Incorporation or Organization)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	OPK	NASDAQ Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ý ~~YES~~ Yes ¨ NO

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Website, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). ý ~~YES~~ Yes ¨ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company”

(in Rule 12b-2 of the Exchange ~~Act) (Check one):~~



~~Large accelerated filer~~	x	~~Accelerated filer~~	¨
~~Non-accelerated filer~~	¨ ~~(Do not check if a smaller reporting company)~~	~~Smaller reporting company~~	¨
		~~Emerging growth company~~	¨

Table of Contents


Large accelerated filer	x	Accelerated filer	☐
Non-accelerated filer	¨	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): ¨☐ YES ý NO

As of ~~October 31, 2017~~,July 20, 2021, the registrant had ~~559,404,941~~681,162,619 shares of Common Stock outstanding.

This Quarterly Report on Form 10-Q contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as ~~amended.~~amended (the “Exchange Act”). Forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies or ~~prospects.~~prospects, including the potential impact of the COVID-19 pandemic on our businesses, operating results, cash flows and/or financial condition. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described below and in “Item 1A-Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2020, and described from time to time in our other ~~reports filed~~filings with the Securities and Exchange ~~Commission.~~Commission (the “SEC”). We do not undertake anany obligation to update forward-looking ~~statements.~~statements, except to the extent required by applicable law. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.

Risks and uncertainties, the occurrence of which could adversely affect our business, include the following:

•our business may be materially adversely affected by the coronavirus (COVID-19) pandemic, including the impact on our sales and operations from continued or increasing infection rates and potential declines in testing needs should infection rates decline;

•we have had a history of losses and may not generate sustained positive cash flow sufficient to fund our operations and research and development programs;

•our need for, and ability to obtain, additional financing when needed on favorable terms, or at all;

•adverse results in material litigation matters or governmental inquiries;

•the risks inherent in developing, obtaining regulatory approvals for and commercializing new, commercially viable and competitive products and treatments;

•our research and development activities may not result in commercially viable products;

•that earlier clinical results of effectiveness and safety may not be reproducible or indicative of future results;

•that we may fail to obtain regulatory approval for hGH-CTP (Somatrogon) or successfully commercialize ~~Rayaldee~~ ~~and hGH-CTP;~~

hGH-CTP (Somatrogon);

•that we may not generate or sustain profits or cash flow from our laboratory operations or substantial revenue from Rayaldee and our other pharmaceutical and diagnostic products;

•that currently available over-the-counter and prescription products, as well as products under development by others, may prove to be as or more effective than our products for the indications being studied;

~~our ability to build a successful pharmaceutical sales and marketing infrastructure;~~

•the performance of our third-party distribution partners, licensees and manufacturers over which we have limited control;

~~our success is dependent on the involvement and continued efforts of our Chairman and Chief Executive Officer;~~

•our ability to manage our growth and our expanded operations;

•increased competition, including price competition;

•changing relationships with ~~payers,~~payors, including the various state and multi-state ~~Blues~~ programs, suppliers and strategic partners;

•efforts by third-party payors to reduce utilization and reimbursement for clinical testing services;

•our ability to maintain reimbursement coverage for our products and services, including Rayaldee and the 4Kscore test;

•failure to timely or accurately bill and collect for our services;

~~failure in our~~•the information technology systems ~~including cybersecurity attacks~~that we rely on may be subject to unauthorized tampering, cyberattack or other data security ~~incidents;~~or privacy incidents that could impact our billing processes or disrupt our operations;

•failure to obtain and retain new clients and business partners, or a reduction in tests ordered or specimens submitted by existing clients;

•failure to establish, and perform to, appropriate quality standards to assure that the highest level of quality is observed in the performance of our testing services;

•failure to maintain the security of patient-related information;

•our ability to obtain and maintain intellectual property protection for our products;

•our ability to defend our intellectual property rights with respect to our products;

•our ability to operate our business without infringing the intellectual property rights of others;

•our ability to attract and retain key scientific and management personnel;

~~our need for, and ability~~•the risk that the carrying value of certain assets may exceed the fair value of the assets causing us to ~~obtain, additional financing;~~impair goodwill or other intangible assets;

~~adverse results in material litigation matters or governmental inquiries;~~

~~our ability to finance and successfully complete construction~~

Table of ~~a research, development and manufacturing center in Waterford, Ireland.~~Contents

PART I. FINANCIAL INFORMATION

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to the “Company”, “OPKO”, “we”, “our”, “ours”, and “us” refer to OPKO Health, Inc., a Delaware corporation, including our ~~wholly-owned~~consolidated subsidiaries.

Item 1. Financial Statements

The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

Table of Contents

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)


	June 30, 2021		December 31, 2020
ASSETS
Current assets:
Cash and cash equivalents	$	65,757	$	72,211

Accounts receivable, net	265,856		286,314
Inventory, net	134,722		132,341
Other current assets and prepaid expenses	47,627		32,313
Assets held for sale	33,067		0
Total current assets	547,029		523,179
Property, plant and equipment, net	106,652		140,554
Intangible assets, net	445,515		475,002
In-process research and development	590,200		590,200
Goodwill	677,360		680,602
Investments	8,945		15,731
Operating lease right-of-use assets	36,349		37,735
Other assets	9,600		10,060
Total assets	$	2,421,650	$	2,473,063
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	88,512	$	100,883
Accrued expenses	187,172		240,869
Current maturities of operating leases	10,102		9,028
Liabilities associated with assets held-for-sale	233		0
Current portion of lines of credit and notes payable	17,961		24,703
Total current liabilities	303,980		375,483
Operating lease liabilities	30,605		29,760
Convertible notes	183,198		221,989
Deferred tax liabilities	136,416		137,208
Other long-term liabilities, principally contract liabilities, contingent consideration and lines of credit	24,866		37,072
Total long-term liabilities	375,085		426,029
Total liabilities	679,065		801,512


Equity:


Common Stock - $0.01 par value, 1,000,000,000 shares authorized; 689,817,971 and 670,585,576 shares issued at June 30, 2021 and December 31, 2020, respectively	6,898		6,706
Treasury Stock - 8,655,082 and 549,907 shares at June 30, 2021 and December 31, 2020, respectively	(1,791)		(1,791)
Additional paid-in capital	3,214,351		3,152,694
Accumulated other comprehensive loss	(9,932)		(4,225)
Accumulated deficit	(1,466,941)		(1,481,833)


Total shareholders’ equity	1,742,585		1,671,551
Total liabilities and equity	$	2,421,650	$	2,473,063

The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

September 30, 2017 December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents $ 100,362
$ 168,733
Accounts receivable, net 233,916
220,284
Inventory, net 46,954
47,228
Other current assets and prepaid expenses 49,324
47,356
Total current assets 430,556
483,601
Property, plant and equipment, net 142,437
122,831
Intangible assets, net 714,552
763,976
In-process research and development 648,377
644,713
Goodwill 715,573
704,603
Investments 32,196
41,139
Other assets 38,299
5,756
Total assets $ 2,721,990
$ 2,766,619
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable $ 66,536
$ 53,360
Accrued expenses 176,300
197,955
Current portion of lines of credit and notes payable 16,112
11,981
Total current liabilities 258,948
263,296
2033 Senior Notes, net of discount 28,590
43,701
Deferred tax liabilities, net 118,799
165,331
Other long-term liabilities, principally deferred revenue, contingent consideration and line of credit 226,617
202,483
Total long-term liabilities 374,006
411,515
Total liabilities 632,954
674,811
Equity:
Common Stock - $0.01 par value, 750,000,000 shares authorized; 559,955,118 and 558,576,051
shares issued at September 30, 2017 and December 31, 2016, respectively 5,600
5,586
Treasury Stock - 549,907 and 586,760 shares at September 30, 2017 and December 31, 2016, respectively (1,791 ) (1,911 )
Additional paid-in capital 2,883,026
2,845,096
Accumulated other comprehensive loss (5,422 ) (27,009 )
Accumulated deficit (792,377 ) (729,954 )
Total shareholders’ equity 2,089,036
2,091,808
Total liabilities and equity $ 2,721,990
$ 2,766,619

Table of Contents

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)


	For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020
Revenues:
Revenue from services	$	397,197	$	250,971	$	904,149	$	421,811
Revenue from products	35,663		29,356		69,608		60,430
Revenue from transfer of intellectual property and other	9,548		20,880		13,816		30,433
Total revenues	442,408		301,207		987,573		512,674
Costs and expenses:
Cost of service revenue	267,807		144,794		607,235		267,680
Cost of product revenue	25,101		17,857		49,179		35,229

Selling, general and administrative	113,236		77,721		225,522		153,852
Research and development	18,222		17,608		37,537		39,369

Contingent consideration	(103)		1,111		(1,059)		251
Amortization of intangible assets	12,574		14,937		25,151		29,874

Total costs and expenses	436,837		274,028		943,565		526,255
Operating income (loss)	5,571		27,179		44,008		(13,581)
Other income and (expense), net:
Interest income	6		5		12		147
Interest expense	(4,887)		(5,474)		(10,282)		(10,970)
Fair value changes of derivative instruments, net	(272)		(13)		(711)		608
Other income (expense), net	(11,783)		18,223		(12,711)		5,890
Other income and (expense), net	(16,936)		12,741		(23,692)		(4,325)
Income (loss) before income taxes and investment losses	(11,365)		39,920		20,316		(17,906)
Income tax provision	(4,754)		(6,028)		(5,314)		(7,200)
Net income (loss) before investment losses	(16,119)		33,892		15,002		(25,106)
Loss from investments in investees	(67)		(189)		(110)		(323)
Net income (loss)	$	(16,186)	$	33,703	$	14,892	$	(25,429)






Income (loss) per share, basic and diluted:


Income (loss) per share	$	(0.03)	$	0.05	$	0.02	$	(0.04)

Weighted average common shares outstanding, basic and diluted	646,996,891		640,578,794		644,001,280		640,578,794

The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

For the three months ended September 30, For the nine months ended September 30,
2017 2016 2017 2016
Revenues:
Revenue from services $ 229,035
$ 259,025
$ 740,992
$ 777,559
Revenue from products 22,795
20,569
73,992
63,275
Revenue from transfer of intellectual property and other 11,665
18,441
58,819
105,338
Total revenues 263,495
298,035
873,803
946,172
Costs and expenses:
Cost of service revenue 135,203
138,554
419,070
417,121
Cost of product revenue 16,107
12,626
44,441
35,033
Selling, general and administrative 131,336
124,845
396,359
370,358
Research and development 32,329
24,424
90,944
83,594
Contingent consideration (11,213 ) 3,093
(4,475 ) 15,604
Amortization of intangible assets 18,023
18,116
53,904
47,337
Total costs and expenses 321,785
321,658
1,000,243
969,047
Operating loss (58,290 ) (23,623 ) (126,440 ) (22,875 )
Other income and (expense), net:
Interest income 249
163
634
341
Interest expense (1,840 ) (2,018 ) (4,771 ) (6,022 )
Fair value changes of derivative instruments, net (7,550 ) (5,701 ) 1,969
(5,889 )
Other income (expense), net 597
(2,972 ) 3,105
3,543
Other income and (expense), net (8,544 ) (10,528 ) 937
(8,027 )
Loss before income taxes and investment losses (66,834 ) (34,151 ) (125,503 ) (30,902 )
Income tax benefit 24,405
19,988
42,309
24,626
Net loss before investment losses (42,429 ) (14,163 ) (83,194 ) (6,276 )
Loss from investments in investees (4,013 ) (814 ) (11,771 ) (5,147 )
Net loss $ (46,442 ) $ (14,977 ) $ (94,965 ) $ (11,423 )
Loss per share, basic and diluted:
Loss per share $ (0.08 ) $ (0.03 ) $ (0.17 ) $ (0.02 )
Weighted average common shares outstanding, basic and diluted 559,405,309
552,229,266
559,065,232
548,550,641

Table of Contents

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~LOSS~~INCOME (LOSS)

(Unaudited)

(In thousands)


	For the three months ended June 30,				For the six months ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	(16,186)	$	33,703	$	14,892	$	(25,429)
Other comprehensive income (loss), net of tax:
Change in foreign currency translation and other comprehensive income (loss)	3,363		4,435		(5,707)		(3,682)




Comprehensive income (loss)	$	(12,823)	$	38,138	$	9,185	$	(29,111)

The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

For the three months ended September 30, For the nine months ended September 30,
2017 2016 2017 2016
Net loss $ (46,442 ) $ (14,977 ) $ (94,965 ) $ (11,423 )
Other comprehensive income (loss), net of tax:
Change in foreign currency translation and other comprehensive income (loss) 8,557
2,796
21,646
5,306
Available for sale investments:
Change in unrealized loss, net of tax (6 ) 449
(749 ) (2,955 )
Less: reclassification adjustments for losses included in net loss, net of tax 96
3,902
690
3,902
Comprehensive loss $ (37,795 ) $ (7,830 ) $ (73,378 ) $ (5,170 )

Table of Contents

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except share data)

For the three and six months ended June 30, 2021


	Common Stock		Treasury			Additional Paid-In Capital		Accumulated Other Comprehensive Income (loss)		Accumulated Deficit					Total
		Shares	Dollars		Shares							Dollars
Balance at March 31, 2021		670,703,076	$	6,707	(549,907)	$	(1,791)	$	3,155,648	$	(13,295)		$	(1,450,755)		$	1,696,514
Equity-based compensation expense		—	—		—	—		3,460		—			—			3,460
Exercise of Common Stock options and warrants		63,625	1		—	—		158		—			—			159

Conversion of 2025 convertible notes		19,051,270	190		(8,105,175)	—		55,085		—			—			55,275
Net loss		—	—		—	—		—		—			(16,186)			(16,186)
Other comprehensive income		—	—		—	—		—		3,363			—			3,363
Balance at June 30, 2021		689,817,971	$	6,898	(8,655,082)	$	(1,791)	$	3,214,351	$	(9,932)		$	(1,466,941)		$	1,742,585


	Common Stock		Treasury			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit					Total
		Shares	Dollars		Shares							Dollars
Balance at December 31, 2020		670,585,576	$	6,706	(549,907)	$	(1,791)	$	3,152,694	$	(4,225)		$	(1,481,833)		$	1,671,551
Equity-based compensation expense		—	—		—	—		6,107		—			—			6,107
Exercise of Common Stock options and warrants		181,125	2		—	—		465		—			—			467

Conversion of 2025 convertible notes		19,051,270	190		(8,105,175)	—		55,085		—			—			55,275
Net income		—	—		—	—		—		—			14,892			14,892
Other comprehensive loss		—	—		—	—		—		(5,707)			—			(5,707)
Balance at June 30, 2021		689,817,971	$	6,898	(8,655,082)	$	(1,791)	$	3,214,351	$	(9,932)		$	(1,466,941)		$	1,742,585

The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

Table of Contents

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands, except share data)

For the three and six months ended June 30, 2020


	Common Stock		Treasury			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit					Total
		Shares	Dollars		Shares							Dollars
Balance at March 31, 2020		670,378,701	$	6,704	(549,907)	$	(1,791)	$	3,145,444	$	(30,187)		$	(1,571,551)		$	1,548,619
Equity-based compensation expense		—	—		—	—		1,586		—			—			1,586



Net income		—	—		—	—		—		—			33,703			33,703
Other comprehensive income		—	—		—	—		—		4,435			—			4,435
Balance at June 30, 2020		670,378,701	$	6,704	(549,907)	$	(1,791)	$	3,147,030	$	(25,752)		$	(1,537,848)		$	1,588,343


	Common Stock		Treasury			Additional Paid-In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit					Total
		Shares	Dollars		Shares							Dollars
Balance at December 31, 2019		670,378,701	$	6,704	(549,907)	$	(1,791)	$	3,142,993	$	(22,070)		$	(1,511,077)		$	1,614,759
Equity-based compensation expense		—	—		—	—		4,037		—			—			4,037

Adoption of ASC 326		—	—		—	—		—		—			(1,342)			(1,342)

Net loss		—	—		—	—		—		—			(25,429)			(25,429)
Other comprehensive loss		—	—		—	—		—		(3,682)			—			(3,682)
Balance at June 30, 2020		670,378,701	$	6,704	(549,907)	$	(1,791)	$	3,147,030	$	(25,752)		$	(1,537,848)		$	1,588,343

The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

Table of Contents

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)


	For the six months ended June 30,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	14,892	$	(25,429)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	40,561		44,318
Non-cash interest	4,981		5,022
Amortization of deferred financing costs	424		411

Losses from investments in investees	110		323
Equity-based compensation – employees and non-employees	6,107		4,037



Realized loss (gain) on disposal of fixed assets and sales of equity securities	(3,146)		156
Loss on conversion of the 2025 Notes	11,111		0

Change in fair value of equity securities and derivative instruments	873		(6,515)

Change in fair value of contingent consideration	(1,059)		251



Deferred income tax provision	2,479		1,028
Changes in assets and liabilities:
Accounts receivable, net	20,352		(81,539)
Inventory, net	(3,817)		(21,905)
Other current assets and prepaid expenses	(13,904)		(2,619)
Other assets	1,388		(61)
Accounts payable	(11,651)		(16,753)
Foreign currency measurement	(2,532)		(2,077)
Contract liabilities	(7,425)		(4,026)
Accrued expenses and other liabilities	(49,160)		47,585


Net cash provided by (used in) operating activities	10,584		(57,793)
Cash flows from investing activities:

Proceeds from sale of investments	8,079		0



Proceeds from the sale of property, plant and equipment	165		65

Capital expenditures	(18,192)		(17,149)
Net cash used in investing activities	(9,948)		(17,084)
Cash flows from financing activities:



Proceeds from the exercise of common stock options and warrants	466		0


Borrowings on lines of credit	982,797		393,651
Repayments of lines of credit	(990,190)		(382,374)



Net cash provided by (used in) financing activities	(6,927)		11,277
Effect of exchange rate changes on cash and cash equivalents	(163)		(240)
Net decrease in cash and cash equivalents	(6,454)		(63,840)
Cash and cash equivalents at beginning of period	72,211		85,452
Cash and cash equivalents at end of period	$	65,757	$	21,612
SUPPLEMENTAL INFORMATION:
Interest paid	$	4,883	$	5,578
Income taxes paid, net of refunds	$	3,690	$	(208)


Non-cash financing:

Shares issued upon the conversion of:

