OPKO Health (OPK) 27 Feb 242023 Q4 Earnings call transcript

Good day, and welcome to the OPKO Health Fourth Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

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

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

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

you was continued ability sale further therapy, billion in this hormone largest over we're progress XXXX. daily Good commercial the NGENLA XXXX world. injection was to in has market global XX optimistic NGENLA, us to we market. now penetrate expect long-acting worldwide, to the the for users by thank in joining the the growth in weekly hormone afternoon, a markets and $X.X the growth convert achievement FDA today. from and growing In for partner, and about Pfizer's our launched Pfizer, year of U.S., OPKO, significant approved our for XXXX,

into realization. the strides to unique to to nondilutive provide its clinic. strategy platform funding last to secure particular, These in advance year, advance ModeX commercial multi-specific made collaborations important biologics collaborations great in our executing its pipeline

announced Merck royalty to develop worldwide Specifically, and received and sizable for eligible virus. milestone March, candidate exclusive are We collaboration we a license and last payments. an upfront ModeX's vaccine Epstein-Barr payment against nanoparticle agreement with

was and a included Elias Authority, pathogens to health an deemed known September, contract from those novel that multi-specific available and Advanced diseases public develop initial contract may the will infectious to and In influenza. BARDA, be antibodies The prevent develop Biomedical to payment awarded against additional such more treat threats. ModeX to as provide Development detail to BARDA Research as multi-specific viral cause be other targeting multi-specific funding develop on antibodies COVID-XX, antibodies programs. viruses

with levels, RAYALDEE, further last patients Sales expecting that which treat our XX% RAYALDEE indicate may and [ this progress low power hormone grew drug of thyroid chronic we're chronic ] vitamin progression. elevated to D kidney We're disease and year, year. disease kidney data, slow gathering

Some obesity. treat of long-time once-weekly diabetes about enthusiasm and to our asking oxyntomodulin product my have Type for you been X

loss, lowering weight greater provided You'll appeared, serum levels. and loss. [ ] significant products a lowered of when weight Phase trial trial a AXc we which remember delayed completed and Phase had II cholesterol III successful that other achieving triglycerides We

which peptide decided great is bulky large ] peg to closer ours. to of is half-life to dose and increase [ administered, Noting of products, loss. the amount added increase the viscosity which of commercial limited these the at the to The glycol related we the and success base polyethylene weight have look maximum its injection, a our

molecule guarded of product. similar on preclinical size in We the evaluation which have now this PEG [ With those found market. of early for ], substitute we're our optimism, a stages to makes

and EirGen our to business, international FinTech Iberoamerica, all well. OPKO Switching are doing

to Health. Turning BioReference

enhance and structure cost our improve to hard revenue. worked has team Our

In expense new with better been tests, reimbursement. efforts, reduction customers larger has addition to and our growth insurance higher drive to segments value aiming BioReference in

returning are in I'll term. detail. Elias. this profitability over We to turn on more segment that the Elias to laser-focused With near overview, will And provide again,

and everyone. Phil, afternoon, good you, Thank

market, and significant therapy's NGENLA growth medication adherence. growth. eventful long-acting and last is easing As daily for And to This ] OPKO mentioned both week our the global next-generation major mentioned, of not in burden, in Health. be assisted year for we Phil was operating positioned of believe and markets, progressing anticipated annual administered quite is is pediatric launches a NGENLA this once segments as Phil, by all and [ drug especially the well, excess well XX%. for increases

an part indications, [ deficiency OPKO's adult But global These hormone $XXX payments trials. ] with additional in Pfizer, strategies as adult of clinical and for associated indication pediatric which underway approvals indications. growth pediatric are the our antilotoan other additional III application partnership for Phase currently registration million for in and milestone with are

study treatment prevention multi-specific which in COVID-XX, last remains evaluation Merck. of against for ModeX and we grant well clinical year success Therapeutics SARS-CoV-X known a recently, particular BARDA, with BARDA also as $XX with patients. I antibodies especially of an Most a immunocompromised initial fund secured truck our as through collaborations and Phil R&D securing million mentioned of Phase for [ to variants our for ], the

a the influenza. targeting provide multispecific million BARDA $XXX used be ]. [ and from for or developed as BARDA upon delivery production Additional for research antibodies flat available DNA milestones certain mRNA with the gene-based the such will vectors using quickly any body's more can program, emerging the very may viral develop of the And other to in to as part that funding be supplement phase pathogens processes of be protein platform methods multispecific of first based up achievement to hopefully natural antibodies

