OPKO Health (OPK) 23 Feb 232022 Q4 Earnings call transcript

Good day, and welcome to the OPKO Health Fourth Quarter 2022 Financial Results Conference Call. [Operator Instructions].

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

Thank you, operator, and good afternoon. with Briggs Yvonne is LHA. This for Thank OPKO call discuss today's financial you results XXXX. all Health's of for to quarter joining the fourth this risks be expected considered remind statements and the as than to company's that be forward-looking that of call subject could will during affect to statements will like other uncertainties by results. fact I'd historical such, management and you made any materially

the is report Those forward-looking the filings date February various obligation Form include, events undertakes only live forward-looking limitation, no risks after of Except statements SEC the year annual without or the filed revise circumstances SEC law, of broadcast the XXXX, including in for call XX, reports. the XX, update or to OPKO accurate The that to today, and on reflect any the as information subsequently as described XX-K company's December conference of date XXXX. statements required ended time-sensitive contains call. this in by

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

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

launched priority XX year. Japan, standard the daily and the growth have [Technical burden the a product Pfizer expects ease Difficulty] of the all and NGENLA markets has developed patient's in partner, Pfizer. is our Somatrogon underway end hormone Germany the once-weekly countries, injectable commercial launched are U.K. by in by our versus to including product injections. to

on his growth share quarterly mentioned review to payments prepared our and royalty in significant Adam is starting and NGENLA profit last sales post remarks. I call, will As sequential OPKO's

progress process the NGENLA FDA's in through making Pfizer believe U.S. the advance regulatory the address and is We to comments.

they as regulatory by provide commercialize in further globally We countries. NGENLA continue on in its the and U.S. commitment progress to stand their status Pfizer work to we'll and commercial foreign with updates

performance progress and driving segments, Laboratories arrangements. the novel while As for the is Elias business. by significant In clinical women's rightsizing on business, and provide reducing is commentary business. expanding portfolio costs on details diagnostics parallel, BioReference making focusing testing urology and growth further innovation it's in including partnership oncology, BRL following health pharmaceutical will the lab our its specialty with his and on

overview, the Elias. brief that I turn will With now call to Elias? over

everyone. Yes. Thanks, Phil, and good afternoon,

I forward think to XXXX eventful few in significant it XXXX milestones has horizon. quite looking I'm OPKO for with and a progress the further an on been

significant enhancing start provides this to optimizes that we plug-and-play, with patents ModeX first, progress by go total proprietary competitive believe made me pharmaceutical manufacturing as Therapeutics platform filed. where platform to division multi-specific of antibodies have our that a multi-specific with We over business flexibilities and up technologies. MSTAR technologies is advantage other STEALTH and simplicity. a X provide These We a known X flexible X. functionality Let beyond targets adaptive believe the at MSTAR

assets, with stages clinical and X X In X I late containing we on to portfolio the have enter Phase by in in stages XXXX of beginning end of planned now our the XXXX. X focused of parallel, significantly which the advancing X clinic of in or is preclinical

is treatments are Epstein–Barr cause of also X% virus' development population continue in a vaccine. prevalence, for associated their For vaccines infects life-threatening the during XX% and infectious the its to diseases, about disease, of first-in-class EBV. advance It up EBV cases is adult there nanoparticle and or cancer the of causing infectious role the no Despite virus we worldwide. global of with leading all mononucleosis. FDA-approved currently lifetime

EBV protection approach for infectious X prevention. vaccine vaccine it's but ultimately The be EBV intended platform target to and EBV This against proteins. mononucleosis, initial Burkitt to biologics protect multi-targeted vaccines papillomavirus complete Very for against HPV provide cancers. innovative human like carcinoma, cervical improves certain this much cancer leverages gastric infection. and will upon for ModeX's other cancer. indication Our major associated holds with previous is potential that nasopharyngeal the lymphoma, efforts

