On May 3, 2023 OPKO Health, Inc. (NASDAQ: OPK) reported business highlights and financial results for the three months ended March 31, 2023 (Press release, Opko Health, MAY 3, 2023, View Source [SID1234630936]).
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First quarter business highlights include the following:
OPKO Health’s ModeX Therapeutics, Inc. (ModeX) entered into an exclusive worldwide license and collaboration agreement with Merck to develop MDX-2201 for Epstein-Barr virus. Under the terms of the agreement, OPKO received a $50.0 million upfront payment and is eligible to receive up to an additional $872.5 million upon the achievement of prespecified development and commercial milestones. In addition, upon commercial launch of MDX-2201, OPKO is eligible to receive royalties on global net sales. Merck will be responsible for clinical and regulatory costs and activities, as well as product commercialization.
Sales are underway by Pfizer for NGENLA (somatrogon) in 17 countries including Japan, Germany and the United Kingdom; NGENLA has been approved in 41 countries and Pfizer continues to work with the FDA to obtain approval in the U.S. NGENLA treats pediatric patients with decreased growth due to insufficient growth hormone and reduces the injection frequency from once daily to once weekly. NGENLA is the first once-weekly product approved for the treatment of pediatric growth hormone deficiency in Japan, Canada, Australia, the United Kingdom, Taiwan, United Arab Emirates and Brazil, and was recently approved in Korea and Turkey. Its European Union marketing authorization is valid in all EU Member States, as well as in Iceland, Norway and Liechtenstein. Pfizer expects to launch in all priority international markets by year-end.
BioReference Health is one of the first commercial laboratories to offer a dual-stain triage test to enhance cervical cancer screenings. The CINtec PLUS Cytology test from Roche Diagnostics is the only approved dual-stain triage test for patients who have a high-risk human papillomavirus result. The dual-stain biomarker test allows healthcare providers to assess a patient’s risk for cervical pre-cancer more accurately and quickly. BioReference is driving innovation to its portfolio with new tests to provide valuable information for healthcare providers and their patients.
First Quarter Financial Results
Pharmaceuticals: Revenue from products in the first quarter of 2023 increased to $40.4 million from $36.6 million in the first quarter of 2022, driven by sales in our international operating companies and an increase in sales of Rayaldee to $6.6 million from $5.1 million in the prior-year period. Revenue from the transfer of intellectual property was $64.8 million in the first quarter of 2023 compared with $6.0 million in the 2022 period. The increase in revenue from the transfer of intellectual property reflects 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 related to Rayaldee and a $2.5 million milestone payment from Nicoya Therapeutics related to the submission of its investigational new drug application to China’s Center for Drug Evaluation for Rayaldee. Total costs and expenses were $86.3 million in the first quarter of 2023, up from $60.7 million in the prior-year period. The increase was mainly due to a $12.5 million payment to Sanofi that accrued under a Sanofi In-License Agreement between ModeX and Sanofi, and research expenses at ModeX, which was acquired in May 2022. Operating income was $19.0 million in the first quarter of 2023, compared with an operating loss of $18.1 million in the first quarter of 2022.
Diagnostics: Revenue from services in the first quarter of 2023 was $132.4 million compared with $286.6 million in the prior-year period. Revenue decreased due to lower COVID-19 testing volume. BioReference processed approximately 68,000 COVID-19 PCR tests in the first quarter of 2023, representing 4.8% of total volume, versus 2.0 million tests in the first quarter of 2022, representing 46.9% of total volume. Furthermore, revenue decreased by $36.1 million due to the sale of GeneDx in April 2022. Total costs and expenses were $172.4 million in the first quarter of 2023 compared with $330.1 million in the first quarter of 2022, resulting in an operating loss of $40.0 million compared with an operating loss of $43.5 million in the 2022 period, which included approximately $16.0 million from GeneDx. BioReference is implementing significant cost-reduction initiatives as it strives to return to profitability.
Consolidated: Consolidated total revenues for the first quarter of 2023 were $237.6 million compared with $329.2 million for the comparable period of 2022. Operating loss for the first quarter of 2023 decreased $41.8 million to $30.6 million from $72.4 million for the 2022 quarter. Net loss for the first quarter of 2023 was $18.3 million, or $0.02 per share, compared with a net loss of $55.4 million, or $0.08 per share, for the 2022 quarter. Net loss for the first quarter of 2023 included non-cash income of $8.3 million due to an increase in the fair value of OPKO’s GeneDx Holdings (formerly Sema4 Holdings Corp) investment and non-cash income of $8.5 million as a result of GeneDx Holdings achieving specific revenue targets for the 2022 fiscal year.
Cash and cash equivalents: Cash and cash equivalents were $110.8 million as of March 31, 2023, which does not include the $50 million upfront payment from Merck that was received in April 2023.
Conference Call and Webcast Information
OPKO’s senior management will provide a business update, discuss first quarter financial results, provide financial guidance 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 here. 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 may 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 May 10, 2023 by dialing 877-344-7529 (U.S.) or 412-317-0088 (International) and providing the passcode 4576780. A webcast replay will be available beginning approximately one hour after the completion of the live conference call here.