2025 Convertible Notes	$	68,775	$	0

The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

Table of Contents

For the nine months ended September 30,
2017 2016
Cash flows from operating activities:
Net loss $ (94,965 ) $ (11,423 )
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 76,677
72,612
Non-cash interest 1,944
2,063
Amortization of deferred financing costs 168
175
Losses from investments in investees 11,771
5,147
Equity-based compensation – employees and non-employees 22,292
34,939
Realized loss (gain) on equity securities and disposal of fixed assets (2,683 ) 943
Change in fair value of derivative instruments (1,969 ) 5,889
Change in fair value of contingent consideration (4,475 ) 15,604
Deferred income tax benefit (46,366 ) (30,982 )
Changes in assets and liabilities, net of the effects of acquisitions:
Accounts receivable, net (13,594 ) (28,974 )
Inventory, net 1,729
(2,726 )
Other current assets and prepaid expenses (2,857 ) (24,310 )
Other assets (449 ) (402 )
Accounts payable 12,013
(16,141 )
Foreign currency measurement 608
(433 )
Deferred revenue (42,142 ) (56,256 )
Accrued expenses and other liabilities (11,892 ) 36,015
Net cash provided by (used in) operating activities (94,190 ) 1,740
Cash flows from investing activities:
Investments in investees (4,625 ) (9,171 )
Acquisition of businesses, net of cash —
15,878
Purchase of marketable securities (6 ) (15,631 )
Maturities of short-term marketable securities —
15,634
Proceeds from the sale of property, plant and equipment 3,979
1,082
Acquisition of intangible assets —
(5,000 )
Capital expenditures (32,061 ) (17,015 )
Net cash used in investing activities (32,713 ) (14,223 )
Cash flows from financing activities:
Proceeds from the exercise of Common Stock options and warrants 1,916
6,112
Borrowings on lines of credit 75,544
15,816
Repayments of lines of credit (20,643 ) (58,901 )
Net cash provided by (used in) financing activities 56,817
(36,973 )
Effect of exchange rate changes on cash and cash equivalents 1,715
504
Net decrease in cash and cash equivalents (68,371 ) (48,952 )
Cash and cash equivalents at beginning of period 168,733
193,598
Cash and cash equivalents at end of period $ 100,362
$ 144,646
SUPPLEMENTAL INFORMATION:
Interest paid $ 1,409
$ 2,519
Income taxes paid, net $ 5,899
$ 8,045
Non-cash financing:
Shares issued upon the conversion of:
Common Stock options and warrants, surrendered in net exercise $ 1,546
$ 350
Issuance of capital stock for contingent consideration settlement:
Transition Therapeutics, Inc. $ —
$ 58,530
OPKO Health Europe $ 303
$ 313
OPKO Renal $ —
$ 25,986
Issuance of stock for investment in Xenetic $ —
$ 4,856

OPKO Health, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 BUSINESS AND ORGANIZATION

We are a diversified healthcare company that seeks to establish industry-leading positions in large and rapidly growing medical markets. Our diagnostics business includes BioReference Laboratories, Inc. (“BioReference”), one of the nation’s ~~third-largest clinical laboratory~~largest full service laboratories with a core genetic testing business and ~~a 400-person~~an almost 300-person sales and marketing team to drive growth and leverage new products, including the 4Kscore ~~prostate cancer test and the~~ ~~Claros~~ ~~1 in-office immunoassay platform (in development).~~ test. Our pharmaceutical business features Rayaldee, ~~an FDA-approved~~a U.S. Food and Drug Administration (“FDA”) approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency ~~and VARUBI™ for chemotherapy-induced nausea and vomiting (oral formulation launched by partner TESARO~~(launched in November ~~2015~~2016) and ~~IV formulation approved October 2017), OPK88003,~~ a ~~once or twice weekly oxyntomodulin for type 2 diabetes and obesity which~~pipeline of products in various stages of development. Our leading product in development is ~~a clinically advanced drug candidate among the new class of GLP-1 glucagon receptor dual agonists (Phase 2b)~~Somatrogon (hGH-CTP), ~~and OPK88004, a selective androgen receptor modulator being developed for benign prostatic hyperplasia and other urologic and metabolic conditions. Our pharmaceutical business also features hGH-CTP,~~ a once-weekly human growth hormone ~~injection (in Phase 3 and~~for which we have partnered with ~~Pfizer),~~Pfizer, Inc. (“Pfizer”) and successfully completed a phase 3 study in August 2019, and for which the FDA has accepted the initial Biologics License Application (“BLA”) for filing. We have also submitted a New Drug Application (an “NDA”) with the Ministry of Health, Labour and Welfare in Japan and a ~~once-daily Factor VIIa drug for hemophilia (Phase 2a).~~Marketing Authorization Application with the European Medicines Agency. We are incorporated in Delaware, and our principal executive offices are located in leased offices in Miami, Florida.

In August 2016, we completed the acquisition of Transition Therapeutics, Inc. (“Transition Therapeutics”), a clinical stage biotechnology company developing OPK88003, a once or twice weekly oxyntomodulin for type 2 diabetes and obesity, and OPK88004, a selective androgen receptor modulator for androgen deficiency indications. Holders of Transition Therapeutics common stock received 6,431,899 shares of OPKO Common Stock. The transaction was valued at approximately $58.5 million, based on a closing price per share of our Common Stock of $9.10 as reported by NASDAQ on the closing date.

Through BioReference, we provide laboratory testing services, primarily to customers in the larger metropolitan areas ~~across~~in New York, New Jersey, Florida, Texas, Maryland, California, Pennsylvania, Delaware, Washington, DC, ~~Florida, California, Texas,~~ Illinois and Massachusetts, as well as to customers in a number of other states. We offer a comprehensive test menu of clinical diagnostics for blood, urine and tissue analysis. This includes hematology, clinical chemistry, immunoassay, infectious diseases, serology, hormones, and toxicology assays, as well as Pap smear, anatomic pathology (biopsies) and other types of tissue analysis. We market our laboratory testing services directly to physicians, geneticists, hospitals, clinics, correctional and other health facilities.

We operate established pharmaceutical platforms in Ireland, Chile, Spain, and Mexico, which are generating revenue and from which we expect to generate positive cash flow and facilitate future market entry for our products currently in development. In addition, we have a development and commercial supply pharmaceutical company and a global supply chain operation and holding company in Ireland. We own a specialty active pharmaceutical ingredients (“APIs”) manufacturer in Israel, which we expect will facilitate the development of our pipeline of molecules and compounds for our proprietary molecular diagnostic and therapeutic products.

Our research and development activities are primarily performed at facilities in ~~Miramar, FL,~~ Woburn, MA, Waterford, Ireland, Kiryat Gat, Israel, and Barcelona, Spain.

In June 2021, we announced that EirGen Pharma Limited (“EirGen”), our wholly owned subsidiary, entered into a definitive agreement to sell 1 of its facilities in Waterford, Ireland to Horizon Therapeutics plc for $65 million in cash less certain assumed and accrued liabilities relating to transferred employees. The facility houses EirGen’s sterile-fill-finish business and is no longer a core component of our ongoing operations and business strategy. The transaction closed in the third quarter of 2021. As of June 30, 2021, the facility met the held-for-sale accounting criteria and the related assets and liabilities are classified as held for sale in the condensed consolidated balance sheet. We recognized a gain on the sale of the facility in the third quarter 2021 of $32.4 million. The facility was included in our pharmaceutical segment as of June 30, 2021.

NOTE 2 IMPACT OF COVID-19

As the disease caused by SARS-CoV-2, a novel strain of coronavirus, COVID-19 continues to spread and severely impact the U.S. economy and economies of other countries around the world, we are committed to being a part of the coordinated public and private sector response to this unprecedented challenge. In response to the COVID-19 pandemic, BioReference is providing COVID-19 solutions, including diagnostic molecular testing and serology antibody testing, to meet the testing needs of its numerous customer verticals, including physicians, health systems, long-term care facilities, governments, schools, employers, professional sports teams and entertainment venues, as wells as the general public through relationships with retail pharmacy chains.

Revenue from services for the six months ended June 30, 2021 increased by $482.3 million as compared to 2020 due to COVID-19 testing volumes; however we are unable to predict how long the demand will continue for our COVID-19 related testing, or whether pricing and reimbursement policies for testing will sustain, and accordingly, the sustainability of our COVID-19 testing volumes is uncertain. Additionally, beginning in March 2020, BioReference experienced a decline in routine testing volumes due to the COVID-19 pandemic; however as stay at home orders and other restrictions have been lifted, we have seen our routine clinical and genomic testing volumes trending towards normalization with prior periods. Should stay

Table of Contents

at home orders or other restrictions be reenacted, we could see our routine testing levels decline. Excluding COVID-19 test volumes, for the six months ended June 30, 2021, genomic and routine clinical test volume increased 39% and 13.4% as compared to volumes for the six months ended June 30, 2020. Additionally, sales of Rayaldee have not increased in accordance with its expected growth trajectory as a result of challenges in onboarding new patients due to the COVID-19 pandemic. Federal, state and local governmental policies and initiatives designed to reduce the transmission of COVID-19 have resulted in, among other things, a significant reduction in physician office visits, the cancellation of elective medical procedures, customers closing or severely curtailing their operations (voluntarily or in response to government orders), and the adoption of work-from-home or shelter-in-place policies. We also continue to see a substantial need for COVID-19 testing by our existing clients and expect new clients as infections for the virus continue.

In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, and the creation of certain payroll tax credits associated with the retention of employees.

We have received, or expect to receive a number of benefits under the CARES Act including, but not limited to:

•During the second quarter of 2020, we received approximately $14 million under The Centers for Medicare & Medicaid Services (CMS) Accelerated and Advance Payment Program, which provides accelerated payments to Medicare providers/suppliers working to provide treatment to patients and combat the COVID-19 pandemic, and the amounts advanced are loans which will be offset against future claims and must be repaid in 2021. These loans are initially recorded as contract liabilities included in Accrued expenses and are reduced as the amounts are recouped by CMS;

•We were eligible to defer depositing the employer’s share of Social Security taxes for payments due from March 27, 2020 through December 31, 2020, interest-free and penalty-free;

•We received approximately $16.2 million during 2020 from the funds that were distributed to healthcare providers for related expenses or lost revenues that are attributable to the COVID-19 pandemic. We recognized the $16.2 million grant in other revenues for the year ended December 31, 2020;

•U.S. Department of Health and Human Services (HHS), will provide claims reimbursement to healthcare providers generally at Medicare rates for testing uninsured patients; and

•Clinical laboratories are provided a one-year reprieve from the reporting requirements under the Protecting Access to Medicare Act (“PAMA”) as well as a one-year delay of reimbursement rate reductions for clinical laboratory services provided under Medicare that were scheduled to take place in 2021.

Since the pandemic began in the U.S., we have invested in testing capabilities and infrastructure to meet demand for our molecular and antibody testing for COVID-19.

NOTE 23 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the ~~United States~~U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments or adjustments otherwise disclosed herein) considered necessary to present fairly the Company’s results of operations, financial position and cash flows have been made. The results of operations and cash flows for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~,2021 are not necessarily indicative of the results of operations and cash flows that may be reported for the remainder of ~~2017~~2021 or any other future periods. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2020.

Principles of consolidation. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of OPKO Health, Inc. and of our wholly-owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Table of Contents

Use of estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from these estimates.

Cash and cash equivalents. Cash and cash equivalents include short-term, interest-bearing instruments with original maturities of 90 days or less at the date of purchase. We also consider all highly liquid investments with original maturities at the date of purchase of 90 days or less as cash equivalents. These investments include money markets, bank deposits, certificates of deposit and U.S. treasury securities.

Inventories. Inventories are valued at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. We consider such factors as the amount of inventory on hand, estimated time required to sell such inventories, remaining shelf-life, and current market conditions to determine whether inventories are stated at the lower of cost and net realizable value. Inventories at our diagnostics segment consist primarily of purchased laboratory supplies, which is used in our testing laboratories. Inventory obsolescence expense for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 and 2016~~2021 was ~~$5.0~~$0.9 million and ~~$0.2~~$3.9 million, respectively. Inventory obsolescence expense for the three and six months ended June 30, 2020 was $1.1 million and $1.7 million, respectively.

Pre-launch inventories. We may accumulate commercial quantities of certain product candidates prior to the date we anticipate that such products will receive final ~~U.S.~~ FDA approval. The accumulation of such pre-launch inventories involves the risk that such products may not be approved for marketing by the FDA on a timely basis, or ever. This risk notwithstanding, we may accumulate pre-launch inventories of certain products when such action is appropriate in relation to the commercial value of the product launch opportunity. In accordance with our policy, this pre-launch inventory is expensed.

Goodwill and intangible assets. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired accounted for by the acquisition method of ~~accounting and arose from our acquisitions.~~accounting. Refer to Note 4.5. Goodwill, in-process research and development (“IPR&D”) and other intangible assets acquired in business combinations, licensing and other transactions was $1.7 billion at both ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016 was $2.1 billion.~~2020.

Assets acquired and liabilities assumed in business combinations, licensing and other transactions are generally recognized at the date of acquisition at their respective fair values. ~~We determined~~Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. At acquisition, we generally determine the fair value of intangible assets, including IPR&D, using the “income method.”

~~Goodwill is~~Subsequent to their acquisition, goodwill and indefinite lived intangible assets are tested at least annually as of October 1 for impairment, or when events or changes in circumstances indicate it is more likely than not that the carrying amount of such assets may not be ~~recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its~~recoverable.

Goodwill was $677.4 million and $680.6 million, respectively, at June 30, 2021 and December 31, 2020. Estimating the fair value ~~exceeds~~of a reporting unit for goodwill impairment is highly sensitive to changes in projections and assumptions and changes in assumptions could potentially lead to impairment. We perform sensitivity analyses around our assumptions in order to assess the reasonableness of the assumptions and the results of our testing. Ultimately, potential changes in these assumptions may impact the estimated fair value of a reporting unit and result in an impairment if the fair value of such reporting unit is less than its carrying value.

Net intangible assets other than goodwill was $1.0 billion and $1.1 billion, including IPR&D of $590.2 million, at June 30, 2021 and December 31, 2020, respectively. Intangible assets are ~~tested~~highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products and IPR&D. Considering the high risk nature of research and development and the industry’s success rate of bringing developmental compounds to market, IPR&D impairment ~~whenever events or~~charges may occur in future periods. Estimating the fair value of IPR&D for potential impairment is highly sensitive to changes in ~~circumstances indicate that the carrying amount of such assets may not be recoverable, although IPR&D is required~~projections and assumptions and changes in assumptions could potentially lead to ~~be tested at least annually until the project is completed or abandoned.~~ impairment.

Upon obtaining regulatory approval, ~~the~~ IPR&D ~~asset is~~assets are then accounted for as a finite-lived intangible asset and amortized on a straight-line basis over its estimated useful life. If the project is abandoned, the IPR&D asset is charged to expense.

~~We reclassified $187.6 million of IPR&D related to~~ ~~Rayaldee~~ ~~from In-process research and development to Intangible assets, net in our Condensed Consolidated Balance Sheets upon the FDA’s approval of~~ ~~Rayaldee~~ ~~in June 2016. The~~ Finite lived intangible assets are ~~being amortized on~~tested for impairment when events or changes in circumstances indicate it is more likely than not that the carrying amount of such assets may not be recoverable. The testing includes a ~~straight-line basis over~~comparison of the carrying amount of the asset to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, then an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Table of Contents

We believe that our estimates and assumptions are reasonable and otherwise consistent with assumptions that marketplace participants would use in their ~~estimated useful life~~estimates of ~~approximately 12 years.~~fair value. However, if future results are not consistent with our estimates and assumptions, including as a result of the COVID-19 global pandemic, then we may be exposed to an impairment charge, which could be material.

We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives, ranging from 3 to 20 years. We use the straight-line method of amortization as there is no reliably determinable pattern in which the economic benefits of our intangible assets are consumed or otherwise used up. Amortization expense was ~~$53.9~~$25.2 million and ~~$47.3~~$29.9 million for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016,~~2020, respectively.

Fair value measurements. The carrying amounts of our cash and cash equivalents, accounts receivable, accounts payable and short-term debt approximate their fair value due to the short-term maturities of these instruments. Investments that are considered ~~available for sale~~equity securities as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 are predominately carried at fair value. Our debt under the credit agreement with JPMorgan Chase Bank, N.A. approximates fair value due to the variable rate of ~~interest.~~interest applicable to such debt.

In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts. Accordingly, the estimates of fair value presented herein may not be indicative of the amounts that could be realized in a current market exchange. Refer to Note 8.9.

Contingent consideration. Each period we revalue the contingent consideration obligations associated with certain prior acquisitions to their fair value and record increases in the fair value as contingent consideration expense and decreases in the fair value as a reduction in contingent consideration expense. Changes in contingent consideration result from changes in the assumptions regarding probabilities of successful achievement of related milestones, the estimated timing in which the milestones are achieved and the discount rate used to estimate the fair value of the liability. Contingent consideration may change significantly as our development programs progress, revenue estimates evolve and additional data is obtained, impacting our assumptions. The assumptions used in estimating fair value require significant judgment. The use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

Derivative financial instruments. We record derivative financial instruments on our Condensed Consolidated Balance ~~Sheets~~Sheet at their fair value and recognize the changes in the fair value in our Condensed Consolidated ~~Statements~~Statement of Operations when they occur, the only exception being derivatives that qualify as hedges. For the derivative instrument to qualify as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, our foreign currency forward contracts held to economically hedge inventory purchases did not meet the documentation requirements to be designated as hedges. Accordingly, we recognize all changes in the fair values of our derivatives instruments, net, in our Condensed Consolidated ~~Statements~~Statement of Operations. Refer to Note 9.10.

Property, plant and equipment. Property, plant and equipment are recorded at ~~cost.~~cost or fair value if acquired in a business combination. Depreciation is provided using the straight-line method over the estimated useful lives of the assets and includes amortization expense for assets capitalized under ~~capital~~finance leases. The estimated useful lives by asset class are as follows: software - 3 years, machinery, medical and other equipment - 5-8 years, furniture and fixtures - 5-12 years, leasehold improvements - the lesser of their useful life or the lease term, buildings and improvements - 10-40 years, and automobiles ~~and aircraft~~ - ~~3-15~~3-5 years. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation expense was ~~$22.7~~$8.0 million and ~~$25.3~~$15.4 million for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2021, respectively. Depreciation expense was $7.3 million and ~~2016,~~$14.4 million for the three and six months ended June 30, 2020, respectively. Assets held under ~~capital~~finance leases are included within Property, plant and equipment, net in our Condensed Consolidated Balance ~~Sheets~~Sheet and are amortized over the shorter of their useful lives or the expected term of their related leases. Assets to be disposed of by sale are recognized as held for sale at the lower of carrying value or fair value less costs to sell.

Impairment of long-lived assets. Long-lived assets, such as property and equipment and assets held for sale, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Income taxes. Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of

Table of Contents

existing assets and liabilities and the respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. We periodically evaluate the realizability of our

net deferred tax assets. Our tax accruals are analyzed periodically and adjustments are made as events occur to warrant such

adjustment. Valuation allowances on certain U.S. deferred tax assets and non-U.S. deferred tax assets are established, because realization of these tax benefits through future taxable income does not meet the more-likely-than-not threshold.

We operate in various countries and tax jurisdictions globally. For interim reporting purposes, we record income taxes based on the expected ~~annual~~ effective income tax rate, taking into consideration year to date and global forecasted tax results. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, the tax rate differed from the U.S. federal statutory rate of ~~35%~~21% primarily due to the valuation allowance against certain U.S. and non-U.S. deferred tax assets, the relative mix in earnings and losses in the U.S. versus foreign tax jurisdictions, and the impact of certain discrete tax events and operating results in tax jurisdictions which do not result in a tax benefit.

We periodically evaluate the realizability of our net deferred tax assets. Our tax accruals are analyzed periodically and adjustments are made as events occur to warrant such adjustment. On December 29, 2016, the Israeli Parliament reduced the standard corporate income tax rate from 25% to 24%, effective January 1, 2017 and 23% effective January 1, 2018. The new rates have been used in determining Income tax benefit in 2017.