double-digit which with case, proteins, in potential license the EBV vaccine sales, program commercial ModeX's development million virus several announced nanoparticle-based payment is we with but upfront to This proteins, MDX-XXXX, antigens milestones vaccine, diseases. digit to, nanoparticle a against our the leverages in and truly $XXX.X platform from which on major million potential a to viral percentages. ranging of address royalties addition, In has received fact, We simultaneous and for X global the Epstein-Barr multivalent develop collaboration vaccine. Merck $XX the itself this enables platform, multiple in multiple against immunization major EBV single this scale

by market XXX,XXX adult Phase EBV start The over up of along Merck lifetime. on later this with sclerosis the trials clinical We're quite this Moreover, [ we virus. cases multiple with global affects and between studies, and opportunity ] association an during I to here expect year. there annually working large, IND Epstein-Barr as the their virus is to are XX% caused cancer population

We HIV. out an ModeX had our the antiviral To versus more require our antibody NIH the and an in therapy partnered we focused tri-specific round moving with candidate first-generation have for next-generation protection prevention patients and the molecule-based there with provide one. are believe pipeline, I of to tetraspecific antibody treatment need potent the unmet multispecific options for beyond Phase trial, we a success We've small who treatment previous therapies. a forward with develop and is that can long-acting on

programs. our lastly, immuno-oncology And

as leukemias [ well focus hard-to-treat as as methods such tumors and ]. Our solid liquid on tumors,

of system target simultaneously control several Our candidates better antibody activation. and can tumor intigens immune multispecific enable ] [

of program first tumors enter this tetraspecific Our to solid treat is to year. expected the laser half clinic the

segment year review like a was to turn closer profitability. XXXX transition our of get a Health. we via, the Diagnostics Diagnostics I'd for division to corner BioReference our Now turning to to as

you As reduce initiatives costs, our REACH and [indiscernible] know, we productivity. implemented to improve efficiency

segments for In to in expect by our of test reduced in was through proprietary or volumes headcount we've Urology American segments, XXXX. XKscore and ] oncology, for like the and as to and early testing various perform, guidelines repeat our for biopsy in continue headcount continued cancer higher-value included [ initial the health The stratification. prostate the X% follow-up example, after specialty urology parallel, detection XKscore these screening and our XXX has test. [ XXXX PSC risk wounds volume driving growth NCNN ] For we're Association test and primarily including we

bolster will expect year. levels continue In to that [ addition, of expansion insurance the this recent coverage ] we

GenPath continued been year. oncology products. over market made have in of panel the growth including to tests malignancy sustain launch the expanded will XXXX innovative an Other advances several GenPath new testing, the and introducing hematologic that

the also signed we've we with over XX Virginia new of example, signed have And accessions, the Oncology Group oncology like XXX in quarter XXXX fourth groups with accounts For major accessions. over oncology additional Oncology -- XX,XXX

[Audio gap]

starting in November.

these over the segment fourth results. expense to reduction next So will last improve made And narrowed financial and confident discuss in and great feel continue further to turn expect profitability loss in and to continue the BioReference build achievements revenue Logal to We now call that I efforts XXXX. our quarter to years. will we in few return growth, these sequentially. both summary, we Adam through financial Adam? our progress operating to this year, metrics Health

to Thank you, with $X.X segment, and as products, of of increased during from Further, payments increased revenue number third from our quarter the our for quarter. million revenue increased U.S. overall of pharmaceutical XXXX for due the of fourth resulting million. for fourth million businesses of and Elias. launch to the market XXXX. result from in the in quarter a Revenue payment million $XX.X period quarter profit Starting in million, RAYALDEE, the prescriptions Pfizer revenue price. including $XX a net related to improvements $XX.X of gross of comparable the the revenue The share Pharmaceuticals NGENLA, $X.X international includes catch-up reflecting by from global

well $XX our period for the million of reporting improvement profit development spending ModeX XX, expenses reflects the for quarter on Costs $X This included million credit share period. third compared R&D quarter launch tax for last partially XXXX for $XX compared Irish quarter loss for were fourth XXXX. to an development of expenses in [ as mentioned quarter our the for of the for our to $XX.X decreased $XX $XX.X occurred none of was Pfizer operating million I The fourth as of resulting million ] U.S. result, 'XX million, operating gross increase quarter, activities. the the results. by programs, activities and for XXXX, XXXX NGENLA amounts. the our loss from ended a the $XX.X fourth in quarter Research XXXX. December comparable and mid-August, million as As were delayed million And and was were a