Epstein–Barr each the prevent be with indicated also to with be virus. associated this associated it potentially, multiple believed over XXX,XXX So for sclerosis has could to And year potential virus. now the malignancies disease,

investigate cause compliance. the in a suppress candidates decrease secondary also received tetra-specific with decrease preclinical could and funding as also therapy that potentially multispecific treatment. to complications has well HIV. effects the multiple potency NIH antibodies from clinical Phase potential such treat for to X trials replication I antiretroviral and therapeutic virus interruption increased tri We target tri-specific drug candidate hope continuous We have of HIV to that whose treatments, for a Such side after drug need the as

in neutralize variants have testing, virus and the of by known multispecific DARPA. partially help may all virus. the funded late continued In limit of These circulating antibodies we SARS-CoV-X, addition, spread to several preclinical the candidates potently

of early X solid liquid clinic multifunctional on focused complication tumors of subjects the oncology, programs There long X and multi-specific such autoimmune in In using such such on entering in goal also whether or diabetes, we diseases. used particularly immunity, to are patients focused a in We're is stage antibodies be interested preclinical COVID, XXXX. cancer, weakened interest the an could These as have protect oncology exploring with antibodies with the antibodies or asthma hard-to-treat tumors. in to treat COVID infections. with

ModeX a Therapy and antibody technology. we visible our Antibodies, make busy ADCs the world Efficacy and schedule scientific at Safety to Bispecific meetings. to regarding with Combination worked presenting several also of presented more outside X We've the conference January, at In specific

multi-specific and titled and molecular presented biologicals biology T CDX cells. Keystone inhibiting targeting poster via the cancer. will On presenting on the March, In cells and at be treatment growth participated and for breast cancer HERX we month, cellular infections the Symposia of a XXnd of festival team our targeting antibody this the in of trispecific

Taken and balance needs together, for the from in change innovative March R&D and pressing more therapeutics our viral unmet XX, cancer present offering ModeX complete for fundamental represents disease prevention to diagnostics to we the direction a treatment. view a OPKO, Therapeutics portfolio on of solutions will shifting XXXX. and And

[indiscernible] of is pharmaceutical We're commercial secondary past exploring also few months the to addition, RAYALDEE as new response the well the our growth. and FDA of division exploring a accelerate strategic in strategic of In renal hyperthyroidism for disease its correction chronic programs during supported advance to approval disease advance partnerships have complication to major partnerships the the to the somatrogon. working Pfizer of Alzheimer's and for and

Now turn to diagnostics I'd to segment our and like by discussed laboratories. reference

back return profitability business Our continued to COVID. priority post to is this

and we reducing costs reached goal eliminating aggressively such, been stated As February have of XXXX. million expenses $XXX have approximately our annualized since of

to We of of organization, Reach productivity in part which touched which is million XXXX. has costs than X% expected reduce targeting additional or designed will our and spend $XX improve continue an more reductions the and about initiative, every our we're of

to virtually our products patient new post continue our redeployment centers XX cycle XX and closed pursuing As call, including management, I aspect centers of and we in excellence, patient refocusing so of less mentioned COVID geographic while every on higher-margin productive XXXX. on service business, including focus efficiencies last our far with operational service this revenue on centers opened in

continue we outperform. testing specialty core testing segments business, stabilize to As our our higher-margin

segments health, urology oncology, women's As the these to Phil bringing by continuing portfolio. on focused and in include these segments growth mentioned, ventures. to We're innovation special drive

For in genomics continues with example, within be cancer area a GenPath strong oncology, for new several to offerings XXXX. growth

large centers and entered the such as quarter, partnerships of into fourth the University as Rochester University examples. academic with During we Pittsburgh of

patients NGS received we a During new testing. for previously advanced service the quarter, launched that also OnkoSight

reduced Let specific set me order a about XX. genetic Typically, markers explain. cancer type, of each to oncologists

to their genetic However, specific developed set cancer that better in pharma to of or is or beyond our By genetic relevant BioReference resequencing therapy as to of reanalysis new an their revenues. panels analyze full biotech panel, physicians reanalyzing it of who need abnormalities. inclusion found relevant can in and The by look able comprehensive offered need assess has increased software without this all for company area also small guide trials great simultaneously analytical options. the oncologists a out, and data clinical help with either also technology the we guide biology therapy enables the XXX for cancer to interest patients the avenue

centers, health on Our has expanded sales new who commercial and will addition X oncology the of offering large of our as X as XXXX, genomics with fourth well molecular roles, focus the cancer oncology during new large cancer in oncology sales territories quarter practices. systems footprint

