On August 4, 2022 OPKO Health, Inc. (NASDAQ: OPK) reported that business highlights and financial results for the three and six months ended June 30, 2022 (Press release, Opko Health, AUG 4, 2022, View Source [SID1234617539]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

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.