related intangible and expenses the and respectively. million million $XX.X quarters, XXXX assets Xth to $XX.X for XXXX Amortization were

for QX our Moving partially for segment. offset COVID million with XXXX We the million lower change $XXX.X to XXXX by loss estimated for collections retention increased from segment approximately reflects well million, as the the to for This of to XXXX testing $XXX.X Diagnostics with $X.X primarily as of expenses collections included decline increased fourth quarter revenue severance Diagnostics in to costs of our million a and Costs change testing and related of programs our our period. compared as $XXX.X associated reported $X.X million million a to estimated employee $X.X to efforts return profitability. million as period. of $XXX.X volumes. Operating XXXX for nonrecurring well

Depreciation $X.X periods, for $X.X and and and million expense million XXXX XXXX respectively. amortization were the

consolidated to financial results. our Turning

For the investment of $X.XX per quarter, our for fourth quarter share, $XX.X $X.XX of mark-to-market XXXX quarter. to of noncash per an loss million reflecting XXXX in the for net GeneDx. loss of Net lower quarter million loss $XX.X operating a or $XX.X was XXXX XXXX, operating related compares loss or an losses for the share the million to we with $XX.X compared million fourth of reported which

were comment had like mature we XX, to to in the sheet balance early set X convertible convertible of completed on recently On debt. I'd debt briefly our that and issuances December our XXXX. refinancing

outstanding of OPKO. the the which raise and of We demand to a cash of X.X% long-term added our proceeds advisers by our of Frost, notes institutional reducing a buy a XX In the we approximately with to Our notes, were the strong from ] our which primarily to X.XX% were notes, stock, $XXX held issue X-year investors Dr. X% in common our took by and consultation million. X.X% to total new held rate of [ used million $XX our number balance at Shao shares million we and back advantage JPMorgan, Dr. interest sheet. institutions, and notes, and to chose investor coupon

of outstanding shares new in oversubscribed investors and OPKO. This note prominent ongoing $XX.X fund notes Our balance of identical the refinancing as holders approximately with financial group additional holders. development our company of X.XX% provided interest principal sheet, to cash the accrued number The activities. the X% and their million offering note terms our with impressive into exchanged reduced and an to brought was strengthened

existing and nondilutive of collaborations other anticipate under transactions with During the as BARDA our progresses. XXXX, potential cash year Merck, receipt payments we additional

As financial following we assumptions. look the following we're ahead, with guidance providing the

segment, NGENLA. not Global for of number share XXXX Pfizer, revenue Pharmaceuticals separately our profit our from are by GENOTROPIN, [ impact including there of from million. ] and sales reported payments For NGENLA. were product a sales has factors reported Pfizer that of as Pfizer of GENOTROPIN sales Enegin $XXX gross

However, prescription consistent globally by NGENLA we growth observed for reported and as Symphony. have IQVIA

growth. exchange will profitable such, for As million assume of may number NGENLA our Pharmaceutical anticipate estimate full that we ex GENOTROPIN continued year, and gross and foreign for globally. be which and although a will $XX for rate of share stable businesses, $XX allow we the million, impact profit our U.S. scenarios between a sales We

activities partially quarter trial. and increased to activities including and partially by our costs by NGENLA, our expect first to related agreement the of R&D the expenses complete first initiation of which substantially first the reflect XXXX down end ModeX our wind ongoing study clinical the funded immuno-oncology BARDA clinical the offset will operations the extension quarter. of efforts will programs, for through higher we for related of lower pediatric for related open-label CMC be our to Those to R&D

rationalizing we work test geographic segment, of the year. For breakeven to Elias as offerings. by and and our our are footprint outlined, of the XXXX profitability by the working to Diagnostics end align consolidating achieve our flow This cash the includes diligently business middle

As we our to and support expect to mix client result, cost go-forward appropriately strategy. improve a our structure

During cycle to events to the management during phase, already. occurred increase due by due volumes per slight core weather partially consistent average volume collection our several this initiatives, testing expect transition quarter we the with impact a first amount offset in revenue that patient