Revenue recognition. Revenue for laboratory services is recognized at the time test results are reported, which approximates when services are provided. Services are provided to patients covered by various third-party payer programs including various managed care organizations, as well as the Medicare and Medicaid programs. Billings for services under third-party payer programs are included in revenue net of allowances for contractual discounts and allowances for differences between the amounts billed and estimated program payment amounts. Adjustments to the estimated payment amounts based on final settlement with the programs are recorded upon settlement as an adjustment to revenue. For the nine months ended September 30, 2017, approximately 31% of our revenues were derived directly from the Medicare and Medicaid programs.

We recognize revenue when a customer obtains control of promised goods or services in accordance with Accounting Standards Codification Topic 606, Revenue from ~~product sales when persuasive evidence~~Contracts with Customers (“Topic 606”). The amount of ~~an arrangement exists, delivery has occurred, collectability~~revenue that is ~~reasonably assured, and~~recorded reflects the consideration that we expect to receive in exchange for those goods or services. We apply the following five-step model in order to determine this amount: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the ~~buyer~~performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation.

We apply the five-step model to contracts when it is ~~fixed~~probable that we will collect the consideration we are entitled to in exchange for the goods or ~~determinable, which is generally when goods are shipped and title and risk of loss~~services we transfer to ~~our customers. Our estimates for sales returns~~the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we review the contract to determine which performance obligations we must deliver and ~~allowances~~which of these performance obligations are ~~based upon~~distinct. We recognize as revenue the ~~historical patterns~~amount of ~~product returns and allowances taken, matched against~~ the ~~sales from which they originated, and our evaluation of specific factors~~transaction price that may increase or decrease the risk of product returns. Product revenues are recorded net of estimated rebates, chargebacks, discounts, co-pay assistance and other deductions (collectively, “Sales Deductions”) as well as estimated product returns. Allowances are recorded as a reduction of revenue at the time product revenues are recognized.

~~We launched~~ ~~Rayaldee~~ ~~in the U.S. through our dedicated renal sales force in November 2016.~~ ~~Rayaldee~~is ~~distributed in the U.S. principally through the retail pharmacy channel, which initiates with the largest wholesalers in the U.S. (collectively, “Rayaldee~~ ~~Customers”). In addition to distribution agreements with~~ ~~Rayaldee~~ ~~Customers, we have entered into arrangements with many healthcare providers and payers that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect~~allocated to the ~~purchase~~respective performance obligation when the performance obligation is satisfied or as it is satisfied. For a complete discussion of ~~Rayaldee~~.

~~We lack the experiential data which would allow us to estimate Sales Deductions~~accounting for Revenues from services, Revenues from products and ~~product returns. Therefore, as of September 30, 2017, we have determined that we do not yet meet the criteria for the recognition of revenue for shipments of~~ ~~Rayaldee~~ ~~at the time of shipment to~~ ~~Rayaldee~~ Customers as allowances for Sales Deductions and product returns are not known or cannot be reasonably estimated. We will not recognize revenue upon shipment until such time as we can reasonably estimate and record provisions for Sales Deductions and product returns utilizing historical information and market research projections.

~~During the nine months ended September 30, 2017, we did not recognize any product revenues related to~~ ~~Rayaldee~~ ~~sales. Payments received from~~ ~~Rayaldee~~ Customers in advance of recognition of revenue are recorded as deferred revenue included in Accrued expenses in our Condensed Consolidated Balance Sheets. The related deferred revenue balance as of September 30, 2017 was $6.5 million. The corresponding costs of product revenues for which we have not recognized product revenue have similarly not yet been reflected in our Condensed Consolidated Statements of Operations.

Revenue from transfer of intellectual property ~~includes revenue related to the sale, license or transfer of intellectual property such as upfront license payments, license fees, milestone~~ and royalty payments received through our license, and collaboration and commercialization agreements. We analyze our multiple-element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting.

Non-refundable license fees for the out-license of our technology are recognized depending on the provisions of each agreement. We recognize non-refundable upfront license payments as revenue upon receipt if the license has standalone value and qualifies for treatment as a separate unit of accounting under multiple-element arrangement guidance. License fees with ongoing involvement or performance obligations that do not have standalone value are recorded as deferred revenue, included in Accrued expenses or Other long-term liabilities, when received and generally are recognized ratably over the period of such performance obligations only after both the license period has commenced and we have delivered the technology.

The assessment of our obligations and related performance periods requires significant management judgment. If an agreement contains research and development obligations, the relevant time period for the research and development phase is based on management estimates and could vary depending on the outcome of clinical trials and the regulatory approval process. ~~Such changes could materially impact the revenue recognized, and as a result, management reviews the estimates related to the~~

relevant time period of research and development on a periodic basis. For the three and nine months ended September 30, 2017, revenue from transfer of intellectual property includes $11.2 million and $46.5 million of revenue, respectively related to the Pfizer Transaction. For the three and nine months ended September 30, 2016, revenue from transfer of intellectual property includes $17.7 million and $53.0 million of revenue, respectively related to the Pfizer Transaction. Referother, refer to Note ~~12.~~13.

Revenue from milestone payments related to arrangements under which we have continuing performance obligations are recognized as Revenue from transfer of intellectual property upon achievement of the milestone only if all of the following conditions are met: the milestone payments are non-refundable; there was substantive uncertainty at the date of entering into the arrangement that the milestone would be achieved; the milestone payment is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item by us; the milestone relates solely to past performance; and the amount of the milestone payment is reasonable in relation to the effort expended or the risk associated with the achievement of the milestone. If any of these conditions are not met, the milestone payments are not considered to be substantive and are, therefore, deferred and recognized as Revenue from transfer of intellectual property over the term of the arrangement as we complete our performance obligations.

Total deferred revenue included in Accrued expenses and Other long-term liabilities was $120.4 million and $162.4 million at September 30, 2017 and December 31, 2016, respectively. The deferred revenue balance at September 30, 2017 relates primarily to the Pfizer Transaction. Refer to Note 12.

Concentration of credit risk and allowance for ~~doubtful accounts~~credit losses. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of accounts receivable. Substantially all of our accounts receivable are with either companies in the healthcare industry or patients. However, credit risk is limited due to the number of our clients as well as their dispersion across many different geographic regions.

While we have receivables due from federal and state governmental agencies, we do not believe that such receivables represent a credit risk ~~since~~because the related healthcare programs are funded by federal and state governments, and payment is primarily dependent upon submitting appropriate documentation. At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, receivable balances (net of ~~contractual adjustments)~~explicit and implicit price concessions) from Medicare and Medicaid were ~~22.0%~~5% and ~~22.9%~~6%, respectively, of our consolidated Accounts receivable, net. At June 30, 2021 and December 31, 2020, receivable balances (net of explicit and implicit price concessions) due directly from states, cities and other municipalities, specifically related to our real-time reverse-transcription polymerase chain reaction (real-time RT-PCR) assay to detect COVID-19, were 7.1% and 6.3% of our consolidated accounts receivable, net, respectively.

The portion of our accounts receivable due from individual patients comprises the largest portion of credit risk. At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, receivables due from patients ~~represent~~represented approximately ~~2.4%~~1.0% and ~~4.1%~~0.7%, respectively, of our consolidated Accounts receivable, net.

We assess the collectability of accounts receivable balances by considering factors such as historical collection experience, customer credit worthiness, the age of accounts receivable balances, regulatory changes and current economic conditions and trends that may affect a customer’s ability to pay. Actual results could differ from those estimates. ~~Our reported net income (loss) is directly affected by our estimate of the collectability of accounts receivable.~~ The allowance for ~~doubtful accounts~~credit losses was ~~$57.6~~$2.5 million and ~~$36.3~~$2.1 million at ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~,2020, respectively. The ~~provision for bad debts~~credit loss expense for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017 and 2016~~2021 was ~~$78.3~~$0.3 million and ~~$62.5~~$0.6 million, respectively. The credit loss expense for the three and six months ended June 30, 2020 was $0.1 million and $0.2 million, respectively.

Equity-based compensation. We measure the cost of ~~employee~~ services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in the Condensed Consolidated ~~Statements~~Statement of Operations over the period during which an employee is required to provide service in exchange for the award. We record excess tax benefits realized from the exercise of stock options as cash flows from operations. ~~Equity-based compensation arrangements to non-employees are recorded at their fair value on~~For the ~~measurement date. The measurement of equity-based compensation to non-employees is subject to periodic adjustment as the underlying equity instruments vest. During the nine~~three and six months ended ~~September~~June 30, ~~2017 and 2016,~~2021 we recorded ~~$22.3~~$3.5 million and ~~$34.9~~$6.1 million, respectively, of equity-based compensation expense. For the three and six months ended June 30, 2020, we recorded $1.6 million and $4.0 million, respectively, of equity-based compensation expense.

Table of Contents

Research and development expenses. Research and development expenses include external and internal ~~expenses, partially offset by third-party grants and fundings arising from collaboration agreements.~~expenses. External expenses include clinical and non-clinical activities performed by contract research organizations, lab services, purchases of drug and diagnostic product materials and manufacturing development costs. Research and development employee-related expenses include salaries, benefits and equity-based compensation expense. Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities. We expense these costs in the period in which they are incurred. We estimate our liabilities for research and development expenses in order to match the recognition of expenses to the period in which the actual services are received. As such, accrued liabilities related to third party research and development activities are recognized based upon our estimate of services received and degree of completion of the services in accordance with the specific third party contract.

~~We record~~Research and development expense includes costs for in-process research and development projects acquired in asset acquisitions which have not reached technological feasibility and which have no alternative future use. For in-process research and development projects acquired in business combinations, the in-process research and development project is capitalized and evaluated for impairment until the development process has been completed. Once the development process has been completed the asset will be amortized over its remaining estimated useful life.

Segment reporting. Our chief operating decision-maker (“CODM”) is Phillip Frost, M.D., our Chairman and Chief Executive Officer. Our CODM reviews our operating results and operating plans and makes resource allocation decisions on a Company-wide or aggregate basis. We manage our operations in ~~two~~2 reportable segments, pharmaceutical and diagnostics. The pharmaceutical segment consists of our pharmaceutical operations ~~we acquired~~ in Chile, Mexico, Ireland, Israel and Spain,Rayaldee product sales and our pharmaceutical research and development. The diagnostics segment primarily consists of clinical and genomics laboratory operations ~~we acquired~~ through ~~the acquisition of~~ BioReference and ~~our~~ point-of-care operations. There are no significant inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no inter-segment allocation of interest expense ~~and~~or income taxes. Refer to Note 15.

Shipping and handling costs. We do not charge customers for shipping and handling costs. Shipping and handling costs are classified as Cost of revenues in the Condensed Consolidated Statement of Operations.

Foreign currency translation. The financial statements of certain of our foreign operations are measured using the local currency as the functional currency. The local currency assets and liabilities are generally translated at the rate of exchange to the U.S. dollar on the balance sheet date and the local currency revenues and expenses are translated at average rates of exchange to the U.S. dollar during the reporting periods. Foreign currency transaction gains (losses) have been reflected as a component of Other income (expense), net within the Condensed Consolidated Statement of Operations and foreign currency translation gains (losses) have been included as a component of the Condensed Consolidated Statement of Comprehensive Income (Loss).

Variable interest entities. The consolidation of a variable interest entity (“VIE”) is required when an enterprise has a controlling financial interest. A controlling financial interest in a VIE will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE. Refer to Note 5.6.

Investments. We have made strategic investments in development stage and emerging companies. We record these investments as equity method investments or ~~investments available for sale~~as equity securities based on our percentage of ownership and whether we have significant influence over the operations of the investees. ~~Investments for which it is not practical to estimate fair value and which we do not have significant influence are accounted for as cost method investments.~~ For investments classified under the equity method of accounting, we record our proportionate share of their losses in Losses from investments in investees in our Condensed Consolidated ~~Statements~~Statement of Operations. Refer to Note 5.6. For investments classified as ~~available for sale,~~equity securities, we record changes in their fair value as ~~unrealized gain or loss~~Other income (expense) in ~~Other comprehensive income (loss)~~our Condensed Consolidated Statement of Operations based on their closing price per share at the end of each reporting ~~period.~~period, unless the equity security does not have a readily determinable fair value. Refer to Note 5.6.

~~Recent~~Pending accounting pronouncements.

In ~~May 2014,~~August 2020, the FASB issued ~~Accounting Standards Update (“ASU”)~~ASU No. ~~2014-09, “Revenue from~~ 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts ~~with Customers.~~in Entity's Own Equity (Subtopic 815-40).” ASU ~~2014-09, as amended, clarifies~~2020-06 will simplify the ~~principles~~accounting for recognizing revenue and develops a common revenue standard for GAAP that removes inconsistencies and weaknesses in revenue requirements, provides a more robust framework for addressing revenue issues, improves comparability of revenue recognition practices across entities, industries, jurisdictions, and capital markets, provides more useful information to users of financial statements through improved disclosure requirements and simplifies the preparation of financial statementsconvertible instruments by reducing the number of ~~requirements to which an entity must refer.~~accounting models for convertible debt instruments and convertible preferred stock. The ASU ~~2014-09~~ is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017. Companies can choose to apply the ASU using either the full retrospective approach or a modified retrospective approach.

We have commenced our implementation analysis, including identification of revenue streams and reviews of customer contracts under ASU 2014-09’s framework. Our analysis includes reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements under this new standard. The Company has reviewed certain contracts with its customers that the Company believes are representative of its revenue streams and continues to review additional contracts across its global business units. ASU 2014-09 requires increased disclosure which in turn is expected to require certain new processes. The determination of the impact of adoption of ASU 2014-09 on our financial condition, results of operations, cash flows and disclosures, is ongoing, and, as such, we have not yet concluded on a transition method and are not able to reasonably estimate the effect that the adoption of the new standard will have on our financial statements. Based on our preliminary assessment of this ASU, however, the majority of the amounts that were historically classified as provision for bad debts, primarily related to patient responsibility, will be considered an implicit price concession in determining net revenues. Accordingly, we will report uncollectible balances associated with individual patients as a reduction of the transaction price and therefore as a reduction in net revenues when historically these amounts were classified as provision for bad debts within Selling, general and administrative expenses.

~~In July 2015, the FASB issued ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory,” which changes the measurement principle for~~public entities ~~that do not measure inventory using the last-in, first-out (“LIFO”) or retail inventory method from the lower of cost or market to lower of cost and net realizable value. ASU 2015-11 is effective~~ for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. The adoption of ASU 2015-11 in the first quarter of 2017 did not have a significant impact on our Condensed Consolidated Financial Statements.

In November 2015, the FASB issued ASU No. 2015-17, “Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes,” which requires deferred tax liabilities and assets to be classified as noncurrent in a classified statement of financial position. The adoption of this ASU simplifies the presentation of deferred income taxes and reduces complexity without decreasing the usefulness of information provided to users of financial statements. We early adopted the provisions of this ASU prospectively in the fourth quarter of 2015, and did not retrospectively adjust the prior periods. The adoption of ASU 2015-17 did not have a significant impact on our Condensed Consolidated Financial Statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments - Overall (Subtopic 825-10),” which addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. The ASU requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. ASU 2016-01 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years,2021, with early adoption permitted. We are currently evaluating the impact of this new guidance on our Condensed Consolidated Financial Statements.

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842),” which will require organizations that lease assets with lease terms of more than 12 months to recognize assets and liabilities for the rights and obligations created by those leases on their balance sheets. The ASU will also require new qualitative and quantitative disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of this new guidance on our Condensed Consolidated Financial Statements.

In March 2016, the FASB issued ASU No. 2016-09, “Compensation - Stock Compensation (Topic 718),” which simplifies several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, classification on the statement of cash flows and accounting for forfeitures. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years, with early adoption permitted. We adopted this standard in the first quarter of 2017. As required by ASU 2016-09, excess tax benefits are classified as an operating activity in our Condensed Consolidated Statement of Cash Flows and we have applied this provision prospectively. In addition, we have elected to estimate forfeitures over the course of a vesting period, rather than account for forfeitures as they occur. We adjust our forfeiture estimates based on the number of share-based awards that ultimately vest on at least an annual basis. Upon the adoption of ASU 2016-09 in 2017, we recorded a cumulative-effect adjustment to increase our deferred tax assets and reduce our accumulated deficit by $32.5 million with respect to excess tax benefits recognized in our Condensed Consolidated Balance Sheets.

In August 2016, the FASB issued ASU No. 2016-15, “Statement of Cash Flows (Topic 230),” which addresses the classification of eight specific cash flow issues with the objective of reducing the existing diversity in practice. ASU 2016-15 will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We are currently evaluating the impact of this new guidance on our Condensed Consolidated Financial Statements.

In January 2017, the FASB issued ASU No. 2017-04, “Intangibles - Goodwill and Other (Topic 350),” which simplifies how an entity is required to test for goodwill impairment. ASU 2017-04 will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019, with early adoption permitted after January 1, 2017. We are currently evaluating the impact of this new guidance on our Condensed Consolidated Financial Statements.

NOTE 34 EARNINGS (LOSS) PER SHARE

Table of Contents

Basic ~~earnings~~income (loss) per share is computed by dividing our net income (loss) by the weighted average number of shares of our common stock par value $0.01 per share (“Common Stock”) outstanding during the period. Shares of Common Stock outstanding under the share lending arrangement entered into in conjunction with the 2025 Notes (as defined in Note 7) are excluded from the calculation of basic and diluted earnings per share because the borrower of the shares is required under the share lending arrangement to refund any dividends paid on the shares lent. Refer to Note 7. For diluted earnings per share, the dilutive impact of stock options ~~warrants~~ and ~~for periods in 2016, conversion options of the 2033 Senior Notes~~warrants is determined by applying the “treasury stock” method. InThe dilutive impact of the 2033 Senior Notes, the 2023 Convertible Notes and the 2025 Notes (each, as defined and discussed in Note 7) has been considered using the “if converted” method. For periods in which their effect would be antidilutive, no effect ~~has been~~is given to Common Stock issuable under outstanding options or warrants or the potentially dilutive shares issuable pursuant to the 2033 Senior Notes, ~~(defined in Note 6)~~the 2023 Convertible Notes and the 2025 Notes in the dilutive computation.

A total of ~~1,016,090~~64,292,882 and ~~1,636,706~~69,505,513 potential shares of Common Stock ~~have been~~were excluded from the calculation of diluted net loss per share for the three ~~and nine~~ months ended ~~September~~June 30, ~~2017,~~2021, and 2020, respectively, because their inclusion would be antidilutive. A total of 69,861,689 and 69,347,867 potential shares of Common Stock were excluded from the calculation of diluted net loss per share for the six months ended June 30, 2021, and 2020, respectively, because their inclusion would be antidilutive. A full presentation of diluted earnings per share has not been provided because the required adjustments to the numerator and denominator resulted in diluted earnings per share equivalent to basic earnings per share.

During the three months ended ~~September~~June 30, ~~2017, no Common Stock options and Common Stock warrants to purchase shares of our Common Stock were exercised.~~

~~During the nine months ended September 30, 2017, 1,646,372~~2021, 63,625 Common Stock options and Common Stock warrants to purchase shares of our Common Stock were exercised, resulting in the issuance of ~~1,373,515~~63,625 shares of Common Stock. Of the ~~1,646,372~~63,625 Common Stock options and Common Stock warrants exercised, ~~272,857~~0 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the agreements.

During the six months ended June 30, 2021, 181,125 Common Stock options and Common Stock warrants to purchase shares of our Common Stock were exercised, resulting in the issuance of 181,125 shares of Common Stock. Of the 181,125 Common Stock options and Common Stock warrants exercised, 0 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the agreements.