have expanded the commercial very high XXXX sales points our testing minimal we launching call by the the XXXX, be will we on residual team selling also territories in training early OnkoSight new expanding portfolio new well all In exclude as growth XKscore testing. with in following disease and urology the entire team expanded their for this X portfolio to and incentivizing In as markets. for test urology, oncologists demand

urology the applications to for XXXX fourth which promising growth. brought the fast have new During a team XX on for start quarter, accounts

we expand build practice women's strong our to continue we In opportunities relationships meaningful continue look to to as with XXXX. large forward which health, groups, create and

a differentiate lab XXXX, we [indiscernible] early be the follow-ups. and a of to virus this our than then testing, could who or PLUS high dangerous which patients test. intervention to rather viruses will are and to HPV and BioReference for with dysplasia cervical require risk will new offering. but terms will cytology development or intervention test at lead and versus HPV identify dysplasia innovation, the can are the therefore, some launching In be first Typically, in of yearly who applies reference who allows have women national this of CINtec cancer biyearly negative the active physicians need CINtec approach. positive watch-versus-wait whether presence

we and In will of clinical business with we continue their terms to Medical XXXX. services, quarter expand head first growth into the partnership lead Center as our services Westchester which to and efforts commencing on our of the outreach hospital are

establishing in continue to offices in bringing we the new network quarter Additionally, XXXX as the new Northeast. relationships, on as well urgent our the sector, in care expand urgent XX focus existing expanding care of a fourth our

very testing In panel. with we way launch in viral This COVID potential treat. they was A respiratory X launched to B, swab an a this and order labs easy new received well common national the one virus identify needed and of XXXX, comprehensive of marketplace of diseases panel to that first the the provided RSV. were included fall for clients which This QX, the for as we and flu to most type

new business our clinical of XXXX on on our focused also retention We've team, for and business expanded roles focused hospital and our current team with expanded attrition. minimizing

the In to reduction to following second as vision in to growth drastic for will I'm revenues that possible BioReference industry. as and And by is apparent BRL hopeful be to third efforts COVID quarter. in move do soon XXXX. very experienced summary, entire so during our back these the profitable the you

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

the Elias. million December Starting an ended months development pharmaceuticals XXXX. of NGENLA amortization segment. our $XX.X Research Total costs compared from segment of year consistent earlier period million, of for you, losses with reflects fourth Thank pharmaceutical is Revenues the $X.X quarter were quarter operating which $XX.X XX, were in were fourth increase including for expenses Operating was expenses $XX.X our loss million noncash X amortization. our of $XX approval the an and increase million, the the intangible the loss quarter and quarter. million million XXXX intangible prior the the The to from comparable of XXXX, XXXX. of upon for of XXXX. $XX.X in for assets with

segment. our the market decline of testing this million QX reported to at-home reflects volumes XXXX the to year. $XXX.X of We for shifted period. compared Moving XXXX for lower million revenue diagnostics testing earlier rapid This as to $XXX.X COVID

our reduced this execute program to program, sequential reduction over benefits quarter. We've from month Elias continue in Reach by We run realized as $XXX rate expense each million during and the expense our mentioned.

profitable that we As mentioned, programs we realize return BioReference growth to to have a growth. Elias number half in the will near- help first identified of XXXX, expect which of and medium-term

of for which of sequential Operating reported of loss XXXX million. our quarter, improvement $XX.X approximately quarter we the the for was an million In loss $XX.X segment reflects fourth $XX.X approximately a diagnostics million. operating and

the loss Turning tax of million to reflecting quarter. included fourth consolidated to results in formerly the net XXXX offset loss quarter equity the operating the a a of $XX operating financial $XX.X value share or or an million $X.XX an We loss quarter. million mark-to-market $XX.X decline by the partially SemaX, of holdings in loss per our income Net compares for a of to of reported million, $XX.X for of $XX.X XXXX for the period. GeneDx, million. $XX.X This in million share QX of noncash $X.XX adjustment compared XXXX loss net resulting benefit per for

we are providing assumptions. ahead, As quarter following financial we with gearing at the look guidance the

