Multidisciplinary biomed company Opko Health Inc. (NYSE: OPK; TASE: OPK) today reported $276 million in revenue in the fourth quarter of 2016, the same as in the corresponding quarter of 2015. Its operating loss in the quarter totaled $50 million, and its net loss was $13 million.
Opko's revenue climbed 140% to $1.2 billion in 2016. The BioReference chain of laboratories it acquired last year accounted for $1 billion of that, meaning that the company's revenue from other activities was halved, leaving the laboratories as the company's main operational activity. Opko's net 2016 loss totaled $25.1 million, and the company had $160 million in cash.
Opko launched the company's leading product, Rayaldee, delayed-release vitamin D designed specifically for dialysis patients, in November. Opko assigned 50 salespeople to the launch, which it financed with cash flow from BioReference laboratories, according to the company. The company claims that insurance companies are already indemnifying 60% of US health policyholders for Rayaldee, and that such a high rate indicates the possibility of a good launch. It did not say, however, whether the price granted for the product by insurance companies was the same high price that the company expects to get for its product. Opko plans to bring four more products for dialysis patients to market in the coming years, including an improved version of Rayaldee and a vitamin D deficiency test.
Disappointment with growth hormone therapy
Opko's kScore4 product for testing the aggressiveness of prostate cancer is considered the leader in the company's portfolio, and the main reason for its acquisition of the BioReference laboratories. According to the company, this product achieved "modest growth" this year. There is no information about revenue from the product, which is currently included in the laboratories segment.
Opko chairman and CEO Dr. Phillip Frost cited what he believed were the interesting achievements in 2016. He first mentioned the Rayaldee launch, and then the acquisition of Transition Therapeutics for $60 million in Opko shares, the company's usual method payment for its acquisitions. The acquired company has two interesting products: a product for treatment of diabetes and obesity (similar to a product developed by Opko subsidiary Prolor, but more advanced), and a drug affecting the level of testosterone. This second product was planned for a different indication, but after going over the information, the company decided to develop it for treatment of benign prostate tumors.
One disappointment for the company in 2016 was the failure of its trial for delayed release growth hormone therapy in adults. In the company's conference call, executive VP administration Steven Rubin said that Opko would consider submitting a reanalysis of the results to the US Food and Drug Administration (FDA), and that it was working on this submission with Pfizer, its partner in developing the product. Opko also began a trial of the product on children.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 2, 2017
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