During the three and six months ended ~~September~~June 30, ~~2016, 660,921~~2020, 0 Common Stock options ~~and~~or Common Stock warrants to purchase shares of our Common Stock were exercised, resulting in the issuance of ~~658,357~~0 shares of Common Stock. ~~Of the 660,921 Common Stock options and Common Stock warrants exercised, 2,564 shares~~

Table of ~~Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the agreements.~~Contents

During the nine months ended September 30, 2016, 2,899,458 Common Stock options and Common Stock warrants to purchase shares of our Common Stock were exercised, resulting in the issuance of 2,771,514 shares of Common Stock. Of the 2,899,458 Common Stock options and Common Stock warrants exercised, 127,944 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the agreements.

NOTE 45 COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS


(In thousands)	June 30, 2021		December 31, 2020
Accounts receivable, net:
Accounts receivable	$	268,327	$	288,369
Less: allowance for credit losses	(2,471)		(2,055)
	$	265,856	$	286,314
Inventories, net:
Consumable supplies	$	90,838	$	86,779
Finished products	38,870		36,831
Work in-process	3,449		5,268
Raw materials	6,409		5,784
Less: inventory reserve	(4,844)		(2,321)
	$	134,722	$	132,341
Other current assets and prepaid expenses:
Taxes recoverable	$	9,291	$	13,440
Prepaid expenses	14,593		7,259



Prepaid insurance	7,374		3,803
Other receivables	492		2,502
Other	15,877		5,309
	$	47,627	$	32,313
Intangible assets, net:
Customer relationships	$	447,484	$	448,751
Technologies	290,582		296,623
Trade names	49,806		49,820

Covenants not to compete	16,328		16,334
Licenses	5,766		5,766
Product registrations	7,803		8,025
Other	6,351		6,513
Less: accumulated amortization	(378,605)		(356,830)
	$	445,515	$	475,002
Accrued expenses:
Inventory received but not invoiced	$	33,478	$	72,160
Commitments and contingencies	23,161		15,454
Employee benefits	40,899		43,300
Contract liabilities	8,400		15,783
Clinical trials	6,116		7,112

Contingent consideration	487		1,188
Finance leases short-term	2,084		2,453

Professional fees	3,347		4,985


Other	69,200		78,434
	$	187,172	$	240,869

Table of Contents

(In thousands) September 30,
2017 December 31,
2016
Accounts receivable, net:
Accounts receivable $ 291,560
$ 256,552
Less: allowance for doubtful accounts (57,644 ) (36,268 )
$ 233,916
$ 220,284
Inventories, net:
Consumable supplies $ 19,446
$ 23,448
Finished products 22,882
16,143
Work in-process 4,087
3,896
Raw materials 6,984
4,686
Less: inventory reserve (6,445 ) (945 )
$ 46,954
$ 47,228
Other current assets and prepaid expenses:
Taxes recoverable 17,581
16,187
Other receivables 12,318
13,021
Prepaid supplies 12,269
6,952
Prepaid insurance 3,276
3,688
Other 3,880
7,508
$ 49,324
$ 47,356
Intangible assets, net:
Customer relationships $ 447,699
$ 443,560
Technologies 340,861
340,397
Trade names 50,520
50,442
Licenses 23,518
23,506
Covenants not to compete 16,373
16,348
Product registrations 10,857
7,641
Other 5,742
5,289
Less: accumulated amortization (181,018 ) (123,207 )
$ 714,552
$ 763,976
Accrued expenses:
Deferred revenue $ 52,403
$ 73,434
Employee benefits 46,237
43,792
Clinical trials 7,606
5,935
Taxes payable 4,590
4,430
Contingent consideration 2,011
259
Capital leases short-term 3,483
3,025
Milestone payment 9,819
4,865
Professional fees 2,584
4,035
Other 47,567
58,180
$ 176,300
$ 197,955


(In thousands)	June 30, 2021		December 31, 2020
Other long-term liabilities:


Contingent consideration	$	2,987	$	4,507

Mortgages and other debts payable	3,970		3,837
Finance leases long-term	2,559		2,805
Contract liabilities	552		595
Other	14,798		25,328
	$	24,866	$	37,072

(In thousands) September 30,
2017 December 31,
2016
Other long-term liabilities:
Deferred revenue $ 68,011
$ 89,016
Line of credit 93,311
38,809
Contingent consideration 38,290
44,817
Mortgages and other debts payable 1,162
717
Capital leases long-term 8,435
7,216
Other 17,408
21,908
$ 226,617
$ 202,483

~~All of the~~Our intangible assets and goodwill ~~acquired~~ relate principally to our completed acquisitions of ~~principally~~ OPKO Renal, OPKO Biologics, EirGen ~~Pharma Limited (“EirGen”)~~ and BioReference. We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives. The estimated useful lives by asset class are as follows: technologies - 7-17 years, customer relationships - 7-20 years, product registrations - 7-10 years, covenants not to compete - 5 years, trade names - 5-10 years, other 9-13 years. We do not anticipate capitalizing the cost of product registration renewals, rather we expect to expense these costs, as incurred. Our goodwill is not tax deductible for income tax purposes in any jurisdiction in which we ~~operate in.~~operate.

~~At September 30, 2017, the~~The changes in value of the intangible assets and goodwill ~~are~~during the six months ended June 30, 2021 were primarily due to foreign currency fluctuations between the Chilean Peso, ~~the Euro~~ and the ~~Shekel~~Euro against the U.S. dollar.

The following table summarizes the changes in Goodwill by reporting unit during the ~~nine~~six months ended ~~September~~June 30, ~~2017.~~2021.


	2021
(In thousands)	Gross goodwill at January 1		Cumulative impairment at January 1		Goodwill impairment		Foreign exchange and other		Balance at June 30
Pharmaceuticals
CURNA	$	4,827	$	(4,827)	$	0	$	0	$	0
Rayaldee	93,418		0		0		(2,875)		90,543
FineTech	11,698		(11,698)		0		0		0
OPKO Biologics	139,784		0		0		0		139,784
OPKO Chile	4,505		0		0		(113)		4,392
OPKO Health Europe	8,086		0		0		(254)		7,832
OPKO Mexico	100		(100)		0		0		0
Transition Therapeutics	3,421		(3,421)		0		0		0

Diagnostics
BioReference	434,809		0		0		0		434,809
OPKO Diagnostics	17,977		(17,977)		0		0		0
	$	718,625	$	(38,023)	$	0	$	(3,242)	$	677,360

2017
(In thousands) Balance at January 1 Foreign exchange and other Balance at September 30th
Pharmaceuticals
CURNA $ 4,827
$ —
$ 4,827
EirGen 78,358
9,639
87,997
FineTech 11,698
—
11,698
OPKO Chile 4,785
217
5,002
OPKO Biologics 139,784
—
139,784
OPKO Health Europe 6,936
853
7,789
OPKO Renal 2,069
—
2,069
Transition Therapeutics 3,360
261
3,621

Diagnostics
BioReference 401,821
—
401,821
OPKO Diagnostics 17,977
—
17,977
OPKO Lab 32,988
—
32,988
$ 704,603
$ 10,970
$ 715,573

Table of Contents

NOTE ~~5 ACQUISITIONS,~~6 INVESTMENTS ~~AND LICENSES~~

~~Transition Therapeutics acquisition~~

In August 2016, we completed the acquisition of Transition Therapeutics, a clinical stage biotechnology company. Holders of Transition Therapeutics common stock received 6,431,899 shares of OPKO Common Stock. The transaction was valued at approximately $58.5 million, based on a closing price per share of our Common Stock of $9.10 as reported by NASDAQ on the closing date.

~~The following table summarizes the purchase price allocation and the fair value of the net assets acquired and liabilities assumed at the date of acquisition:~~

(In thousands) Transition Therapeutics
Cash and cash equivalents $ 15,878
IPR&D assets 41,000
Goodwill 3,453
Other assets 634
Accounts payable and other liabilities (1,035 )
Deferred tax liability (1,400 )
Total purchase price $ 58,530

Goodwill from the acquisition of Transition Therapeutics principally relates to intangible assets that do not qualify for separate recognition (for instance, Transition Therapeutics’ assembled workforce) and the deferred tax liability generated as a result of the transaction. Goodwill is not tax deductible for income tax purposes and was assigned to the pharmaceutical reporting segment.

Our IPR&D assets will not be amortized until the underlying development programs are completed. Upon obtaining regulatory approval, the IPR&D assets are then accounted for as finite-lived intangible assets and amortized on a straight-line basis over its estimated useful life.

Investments

The following table reflects the accounting method, carrying value and underlying equity in net assets of our unconsolidated investments as of ~~September~~June 30, ~~2017~~:2021 and December 31, 2020:


(in thousands)					(in thousands)	As of June 30, 2021				As of December 31, 2020
Investment type	Investment Carrying Value		Underlying Equity in Net Assets		Investment type	Investment Carrying Value		Underlying Equity in Net Assets		Investment Carrying Value		Underlying Equity in Net Assets
Equity method investments	$	24,101	$	23,910	Equity method investments	$	346	$	2,242	$	426	$	2,252
Variable interest entity, equity method	361		—		Variable interest entity, equity method	1,030		0		1,060		9
Available for sale investments	3,108
Cost method investment	2,606
Equity securities					Equity securities	7,466				14,136
Equity securities with no readily determinable fair value					Equity securities with no readily determinable fair value	35				35
Warrants and options	2,020				Warrants and options	68				74
Total carrying value of investments	$	32,196			Total carrying value of investments	$	8,945			$	15,731

Equity method investments

Our equity method investments consist of investments in Pharmsynthez (ownership 9%), Cocrystal Pharma, Inc. (“COCP”) ~~(9%), Sevion Therapeutics, Inc. (“Sevion”) (31%~~(3%), Non-Invasive Monitoring Systems, Inc. (“NIMS”) (1%), Neovasc, ~~(4%), VBI Vaccines~~ Inc. (“~~VBI”~~Neovasc”) ~~(15%~~(1%), InCellDx, Inc. ~~(28%~~(“InCellDx”) (29%), BioCardia, Inc. (“BioCardia”) ~~(5%~~(1%), and Xenetic Biosciences, Inc. (“Xenetic”) ~~(4%~~(2%). The ~~total~~aggregate amount of assets, liabilities, and net losses of our equity method investees as of and for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 were ~~$415.4~~$179.0 million, ~~$(203.2)~~$26.7 million, and ~~$(106.1)~~$5.9 million, respectively. The aggregate amount of assets, liabilities, and net losses of our equity method investees as of and for the year ended December 31, 2020 were $90.9 million, $28.4 million, and $75.4 million, respectively. We have determined that we and/or our related parties can significantly influence ~~the success~~control of our equity method investments through our board representation and/or voting power. Accordingly, we account for our investment in these entities under the equity method and record our proportionate share of their losses in Loss from investments in investees in our Condensed Consolidated ~~Statements~~Statement of Operations. The aggregate

value of our equity method investments based on the quoted market ~~price~~prices of their respective shares of common stock and the number of shares held by us as of ~~September~~June 30, ~~2017~~ ~~is $67.4~~2021 was $7.1 million.

~~Available for sale investments~~Investments in Equity Securities

Our ~~available for sale investments~~equity securities consist of investments in ~~RXi~~Phio Pharmaceuticals ~~Corporation~~ (“~~RXi”~~Phio”) (ownership 2%0.01%), VBI Vaccines Inc. (“VBI”) (1%), ChromaDex Corporation ~~(1%), MabVax Therapeutics Holdings, Inc.~~ (“~~MabVax”~~ChromaDex”) ~~(4%~~(0.1%), and ~~ARNO Therapeutics,~~Eloxx Pharmaceuticals, Inc. (“~~ARNO”~~Eloxx”) ~~(5%~~(2%). We have determined that our ownership, along with that of our related parties, does not provide us with significant influence over the operations of ~~our available for sale~~these investments. Accordingly, we account for our investment in these entities as ~~available for sale,~~equity securities, and we record changes in ~~these investments as an unrealized gain or loss in Other comprehensive income (loss) each reporting period.~~

~~Based on our evaluation of~~ the ~~value of our investment in Xenetic, including Xenetic’s decreasing stock price during the~~ ~~nine months ended September 30, 2017, we determined that the decline in~~ fair value of ~~our Xenetic common shares was other-than-temporary and recorded an impairment charge of $0.6 million~~these investments in Other income (expense)~~, net in~~ each reporting period when they have readily determinable fair value. Equity securities without a readily determinable fair value are adjusted to fair value when there is an observable price change. Net gains and losses on our ~~Condensed Consolidated Statements of Operations~~equity securities for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~ ~~to write our investment in Xenetic down to its fair value~~2021, and 2020 were as ~~of September 30, 2017.~~follows:

Based on our evaluation of the value of our investments in Xenetic and RXi, including their decreasing stock price during the nine months ended September 30, 2016, we determined that the decline in fair value of our common shares in Xenetic and RXi was other-than-temporary and recorded an impairment charge of $3.9 million in Other income (expense), net in our Condensed Consolidated Statements of Operations for the nine months ended September 30, 2016 to write our investments in Xenetic and RXi down to their respective fair values as of September 30, 2016.

~~Cost method investments~~

Our cost method investments consist primarily of our investment in Eloxx Pharmaceuticals (“Eloxx”) (ownership 3%). Investments for which it is not practical to estimate fair value and with which we do not have significant influence, are accounted for as cost method investments.


	For the six months ended June 30
(in thousands)	2021		2020
Equity Securities:
Net gains and losses recognized during the period on equity securities	$	1,408	$	5,907
Less: Net gains and losses realized during the period on equity securities	(2,981)		0
Unrealized net gains and losses recognized during the period on equity securities still held at the reporting date	$	(1,573)	$	5,907

Sales of investments

Gains (losses) included in earnings from sales of our investments are recorded in Other income (expense), net in our Condensed Consolidated ~~Statements~~Statement of Operations. ~~We did not have any such activity in the nine months ended September 30, 2017 and 2016.~~ The cost of securities sold is based on the specific identification method.

Table of Contents

Warrants and options

In addition to our equity method investments and ~~available for sale investments,~~equity securities, we hold options to purchase ~~1.0 million additional shares of Neovasc, which are fully vested as of September 30, 2017, options to purchase 5.0 million~~47 thousand additional shares of BioCardia, ~~none~~all of which ~~are~~were vested as of ~~September~~June 30, ~~2017,~~2021 and ~~1.0 million, 0.3 million, 0.2 million,~~December 31, 2020, and 33 thousand, 0.7 million, ~~0.5 million~~40 thousand and ~~0.2 million of~~404 warrants to purchase ~~additional~~ shares of COCP, ~~Sevion, MabVax,~~ InCellDx, Inc., Xenetic, and ~~RXi,~~Phio, respectively. We recorded the changes in the fair value of the options and warrants in Fair value changes of derivative instruments, net in our Condensed Consolidated ~~Statements~~Statement of Operations. We also recorded the fair value of the options and warrants in Investments, net in our Condensed Consolidated Balance ~~Sheets.~~Sheet. See further discussion of the Company’s options and warrants in Note 89 and Note 9.10.

Investments in variable interest entities

We have determined that we hold variable interests in Detect Genomix, LLC (“Detect Genomix”) and Zebra Biologics, Inc. (“Zebra”). We made this determination as a result of our assessment that ~~Zebra does~~they do not have sufficient resources to carry out ~~its~~their principal activities without additional financial support.

In August 2020, GeneDx, Inc., a subsidiary of BioReference, announced that it had entered into an agreement with Pediatrix Medical Group (“Pediatrix”), a provider of maternal-fetal, and pediatric medical and surgical subspecialty physician services, to offer genomic sequencing to support clinical diagnosis in neonatal intensive care units staffed by Pediatrix’s affiliated neonatologists. The offering is planned to include whole exome and whole genome sequencing and genomic support services under the brand Detect Genomix.

Our initial capital investment in Detect Genomix was $245,000 for which we received a 49% ownership interest in Detect Genomix. We are required to make additional capital contributions to Detect Genomix in accordance with our percentage interests if Detect Genomix is unable to generate positive cash flow from operations or is unable to obtain alternative financing. We have not made any other investments in or loans to Detect Genomix through June 30, 2021.

In order to determine the primary beneficiary of Detect Genomix, we evaluated our investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Detect Genomix. Based on the capital structure, governing documents and overall business operations of Detect Genomix, we determined that, while a VIE, we do not have the power to direct the activities that most significantly impact Detect Genomix’s economic performance. We determined, however, that we can significantly influence control of Detect Genomix through our board representation and voting power. Therefore, we have the ability to exercise significant influence over Detect Genomix’s operations and account for our investment in Detect Genomix under the equity method.

We own 1,260,000 shares of Zebra Series A-2 Preferred Stock and 900,000 shares of Zebra restricted common stock (ownership 29% at ~~September~~June 30, ~~2017)~~2021). Zebra is a privately held biotechnology company focused on the discovery and development of biosuperior antibody therapeutics and complex drugs. Dr. Richard Lerner, M.D., a member of our Board of Directors, is a founder of Zebra and, along with Dr. Frost, serves as a member of Zebra’s Board of Directors.

In order to determine the primary beneficiary of Zebra, we evaluated our investment and our related parties’ investment, as well as our investment combined with the related ~~party group’s~~parties’ investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Zebra. Based on the capital structure, governing documents and overall business operations of Zebra, we determined that, while a VIE, we do not have the power to direct the

activities that most significantly impact Zebra’s economic performance and have no obligation to fund expected losses. We ~~did determine,~~determined, however, that we can significantly influence ~~the success~~control of Zebra through our board representation and voting power. Therefore, we have the ability to exercise significant influence over Zebra’s operations and account for our investment in Zebra under the equity method.

~~Other~~

~~In March 2016,~~23

Table of Contents

NOTE 7 DEBT

As of June 30, 2021 and December 31, 2020, our debt consisted of the following:


(In thousands)	June 30, 2021		December 31, 2020
2025 Notes	$	116,009	$	156,163
2023 Convertible Notes	64,139		62,776
2033 Senior Notes	3,050		3,050
JP Morgan Chase	0		7,057
Chilean and Spanish lines of credit	16,197		15,897
Current portion of notes payable	1,764		1,749
Long term portion of notes payable	4,517		4,513
Total	$	205,676	$	251,205

Balance sheet captions
Convertible Notes	$	183,198	$	221,989
Current portion of lines of credit and notes payable	17,961		24,703
LT notes payable included in long-term liabilities	4,517		4,513
Total	$	205,676	$	251,205

On February 25, 2020, we entered into ana credit agreement with ~~Relative Core~~an affiliate of Dr. Frost, pursuant to which ~~we delivered $5.0 million cash~~the lender committed to ~~Relative Core~~provide us with an unsecured line of credit in ~~exchange~~the amount of $100 million. The line of credit called for a ~~$5.0~~commitment fee equal to 0.25% per annum of the unused portion of the line. We terminated this line of credit in June 2021 and as of June 30, 2021, 0 amount was outstanding thereunder.

In February 2019, we issued $200.0 million ~~promissory note (“Relative Note”~~aggregate principal amount of Convertible Senior Notes due 2025 (the “2025 Notes”) ~~which bears~~in an underwritten public offering. The 2025 Notes bear interest at ~~10%~~a rate of 4.50% per year, payable semiannually in arrears on February 15 and ~~is due in 2018.~~August 15 of each year. The ~~Relative Note is secured by 122,446~~notes mature on February 15, 2025, unless earlier repurchased, redeemed or converted.

