OPKO Health (OPK) 8 Nov 222022 Q3 Earnings call transcript

Good day and welcome to the OPKO Health Third Quarter 2022 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

good and operator, you, afternoon. Thank Briggs This LHA. is Yvonne with today's discuss third OPKO you of all financial to joining for the Thank Health's call results XXXX. quarter for

the date various live statements by I'd events affect during conference the XXXX, be the this described could revise company's and call These circumstances to broadcast, statements on considered XXXX. Except today risks for the such, by results. accurate of that in risks remind This information as ended forward-looking like to will time-sensitive forward-looking reflect any of reports. company's SEC is November and OPKO Form to that X, without SEC XX-K of obligation be to historical December fact expected required this other limitation, management undertakes no the contains statements only materially will including or the call forward-looking as than year and statements the you that the made subsequently in law, any of include, XX, filings, subject update or as report filed date uncertainties after call. annual

and third review for up open company's well questions. Vice Before me let Laboratories open review After . to the Logal, Frost, financial the then President BioReference CFO, business of Officer, the and as Chairman an overview OPKO’s provide Executive will as call pharmaceutical of that, Adam results. the call. we Dr. then OPKO's Phillip we’ll format quarter And Chairman, call. Dr. begin, Zerhouni, Chief will today's Elias will OPKO

the turn like Frost. I'd to over call to Now Dr.

call a results a we business NGENLA, that’s or you with expected ease standard Health's our progress. and quarter our NGENLA to business, somatrogon, injectable the thank third is discuss burden hormone once and of injections. to patients afternoon pharmaceutical Pfizer. growth today partner biocommercial versus for weekly product with Serving OPKO joining pleased launches are today's daily Good financial

launched offered in and countries Japan Drug which including is Australia. other the now Germany, benefit through National has scheme, Canada, NGENLA program. Australia's Pfizer pharmaceutical subsidy In Australia, is

very which moment. of just starting growth, review the still few in Adam quarter to it's territories is will significant experience early sequential a Although NGENLA launch in

Additionally, approvals European In resolve to FDA's occur assure the pending there regarding pricing Pfizer are which with you comments several should other I working countries, submission. in somatrogon's U.S., diligently soon. BLA we're can the

you the or know, ongoing complete further As and regulatory Pfizer's the advance a information letter, it's FDA's strategy any response to process. disclose agency the with not comments, position to regarding discussions

have the U.S Yet, their stated to they publicly commitment product the market. in

development on we our somatrogon As pleased with drug soon of an regulatory licensing with in as partners the we our of for are additional update several the information U.S. the provide of able, We're will progress candidates. status stage

partner China clinical also Oxyntomodulin the treat studies factor initiate a countries approval venture we to for X joint of regulatory forward obesity China. results these as is We look the long to VII-CTP, Factor a treatment our of to data X LeaderMed in diabetes coagulation to of is plan expected for from the type next novel leverage acting our year. a Phase outside early trial LeaderMed, trial clinical planning of and hemophilia. in

partners. on motivated technology the ModeX and and on the enthusiastic to the platform technology represents unique antibodies. leverage is combined proprietary you discussions We'll wide with patients. of team ModeX therapy multi-specific outcomes company opportunity to progress. potential The focused and advance updated to provide variety we better significant a advance of to keep Their continue And pipeline a platform our our for

further operations business, pharmaceutical significant and Laboratories to details of BioReference and provide aspects lab provide leadership in on himself time Elias on the Zerhouni diagnostic its the of on will performance, oversight immersed commentary following his at all our site business. the spent has strategy. and Elias has

Elias. over that turn call the Elias? now I'll brief review, With to

Phil thank teams by for for Well, ModeX, good everyone. and you, that busy was and Thank rewarding me the extremely OPKO you. afternoon, since are all a and acquired It's involved. X months been

mentioned, Phil of I've divisions. pharmaceutical focusing our As and business, OPKO's my including all been diagnostic on time aspects

Starting as from with be within of is knowledge, we our OPKO team part the the advance platforms and and leverage ModeX, very of technologies. OPKO and integration the multi-specific excited to to resources benefit

their One for ModeX it focused which as calls, iron particles, developing platforms. on brings As utilizing a all has two I've is necessary discussed ferritin cells, vaccines, is on metabolism. for past technology protein

the specific technology a very effective self in manner. and cost scalable which ferritin assembles then protein, Our antigens to attaches into nanoparticles