our For is because million. result forecast. NGENLA U.S. of have assumed would pharmaceuticals we segment, the of timing in not payment Approval milestone approval certain, a the $XX our not FDA by in the

region share. not for gross the assumed also will profit have U.S. We the NGENLA in be

gross in share EU milestone receive first a in have assumed currently pricing XXXX. determinations that a triggering XXXX half thereby place. territories likely will in beginning will the launch Vifor royalty to RAYALDEE also We in and million the We region shift the from additional $X structure EU assume of QX payment profit will

stable a ex rate months. assume business we as our last We a FX XX% on the have impact for over XX U.S. business seen pharmaceutical our

decline assume diagnostics and stronger COVID testing. continue higher-margin oncology, testing core have will modest growth of specialty assumed and segment, we we lines health women's our XXXX, in volumes with our throughout For volumes testing in urology growth to

and to in outlined, We've Reach additional million quarter spend. providing to during spending and X% variables our also full delivering of look have more our significant first our XXXX savings of plans assumed quarter cost in impact or revenue outlook limited the an program, our $XX first to our forward we total Due than diagnostic the additional the of conference call. updates

$XX revenue of services expect $XXX million. revenue $XX quarter other $XXX total million; $XXX XXXX, sales between revenues first $X million from and revenue from following: $XXX million between product and between million we million and and million, the the For $XX between million and with

amortization to be million XXXX and million million We and $XXX and QX expenses of million. million including $XX expense costs $XX between expect R&D expense and between depreciation $XXX $XX and

expect licensing for As X Elias non-dilutive described. we X programs enter of our progress at that XXXX, into transaction we early-stage through least to

our in R&D available new and resources. We investments will manage our cash to programs commercial initiatives

our open concludes Thank Operator? That remarks. let's your call for attention. And now questions. prepared the you operator, for

[Operator Instructions].

comes Raycroft with from Maury question Jefferies. The first

there update? Maury. resolution for on this sort would way? a this either one the then update. And could what what This can update I drivers could had any Or say likely time midyear just status could be lines Pfizer? the a first you of year granularity is potential expect some Kevin we of about a on behind timing, on Congrats a be from somatrogon. Is are this there? And be on it update? And

expect communications do around of definitive We Rubin. Steve is FDA some This from NGENLA. form the

but or that we point. but So definitive obviously at hoping will be, a that to be midyear, yes by guarantee for that do I no when can't expect

for question quick a then Adam. And Great. Okay.

to mentioned is any I and gating in shift? on profit And be when there Europe. -- gross to believe the you that are there that You share could XXXX, expect I to think factors granularity what shift

-- so X what the Kevin, get gross markets. yes, is the we -- additional move region requires for share to expect in in to us for profit pricing to major European

guided that this expected the -- gross QX the we to We've launch year. share. in half this the We Germany. year There's them territory have other are in major of to pricing profit to first markets in shift for expect and

regard this pipeline, of you're update Okay. when that there maybe to And potentially just or in Elias deals that just and might the a on types make year? see looking for the an we last ModeX Great. one partnerships

lot for And on of the it terms So incoming interest, had vaccine. the as each portfolio. well multispecific in a We've depends of as product. both the antibodies

X So complete or we're half. in hopefully, this the X active conversations. I see first in hope to transactions maybe year,

dominant and and be The is develop will valuable. to collaborations depending this In resources with more other and some very, are structure cash we upon for also because they're royalties, attempt long-term type words, we're is it our looking transaction products the them scope of of variable pretty keep looking of But that for. very the can collaboration. milestones the own upfront plus Others classic.

next Cohen The & Ladenburg from Company. comes question Jeffrey Thalmann with

better thought, start, the commentary on So balancing any we to speaking, basis? I any guess pull-through? Adam, margins, on looks generally little than like you're which a were It linear a back

Yes.

impact So during there's QX. a its obviously, couple biggest had that of the Reach program things

and reductions we of So the expected quarter see. exits we QX saw full that to a

that So of was the one drivers.

commercialization China our the that We million pharmaceutical activities in on are a development from for $X.X partner RAYALDEE. business the also received or side Chinese our of payment for ongoing

So Jeff. drivers, main X the those are

Got what further facilities, urgent about could size next, you located, it. this network where Elias, care facility and And as Okay. they're looks as talk I typical of a like guess scope. a number the little far and

service the about hear patient your talking I You're question. centers? could

Yes.