Holders may convert their 2025 Notes into shares of ~~common stock~~Common Stock at their option at any time prior to the close of ~~Xenetic~~business on the business day immediately preceding November 15, 2024 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ended March 31, 2019 (and only during such calendar quarter), if the last reported sale price of our Common Stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; (2) during the 5 business day period after any 5 consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of 2025 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Common Stock and ~~494,462~~the conversion rate on each such trading day; (3) if we call any or all of the 2025 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate events set forth in the indenture governing the 2025 Notes. On or after November 15, 2024, until the close of business on the business day immediately preceding the maturity date, holders of the 2025 Notes may convert their notes at any time, regardless of the foregoing conditions. Upon conversion, we will pay or deliver, as the case may be, cash, shares of ~~OPKO common stock.~~our Common Stock, or a combination of cash and shares of our Common Stock, at our election.

The initial and current conversion rate for the 2025 Notes is 236.7424 shares of Common Stock per $1,000 principal amount of 2025 Notes (equivalent to a conversion price of approximately $4.22 per share of Common Stock). The conversion rate for the 2025 Notes is subject to adjustment in certain events, but will not be adjusted for any accrued and unpaid interest. In addition, following certain corporate events that occur prior to the maturity date of the 2025 Notes or if we deliver a notice of redemption, in certain circumstances the indenture governing the 2025 Notes requires an increase in the conversion rate of the 2025 Notes for a holder who elects to convert its notes in connection with such a corporate event or notice of redemption, as the case may be.

We may not redeem the 2025 Notes prior to February 15, 2022. We may redeem for cash any or all of the 2025 Notes, at our option, on or after February 15, 2022, if the last reported sale price of our Common Stock has been at least 130% of the then

Table of Contents

current conversion price for the notes for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which we provide a notice of redemption at a redemption price equal to 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. No sinking fund is provided for the 2025 Notes.

If we undergo a fundamental change, as defined in the indenture governing the 2025 Notes, prior to the maturity date of the 2025 Notes, holders may require us to repurchase for cash all or any portion of their notes at a repurchase price equal to 100% of the principal amount of the notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The 2025 Notes are our senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the 2025 Notes; equal in right of payment to any of our existing and future liabilities that are not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our current or future subsidiaries.

In May 2021, we entered into exchange agreements with certain holders of the 2025 Notes pursuant to which the holders exchanged $55.4 million in aggregate principal amount of the outstanding 2025 Notes for 19,051,270 shares of our Common Stock (the “Exchange”). We recorded an $11.1 million non-cash loss related to the ~~Relative~~Exchange.

In conjunction with the issuance of the 2025 Notes, we agreed to loan up to 30,000,000 shares of our Common Stock to affiliates of the underwriter in order to assist investors in the 2025 Notes to hedge their position. Following consummation of the Exchange, the number of outstanding borrowed shares of Common Stock was reduced by approximately 8,105,175 shares. As of June 30, 2021 and December 31, 2020, a total of 21,144,825 and 29,250,000 shares remained outstanding under the share lending arrangement, respectively. We will not receive any of the proceeds from the sale of the borrowed shares, but we received a one-time nominal fee of $0.3 million for the newly issued shares. Shares of our Common Stock outstanding under the share lending arrangement are excluded from the calculation of basic and diluted earnings per share. See Note ~~within~~4.

As required by ASC 470-20, “Debt with Conversion and Other ~~current assets~~Options,” we calculated the equity component of the 2025 Notes, taking into account both the fair value of the conversion option and ~~prepaid expenses~~the fair value of the share lending arrangement. The equity component was valued at $52.6 million at issue date and this amount was recorded as Additional paid-in capital, which resulted in a discount on the 2025 Notes. The discount is being amortized to Interest expense over the term of the 2025 Notes, which results in an effective interest rate on the 2025 Notes of 11.2%.

The following table sets forth information related to the 2025 Notes which is included in our Condensed Consolidated Balance ~~Sheets.~~Sheet as of June 30, 2021:


(In thousands)	2025 Senior Notes		Discount		Debt Issuance Cost		Total
Balance at December 31, 2020	$	200,000	$	(39,537)	$	(4,300)	$	156,163

Amortization of debt discount and debt issuance costs	—		3,617		394		4,011
Conversion	(55,420)		10,151		1,104		(44,165)
Balance at June 30, 2021	$	144,580	$	(25,769)	$	(2,802)	$	116,009

~~NOTE 6 DEBT~~

In February 2018, we issued a series of 5% Convertible Promissory Notes (the “2023 Convertible Notes”) in the aggregate principal amount of $55.0 million. The 2023 Convertible Notes mature five years following the date of issuance. Each holder of a 2023 Convertible Note has the option, from time to time, to convert all or any portion of the outstanding principal balance of such 2023 Convertible Note, together with accrued and unpaid interest thereon, into shares of our Common Stock at a conversion price of $5.00 per share. We may redeem all or any part of the then issued and outstanding 2023 Convertible Notes, together with accrued and unpaid interest thereon, pro rata among the holders, upon no fewer than 30 days, and no more than 60 days, notice to the holders. The 2023 Convertible Notes contain customary events of default and representations and warranties of OPKO.

Purchasers of the 2023 Convertible Notes included an affiliate of Dr. Phillip Frost, M.D., our Chairman and Chief Executive Officer, and Dr. Jane H. Hsiao, Ph.D., MBA, our Vice-Chairman and Chief Technical Officer.

In January 2013, we entered into note purchase agreements with respect to the issuance and sale of our 3.0% Senior Notes due 2033 (the “2033 Senior Notes”~~) with qualified institutional buyers and accredited investors (collectively, the “Purchasers”~~) in a private placement ~~in reliance on exemptions~~exempt from registration under the Securities ~~Act of 1933, as amended (the “Securities Act”). The~~Act. We issued the 2033 Senior Notes ~~were issued~~ on January 30, 2013. The 2033 Senior Notes, which totaled $175.0 million in original principal amount,

Table of Contents

bear interest at the rate of ~~3.00%~~3.0% per year, payable semiannually on February 1 and August 1 of each year. The 2033 Senior Notes ~~will~~ mature on February 1, 2033, unless earlier repurchased, redeemed or converted. Upon a fundamental change, as defined in the ~~Indenture, dated as of January 30, 2013, by and between the Company and Wells Fargo Bank N.A., as trustee,~~indenture governing the 2033 Senior Notes, ~~(the “Indenture”),~~ subject to certain exceptions, the holders may require us to repurchase all or any portion of their 2033 Senior Notes for cash at a repurchase price equal to 100% of the principal amount of the 2033 Senior Notes being repurchased, plus any accrued and unpaid interest to, but not including, the related fundamental change repurchase date.

~~The following table sets forth information related~~From 2013 to 2016, holders of the 2033 Senior Notes ~~which is included our Condensed Consolidated Balance Sheets as~~converted $143.2 million in aggregate principal amount into an aggregate of ~~September 30, 2017~~:

(In thousands) Embedded conversion option 2033 Senior Notes Discount Debt Issuance Cost Total
Balance at December 31, 2016 $ 16,736
$ 31,850
$ (4,612 ) $ (273 ) $ 43,701
Amortization of debt discount and debt issuance costs —
—
1,514
111
1,625
Change in fair value of embedded derivative (3,185 ) —
—
—
(3,185 )
Reclassification of embedded derivatives to equity (13,551 ) —
—
—
(13,551 )
Balance at September 30, 2017 $ —
$ 31,850
$ (3,098 ) $ (162 ) $ 28,590

The 2033 Senior Notes will be convertible at any time on or after November 1, 2032, through the second scheduled trading day immediately preceding the maturity date, at the option of the holders. Additionally, holders may convert their 2033 Senior Notes prior to the close of business on the scheduled trading day immediately preceding November 1, 2032, under the following circumstances: (1) conversion based upon satisfaction of the trading price condition relating to the 2033 Senior Notes; (2) conversion based on the Common Stock price; (3) conversion based upon the occurrence of specified corporate events; or (4) if we call the 2033 Senior Notes for redemption. The 2033 Senior Notes will be convertible into cash, shares of our Common Stock, or a combination of cash and21,539,873 shares of Common ~~Stock, at our election unless we have made an irrevocable election of net share settlement. The initial conversion rate for the 2033 Senior Notes will be 141.48 shares of Common Stock per $1,000~~Stock. On February 1, 2019, approximately $28.8 million aggregate principal amount of 2033 Senior Notes ~~(equivalent~~were tendered by holders pursuant to ~~an initial conversion price of approximately $7.07 per share of Common Stock), and will be subject~~such holders’ option to ~~adjustment upon~~require us to repurchase the ~~occurrence of certain events. In addition, we will, in certain circumstances, increase the conversion rate for holders who convert their~~ 2033 Senior Notes ~~in connection with a make-whole fundamental change (as defined~~as set forth in the ~~Indenture) and holders who convert upon~~indenture, governing the ~~occurrence~~2033 Senior Notes, following which repurchase only $3.0 million aggregate principal amount of ~~certain specific events prior to February 1, 2017 (other than in connection with a make-whole fundamental change).~~the 2033 Senior Notes remained outstanding. Holders of the remaining $3.0 million principal amount of the 2033 Senior Notes may require us to repurchase ~~the 2033 Senior Notes~~such notes for 100% of their principal amount, plus accrued and unpaid interest, on February 1, ~~2019, February 1,~~ 2023, ~~and~~on February 1, 2028, or following the occurrence of a fundamental change as ~~defined in the indenture governing the 2033 Senior Notes.~~

On or after February 1, 2017 and before February 1, 2019, we may redeem for cash any or all of the 2033 Senior Notes but only if the last reported sale price of our Common Stock exceeds 130% of the applicable conversion price for at least 20 trading days during the 30 consecutive trading day period ending on the trading day immediately prior to the date on which we deliver the redemption notice. The redemption price will equal 100% of the principal amount of the 2033 Senior Notes to be redeemed, plus any accrued and unpaid interest to but not including the redemption date. On or after February 1, 2019, we may redeem for cash any or all of the 2033 Senior Notes at a redemption price of 100% of the principal amount of the 2033 Senior Notes to be redeemed, plus any accrued and unpaid interest up to but not including the redemption date.described above.

The terms of the 2033 Senior Notes, include, among others: (i) rights to convert the notes into shares of our Common Stock, including upon a fundamental change; and (ii) a coupon make-whole payment in the event of a conversion by the holders of the 2033 Senior Notes on or after February 1, 2017 but prior to February 1, 2019. We determined that these specific terms were ~~considered to be~~ embedded derivatives. Embedded derivatives are required to be separated from the host contract, the 2033 Senior Notes, and carried at fair value when: (a) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract; and (b) a separate, stand-alone instrument with the same terms would qualify as a derivative instrument. We concluded that the embedded derivatives within the 2033 Senior Notes

~~meet~~ met these criteria ~~for periods prior to February 1, 2017~~ and, as such, were valued separate and apart from the 2033 Senior Notes and recorded at fair value each reporting period.

For accounting and financial reporting purposes, ~~prior to 2017~~ we combined these embedded derivatives and valued them together as one unit of accounting.

~~On February 1,~~ In 2017, certain terms of the embedded derivatives expired pursuant to the original agreement and ~~we determined that~~ the embedded derivatives no longer met the criteria to be separated from the host contract and, as a result, the embedded derivatives ~~are~~were no longer required to be valued separate and apart from the 2033 Senior Notes and ~~are not required to be measured at fair value subsequent to February 1, 2017.~~

The change in derivative income for the period from January 1, 2017 to February 1, 2017 related to the embedded derivatives was $3.2 million and the fair value at that date was $13.6 million. For financial reporting purposes, we had remeasured the embedded derivatives subsequent to February 1, 2017 and recorded derivative income of $4.9 million and $5.1 million for the three months ended March 31, 2017 and June 30, 2017, respectively. In the three and nine months ended September 30, 2017, we reversed aggregate derivative income of $6.8 million to correct the derivative to its value as of February 1, 2017. The adjustment of previously recorded derivative income for the three months ended March 31, 2017 and June 30, 2017 were not significant to those previous periods and increased our basic loss per share by $(0.01) for the three months ended September 30, 2017 in the consolidated statements of operations. In addition, because the embedded derivatives are no longer required to be accounted for separately each period, in September 2017 the embedded derivative fair value of $13.6 million as of February 1, 2017 was reclassified to additional paid in capital.

~~From 2013 to 2016, holders of the 2033 Senior Notes converted 143.2 million in aggregate principal amount into an aggregate of 21,539,873 shares of the Company’s Common Stock.~~

On April 1, 2015, we initially announced that our 2033 Senior Notes were convertible through June 2015 by holders of such notes. This conversion right was triggered because the closing price per share of our Common Stock exceeded $9.19, or 130% of the initial conversion price of $7.07, for at least 20 of 30 consecutive trading days during the applicable measurement period. We have elected to satisfy our conversion obligation under the 2033 Senior Notes in shares of our Common Stock. Our 2033 Senior Notes continued to be convertible by holders of such notes for the remainder of 2015, 2016 and the first quarter of 2017, and may be convertible thereafter, if one or more of the conversion conditions specified in the Indenture is satisfied during future measurement periods. Pursuant to the Indenture, a holder who elects to convert the 2033 Senior Notes will receive 141.4827 shares of our Common Stock plus such number of additional shares as is applicable on the conversion date per $1,000 principal amount of 2033 Senior Notes based on the early conversion provisions in the Indenture.

Through February 1, 2017, we used a binomial lattice model in order to estimate the fair value of the embedded derivative in the 2033 Senior Notes. A binomial lattice model generates two probable outcomes — one up and another down —arising at each point in time, starting from the date of valuation until the maturity date. A lattice model was initially used to determine if the 2033 Senior Notes would be converted, called or held at each decision point. Within the lattice model, the following assumptions are made: (i) the 2033 Senior Notes will be converted early if the conversion value is greater than the holding value; or (ii) the 2033 Senior Notes will be called if the holding value is greater than both (a) the redemption price (as defined in the Indenture) and (b) the conversion value plus the coupon make-whole payment at the time. If the 2033 Senior Notes are called, then the holders will maximize their value by finding the optimal decision between (1) redeeming at the redemption price and (2) converting the 2033 Senior Notes.

Using this lattice model, we had valued the embedded derivatives using the “with-and-without method,” where the value of the 2033 Senior Notes including the embedded derivatives is defined as the “with,” and the value of the 2033 Senior Notes excluding the embedded derivatives is defined as the “without.” This method estimated the value of the embedded derivatives by looking at the difference in the values between the 2033 Senior Notes with the embedded derivatives and the value of the 2033 Senior Notes without the embedded derivatives.

The lattice model requires the following inputs: (i) price of our Common Stock; (ii) Conversion Rate (as defined in the Indenture); (iii) Conversion Price (as defined in the Indenture); (iv) maturity date; (v) risk-free interest rate; (vi) estimated stock volatility; and (vii) estimated credit spread for the Company.

~~The following table sets forth the inputs to the lattice model used to value the embedded derivative as of February 1, 2017:~~



	~~February 1, 2017~~
~~Stock price~~	~~$8.63~~
~~Conversion Rate~~	~~141.4827~~
~~Conversion Price~~	~~$7.07~~
~~Maturity date~~	~~February 1, 2033~~
~~Risk-free interest rate~~	~~1.22%~~
~~Estimated stock volatility~~	~~49%~~
~~Estimated credit spread~~	~~761 basis points~~

OnIn November 5, 2015, BioReference and certain of its subsidiaries entered into a credit agreement with JPMorgan Chase Bank, N.A. (“CB”), as lender and administrative agent, as amended (the “Credit Agreement”)~~, which replaced BioReference’s prior credit facility.~~. The Credit Agreement provides for a ~~$175.0~~$75.0 million secured revolving credit facility and includes a $20.0 million sub-facility for swingline loans and a $20.0 million sub-facility for the issuance of letters of credit. ~~BioReference may increase the credit facility to up to $275.0 million on a secured basis, subject to the satisfaction of specified conditions.~~ The Credit Agreement matures on November 5, ~~2020~~2021 and is guaranteed by all of BioReference’s domestic subsidiaries. The Credit Agreement is also secured by substantially all assets of BioReference and its domestic subsidiaries, as well as a non-recourse pledge by us of our equity interest in BioReference. Availability under the Credit Agreement is based on a borrowing base ~~comprised~~composed of eligible accounts receivables of BioReference and certain of its subsidiaries, as specified therein. As of June 30, 2021, $64.3 million remained available for borrowing under the Credit Agreement. Principal under the Credit Agreement is due upon maturity on November 5, ~~2020.~~2021.

At BioReference’s option, borrowings under the Credit Agreement (other than swingline loans) will bear interest at (i) the CB floating rate (defined as the higher of (a) the prime rate and (b) the LIBOR rate (adjusted for statutory reserve requirements for Eurocurrency liabilities) for an interest period of one month plus 2.50%) plus an applicable margin of 0.35% for the first 12 months and 0.50% thereafter or (ii) the LIBOR rate (adjusted for statutory reserve requirements for Eurocurrency liabilities) plus an applicable margin of 1.35% for the first 12 months and 1.50% thereafter. Swingline loans will bear interest at the CB floating rate plus the applicable margin. The Credit Agreement also calls for other customary fees and charges, including an unused commitment fee of ~~0.50%~~0.25% of the lending commitments.

~~On March 17, 2017, BioReference~~ As of June 30, 2021 and ~~certain of its subsidiaries entered into Amendment No. 3 to Credit Agreement, which amended~~December 31, 2020, 0 amount and $7.1 million, respectively, was outstanding under the Credit Agreement to permit BioReference and its subsidiaries to dividend cash to the Company in the form of an intercompany loan, in an aggregate amount not to exceed $55,000,000. On August 7, 2017, BioReference and certain of its subsidiaries entered into Amendment No. 4 to Credit Agreement, which amended the Credit Agreement to permit BioReference and its subsidiaries to dividend cash to the Company in the form of an additional intercompany loan, in an aggregate amount not to exceed $35,000,000. The other terms of the Credit Agreement remain unchanged.Agreement.

The Credit Agreement contains customary covenants and restrictions, including, without limitation, covenants that require BioReference and its subsidiaries to maintain a minimum fixed charge coverage ratio if availability under the new credit facility falls below a specified amount and to comply with laws and restrictions on the ability of BioReference and its subsidiaries to incur additional indebtedness or to pay dividends and make certain other distributions to the Company, subject to certain exceptions as specified therein. Failure to comply with these covenants would constitute an event of default under the Credit Agreement, notwithstanding the ability of BioReference to meet its debt service obligations. The Credit Agreement also

Table of Contents

includes various customary remedies for the lenders following an event of default, including the acceleration of repayment of outstanding amounts under the Credit Agreement and execution upon the collateral securing obligations under the Credit Agreement. Substantially all the assets of BioReference and its subsidiaries are restricted from sale, transfer, lease, disposal or distributions to the Company, subject to certain exceptions. As of June 30, 2021, BioReference and its subsidiaries had net assets as of ~~September 30, 2017 were~~ approximately ~~$1.0 billion,~~$1,095.7 million, which ~~includes~~included goodwill of ~~$401.8~~$434.8 million and intangible assets of ~~$457.0~~$314.4 million.