Our first is responsible to its for virus, such consequences target is as application and which multiple of in and mononucleosis, some sclerosis. the Epstein-Barr cancers infectious patients, this long-term technology

them drug diseases. date And suitable upon our we into subjects multiple advance are development as to our the safety, encouraged ultimately targets. we're We other market seek and to lends test as pursue and vaccine for in potentially efficacy for itself collaborations application pharma to in partners applications that of this as for in But very numbers for said pre-IND platform, companies strategy trials larger with know, clinic vaccine the with to candidates and technology stages Phil earlier require bring promising significantly stage larger is you approval. as to infectious which to discussions

go is design simplicity, proprietary us technologies. manufacturing and extraordinary for multi-specific to formats our provides which and novel platforms called challenge targets platform, total a tri-specific technology functionality optimizes and a multivalent for that the star This multi-specific plug our typically Star beyond of six and believe and Stealth, play to up simultaneously. a We used currently bispecific flexibility enable Now, multi-specific antibodies others. by us to

from we focused Our targeting on have multi-specific hematologic support receives HIV malignancies. tri-specific X both disease, a treat NIH, our HIV. HIV candidates Phase candidate infectious star solid well indications. actually, two also In the pipeline, and technologies and address and diseases In infectious as preclinical oncology, include as oncology COVID-XX. In to that in we and we

have multiple all on concern In SARS, clinic These of multi-specific multi-specific to addition, at by hard oncology provides tumors. oncology, one in preclinical late once. late COVID-X In stages, two preclinical a of antibodies funded all in partially goal variants in antibodies the XXXX. the focused several protection we have DARPA entering that we and programs are tumors, solid on XXXX treat with focused stage early liquid against or

discuss Now switch I'd and Laboratories. like gears to BioReference

base that realize continue COVID away had we testing reductions we COVID another from to moving those challenging we Although our post focus on rapidly. experienced, The transition additional quite the and are initiatives quarter as expansion cost laboratory business. strengthening

a order to put in was conference expense growth in size structure specialty the core our drive place in last our three-prong testing discussed call, in plan businesses. and right As and

cost expenses have on decreasing commenced the of than this structure Initiative, beginning through and our focused million at more So a Reach XXXX. year, million We of year $XXX which remove we first realized to in were our $XXX looking date. savings to

have levels, at X,XXX costs, for September of in It reduced total current to inflation addition We end a pressures. to to volumes COVID endemic over testing being related we our July. with prior the workforce our reduced infrastructure is X,XXX from also that and of to align imperative

use testing on pressures, opportunities machine area pursuing to efforts business, our lab and offset excellence virtually to automation every in possible. while learning cycle efficiencies platforms of operational these our looking focused including where have including at of and our We revenue management rationalization

for showing a We, our our promising which segments demonstrated year-on-year that oncology, outperform. think and ventures, outperform example, segments, the have women's our oncology specialty growth diagnostic continue as sequencing strong which I of within of These we're opportunities. growth urology, line testing. genomic to in highlight business of special include franchise to health, is all continue

relationship management Center Medical Westchester our We've expanded existing our lab with beyond business.

University Rochester as definitive several for oncology a agreement larger with have we testing, large other well of cancer addition, centers. the In new -- as

new We continue best-in-class portfolio with oncology diagnostics to emerging our and expand testing.

is -- whether this not which minimal unmet to of [indiscernible] times, to for to is oncologists determine patients, physicians considered An disease therapy helps emerging reoccurring oncologists example at adjust accordingly. need, residual all management and in disease their critical which or of

emerging for to A, which well business On B for tests used. prepare respiratory multi for that the season received flu panel and the and RSV, we've work test is for simultaneously the increasingly launch and COVID, core side, new flu done

I volume growth health, women's in an forward. eye good with a done moving on stabilizing we've job of think

Health in women malignancy example An BioReference lab and FDA surgery. a Women's with cleared and and collaboration women prior in to and in of laboratories distribute Aspira ovarian -- will co-market Aspira blood OvaX with the adnexal OVERA women's combines risk health is Aspira's to detect masses tests, which OvaXPlus,

speed much to is responsibilities structure leadership cancer And sizing Our with perform systems and decision and to products diagnostic to a a improve structure. care health complex new XKscore on less right of our Test and growth continues the management prong improve focused the in our team to our our third platforms. prostate synergy of plan initiatives, our organizational also making agility optimizing for streamline and We're particularly market opportunities with represent well. most active also with in discussions through a which significant organizations, value-based

turn our CFO, will I And Adam? call Adam. the so now over to

in growth Thank our its regulatory recently NGENLA launch Pfizer, continue a commercial this global expand year long XX a launched months, segment, number strategy. its countries you, part over Elias. for acting next of and the Starting with earlier hormone to since our pharmaceutical partner our of and

product profit franchise is gross is we're the share. the to In royalties on region launched the U.S., share depending pricing gross until profit the move sold. And in markets entitled approved major receiving Japan, we And in two Europe. NGENLA profit is gross in the in in will which U.S. additional to If region stage. We're in Europe, are royalties approved.

