared with an operating
loss of $23.1 million in the 2022 period.
- Consolidated:
Consolidated total revenues for the fourth quarter of 2023 were
$181.9 million compared with $185.4 million for the comparable 2022
period. Operating loss for the fourth quarter of 2023 was $69.1
million compared with an operating loss of $55.3 million for the
2022 quarter. Net loss for the fourth quarter of 2023 was $65.5
million, or $0.09 per share, compared with a net loss of $85.2
million, or $0.11 per share, for the 2022 quarter. Net
loss for the 2023 period included a mark-to-market adjustment of
$3.2 million compared with $49.1 million in the 2022 period related
to the decrease in the share price of GeneDx. In addition, OPKO
reported an income tax benefit in the 2023 period of $6.0 million
compared with $17.0 million in the 2022 period.
- Cash and cash
equivalents: Cash and cash equivalents were $95.9 million
as of December 31, 2023. Subsequent to the close of the fourth
quarter, OPKO completed the sale of $230 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.
Conference Call and Webcast
Information
OPKO’s senior management will provide a business
update, discuss fourth 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 using this link.
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 can 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 March
5, 2024 by dialing 877-344-7529 (U.S.) or 412-317-0088
(International) and providing the passcode 6034226. A webcast
replay will be available beginning approximately one hour after the
completion of the live conference call here.
About OPKO Health
OPKO Health 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 its
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 market and sell any of our products in
development, whether we will continue to successfully advance
products in our pipeline and whether they can be commercialized,
our expectations about RAYALDEE, 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 |
| |
December 31,2023 |
|
December 31,2022 |
|
Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
95.9 |
|
|
$ |
153.2 |
|
|
Other current assets |
|
213.6 |
|
|
|
241.3 |
|
| Total current assets |
|
309.5 |
|
|
|
394.5 |
|
| In-process research and
development and goodwill |
|
793.3 |
|
|
|
790.9 |
|
| Other assets |
|
908.9 |
|
|
|
981.9 |
|
|
Total Assets |
$ |
2,011.7 |
|
|
$ |
2,167.3 |
|
| |
|
|
|
|
|
|
|
| Liabilities and Equity: |
|
|
|
|
|
|
|
|
Accounts payable |
$ |
69.7 |
|
|
$ |
67.0 |
|
|
Accrued expenses |
|
90.1 |
|
|
|
98.3 |
|
|
Current portion of convertible notes |
|
0.0 |
|
|
|
3.1 |
|
|
Other current liabilities |
|
40.3 |
|
|
|
45.1 |
|
| Total current liabilities |
|
200.1 |
|
|
|
213.5 |
|
|
Long-term portion of convertible notes |
|
214.3 |
|
|
|
210.4 |
|
|
Deferred tax liabilities, net |
|
126.8 |
|
|
|
126.4 |
|
|
Other long-term liabilities, principally contract liabilities,
leases, contingent consideration, and lines of credit |
|
81.3 |
|
|
|
55.4 |
|
|
Total Liabilities |
|
622.5 |
|
|
|
605.7 |
|
|
Equity |
|
1,389.2 |
|
|
|
1,561.6 |
|
|
Total Liabilities and Equity |
$ |
2,011.7 |
|
|
$ |
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 endedDecember 31, |
|
For the twelve months endedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services |
$ |
124.2 |
|
|
$ |
139.4 |
|
|
$ |
515.3 |
|
|
$ |
755.6 |
|
|
Revenue from products |
|
43.0 |
|
|
|
37.9 |
|
|
|
167.5 |
|
|
|
142.9 |
|
|
Revenue from transfer of intellectual property and other |
|
14.7 |
|
|
|
8.1 |
|
|
|
180.7 |
|
|
|
105.7 |
|
|
Total revenues |
|
181.9 |
|
|
|
185.4 |
|
|
|
863.5 |
|
|
|
1,004.2 |
|
| Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of service revenues |
|
112.4 |
|
|
|
106.4 |
|
|
|
445.8 |
|
|
|
627.6 |
|
|
Cost of product revenues |
|
24.8 |
|
|
|
23.0 |
|
|
|
99.5 |
|
|
|
88.4 |
|
|
Selling, general, and administrative |
|
72.9 |
|
|
|
74.0 |
|
|
|
300.6 |
|
|
|
372.7 |
|
|
Research and development |
|
19.4 |
|
|
|
19.5 |
|
|
|
89.6 |
|
|
|
73.9 |
|
|
Contingent consideration |
|
(0.0 |
) |
|
|
(0.6 |
) |
|
|
(1.0 |
) |
|
|
(1.3 |
) |
|
Amortization of intangible assets |
|
21.5 |
|
|
|
21.6 |
|
|
|
86.0 |
|
|
|
87.8 |
|
|
Gain on sale of assets |
|
0.0 |
|
|
|
(3.2 |
) |
|
|
0.0 |
|
|
|
(18.6 |
) |
|
Total costs and expenses |
|
251.0 |
|
|
|
240.7 |
|
|
|
1,020.5 |
|
|
|
1,230.5 |
|
| Operating loss |
|
(69.1 |
) |
|
|
(55.3 |
) |
|
|
(157.0 |
) |
|
|
(226.3 |
) |
| Other expense, net |
|
(3.4 |
) |
|
|
(46.9 |
) |
|
|
(27.4 |
) |
|
|
(165.2 |
) |
| Loss before income taxes and
investment losses |
|
(72.5 |
) |
|
|
(102.2 |
) |
|
|
(184.4 |
) |
|
|
(391.5 |
) |
| Income tax benefit
(provision) |
|
6.0 |
|
|
|
17.0 |
|
|
|
(4.4 |
) |
|
|
63.5 |
|
| Loss before investment
losses |
|
(66.5 |
) |
|
|
(85.2 |
) |
|
|
(188.8 |
) |
|
|
(328.0 |
) |
| Loss from investments in
investees |
|
(0.0 |
) |
|
|
(0.0 |
) |
|
|
(0.1 |
) |
|
|
(0.4 |
) |
| Net loss |
$ |
(65.5 |
) |
|
$ |
(85.2 |
) |
|
$ |
(188.9 |
) |
|
$ |
(328.4 |
) |
| Loss per share, basic and
diluted |
$ |
(0.09 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.25 |
) |
|
$ |
(0.46 |
) |
| Weighted average common shares
outstanding, basic and diluted |
|
751,506,257 |
|
|
|
750,169,485 |
|
|
|
751,716,915 |
|
|
|
719,060,942 |
|
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