Okay.

we full system. PSC will, really we're either the And draws minimum then day. what position, also located not starting I what expenses is we XX there that and did, in own needed XX just we whereby the optimal And totality you of analysis a you very if clients, really think is on that did to see our to investment, the XX which requires, displaced a attract can So promising we some or ones revenue locations not opened a productivity be our what of looked you closed. the as volume each but that do that return in to some were a at that found of when are

to and will, redeployment increase that in revenue if to as we be you draws, for reimbursement know, the positive you line. very With the investment, then expect

the that? on OnkoSight little about And could flows and the then money a the And how talk bit more testing? Okay. are Got payers it. you

GenPath with an at team approach the excellent the full to gene sequencing. did So their job

XXX is with they industry turnaround so that do X best to all And X And to are basically in days. able the tests the time run. X

codes know, may But CPT patient specific have, as colon are the or cancer. breast to of you each that X the cancer type -- cancer

the oncologist -- the requires And typically, reduce oncologist so to treating that.

goes However, are in be maybe on, so other be second whether it as or active readjusting the may tumor, therapy, a the tumor. and for first on, what that pathways line, really need solid understanding there line tumor liquid patient

back figuring in demand minimal the understanding and the or going is biology if there out So there two, residual is One disease a is X areas. better cancer; of for the not.

X genetic have developed we oncologist is we to by clinical in say in others. back really large for But demand , the whole it and that So -- what are approaches. We to highest biotech look the companies oncology that and want the we One we what XXX participate for companies patient. looking that are trials, the say gene oncology like software the but and to inform at is for trials abnormalities we U.S. oncology know found particular set, for. the or is pharma the want to practices the

developed And are a put today of place. makeup of the And what the we this so in genetic the as patient therapies is function many, many harbors. that cancer

I our And to residual to launch are full disease test, clear. now the going oncology. which will minimal we complement hope that's offering

And where I will What And heard helpful. be? then will complete very that lastly, that analysis. about be? a comment March XX, that's the portfolio Yes,

preparing there. respond, Gary he's let I'll

will virtual are And in. is the It we event. XX and in the on have at as Day we'll terms This be March providing Nabel. specifics Yes. X R&D planning in a to logging afternoon, of be Gary the

solid the starting to you'll evolving hear what you'll portfolio, hear the antibodies, that about liquid is At time, multi-specific tumors. tumors, applications their with

addition disease work will emerging portfolio, on some also pathogens. We other infectious the SARS-CoV-X in that, and HIV, to cover

the future. described, what as finally, EBV status and what programs is the of the prospects then are the And vaccine, Elias the for

the diseases. we're forward to excitement variety offer new our portfolio sharing So for really looking our of and really that about the technologies a advantages

one beginning allow is an and pretty of our IND me, mean vaccine portfolio of the the of as the EBV year of the are next well. It's programs is to add-on, I end that if clinic you those by molecules approval. advanced year, much enter the Gary, through as most -- likely going last the Just in stages

with comes question Tenthoff from The Edward Piper Sandler. next

next looking ultimate at start how of market to you you has do NGENLA update very be you head a And U.S. you Are the is do the much really Thank competition Day for SKYTROFA? setback and gotten? this share Great. think overseas question of How that might ultimate to guess for doing? and the to a do much the is competition delay my seeing in month. respect think the forward SKYTROFA of terms how point really just I has in from R&D that the much here in U.S. in with

sure off, will and I'm weigh It's Adam. in. I'll start others

that right So long-acting at in a few well. don't outside SKYTROFA or Japanese that Pfizer hormones has there of the had head the region, for Europe, start as Japanese markets growth U.S. we expect market enter a now, In least is to years. on

the second SKYTROFA market. think I they've European launched be until of won't this in year the half --

is of to market. there Pfizer that has able progress deal in been good make So that a

impacted As landscapes which into SKYTROFA's far have Payer it's -- going, the are launch. a as may delay all market, big there's new entrants market. for is is which challenging the -- U.S.