from to Chilean ended in until X market. that well currency European receive $XX.X pressures as of our [indiscernible] -- But in in as continue million, reflecting the a were will a the regions the sales volumes. pharmaceutical then, months decrease on segment $X.X Overall operations, decrease royalties in million revenues foreign we and for

nonrecurring were tangible in noncash included In $XX.X million, costs addition, payments and period LeaderMed. the segment of period including XXXX pharmaceutical XXXX our during Total from $XX.X CAMPX from upfront expenses the in and amortization. million

million, activities $X.X the quarter next operations, principally expense to development reflecting a related as much increased drug and ModeX activities, of generation a development costs around full well development development our and device. from our as of Research so

The million. $XX.X comparable $XX As from includes for and result, of of from pharmaceutical $XX.X our a net gains, from period million XXXX of million of million expenses a operations $XX.X quarter XXXX. segment which expense million the loss income offset $XX.X third was of operating

has Moving This to reflects to XXXX testing. $XXX.X the the levels, our decline of period. segment, for to broad reported wrap testing it market diagnostic decreased $XXX.X revenue as million we shifted million, testing home COVID at compared

and million program reductions our targeting our alone, and start the Elias as organization. to the employee Reach by execute do mentioned, during quarter of we entirety continue $XX expense annualized the further We across costs third

As rates term Elias we Health platforms. so including our program, far this quarter of continue XXXX. expense to commercial of run our and of spending our longer eliminated Scarlet third month by or mentioned over benefits each We've again, the sequential million digital XXXX, in have initiatives, and reduced reduced on see health $XXX

we the levels. line structure cost of expected our While in our volume remainder bring with

a and We have expect realize we outlined, by a near will help first of the number Elias those term medium of profitable to in which reference identified growth. XXXX, to which half growth return programs

business, results our and X%. third about The gross our decreased quarter Looking base at overall by volumes margins. impacted operating negatively our

with genomics business our cancer in as XXXX with score showing lines tests XK We testing compared of certain strength Elias saw along to our growth levels. mentioned,

practice were where physician the However, by offices. small gains consolidation due roll we saw physician client to the group loss of market up evolving these offset and

sequential quarter. for decrease a considering before a million $X of diagnostic $XX.X included million, of was segment nonrecurring Operating the which third charges $X loss million in approximately reflects

that XXXX which summer. third $XX.X benefited of testing significant occurred The COVID-XX quarter operating of approximately income reported from last million,

of benefit noncash in $X.XX tax per $XX.X a to declines quarter consolidated the of of million adjustment reported $XX.X stock, for or or $XX.X mark-to-market net for with the by third share, includes diluted from We an per net common a results operating million. SemaX’s loss the financial $X.XX million, to to million $XX.X $XX.X XXXX of million, quarter. offset the income operating compared the income of third million, compared of $XX.X share. price resulting an loss Turning income loss Net

as I benefited mentioned, of as from in facility testing well the sale For the finished which Ireland. our as COVID period, previously

our narrowed prior we XXXX, assumptions the with of ranges, the at quarters our As following. look are consistent to have remainder we which from

We don't in expect testing. surge a COVID

we that of of million. XXXX between to stock. the $X Our value to billion, million trends, base most and our business revenue expect in With including to changes $XXX for not any million will continue revenue from we with services for now recent and common $XXX SemaX be year have factored full $XXX

to Revenue from million million. products and revenue $XXX million of $XXX other to $XXX of $XXX

$X.XX and to depreciation costs various as and Operating billion, expenses $X.XX $XX of noncash well include expect results We assumptions to or reflect expected of which testing billion million. the development as million be million approximately research expense, and you. amortization $XX between volumes. Thank and expense $XXX

the We'll Operator? for call questions. open up

our Instructions] first [Operator comes ahead. Raycroft Please And of Maury question from go Jefferies.