In addition to the Credit Agreement with CB, we ~~have~~had line of credit agreements with ~~eleven~~11 other financial institutions as of ~~September~~both June 30, ~~2017~~2021 and ~~ten other financial institutions as of~~ December 31, ~~2016~~2020 in ~~United States,~~the U.S., Chile and Spain. These lines of credit are used primarily as ~~a source~~sources of working capital for inventory purchases.

The following table summarizes the amounts outstanding under the ~~Bio Reference,~~BioReference, Chilean and Spanish lines of credit:


(Dollars in thousands)				Balance Outstanding				(Dollars in thousands)				Balance Outstanding
Lender	Interest rate on borrowings at September 30, 2017	Credit line capacity		September 30, 2017		December 31, 2016		Lender	Interest rate on borrowings at June 30, 2021	Credit line capacity		June 30, 2021		December 31, 2020
JPMorgan Chase	3.36%	$	175,000	$	93,311	$	38,809	JPMorgan Chase	3.75%	$	75,000	$	0	$	7,057
Itau Bank	5.50%	1,810		374		419		Itau Bank	5.50%	2,887		2,887		2,353
Bank of Chile	6.60%	3,800		2,687		1,619		Bank of Chile	6.60%	2,275		860		1,494
BICE Bank	5.50%	2,500		1,720		1,538		BICE Bank	5.50%	2,500		919		1,166
BBVA Bank	5.50%	3,250		2,164		1,063
Scotiabank								Scotiabank	5.50%	4,500		0		1,829
Santander Bank								Santander Bank	5.50%	4,500		663		3,025
Security Bank								Security Bank	5.50%	2,797		2,797		262
Estado Bank	5.50%	3,500		2,559		1,870		Estado Bank	5.50%	4,700		2,161		2,127
BCI Bank								BCI Bank	5.00%	2,645		2,645		0
Corpbanca								Corpbanca	5.00%	3,265		3,265		3,641
Banco De Sabadell								Banco De Sabadell	1.75%	594		0		0
Santander Bank	5.50%	4,500		2,133		1,196		Santander Bank	1.82%	594		0		0
Scotiabank	5.00%	1,800		986		789
Corpbanca	5.00%	—		—		18
Banco Bilbao Vizcaya	2.90%	295		—		—
Santander Bank	2.67%	354		—		—

Total		$	196,809	$	105,934	$	47,321	Total		$	106,257	$	16,197	$	22,954

At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the weighted average interest rate on our lines of credit was approximately ~~4.5%~~5.4% and ~~4.7%~~4.9%, respectively.

At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, we had notes payable and other debt (excluding the 2033 Senior Notes, the 2023 Convertible Notes, the 2025 Notes, the Credit Agreement and amounts outstanding under lines of ~~credit)~~credit described above) as follows:


(In thousands)	June 30, 2021		December 31, 2020
Current portion of notes payable	$	1,764	$	1,749
Other long-term liabilities	4,517		4,513
Total	$	6,281	$	6,262

(In thousands) September 30,
2017
December 31,
2016
Current portion of notes payable $ 3,726
$ 3,681
Other long-term liabilities 2,085
2,090
Total $ 5,811
$ 5,771

The notes and other debt mature at various dates ranging from ~~2017~~2020 through 2024, bearing variable interest rates from ~~1.8%~~0.7% up to ~~6.3%~~3.8%. The weighted average interest rate on the notes and other debt at ~~September~~was 2.7% and 2.9% on June 30, ~~2017~~2021 and December 31, ~~2016, was~~ ~~2.9%~~ ~~and~~ ~~3.2%, respectively.~~2020. The notes ~~payable~~ are partially secured by our office space in Barcelona.

NOTE 78 ACCUMULATED OTHER COMPREHENSIVE ~~INCOME (LOSS)~~LOSS

For the ~~nine~~six months ended ~~September~~June 30, ~~2017~~,2021, changes in Accumulated other comprehensive ~~income (loss),~~loss, net of tax, were as follows:


(In thousands)	Foreign currency translation
Balance at December 31, 2020	$	(4,225)
Other comprehensive loss	(5,707)


Balance at June 30, 2021	$	(9,932)

(In thousands)
Foreign
currency

Unrealized
gain (loss) in
Accumulated
OCI
Total
Balance at December 31, 2016 $ (28,128 ) $ 1,119
$ (27,009 )
Other comprehensive income (loss) before reclassifications 21,646
(749 ) 20,897
Reclassification adjustments for losses included in net loss, net of tax

690
690
Net other comprehensive income (loss) 21,646
(59 ) 21,587
Balance at September 30, 2017 $ (6,482 ) $ 1,060
$ (5,422 )

Table of Contents

NOTE 89 FAIR VALUE MEASUREMENTS

We record fair values at an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers ~~include:~~are: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

~~A summary of our investments classified as available for sale and carried at fair value, is as follows:~~

As of September 30, 2017
(In thousands)
Amortized
Cost

Gross
unrealized
gains in
Accumulated
OCI

Gross
unrealized
losses in
Accumulated
OCI

Fair
value
Common stock investments, available for sale $ 2,048
$ 1,308
$ (248 ) $ 3,108
Total assets $ 2,048
$ 1,308
$ (248 ) $ 3,108

As of December 31, 2016
(In thousands)
Amortized
Cost

Gross
unrealized
gains in
Accumulated
OCI

Gross
unrealized
losses in
Accumulated
OCI

Fair
value
Common stock investments, available for sale $ 3,409
$ 1,313
$ (194 ) $ 4,528
Total assets $ 3,409
$ 1,313
$ (194 ) $ 4,528

Any future fluctuation in fair value related to our available for sale investments that is judged to be temporary, and any recoveries of previous temporary write-downs, will be recorded in Accumulated other comprehensive income (loss). If we determine that any future valuation adjustment was other-than-temporary, we will record a loss during the period such determination is made.

As of ~~September~~June 30, ~~2017,~~2021, we ~~have money market funds that qualify as cash equivalents,~~had equity securities (refer to Note 6), forward foreign currency exchange contracts for inventory purchases (refer to Note 9)10) and contingent consideration related to the acquisitions of CURNA, OPKO Diagnostics and OPKO Renal that are required to be measured at fair value on a recurring basis. In addition, in connection with our investment and our consulting ~~agreements~~agreement with ~~Neovasc and~~ BioCardia, we record the related ~~Neovasc and~~ BioCardia options at fair value as well as the warrants from COCP, ~~Sevion, MabVax,~~ InCellDx, ~~Inc.,~~ Xenetic and ~~RXi.~~

Phio.

Our financial assets and liabilities measured at fair value on a recurring basis are as follows:


	Fair value measurements as of June 30, 2021
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:


Equity securities	$	7,466	$	0	$	0	$	7,466
Common stock options/warrants	0		68		0		68
Forward contracts	0		358		0		358
Total assets	$	7,466	$	426	$	0	$	7,892
Liabilities:



Contingent consideration	0		0		3,474		3,474
Total liabilities	$	0	$	0	$	3,474	$	3,474


	Fair value measurements as of September 30, 2017									Fair value measurements as of December 31, 2020
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total		(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:									Assets:
Money market funds	$	12,621	$	—	$	—	$	12,621
Common stock investments, available for sale	3,108		—		—		3,108

Equity securities									Equity securities	$	14,136	$	0	$	0	$	14,136
Common stock options/warrants	—		2,020		—		2,020		Common stock options/warrants	0		74		0		74

Total assets	$	15,729	$	2,020	$	—	$	17,749	Total assets	$	14,136	$	74	$	0	$	14,210
Liabilities:									Liabilities:

Forward contracts	—		264		—		264		Forward contracts	0		1,040		0		1,040

Contingent consideration	—		—		40,301		40,301		Contingent consideration	0		0		5,695		5,695
Total liabilities	$	—	$	264	$	40,301	$	40,565	Total liabilities	$	0	$	1,040	$	5,695	$	6,735

Fair value measurements as of December 31, 2016
(In thousands)
Quoted
prices in
active
markets for
identical
assets
(Level 1)

Significant
other
observable
inputs
(Level 2)

Significant
unobservable
inputs
(Level 3)
Total
Assets:
Money market funds $ 5,314
$ —
$ —
$ 5,314
Common stock investments, available for sale 4,528
—
—
4,528
Common stock options/warrants —
4,017
—
4,017
Forward contracts —
39
—
39
Total assets $ 9,842
$ 4,056
$ —
$ 13,898
Liabilities:
Embedded conversion option $ —
$ —
$ 16,736
$ 16,736
Contingent consideration —
—
45,076
45,076
Total liabilities $ —
$ —
$ 61,812
$ 61,812

The carrying amount and estimated fair value of our ~~2033 Senior~~2025 Notes, ~~with the embedded conversion option,~~ as well as the applicable fair value hierarchy tiers, are contained in the table below. The fair value of the ~~2033 Senior~~2025 Notes is determined using ~~a binomial lattice approach~~inputs other than quoted prices in ~~order to estimate the fair value~~active markets that are directly observable.

Table of ~~the embedded derivative in the 2033 Senior Notes. Refer to Note 6.~~Contents


	June 30, 2021
(In thousands)	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3
2025 Notes	$	116,009	$	188,902	$	0	$	188,902	$	0

September 30, 2017
(In thousands)
Carrying
Value

Total
Fair Value
Level 1 Level 2 Level 3
2033 Senior Notes $ 28,590
$ 37,011
$ —
$ —
$ 37,011

There have been no transfers between Level 1 and Level 2 and no transfers to or from Level 3 of the fair value hierarchy.

As of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016,~~2020, the carrying value of our other financial instrument assets ~~and liabilities~~ approximates their fair value due to their short-term nature or variable rate of interest.

The following table reconciles the beginning and ending balances of our Level 3 assets and liabilities as of ~~September~~June 30, ~~2017~~:2021:

The estimated fair values of our financial instruments have been determined by using available market information and what we believe to be appropriate valuation methodologies. We use the following methods and assumptions in estimating fair value:

Contingent consideration – We estimate the fair value of the contingent consideration utilizing a discounted cash flow model for the expected payments based on estimated timing and expected revenues. We use several discount rates depending on each type of contingent consideration related to OPKO Diagnostics, CURNA and OPKO Renal transactions. ~~If estimated future sales were to decrease by~~ ~~10%, the contingent consideration related to OPKO Renal, which represents the majority of our contingent consideration liability, would decrease by~~ ~~$2.4 million~~. As of ~~September~~June 30, ~~2017~~,2021, of the ~~$40.3~~$3.5 million of contingent consideration, ~~$2.0~~$0.5 million is was recorded in Accrued expenses and ~~$38.3~~$3.0 million is was recorded in Other long-term liabilities. As of December 31, ~~2016~~,2020, of the ~~$45.1~~$5.7 million of contingent consideration, ~~$0.3~~$1.2 million is was recorded in Accrued expenses and ~~$44.8~~$4.5 million iswas recorded in Other long-term liabilities.

NOTE 910 DERIVATIVE CONTRACTS

The following table summarizes the fair values and the presentation of our derivative ~~financial instruments~~assets (liabilities) in the Condensed Consolidated Balance Sheets:

We enter into foreign currency forward exchange contracts with respect to ~~cover~~ the risk of exposure to exchange rate differences arising from inventory purchases on letters of credit. Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.

To qualify the derivative instrument as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~,2020, our derivative financial instruments dodid not meet the documentation requirements to be designated as hedges. Accordingly, we recognize the changes in Fair value of derivative instruments, net in our Condensed Consolidated ~~Statements~~Statement of Operations. The following table summarizes the losses and gains recorded for the ~~nine~~three and six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016:~~2020:

NOTE 1011 RELATED PARTY TRANSACTIONS

In August 2020, we paid a $125,000 filing fee to the Federal Trade Commission (the “FTC”) in connection with filings made by us and Dr. Jane Hsiao, our Vice Chairman and Chief Technical Officer, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”) relating to her percentage equity ownership interest in OPKO and potential future purchases of our Common Stock.

In August 2020, Dr. Phillip Frost, our Chairman and Chief Executive Officer, paid a filing fee of $280,000 to the FTC under the HSR Act in connection with filings made by us and Dr. Frost, relating to his percentage equity ownership interest in OPKO and potential future purchases of our Common Stock. We reimbursed Dr. Frost for the HSR filing fee.

In August 2020, GeneDx, Inc., a subsidiary of BioReference, entered into an agreement with Mednax Services, Inc. (“Mednax Services”), a subsidiary of MEDNAX, Inc., (“MEDNAX”) pursuant to which the parties formed a joint venture under the brand Detect Genomix. GeneDx’s initial capital investment in Detect Genomix was $245,000 for which GeneDx received a 49% ownership interest in Detect Genomix, and Mednax Services contributed $255,000 in exchange for a 51% ownership interest in Detect Genomix. Adam Logal, the Company’s CFO, is the chair and sits on the Board of Managers of the joint venture. Mednax Services provides administrative services to the joint venture pursuant to an administrative services agreement. GeneDx provides laboratory services to the joint venture. Dr. Roger Medel, a director of the Company, is the former Chief Executive Officer of MEDNAX and Mednax Services. Dr. Medel serves on the board of MEDNAX.

On February 25, 2020, we entered into a credit agreement with an affiliate of Dr. Frost, pursuant to which the lender committed to provide us with an unsecured line of credit in the amount of $100 million. The line of credit called for a commitment fee equal to 0.25% per annum of the unused portion of the line. We terminated this line of credit in June 2021 and as of June 30, 2021, 0 amount was outstanding thereunder.

The Company owns approximately 9% of Pharmsynthez and Pharmsynthez is Xenetic’s largest and controlling stockholder. Dr. Richard Lerner, a director of the Company, is a co-inventor of Xenetic’s technology and received 31,240 shares of Xenetic upon the closing of the Xenetic transactions described above. Adam Logal, our Senior Vice President and Chief Financial Officer, is the Chairman of the Board of Directors of Xenetic.

We hold investments in Zebra (ownership 29%), ~~Sevion (31%),~~ Neovasc ~~(4%~~(1%), ChromaDex Corporation ~~(1%), MabVax (4%~~(0.1%), COCP ~~(9%) ARNO (5%~~(3%), NIMS (1%), Eloxx (2%), and BioCardia ~~(5%) and Eloxx (3%~~(1%). These investments were considered related party transactions as a result of our executive management’s ownership interests and/or board representation in these entities. See further discussion of our investments in Note 5.

In June 2017, we invested $1.5 million in Eloxx for 99,915 Preferred C Shares and in July 2017, we invested an additional $1.5 million in Sevion for 10,000,000 shares of Sevion common stock. An entity controlled by Dr. Frost also made in investment in Eloxx and committed to investing additional funds in Sevion by December 31, 2017. Sevion and Eloxx entered into an acquisition agreement on May 31, 2017 under which Eloxx will become a wholly owned subsidiary of Sevion. Upon completion of the transaction, Sevion will change its name to Eloxx Pharmaceuticals, Inc. Previously, in November 2016, we made a $0.2 million loan to Sevion, and in February 2017, we entered into an agreement with Sevion pursuant to which we delivered $0.3 million cash to Sevion in exchange for a promissory note. The loan and promissory note were converted into 4.1 million shares of Sevion common stock in August 2017. In September 2017, we converted 66,667 shares of Series C Preferred Stock of Sevion into 1,250,006 shares of common stock. The agreements with Sevion were considered related party transactions as a result of our executive management’s ownership interests and board representation in Sevion.

In July 2017, we invested an additional $0.1 million in MabVax for 152,143 shares of common stock and in May 2017, we invested an additional $0.5 million in MabVax for 285,714 shares of Series G Preferred Stock and 322,820 shares of Series I Preferred Stock. We had also invested an additional $1.0 million in MabVax in August 2016 for 207,900 shares of its common stock and warrants to purchase 415,800 shares of its common stock.

In April 2017, we invested an additional $1.0 million in COCP for 4,166,667 shares of its common stock, and in August 2016, we had invested an additional $2.0 million in COCP for 4,878,050 shares of its common stock.

In January 2016, we invested an additional $0.3 million in ARNO for 714,285 shares of its common stock, and in August 2016, we had invested an additional $0.3 million in ARNO for 714,285 shares of its common stock and warrants to purchase 357,142 shares of its common stock.

In October 2016, we entered into a consulting agreement to provide strategic advisory services to BioCardia. In connection with the consulting agreement, BioCardia granted us 5,027,726 common stock options. In December 2016, we purchased 19,230,769 shares of BioCardia from Dr. Frost for $2.5 million. We have also purchased shares of BioCardia in the open market. BioCardia is a related party as a result of our executive management’s ownership interest and board representation in BioCardia and its predecessor, Tiger X Medical, Inc. In October 2016, BioCardia completed its merger with Tiger X Medical, Inc., to which Tiger X Medical, Inc. was the surviving entity and the name of the issuer was changed to BioCardia.6.

In November 2016, we entered into a Pledge Agreement with the Museum of Science, Inc. and the Museum of Science Endowment Fund, Inc. pursuant to which we ~~will~~agreed to contribute an aggregate of $1.0 million over a four-year period for constructing, equipping and the general operation of the Frost Science Museum. Dr. Frost and Mr. Richard Pfenniger serve on the Board of Trustees of the Frost Science Museum and Mr. Pfenniger is the Vice Chairman of the Board of Trustees.

We lease office space from Frost Real Estate Holdings, LLC (“Frost Holdings”) in Miami, Florida, where our principal executive offices are located. Effective ~~January~~August 1, ~~2017,~~2019, we entered into an amendment to our lease agreement with Frost Holdings. The lease, as amended, is for approximately 29,500 square feet of space. The lease provides for payments of approximately ~~$81~~$89 thousand per month in the first year increasing annually to ~~$86~~$101 thousand per month in the ~~third~~fifth year, plus applicable sales tax. The rent is inclusive of operating expenses, property taxes and parking.

~~Our wholly-owned subsidiary,~~ BioReference purchases and uses certain products acquired from InCellDx, ~~Inc.,~~ a company in which we hold a ~~28%~~29% minority interest.

We reimburse Dr. Frost for Company-related use by Dr. Frost and our other executives of an airplane owned by a company that is beneficially owned by Dr. Frost. We reimburse Dr. Frost for out-of-pocket operating costs for the use of the airplane by Dr. Frost or Company executives for Company-related business. We do not reimburse Dr. Frost for personal use of the airplane by Dr. Frost or any other executive. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2017,~~2021, we ~~recognized~~reimbursed approximately ~~$168~~$43 thousand ~~and $309 thousand, respectively,~~ for Company-related travel by Dr. Frost and other OPKO executives. For the three and ~~nine~~six months ended ~~September~~June 30, ~~2016,~~2020, we ~~recognized~~reimbursed approximately ~~$154~~$0 thousand and ~~$274~~$94 thousand, respectively, for Company-related travel by Dr. Frost and other OPKO executives.

NOTE 1112 COMMITMENTS AND CONTINGENCIES

In connection with our acquisitions of CURNA, OPKO Diagnostics and OPKO Renal, we agreed to pay future consideration to the sellers upon the achievement of certain events. As a result, as of ~~September~~June 30, ~~2017,~~2021, we recorded ~~$40.3~~$3.5 million as contingent consideration, with ~~$2.0~~$0.5 million recorded within Accrued expenses and ~~$38.3~~$3.0 million recorded within Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. Refer to Note 4.5 and Note 17.