$XXX our activities, any $X cost to expect nonrecurring million cost expenses we million. considering result from Before that our and approximately to by restructuring sequentially may decline

gross from As for a total following and quarter revenue $XXX first between between million the $XXX million, services from and product of million million and sales between XXXX: result, the estimated we $X expect million; and revenue $XXX revenue $XX $XX payments million; between Pfizer revenues profit and $XXX million, of $XX the and other $XX inclusive $XX million share million million. between

timing R&D CMC ModeX dependent million, $XXX between We million expect $XX and programs and first quarter and and for be to $XXX of certain costs activities our amortization million, depreciation including million and between expenses $XX expense $XX for on the expense million.

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

our And Ladenburg. Cohen question Instructions] [Operator comes ahead. from Jeffrey go of Please first

share I guess, is XXX, approximately there? what the would the forma? regard debt first, currently, and your X.X% the be levels cash Adam, appropriate with instruments could -- you out pro then to just financials estimating count toward and So X% and what down we're recap of

Yes.

So cash. we million with ended the in year $XX

on million $XXX forma And so pro us you in the right, if count the $XXX convertible right put million, So million cash basis. about The over total got at just notes million, just $XX principal. pro in $XXX a share at in were that right additional you've would the... forma

as of Could should a you're offering far it. Got bit the to in would the global little perhaps status of Perfect. and we China with discuss about the and expect Alibaba X press on 'XX? that talk -- products release regard some what about during Okay. planning platform the you as

a Irish just I'm to by in China, our large sorry, made products and appears animals, nutritional company, and it The which are is -- there Spanish beginning. involved by for market for our products are company primarily and be

it. to not say there's else So about much

and Pfizer's what's it. provide X how any look and for as what to [ you and patients then year? coming transferring ] new costs weekly as the on Jayawi over and versus commentary or NGENLA to perhaps other from us, and could learned you've Got learned going what that the to lastly Okay. And far patients anticipated may

Jeff. off, start I'll

markets bit launching where the the what that the we've similar initially X with happening. launched the what seen from seen competitors the seen conversion in in mature Broadly, a earlier good, we've conversion steady to most growth market, happen, that of we've is I think U.S. I think in they are Pfizer globally. is

that continue Pfizer ] eventually [ enters Novo and to as market with as market enters if as accelerate We the products. expect their well the long-acting

we those the are expect and next to to happening, So XX conversions months. over accelerate the XX

where Okay. we lastly, growth. pricing-wise may strong or on like geographically that? you and then or Perfect. QX us had like identify it what It coming And for you're looks and should either from, some reality. sounds expecting be expect growth, they for Could demographically

you do go? So want Charlie, to

that. do Yes, happy to

we're with Reality growth of reasons [ for So brand. seeing a ] number the

obvious it pandemic, the the get to of of which abated slowed and force to is and into the into to the of the the promote passing patients our brand, clinics of get ability of of That year. adverse slowed beginning prescriptions. QX have clinics ability also of sales First as effects last seems get the to the

our more moving co-pays. sales that Part the low-income who Medicare D include force areas low subsidy Medicaid product would the have addition, patients. it is This now includes the sector. commercial This business patients much includes also In X co-pay. have at adept And of into the

main in growth the of So the drivers business. are these the

currently. seems Okay. like [ It it's a Got COVID it. mesh on trajectory, ] post

Okay.

I for does think that it us.

The of comes from next Maurice question Raycroft Jefferies.

and can pediatric if an I more label next about for you indications? steps setting for adult expansions was additional timing NGENLA talk wondering the

indication. pediatric we're the we're mentioned for the the as obviously, comments, basically, end towards adult with process Pfizer, III of to FDA. Yes, application And Phase I the quickly. in my our in in The indication, to put

next adult pediatrics the probably everything So and for timing-wise, if for next early year beginning the the end as year, well. probably of of year the

it. Got

more share heard on that that currently can GENOTROPIN. and to how I more profit correctly, sure to I just And for NGENLA million. that Pfizer, the what Is are there And wanted share is XXXX Okay. look right? And takes percent the wondering profit $XX million would as if make profit change provide guidance for this like? a with $XX share peak you market share details will from then

Sure.