Hi. This for questions. is for my Strang Kevin Thanks Maury. on taking

on question Europe. First NGENLA in

switching on could that be doctor talk the there about last And hormone? by the and year-end? learned you've in to Could growth be there the you also, can two to sharing you from terms Just far so Ascendis acting profit appetite far launch that how away is from patient anything long then launches? of

talk for the about Thanks profit question. I'll So share. the

So projected things to quarter switch that that we sooner, the in and where are. happen Certainly happen next is current guided year. first expectations we've that expect but in can Europe, of our

As for the It's them. long switching far U.S beyond the hard launch, is quickly anywhere to happen adoption seems the products the that, under acting the in Ascendis we the happen form. as fairly going but to going and to so of think adoption be rapidly well see will the

Great, just effort. thanks. one the on cost follow-up And more reduction

COVID-XX final Can what then so going cost testing there forward this You where of in the do far your mentioned be goals? of context the paradigm, just $XXX talk you capacity And are about you million given reduction expect year. you will your sort

we talked Reach to going a So be it's the about effort. program, multiyear

to the million on already. Reach our for that And involvement said if to on know we've well don't you set We on say for. Elias, date? haven't any to going costs. to finalized haven't we our program $XXX XXXX in objective out is based But targets about go we've that to what the wanted program way we're I take words your

No, you're I right. think

go we're the think to automate to And I and to opportunities really beyond therefore, the expenses. we to us for aiming laboratories labor that ability reduce XXX. to of and flattening related go organization actually see the

that. I minimum But tell is million figured couldn't $XXX do have think and So can I a you we the we XXXX than until out. better

continue to as have so capacity And capacity, it relates adequate to COVID we now.

We're ability flex our needed where talked pretty when to we've it capacity current but dramatically come to it volumes, year, up scale we would brought need. we remember, back you As about quickly, have which was they this and down up, have could now. right should to staffed the from were earlier

So far …

I if flu ones previous no, CDC, different were aware a B were to it's of very -- projections we virus, quite season that be endemic may, be also, you will I also be this were that we I [indiscernible], persistent that think COVID A, high. from the the think predicted flu than will as no, know,

that in lot And of reviews of actually beginning test four one very the people a community. terms are in getting is developed quite the predicted demand, good the growing reception good in to of and point. a medical just tridemic and fast COVID, because offering, we RSV, So new of severe be flu winter in and next year a what of terms call a this

serious lot we're hopeful on costs, I'm cutting to highlight to, of course, way. with I in approach. that really area was revenues. themselves. add This regard, some will pay was increasing that that new two-pronged applying the point that a talent, off reference, mentioned it's attention course, viral I'll that ventures. devoting with in but is a is a a this going One, very neglect, to regard one that And of good of to was just And not and an emphasis

you Thank Great. very much.

go Our Jeffrey ahead. Cohen of comes Please S. next Thalmann Ladenburg from question Company Incorporated.

Hi, how're Adam, Dr. Dr. Frost, you? and Zerhouni

Doing good, Jeff.

Good. Thanks,

Jeff. Hi,

you as So throughout? the just they're bit. little and territories, I these or as general reimbursement firstly, end. launching from few as to, far clarity, as share go a questions information could our which in back some by Do a of far your we pricing guess, if have

than any specific get don't guidance pricing publicly we otherwise. available So other what's

it's revenue cost Okay, got of your it. convenience? helpful. possible to don't if revenue I is but and at service know handy, our Thanks. cost of And it That's product get

queue be Yes, to we'll file now, that minute get Jeff. you. should on The any

as when Dr. then, in lastly, own interesting kind I health I Aspira Women's Super. a building as end? you arrangement of had or there you of wanted your out tests for that at you're of far tests guess And us, to any your I as hear the color the about talked some initiatives us that an as that Frost, test you little with ventures. side. saw about on how developing Could more far more had licensing give and new BRL

all above. of say would I the

Got it.

the any outlook any And readout any specific commentary Okay. then, lastly, from or on quarter or QX on going XK XK? forward from

that It's of a Elias to payers But very on think has doing working perhaps it's drain seeing we're identifying now again is certainly growth And last been very year. continue job I a and more initiatives moving that ahead good doing that of board. optimistic bring well. we're team shell accelerate. will the with

our taking Super. Thanks Okay, for questions.