~~In August 2017, we entered into a Commitment Letter (the “Commitment Letter”) with Veterans Accountable Care Group, LLC~~As previously mentioned, BioReference receives and is routinely required to respond to Civil Investigative Demands (“~~VACG”~~CID”) in ~~connection with submission~~the ordinary course of business. On November 26, 2019, BioReference received a ~~bid by its affiliate, the Veterans Accountable Care Organization, LLC (“VACO”) in response to a request for proposal (“RFP”)~~CID from the ~~Veterans Health Administration~~U.S. Department of Justice (“~~VA”~~DOJ”). The CID states that DOJ is investigating whether BioReference paid unlawful remuneration to health care practitioners in violation of the Anti-Kickback Statute or Stark law and thus submitted or caused to be submitted false claims to government health care programs in violation of the False Claims Act. The time period covered by DOJ’s requests is January 1, 2011 through November 26, 2019. BioReference has fully cooperated with the DOJ by submitting the requested information and making current employees available for interviews, and DOJ recently made a presentation to BioReference regarding its ~~Community Care Network. If VACO is successful in its bid, we will acquire a fifteen percent (15%) membership interest in VACO. In addition,~~position. While BioReference our wholly-owned subsidiary, will provide laboratory services for the Community Care Network, a region which currently includes approximately 2,133,000 veterans in the states of Massachusetts, Maine, New Hampshire, Vermont, New York, Pennsylvania, New Jersey, Rhode Island, Connecticut, Maryland, Virginia, West Virginia, and North Carolina.

~~Pursuant~~intends to the Commitment Letter, we committed to provide, or to arrange from a third party lender, a line of credit for VACG in the amount of $50.0 million (the “Facility”). Funds drawn under the Facility would be contributed by VACG to VACO in order to satisfy the financial stability requirement of VACO in connection with its submission of the RFP. VACG would not be permitted to draw down on the Facility unless and until the VHA awards a contract to VACO. The Facility would have a maturity of five (5) years. Interest on the Facility would be payable at a rate equal to six and one-half percent (6.5%) per annum, payable quarterly in arrears.

~~We currently anticipate that a decision by the VHA~~vigorously defend itself with respect to the ~~RFP will occur during~~claims, the ~~fourth quarter~~parties have begun to discuss settlement.

On April 5, 2019, former shareholders of ~~2017, although there can be no assurance that~~Claros Diagnostics, Inc. filed a ~~decision will be made by such time or that, if made, such decision will not be challenged by participants~~complaint in the ~~RFP process or otherwise.~~

~~The Facility is subject~~Chancery Court of Delaware against the Company, alleging among other things, that the Company breached the Agreement and Plan of Merger dated October 13, 2011 by and among the Company, Claros Merger Subsidiary, LLC and Claros Diagnostics, Inc. (the “Merger Agreement”): (i) by failing to make a milestone payment of $2.375 million (payable in OPKO Common Stock) upon obtaining FDA approval of the ~~negotiation of definitive documentation conditions customary for transactions of such type~~Claros PSA test; and ~~otherwise acceptable~~(ii) by repudiating its obligations to ~~VACG~~make additional future milestone payments as required under the Merger Agreement. In January 2021, the Company and the ~~lender under~~shareholder representative entered into a settlement agreement providing, among other things, that the ~~Facility.~~Company pay the shareholders $1.2 million, which the Company has paid.

~~We accrue a liability~~In April 2017, the Civil Division of the United States Attorney’s Office for ~~legal contingencies when we believe~~the Southern District of New York (the “SDNY”) informed BioReference that it ~~is both probable~~believed that, from 2008 to 2012, BioReference had, in violation of the False Claims Act, improperly billed Medicare and TRICARE (both are federal government healthcare programs) for clinical laboratory

services provided to hospital inpatient beneficiaries at certain hospitals. In April 2019, the SDNY also informed BioReference that it believed that BioReference provided physicians subsidies for electronic health record systems prior to 2012 that violated regulations adopted by HHS in 2006 which allowed laboratories to provide these donations under certain conditions. BioReference and the SDNY reached a ~~liability has been incurred~~settlement with respect to these matters and ~~that we can reasonably estimate the~~a final settlement and release, including BioReference’s payment of an approximately $11.5 million settlement amount, was approved on September 22, 2020. The amount of ~~the loss. We review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information~~related attorneys’ fees is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. For the matters referenced in the paragraph below, the amount of liability is not probable or the amount cannot be reasonably estimated; and, therefore, accruals have not been made. In addition, in accordance with the relevant authoritative guidance, for matters which the likelihood of material loss is at least reasonably possible, we provide disclosure of the possible loss or range of loss; however, if a reasonable estimate cannot be made, we will provide disclosure to that effect.currently being negotiated.

From time to time, we may receive inquiries, document requests, CIDs or subpoenas from the Department of Justice, ~~the Office of Inspector General and Office for Civil Rights (“OCR”) of the Department of Health and Human Services, the Centers for Medicare and Medicaid Services,~~OCR, CMS, various payors and fiscal intermediaries, and other state and federal regulators regarding investigations, audits and reviews. In addition to the matters discussed in this note, we are currently responding to CIDs, subpoenas, orpayor audits, and document requests for various matters relating to our laboratory operations. Some pending or threatened proceedings against us may involve potentially substantial amounts as well as the possibility of civil, criminal, or administrative fines, penalties, or other sanctions, which could be material. Settlements of suits involving the types of issues that we routinely confront may require monetary payments as well as corporate integrity agreements. Additionally, qui tam or “whistleblower” actions initiated under the civil False Claims Act may be pending but placed under seal by the court to comply with the False Claims Act’s requirements for filing such suits. Also, from time to time, we may detect issues of non-compliance with federal healthcare laws pertaining to claims submission and reimbursement practices and/or financial relationships with physicians, among other things. We may avail ourselves of various mechanisms to address these issues, including participation in voluntary disclosure protocols. Participating in voluntary disclosure protocols can have the potential for significant settlement obligations or even enforcement action. The Company generally has cooperated, and intends to continue to cooperate, with appropriate regulatory authorities as and when investigations, audits and inquiries arise.

We are a party to other litigation in the ordinary course of business. ~~We do not believe that any such litigation will have a material adverse effect on our business, financial condition, results of operations or cash flows.~~

In April 2017, the Civil Division of the United States Attorney’s Office for the Southern District of New York (the “SDNY”) informed BioReference Laboratories (“BioReference”) that it believes that, from 2006 to the present, BioReference

had, in violation of the False Claims Act, improperly billed Medicare and Tricare (both are federal government healthcare programs) for clinical laboratory services provided to hospital inpatient beneficiaries at certain hospitals. BioReference is reviewing and assessing the allegations made by the SDNY, and, at this point, BioReference has not determined whether there is any merit to the SDNY’s claims nor can it determine the extent of any potential liability. While ~~management~~we cannot predict the ultimate outcome of ~~these~~legal matters, ~~at this time,~~we accrue a liability for legal contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. It’s reasonably possible the ultimate liability could exceed amounts currently estimated and we review established accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. Because of the high degree of judgment involved in establishing loss estimates, the ultimate outcome ~~could~~of such matters will differ from our estimates and such differences may be material to our business, financial condition, results of operations, and cash flows.

We expect to continue to incur substantial research and development expenses, including expenses related to the hiring of personnel and additional clinical trials. We expect that selling, general and administrative expenses will also increase as we expand our sales, marketing and administrative staff and add infrastructure, particularly as it relates to the launch of ~~Rayaldee.~~ We do not anticipate that we will generate substantial revenue from the sale of proprietary pharmaceutical products or certain of our diagnostic products for some time and we have generated only limited revenue from our pharmaceutical operations in Chile, Mexico, Israel, Spain, and Ireland, and from sale of the ~~4Kscore~~ test. If we acquire additional assets or companies, accelerate our product development programs or initiate additional clinical trials, we will need additional funds. If we are not able to secure additional funding when needed, we may have to delay, reduce the scope of, or eliminate one or more of our clinical trials or research and development programs or possible acquisitions.

We have employment agreements with certain executives of BioReference which provide for compensation and certain other benefits and for severance payments under certain circumstances. During the nine months ended SeptemberAt June 30, ~~2017 and 2016, we recognized $3.7 million and $17.9 million, respectively, of severance costs pursuant to these employment agreements as a component of Selling, general and administrative expense.~~

~~At September 30, 2017,~~2021, we were committed to make future purchases for inventory and other items in ~~2017~~2021 that occur in the ordinary course of business under various purchase arrangements with fixed purchase provisions aggregating ~~$106.6~~approximately $135.5 million.

NOTE 13 REVENUE RECOGNITION

We generate revenues from services, products and intellectual property as follows:

Revenue from services

Revenue for laboratory services is recognized at the time test results are reported, which approximates when services are provided and the performance obligations are satisfied. Services are provided to patients covered by various third-party payor programs including various managed care organizations, as well as the Medicare and Medicaid programs. Billings for services are included in revenue net of allowances for contractual discounts, allowances for differences between the amounts billed and estimated program payment amounts, and implicit price concessions provided to uninsured patients which are all elements of variable consideration.

The following are descriptions of our payors for laboratory services:

Healthcare Insurers. Reimbursements from healthcare insurers are based on negotiated fee-for-service schedules. Revenues consist of amounts billed, net of contractual allowances for differences between amounts billed and the estimated consideration we expect to receive from such payors, which considers historical denial and collection experience and the terms of our contractual arrangements. Adjustments to the allowances, based on actual receipts from the third-party payors, are recorded upon settlement.

Government Payors. Reimbursements from government payors are based on fee-for-service schedules set by governmental authorities, including traditional Medicare and Medicaid. Revenues consist of amounts billed, net of contractual allowances for differences between amounts billed and the estimated consideration we expect to receive from such payors,

which considers historical denial and collection experience and the terms of our contractual arrangements. Adjustments to the allowances, based on actual receipts from the government payors, are recorded upon settlement.

Client Payors. Client payors include physicians, hospitals, employers, and other institutions for which services are performed on a wholesale basis, and are billed and recognized as revenue based on negotiated fee schedules. Client payors also include cities, states and companies for which BioReference provides COVID-19 testing services.

Patients. Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients. Insured patients (including amounts for coinsurance and deductible responsibilities) are billed based on fees negotiated with healthcare insurers. Collection of billings from patients is subject to credit risk and ability of the patients to pay. Revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with our policies and implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration that we expect to receive from patients, which considers historical collection experience and other factors including current market conditions. Adjustments to the estimated allowances, based on actual receipts from the patients, are recorded upon settlement.

The complexities and ambiguities of billing, reimbursement regulations and claims processing, as well as considerations unique to Medicare and Medicaid programs, require us to estimate the potential for retroactive adjustments as an element of variable consideration in the recognition of revenue in the period the related services are rendered. Actual amounts are adjusted in the period those adjustments become known. For the six months ended June 30, 2021 and June 30 2020, positive revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $28.5 million and $0.2 million were recognized, respectively. Revenue adjustments for the six months ended June 30, 2021 were primarily due to an improvement in COVID-19 test reimbursement estimates.

Third-party payors, including government programs, may decide to deny payment or recoup payments for testing they contend were improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received. Our revenues may be subject to retroactive adjustment as a result of these factors among others, including without limitation, differing interpretations of billing and coding guidance and changes by government agencies and payors in interpretations, requirements, and “conditions of participation” in various programs. We have processed requests for recoupment from third-party payors in the ordinary course of our business, and it is likely that we will continue to do so in the future. If a third-party payor denies payment for testing or recoups money from us in a later period, reimbursement for our testing could decline.

As an integral part of our billing compliance program, we periodically assess our billing and coding practices, respond to payor audits on a routine basis, and investigate reported failures or suspected failures to comply with federal and state healthcare reimbursement requirements, as well as overpayment claims which may arise from time to time without fault on the part of the Company. We may have an obligation to reimburse Medicare, Medicaid, and third-party payors for overpayments regardless of fault. We have periodically identified and reported overpayments, reimbursed payors for overpayments and taken appropriate corrective action.

Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are also considered variable consideration and are included in the determination of the estimated transaction price for providing services. These settlements are estimated based on the terms of the payment agreement with the payor, correspondence from the payor and our historical settlement activity, including an assessment of the probability a significant reversal of cumulative revenue recognized will occur when the uncertainty is subsequently resolved. Estimated settlements are adjusted in future periods as adjustments become known (that is, new information becomes available), or as years are settled or are no longer subject to such audits, reviews, and investigations. As of June 30, 2021 and December 31, 2020, we had liabilities of approximately $9.5 million and $14.9 million, respectively, within Accrued expenses and Other long-term liabilities related to reimbursements for payor overpayments.

The composition of Revenue from services by payor for the three and six months ended June 30, 2021 and 2020 was as follows:


	Three months ended June 30,				Six months ended June 30,
(In thousands)	2021		2020		2021		2020
Healthcare insurers	$	109,084	$	84,082	$	273,913	$	183,232
Government payers	57,611		15,886		131,269		42,784
Client payers	225,936		141,090		488,845		180,191
Patients	4,566		9,913		10,122		15,604
Total	$	397,197	$	250,971	$	904,149	$	421,811

Revenue from products

We recognize revenue from product sales when a customer obtains control of promised goods or services. The amount of revenue that is recorded reflects the consideration that we expect to receive in exchange for those goods or services. Our estimates for sales returns and allowances are based upon the historical patterns of product returns and allowances taken, matched against the sales from which they originated, and our evaluation of specific factors that may increase or decrease the risk of product returns. Product revenues are recorded net of estimated rebates, chargebacks, discounts, co-pay assistance and other deductions (collectively, “Sales Deductions”) as well as estimated product returns which are all elements of variable consideration. Allowances are recorded as a reduction of revenue at the time product revenues are recognized. The actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect Revenue from products in the period such variances become known.

Rayaldee is distributed in the U.S. principally through the retail pharmacy channel, which initiates with the largest wholesalers in the U.S. (collectively, “Rayaldee Customers”). In addition to distribution agreements with Rayaldee Customers, we have entered into arrangements with many healthcare providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of Rayaldee.

We recognize revenue for shipments of Rayaldee at the time of delivery to customers after estimating Sales Deductions and product returns as elements of variable consideration utilizing historical information and market research projections. For the three and six months ended June 30, 2021, we recognized $5.0 million and $8.6 million, respectively, in net product revenue from sales of Rayaldee. For the three and six months ended June 30, 2020, we recognized $8.6 million and $18.6 million, respectively, in net product revenue from sales of Rayaldee.

The following table presents an analysis of product sales allowances and accruals for the three and six months ended June 30, 2021:


(In thousands)	Chargebacks, discounts, rebates and fees		Governmental		Returns		Total
Balance at March 31, 2021	$	1,693	$	6,209	$	3,487	$	11,389
Provision related to current period sales	3,724		7,061		322		11,107

Credits or payments made	(3,716)		(5,684)		(485)		(9,885)
Balance at June 30, 2021	$	1,701	$	7,586	$	3,324	$	12,611

Total gross Rayaldee sales							$	16,122
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales							69%


(In thousands)	Chargebacks, discounts, rebates and fees		Governmental		Returns		Total
Balance at December 31, 2020	$	2,332	$	5,812	$	3,593	$	11,737
Provision related to current period sales	7,539		12,755		635		20,929

Credits or payments made	(8,170)		(10,981)		(904)		(20,055)
Balance at June 30, 2021	$	1,701	$	7,586	$	3,324	$	12,611

Total gross Rayaldee sales							$	31,767
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales							66%

Taxes collected from customers related to revenues from services and revenues from products are excluded from revenues.

Revenue from intellectual property

We recognize revenues from the transfer of intellectual property generated through license, development, collaboration and/or commercialization agreements. The terms of these agreements typically include payment to us for one or more of the following: non-refundable, up-front license fees; development and commercialization milestone payments; funding of research and/or development activities; and royalties on sales of licensed products. Revenue is recognized upon satisfaction of a performance obligation by transferring control of a good or service to the customer.

For research, development and/or commercialization agreements that result in revenues, we identify all material performance obligations, which may include a license to intellectual property and know-how, and research and development activities. In order to determine the transaction price, in addition to any upfront payment, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. We constrain (reduce) our estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue. In making these assessments, we consider the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required.

Upfront License Fees: If a license to our intellectual property is determined to be functional intellectual property distinct from the other performance obligations identified in the arrangement, we recognize revenue from nonrefundable, upfront license fees based on the relative value prescribed to the license compared to the total value of the arrangement. The revenue is recognized when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, we apply an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.

Development and Regulatory Milestone Payments: Depending on facts and circumstances, we may conclude that it is appropriate to include the milestone in the estimated transaction price or that it is appropriate to fully constrain the milestone. A milestone payment is included in the transaction price in the reporting period that we conclude that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods. We may record revenues from certain milestones in a reporting period before the milestone is achieved if we conclude that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. We record a corresponding contract asset when this conclusion is reached. Milestone payments that have been fully constrained are not included in the transaction price to date. These milestones remain fully constrained until we conclude that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. We re-evaluate the probability of achievement of such development milestones and any related constraint each reporting period. We adjust our estimate of the overall transaction price, including the amount of revenue recorded, if necessary.

Research and Development Activities: If we are entitled to reimbursement from our customers for specified research and development expenses, we account for them as separate performance obligations if distinct. We also determine whether the research and development funding would result in revenues or an offset to research and development expenses in accordance

with provisions of gross or net revenue presentation. The corresponding revenues or offset to research and development expenses are recognized as the related performance obligations are satisfied.

Sales-based Milestone and Royalty Payments: Our customers may be required to pay us sales-based milestone payments or royalties on future sales of commercial products. We recognize revenues related to sales-based milestone and royalty payments upon the later to occur of (i) achievement of the customer’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to our intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate.

Other Potential Products and Services: Arrangements may include an option for license rights, future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s election. We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations at the inception of the contract and revenue is recognized only if the option is exercised and products or services are subsequently delivered or when the rights expire. If the promise is based on market terms and not considered a material right, the option is accounted for if and when exercised. If we are entitled to additional payments when the licensee exercises these options, any additional payments are generally recorded in license or other revenues when the licensee obtains control of the goods, which is upon delivery.

For the three and six months ended June 30, 2021, revenue from transfer of intellectual property principally reflects $2.8 million and $5.6 million of revenue, respectively, related to the Pfizer Transaction (as defined below) and a $5.0 million non-refundable upfront payment we have received under the Nicoya Agreement (as defined below). For the three and six months ended June 30, 2020, revenue from transfer of intellectual property principally reflects $13.9 million and $22.7 million of revenue, respectively, related to the Pfizer Transaction. In addition, revenue from the transfer of intellectual property and other for the three and six months ended June 30, 2020 includes a $6.2 million grant received by BioReference from the CARES Act. Refer to Note 14 for discussion of the Pfizer Transaction.

Contract liabilities relate to cash consideration that OPKO receives in advance of satisfying the related performance obligations. Changes in the contractual liabilities balance during the six months ended June 30, 2021 are as follows:


(In thousands)
Balance at December 31, 2020	$	16,378
Balance at June 30, 2021	8,952
Revenue recognized in the period from:
Amounts included in contracts liability at the beginning of the period	7,425

The contract liability balance at June 30, 2021 related primarily to accelerated payments received as part of the CARES Act. Refer to Note 2.