they So the once launch U.S. positioned we Pfizer well is have in do think approval to

Today, we with players competitive expect in to market. X it's market. it a daily fragmented So the be

X So put in X should competitors having us spot. or a good

I Adam. one Just thing, if more could,

as we an if there approval for FDA. setbacks, -- and is addition get that asked, you is or to the that important. In upside hopefully, element And is the when,

decrease Our sites somatrogon because in with will as keeping we we're as open approval of extensions significantly finalized expenses long haven't the R&D that.

will, numbers that eventually. you into is don't think the Adam maybe and taken account if sheet, give the I can balance the in of help also will that So program. you

Company. Jen comes question Yale from with The & Laidlaw next

year. guys My over more provide sales start later NGENLA you or figures Europe, in those colors. Do is Pfizer territories we first anticipate will terms to of and in either provide this question you sharing to have some selling profit a

know their numbers. what Pfizer NGENLA's to split I plans out don't revenue are So --

becomes OPKO, royalty potentially profit from when the those provide to overall receiving would the wouldn't we're out we financials So it that we break income material of it. share or

And launched point in priority color press there's this Could that all maybe we more the a on think I year. markets little you in bit terms what in question to this of release, markets a follow-up that is to this the mentioned priority be give statement?

It's would the pharmaceutical way markets, the I major define is it.

And some maybe Could question pre-COVID compare height last well Okay. as diagnostics terms sense groups. get of does the -- in COVID that the -- we is in the terms as here of of the to of sector to recently the the days headcount how days. from

of can X,XXX. answer the COVID, Yale peak I X,XXX. question that basically the of beginning At the we're at end 'XX, Today, Jen. of 'XX,

How prior that Okay. the to also to compare COVID? would

headcount, mentioned. the on still it X,XXX. in it, And was So we're as XXXX, Adam working same

just maybe -- sorry. And

Go ahead.

Just company to of to million profitability, the efficiencies. as hoping back we bring we another to $XX are achieve

from H.C. Wainwright. with The Yi comes next Chen question

first how disclosed you of royalty based have you have in quarter? clarify, sales on the somatrogon to just much received question, First

it separately. No. broken not have We out

Okay. Do point some you future? at that plan the in to do

Yes.

could once So number, Europe number share market online. the expect a this and in you royalty scheme profit based to could gross U.S. gross year the material shifting later becomes shifting on potential the the or happen profit which coming a

regarding the will this And of second be when resubmission, has there an it Pfizer half be this half -- first update whether year? year of could U.S. indicated or

dialogue year, provided half be regular haven't this approval, it a and we FDA has but they Pfizer to specific of when. first a exactly date. know with hope we to So

Okay.

on growth the this year. you Lastly, most recent volume first could And expect tests? for half revenue specifically of in the of you trends diagnostic segment do the whether could comment diagnostic resume non-COVID

essentially the XXXX business base And -- business we're that level as at said, of talking double-digit growth is as which what the on of is partnerships, come working main and women's same on. systems planning I low But going That's in also And health Adam core single, to in is growth actually range. specialty from exactly I'm X%, now. core described, it X%. the health testing, about the oncology, about the as large we're high urology, the

I would session. to to question-and-answer for Frost our turn closing any concludes Phillip conference over Dr. the back This remarks. like

Thank in your you interest OPKO. and your for questions for

and heard, of of questions we address in we There's progress in team you you've on of hope your with about United they FDA, And that what's in that fronts. the that great with Pfizer As course. way. forthcoming the a -- NGENLA. by interest, the can great were are the questions hope very the we FDA States that working be were raised agrees all interest sure working favorable think our And answered We are positive, us.

it of is And it it have but so the it to bring a BioReference work lot will think far business as diligently the the do, back business rest to as pointed concerned, we was to be. be out, working of we we're where with should and where

talk much doing we're working be increase our as are can far hard We about that the and revenues sure you on that product work is about And we're partners it, enthusiastic concerned. but the very didn't RAYALDEE as and to the well. so profitability,

we in as many the will R&D So and you participate with that as you the and hope discuss forward of March, and again to event good on I'll XXth the first quarter look have evening. with results. meeting a leave that you possible Thank of to you

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

may disconnect. You now