Jeff. Thanks,

next comes Tenthoff Piper ahead. of Please go from Our question Sandler. Edward

Appreciate update. Great. the really efforts much. about I'm excited Thank with very new the ModeX. you

and this maybe what because a you Thank on on of programs disease? specific is keep partnering on, You for more mentioned to up, you. what ultimately partners? externally? would internally prioritize ultimately sort of maybe opportunities. or develop infectious like focus keep can sort How you and where will either but internally a little I'm bit Or the complexity there with and to seek decide like, making so there get Are you areas oncology, much going into detail of

question. question. the important for you Very Thank

disease can portfolio you mononucleosis, but of our composed received have segment. lot interest the as Whereas EBV the our the We leading we candidate and The EBV. do also as is presented that's obviously. a important is is to portfolio vaccine a know, various in now, infectious of thing venues. And advanced most strategic segments on that is first a cancer sclerosis. we incoming two And vaccine part, interest consideration is and have multiple quite

interest. attracted being So we that's flu market of the and has that huge time, have lot are prototypes other a same a that At tested.

and and as HIV as collaborations large vaccines we think trials. COVID, near-term have of diseases like well for And quite bit in large, potential that so viral a potential we

are terms based approach to multivalent, In that at we of at actually to not very out oncology, using we targets multi-specific combinations, look on knowledge the ability really in novel unique looking have. our the but unknown known targets, test

be to Dr. Our in-house, we mentioned preference the multi-specific platform not to would Frost because those potential, to multivalent partner keep has enormous as that that think you.

maybe So to to of half a through ability partnering, keep little a that out trying licensing to you we're disease, portfolio our helps the OPKO. if will, you. know and don't if finance I infectious the for bit us internal

you. Thank color. helpful Super

go Our Please next comes question from [indiscernible]. ahead.

thanks and questions. for the afternoon Good taking

you next I the call, question that the that [indiscernible] you highlight that first this is R&D some year? the mentioned Is year remember in or ModeX. schedule The to for last made Day in things doing still

have that schedule. do. we We with others the need we is Yes, to still finalize things that do need in to in of a planning discussions terms few it still it. We're

do Day. or for JPMorgan aiming the or we're trying R&D either So something we're where JPMorgan. around to right December That's

what do will things detailed will a than mature. be little more it because think people more And be more I today. I will think can we it enjoy

before development in most question. But a to stage mentioned, more clinical even the one Maybe that earlier the guys vaccine, you you helpful. as maybe much complete are preclinical you In of That's great. to stage development clinical be terms stage? looking first early the stage partnering partnered, contemplate partnering of be in -- early, even likely out or opportunity. for partnering or Okay,

do Things quality the what’s depends for really and practical interest it we on going are have to of We partners. the both.

And we to that do stage need going, the go basically are attractive, of so we you find terms are are do steps it And we willing collaborations you alone, and other need have we'll of if are we -- we the before on way. pre-IND to, to working we all we’ve are the IND. it if to a manufacturing term

or our on it. So other. pressed one can the we're choice partner not can it own, We continue for we also

Okay.

trying to I'm I'm or is the not say. one other wedded what way to

is incomes, Understood And appreciate the a that. maybe fluctuate total look housekeeping question quarters. it the as we last one, seems the lot between at or and that revenues other

So how we, general, fit this about forward? shall going think number in

lumpy going in a because milestones bouncing payments as overall so come Yes, come just of well the that some through got deals milestone through. some that to number, it's our partnering we've be as

not your to we we'll and this factored related we we milestone year, the included, and payments going streams. to growth and [ph] didn't gross have talked in otherwise, [indiscernible] to we continue is to when what material, the good for in expect So what's that in we'll individually guidance a then model. out break early that And we about, give start -- you our consistency that to approvals to from those. until build royalty guys be But in base. included -- like got work the those number But what's reality on profit the Pfizer, guidance in become those

very thus far. That's and congrats the great. Okay, helpful progress all on

[indiscernible]. Thanks,

now this call over concluded. time, to question-and-answer Frost back turn I'll remarks. for the is Dr. closing the At Mr. session

Well, for participation and thank your you questions. excellent

which so end of projects Thank in year a products. you. more As you join why these the for you the on hope sometime here. end detailed said you dealing we're get research which to will to meeting, And of what I'll us near the we're give meet invite development better you can quarter, perhaps lot enthusiastic. feel to we and bit day there's the of first have be of can forthcoming. the in a in so we work understand fourth some in to a quarter can with going that more into that, chance a detail the about do What future, little session a for go the scientists some see, new Having and

The is for conference presentation. today's now you concluded. attending Thank

disconnect. now You may