the today, you're forecast sales. way the information or $XX year million correct, separately -- doesn't know based the to or on the we Pfizer is Maurice, NGENLA guide million, -- So right? out So so full GENOTROPIN $XX

anticipate internal have the we then our models to globally. the calculation. we tables that various we revenues be calculate up what using we're And our So come to to apply franchise with estimated

that we've into conservatism daily for So and modest uncertainty growth the NGENLA. would we got built for some with portion some expect on rates GENOTROPIN that

to had you've million, So million quarter, about we gross $XX in $XX payments. right? share in out fourth you quarter the third take profit got catch-up, million So the the if $X

kind when modest that So looks overall. of we're you forecasting gross what math share, that that think can the like about growth you profit see in

When franchise Pfizer at -- peak think peak, and so product and the is we has be NGENLA. I where at potential at hormone stated peak as stream. GENOTROPIN, think NGENLA total revenue a its for they the combination look the you substantial out the when whole, we growth think is could market when It's a of look the what

that to mid-XXs franchise. an be royalty in have We estimated on effective rate the

substantial we hit would So cash a that now peak. at peak, we see expect to it's growth the from flow, until pretty

question, maybe on last oxyntomodulin. helpful. it. Got And That's just

and is this does And for time path about to have something the rights clinical new partner a would this in-house lines there? going or what talk to And any you're keep out? look program? like could LeaderMed formulation you If development

definitive those respect more get questions, as you to to I soon it's we think of both talk early. back with to about. as something have We'll

Tenthoff question of next The Edward from Sandler. Piper comes

may. Two quick if I questions,

accounts them are they're just Pfizer other ]. with to respect to trying land NGENLA where Firstly, the of to [ is that basically grab GENOTROPIN level a point many just as high really get at pushing versus over at is and the a as into clients terms GENOTROPIN marketing? possible? Or in differences and What it converting this going

to that And Diagnostics for Diagnostic is as business segment/products, potentially to the ultimately of see level, how then the part forward? plan of the for going Diagnostic still have breakeven, or some Phil, BioReference here question business do it, to high being you and OPKO monetize keep Pharma really the this returns you second as other in

who terms we foremost, the interest know realize For creating those shareholders and best first me, value. in in do of you of will you that, always of the what's

be inherent But the if around So we're now. at particular that moment, that I turning time, at certainly clear that more losing than it value very our highest a to approach that X although in seems consider point we'll an as we books seriously. money, asset. asset advisable, don't on is, an have that it's about specific want optimistic right

so And Sure. we're that. of very mindful

And on of marketing weekly then growth the sort [ on ]. long-acting the the and more little competition or and common a bit

Yes.

obviously, is charge Pfizer leading the the on efforts. So commercial

very other think in think for near the in plans. they're and the their suggesting U.S. they've strong share the substantial Europe we take access space you they're market themselves and We number right? countries is the where with going the growth. and penetration a currently, as well. In market, successful throughout there's or share market, well conversion team are that to alone think ahead to So positioned as So be job market there meaningful hormone done of when great which they where continued of the commercially they to They've forcing U.S. well. as conversion And is the themselves. about they're in a had a number they've the got is well growth where substantial where buy go marketing by a Japanese term market,

Pfizer for answer. going as think a far As that, they're about go that's I to question how to

next from Co. & H.C. of Chen Yi Wainright The comes question

Hello?

can We now. hear you Yi. Hey,

Sorry about that.

that potential OPKO affect how potential you revenue environment market in And the XXXX? the and storefront Alibaba. [indiscernible]? can what could market regarding Can is prospects And target? in your economic the So contribution talk is the about current size

animals is sold They to products unit. by have successful they beginning the well product done have that has the line a company to they're a products, as to This fact, manufacture our expand We that and continue expand France, by is geographically. matter and intention so approached a were into very that as successful, that we And now. the be interest are in a are we let thinking Alibaba said, where partnership of because It's now them because that's China with in that have in tremendous Alibaba. why and And willing getting launched. we just might products And them such distribute through China. pet develop not? of Spanish we to is every

too a for So early situation. much It's is about more it's say that products our to market the by sold size wait-and-see Alibaba.

So right? strictly on are products stuff? products, There health human animal no offered this

the there's health and a that veterinary products platform. human eventually on will So of go combination

Right.

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

Well, you we'd session. results. be we quarter with thank like we participating report today's hope certainly to us you. in [indiscernible] And for Thank first the when again

today's you presentation, has you may conference Thank disconnect. now for attending and now concluded. The