Opko Health Inc. (NASDAQ:OPK) reports financial and operating results for the three and six months ended June 30, 2016.

Financial Highlights

  • Consolidated revenues for the three months ended June 30, 2016 increased to $357.1 million from $42.4 million for the three months endedJune 30, 2015. The 2016 period includes revenue from BioReference Laboratories and EirGen which were acquired in August and May 2015, respectively. In addition, the 2016 period includes $50.0 million of revenue related to our license of RAYALDEE to VFMCRP.
  • Net income for the three months ended June 30, 2016 was $15.5 million compared with net loss of $42.8 million for the 2015 period. Net income (loss) during the three month periods include significant non-recurring and non-cash activities, including:
    • Upfront payment for the license of RAYALDEE to VFMCRP of $50.0 million; and
    • Other income and (expense) was $5.1 million and ($16.8) million in the 2016 and 2015 periods, respectively, primarily related to the change in fair value of derivative instruments. The change in fair value is principally related to an embedded derivative in OPKO’sJanuary 2013 convertible senior notes due in 2033.
  • Cash, cash equivalents and marketable securities were $171.6 million as of June 30, 2016.

Business Highlights

  • VFMCRP and OPKO Health Enter into License and Option Agreement for OPKO’s RAYALDEE: OPKO entered into an agreement with VFMCRP for the development and commercialization of RAYALDEE in Europe, Canada, Mexico, Australia, South Korea and certain other international markets for the treatment of secondary hyperparathyroidism (SHPT) in patients with chronic kidney disease (CKD) and vitamin D insufficiency. Under the terms of the agreement, OPKO received an upfront payment of $50 million, and will receive up to $232 million in regulatory and sales based milestones. In addition, VFMCRP will pay OPKO tiered, double digit royalties on sales of the product. OPKO and VFMCRP will also collaborate to develop and commercialize a new dosage form of RAYALDEE for the treatment of SHPT in dialysis patients. OPKO granted VFMCRP an option to acquire rights to this dosage form for the US market; if exercised, OPKO will receive up to $555 million in additional milestones and double digit royalties.
  • RAYALDEE Approved in June 2016: The FDA approved RAYALDEE extended release capsules for the treatment of secondary hyperparathyroidism (SHPT) in adults with stage 3 or 4 chronic kidney disease (CKD) and serum total 25-hydroxyvitamin D levels less than 30 ng/mL. RAYALDEE is a patented extended release product containing 30 mcg of a prohormone called calcifediol (25-hydroxyvitamin D3).
  • Transition Therapeutics: The acquisition of Transition Therapeutics Inc. (NASDAQ: TTHI, TSX: TTH), a Toronto based biotechnology company, is expected to close during the third quarter of 2016. Transition Therapeutics has two drugs in mid-stage clinical development; TT401, a long acting GLP-1/glucagon dual agonist for the treatment of type 2 diabetes and obesity; and TT701, an orally administered selective androgen receptor modulator (SARM) being developed for the treatment of certain features of androgen deficiency without androgenic effects on the prostate gland.
  • 4Kscore test utilization continues to grow; reimbursement coverage negotiations continued: Reimbursement of the 4Kscore test is progressing; pricing agreements are already in place with several payors, and the Company is working to obtain a positive coverage decision by its local Medicare administrator. Through June 30, 2016, over 5,000 clinicians have utilized the test and in the month of June, alone, over 5,3004Kscore tests were performed.

“Our improved financial performance this quarter was fueled by continued growth in our diagnostics business through increases in patient volume atBioReference Laboratories and its GeneDx unit, as well as continued growth in the utilization of our innovative 4Kscore test for predicting the probability of aggressive prostate cancer,” stated Phillip Frost, M.D., Chairman and Chief Executive Officer of OPKO. “We were pleased with the FDA’s decision to approve RAYALDEE before its PDUFA date, and we are building an impressive commercial team to make this important medicine available to the large number of chronic kidney disease patients suffering from SHPT. Other drug development programs are progressing well and we anticipate having topline data from our phase 3 clinical trial for long acting human growth hormone in adults later this year. We also anticipate clinical data late this year or early next year for our long acting Factor VIIa-CTP, as well as clinical data for our Phase 1 clinical trial for long acting oxyntomodulin. We look forward to the closing of the Transition Therapeutics acquisition and adding Transition’s important products to our robust late stage drug pipeline,” continued Dr. Frost. (Original Source)

Shares of Opko are up nearly 7% to $10.78 in after-hours trading Monday. OPK has a 1-year high of $10.22 and a 1-year low of $8.71. The stock’s 50-day moving average is $9.75 and its 200-day moving average is $9.78.

On the ratings front, OPK has been the subject of a number of recent research reports. In a report issued on June 21, Oppenheimer analyst Rohit Vanjani reiterated a Hold rating on OPK. Separately, on the same day, Standpoint Research’s Ronnie Moas reiterated a Buy rating on the stock and has a price target of $18.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Rohit Vanjani and Ronnie Moas have a total average return of 8.3% and 4.7% respectively. Vanjani has a success rate of 54% and is ranked #394 out of 4019 analysts, while Moas has a success rate of 69% and is ranked #80.

OPKO Health, Inc. is a multi-national pharmaceutical and diagnostics company. The company is engaged in discovering, developing, commercializing and expertise its novel and proprietary technologies with a focus to provide unmet medical needs through a range of develops solutions to diagnose, treat and prevent various conditions, including molecular diagnostics, point-of-care tests and proprietary pharmaceuticals and vaccines. It operates its business through two segments: Pharmaceutical and Diagnostics. The Pharmaceutical segment consists of pharmaceutical research and development operations in Chile, Mexico, Ireland, Israel and Spain. The Diagnostics segment consists of pathology operations and point-of-care and molecular diagnostics operations.