NOTE 1214 STRATEGIC ALLIANCES

NICOYA Macau Limited

On June 18, 2021, EirGen, our wholly owned subsidiary, and NICOYA Macau Limited (“Nicoya”), a Macau corporation and an affiliate of NICOYA Therapeutics, entered into a Development and License Agreement (the “Nicoya Agreement”) granting Nicoya the exclusive rights for the development and commercialization of extended release calcifediol (the “Nicoya Product”) in Greater China, which includes mainland China, Hong Kong, Macau, and Taiwan (collectively, the “Nicoya Territory”). Extended release calcifediol is marketed in the U.S. by OPKO under the tradename Rayaldee. The license grant to Nicoya covers the therapeutic and preventative use of the Nicoya Product for SHPT in non-dialysis and hemodialysis chronic kidney disease patients (the “Nicoya Field”).

EirGen has received an initial upfront payment of $5 million and is eligible to receive an additional $5 million upon the first to occur of (A) a predetermined milestone and (B) the first anniversary of the effective date. EirGen is also eligible to receive up to an additional aggregate amount of $115 million upon the achievement of certain development, regulatory and sales-based milestones by Nicoya for the Nicoya Product in the Nicoya Territory. EirGen will also receive tiered, double digit royalty payments at rates in the low double digits on net product sales within the Nicoya Territory and in the Nicoya Field.

Nicoya will, at its sole cost and expense, be responsible for performing all development activities necessary to obtain all regulatory approvals for the Nicoya Product in the Nicoya Territory and for all commercial activities pertaining to the Nicoya Product in the Nicoya Territory.

Unless earlier terminated, the Nicoya Agreement will remain in effect until such time as all royalty payment terms and extended payment terms have expired, and Nicoya shall have no further payment obligations to EirGen under the terms of the Nicoya Agreement. Nicoya’s royalty obligations expire on the later of (i) expiration of the last to expire valid patent claim covering the Nicoya Product sold in the Nicoya Territory, (ii) expiration of all regulatory and data exclusivity applicable to the Nicoya Product in the Nicoya Territory, and (iii) on a product-by-product basis, ten (10) years after such Nicoya Product’s first commercial sale in the Nicoya Territory. In addition to termination rights for material breach and bankruptcy, Nicoya is permitted to terminate the Nicoya Agreement after a specified notice period.

On October 12, 2017, EirGen and Japan Tobacco Inc. (“JT”) entered into a Development and License Agreement (the “JT Agreement”) granting JT the exclusive rights for the development and commercialization of Rayaldee in Japan (the “JT Territory”). The license grant to JT covers the therapeutic and preventative use of the product for (i) SHPT in non-dialysis and dialysis patients with CKD, (ii) rickets, and (iii) osteomalacia (the “JT Initial Indications”), as well as such additional indications as may be added to the scope of the license subject to the terms of the JT Agreement (the “JT Additional Indications” and together with the JT Initial Indications, the “JT Field”).

On May 17, 2021, JT delivered to the Company a notice of termination of the JT Agreement pursuant to Section 16.1(a) thereof, which permits termination by JT for any reason, indicating its decision to discontinue development of the product for the Japanese market based on a comprehensive review of its development pipeline. The termination of the JT Agreement became effective shortly thereafter upon Vifor Fresenius Medical Care Renal Pharma Ltd’s (“VFMCRP”) assumption of the JT Territory.

Vifor Fresenius Medical Care Renal Pharma Ltd

~~We plan to develop a portfolio of product candidates through a combination of internal development and external partnerships.~~ In May 2016, EirGen ~~our wholly-owned subsidiary,~~ and ~~Vifor Fresenius Medical Care Renal Pharma Ltd (“VFMCRP”),~~VFMCRP entered into a Development and License Agreement (the “VFMCRP Agreement”) for the development and commercialization of Rayaldee (the “Product”) worldwide, except for (i) the ~~United States,~~U.S., (ii) any country in Central America or South America ~~(excluding~~(including Mexico), (iii) Russia, (iv) China, (v) ~~Japan,~~South Korea, (vi) Ukraine, (vii) Belorussia, (viii) Azerbaijan, (ix) Kazakhstan, ~~and~~ (x) Taiwan (xi) the Middle East, and (xii) all countries of Africa (the “VFMCRP Territory”)., as amended. The license to VFMCRP potentially covers all therapeutic and prophylactic uses of the Product in human patients (the “VFMCRP Field”), provided that initially the license is for the use of the Product for the treatment or prevention of SHPT related to patients with ~~stage 3 or 4 chronic kidney disease~~CKD and vitamin D insufficiency/deficiency (the “VFMCRP Initial Indication”).

~~Under~~Effective May 23, 2021, we entered into an amendment to the ~~terms~~VFMCRP Agreement pursuant to which the parties thereto agreed to include Japan as part of the VFMCRP ~~Agreement, EirGen granted~~Territory.

Effective May 5, 2020, we entered into an amendment to ~~VFMCRP an exclusive license in~~ the VFMCRP ~~Territory in~~Agreement pursuant to which the parties agreed to exclude Mexico, South Korea, the Middle East and all of the countries of Africa from the VFMCRP ~~Field~~Territory. In addition, the parties agreed to ~~use~~ certain ~~EirGen patents and technology~~amendments to ~~make, have made, use, sell, offer for sale, and import Products~~the milestone structure and to ~~develop, commercialize, have commercialized, and otherwise exploit~~reduce minimum royalties payable. As revised, the ~~Product. EirGen~~Company has received a ~~non-refundable~~$3 million payment triggered by the first marketing approval of Rayaldee in Europe and ~~non-creditable initial payment of $50 million. EirGen~~ is ~~also~~ eligible to receive up to an additional ~~$37~~$17 million in regulatory milestones ~~(“Regulatory Milestones”)~~ and ~~$195~~$210 million in milestone payments tied to launch, pricing and ~~sales-based milestones (“Sales Milestones”)~~sales of Rayaldee, and ~~will receive~~ tiered, ~~royalties on sales of the product at percentage rates that range from the mid-teens~~double-digit royalties.

We plan to ~~the mid-twenties or a minimum royalty, whichever is greater, upon the commencement of sales of the Product within the VFMCRP Territory and in the VFMCRP Field.~~

~~As part of the arrangement, the companies will~~ share responsibility with VFMCRP for the conduct of trials specified within an agreed-upon development plan, with each company leading certain activities within the plan. EirGen will lead the manufacturing activities within and outside the VFMCRP Territory and the commercialization activities outside the VFMCRP Territory and outside the VFMCRP Field in the VFMCRP Territory and VFMCRP will lead the commercialization activities in the VFMCRP Territory and the VFMCRP Field. For the initial development plan, the companies have agreed to certain cost sharing arrangements. VFMCRP will be responsible for all other development costs that VFMCRP considers necessary to develop the Product for the use of the Product for the VFMCRP Initial Indication in the VFMCRP Territory in the VFMCRP Field except as otherwise provided in the VFMCRP Agreement.

The ~~VFMCRP Agreement will remain in effect with respect to the Product in each country~~first of the VFMCRP Territory, on a country by country basis, until the date on which VFMCRP shall have no further payment obligations to EirGen under the terms of the VFMCRP Agreement, unless earlier terminated pursuant to the VFMCRP Agreement. VFMCRP’s royalty

obligations expire on a country-by-country and product-by-product basis on the later of (i) expiration of the last to expire valid claim covering the Product sold in such country, (ii) expiration of all regulatory and data exclusivity applicable to the Productclinical studies provided for in the ~~country of sale, and (iii) ten (10) years after the Product first commercial sale~~development activities commenced in such country. In addition to termination rights for material breach and bankruptcy, VFMCRP is permitted to terminate the VFMCRP Agreement in its entirety, or with respect to one or more countries in the VFMCRP Territory, after a specified notice period, provided that VFMCRP shall not have the right to terminate the VFMCRP Agreement with respect to certain major countries without terminating the entire VFMCRP Agreement. If the VFMCRP Agreement is terminated by EirGen or VFMCRP, provision has been made for transition of product and product responsibilities to EirGen.September 2018.

In connection with the VFMCRP Agreement, the parties entered into a letter agreement ~~(the “Letter Agreement”)~~ pursuant to which EirGen granted to VFMCRP an exclusive option (the “Option”) to acquire an exclusive license under certain EirGen patents and technology to use, import, offer for sale, sell, distribute and commercialize the Product in the ~~United States~~U.S. solely for the treatment of ~~secondary hyperparathyroidism~~SHPT in dialysis patients with ~~chronic kidney disease~~CKD and vitamin D insufficiency (the “Dialysis Indication”). Upon exercise of the Option, VFMCRP will reimburse EirGen for all of the development costs incurred by EirGen with respect to the Product for the Dialysis Indication in the ~~United States.~~U.S. VFMCRP would also pay EirGen up to an additional aggregate amount of $555 million of sales-based milestones upon the achievement of certain milestones and would be obligated to pay royalties at percentage rates that range from the ~~mid-teens~~mid-

teens to the mid-twenties on sales of the Product in the ~~United States~~U.S. for the Dialysis Indication. To date, VFMCRP has not exercised its option.

The Option is exercisable until the earlier of (i) the date that EirGen submits a new drug application or supplemental new drug application or their then equivalents to the U.S. Food and Drug Administration for the Product for the Dialysis Indication in the United States, (ii) the parties mutually agree to discontinue development of Product for the Dialysis Indication, or (iii) VFMCRP provides notice to OPKO that it has elected not to exercise the Option.

~~OPKO has guaranteed the performance of certain of EirGen’s obligations under the VFMCRP Agreement and the Letter Agreement.~~

For revenue recognition purposes, we evaluated the various agreements with VFMCRP to determine whether there were multiple deliverables in the arrangement. The VFMCRP Agreement provides for the following: (1) an exclusive license in the VFMCRP Territory in the VFMCRP Field to use certain patents and technology to make, have made, use, sell, offer for sale, and import Products and to develop, commercialize, have commercialized, and otherwise exploit the Product; (2) EirGen will supply Products to support the development, sale and commercialization of the Products to VFMCRP in the VFMCRP Territory (the “Manufacturing Services”); and (3) the Option to acquire an exclusive license under certain EirGen patents and technology to use, import, offer for sale, sell, distribute and commercialize the Product in the United States solely for the Dialysis Indication. Based on our evaluation, the exclusive license is the only deliverable at the outset of the arrangement. We concluded the Manufacturing Services were a contingent deliverable dependent on the future regulatory and commercial action by VFMCRP and the Option was substantive and not considered a deliverable under the license arrangement.

We recognized the $50.0 million upfront license payment in Revenue from transfer of intellectual property in our Condensed Consolidated Statements of Operations in the second quarter of 2016. Revenues related to the Manufacturing Services will be recognized as Product is sold to VFMCRP. No revenue related to the Option will be recognized unless and until VFMCRP exercises its Option under the Letter Agreement.

We determined that the cost sharing arrangement for development of the Dialysis Indication is not a deliverable in the VFMCRP Agreement. Payments for the Dialysis Indication will be recorded as Research and development expense as incurred.

~~EirGen is also eligible to receive up to an additional $37 million in Regulatory Milestones and $195 million in Sales Milestones.~~ Payments received for ~~Regulatory Milestones~~regulatory milestones and ~~Sales Milestones~~sales milestones are non-refundable. The ~~Regulatory Milestones~~regulatory milestones are payable if and when VFMCRP obtains approval from certain regulatory authorities and will be recognized as revenue in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria are met. We account for the ~~Sales Milestones~~sales milestones as royalties and ~~Sales Milestones~~sales milestones payments will be recognized as revenue ~~in full~~ in the period in which the associated milestone is achieved or sales occur, assuming all other revenue recognition criteria are met. ~~To date, no revenue has been recognized related to the achievement of the milestones.~~

In December 2014, we entered into an exclusive worldwide agreement (the “Pfizer Agreement”) with Pfizer ~~Inc. (“Pfizer”)~~ for the development and commercialization of our long-acting ~~hGH-CTP~~Somatrogon (hGH-CTP) for the treatment of growth hormone deficiency (“GHD”) in adults and children, as well as for the treatment of growth failure in children born small for gestational age ~~(“SGA”)~~ (the “Pfizer Transaction”).

During the first quarter of 2021, regulatory submissions in the major global markets for Somatrogan have been accepted including, the U.S., European Medicines Agency, and Ministry of Health, Labour, and Welfare in Japan for Somatrogon for the treatment of pediatric patients with GHD.

~~The~~In May 2020, we entered into an Amended and Restated Development and Commercialization License Agreement (the “Restated Agreement”) with Pfizer, ~~Transaction closed~~effective January 1, 2020, pursuant to which the parties agreed, among other things, to share all costs for Manufacturing Activities, as defined in ~~January 2015 following~~ the ~~termination~~Restated Agreement, for developing a licensed product for the three indications included in the Restated Agreement.

On October 21, 2019, we and Pfizer announced that the global phase 3 trial evaluating Somatrogon dosed once-weekly in prepubertal children with GHD met its primary endpoint of ~~the waiting period under the Hart-Scott-Rodino Act.~~ non-inferiority to daily Genotropin® (somatropin) for injection, as measured by annual height velocity at 12 months.

Under the terms of the Pfizer Transaction, as restated, we received non-refundable and non-creditable upfront payments of $295.0 million and are eligible to receive up to an additional $275.0 million upon the achievement of certain regulatory milestones. Pfizer received the exclusive license to commercialize ~~hGH-CTP~~Somatrogon worldwide. In addition, we are eligible to receive initial tiered royalty payments associated with the commercialization of ~~hGH-CTP~~Somatrogon for ~~Adult~~adult GHD with percentage rates ranging from the high teens to mid-twenties. Upon the launch of ~~hGH-CTP~~Somatrogon for ~~Pediatric~~pediatric GHD in certain major markets, the royalties will transition to regional, tiered gross profit sharing for both ~~hGH-CTP~~Somatrogon and Pfizer’s Genotropin®.

The agreement with Pfizer will remain in effect until the last sale of the licensed product, unless earlier terminated as permitted under the ~~agreement.~~Pfizer Agreement. In addition to termination rights for material breach and bankruptcy, Pfizer is permitted to terminate the Pfizer Agreement in its entirety, or with respect to one or more world regions, without cause after a specified notice period. If the Pfizer Agreement is terminated by us for Pfizer’s uncured material breach, or by Pfizer without cause, provision has been made for transition of product and product responsibilities to us for the terminated regions, as well as continued supply of product by Pfizer or transfer of supply to us in order to support the terminated regions.

We will lead the clinical activities and will be responsible for funding the development programs for the key indications, which includes Adult and Pediatric GHD and Pediatric SGA. Pfizer will be responsible for all development costs for additional indications as well as all post-marketing studies. In addition, Pfizer will fund the commercialization activities for all indications and lead the manufacturing activities covered by the global development plan.

For revenue recognition purposes, we viewed the Pfizer Transaction as a multiple-element arrangement. Multiple-element arrangements are analyzed to determine whether the various performance obligations, or elements, can be separated or whether they must be accounted for as a single unit of accounting. We evaluated whether a delivered element under an arrangement has standalone value and qualifies for treatment as a separate unit of accounting. Deliverables that do not meet these criteria are not evaluated separately for the purpose of revenue recognition. For a single unit of accounting, payments received are recognized in a manner consistent with the final deliverable. We determined that the deliverables under the Pfizer Transaction, including the licenses granted to Pfizer, as well as our obligations to provide various research and development services, will be accounted for as a single unit of account. This determination was made because the ongoing research and development services to be provided by us are essential to the overall arrangement as we have significant knowledge and technical know-how that is important to realizing the value of the licenses granted. The performance period over which the revenue will be recognized is expected to continue from the first quarter of 2015 through 2020, when we anticipate completing the various research and development services that are specified in the Pfizer Transaction and our performance obligations are completed. We will continue to review the timing of when our research and development services will be completed in order to assess that the estimated performance period over which the revenue is to be recognized is appropriate. Any significant changes in the timing of the performance period will result in a change in the revenue recognition period. We increased the expected performance period over which the revenue will be recognized in the third quarter of 2017 by approximately one year.

~~We are recognizing~~ the non-refundable $295.0 million upfront payments ~~on a straight-line basis over~~as revenue as the ~~performance period. We recognized $46.5 million~~research and development services were completed and as of ~~revenue~~both June 30, 2021 and December 31, 2020, we had no contract liabilities related to the Pfizer Transaction in Revenue from transfer of intellectual property in our Condensed Consolidated Statements of Operations during the nine months ended September 30, 2017, and had deferred revenue related to the Pfizer Transaction of $112.3 million at September 30, 2017. As of September 30, 2017, $44.9 million of deferred revenue related to the Pfizer Transaction was classified in Accrued expenses and $67.4 million was classified in Other long-term liabilities in our Condensed Consolidated Balance Sheets.Transaction.

The Pfizer Transaction includes milestone payments ~~totaling~~of $275.0 million upon the achievement of certain milestones. The milestones range from $20.0 million to $90.0 million each and are based on achievement of regulatory approval in the U.S. and regulatory approval and price approval in other major markets. We evaluated each of these milestone payments and believe that all of the milestones are substantive as (i) there is substantive uncertainty at the close of the Pfizer Transaction that the milestones would be achieved as approval from a regulatory authority must be received to achieve the milestones which would be commensurate with the enhancement of value of the underlying intellectual property, (ii) the milestones relate solely to past performance and (iii) the amount of the milestone is reasonable in relation to the effort expended and the risk associated with the achievement of the milestone. The milestone payments will be recognized as revenue ~~in full~~ in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria are met. To date, no0 revenue has been recognized related to the achievement of the milestones.

~~TESARO~~

In November 2009, we entered into an asset purchase agreement (the “NK-1 Agreement”) under which we acquired VARUBI™ (rolapitant) and other neurokinin-1 (“NK-1”) assets from Merck. In December 2010, we entered into an exclusive license agreement with TESARO, in which we out-licensed the development, manufacture, commercialization and distribution38

If TESARO elects to develop and commercialize VARUBI™ in Japan through a third-party licensee, TESARO will share equally with us all amounts it receives in connection with such activities, subject to certain exceptions and deductions.

The term of the license will remain in force until the expiration of the royalty term in each country, unless we terminate the license earlier for TESARO’s material breach of the license or bankruptcy. TESARO has a right to terminate the license at any time during the term for any reason on three months’ written notice.

In April 2013, we entered into a series of concurrent transactions with Pharmsynthez, a Russian pharmaceutical company traded on the Moscow Stock Exchange, pursuant to which we acquired an equity method investment in Pharmsynthez (ownership 9%). We also granted rights to certain technologies in the Russian Federation, Ukraine, Belarus, Azerbaijan and Kazakhstan (the “Pharmsynthez Territories”) to Pharmsynthez and agreed to perform certain development activities. We will receive from Pharmsynthez royalties on net sales of products incorporating the technologies in the Pharmsynthez Territories, as well as a percentage of any sublicense income from third parties for the technologies in the Pharmsynthez Territories.

In July 2015, we entered into a Note Purchase Agreement with Pharmsynthez pursuant to which we delivered $3.0 million to Pharmsynthez in exchange for a $3.0 million note (the “Pharmsynthez Note Receivable”). The Pharmsynthez Note Receivable will be settled in 2017 and Pharmsynthez may satisfy the note either in cash or shares of its capital stock. We recorded the Pharmsynthez Note Receivable within Other current assets and prepaid expenses in our Condensed Consolidated Balance Sheets.

~~RXi Pharmaceuticals Corporation~~

In March 2013, we completed the sale to RXi of substantially all of our assets in the field of RNA interference (the “RNAi Assets”) (collectively, the “Asset Purchase Agreement”). Pursuant to the Asset Purchase Agreement, RXi will be required to pay us up to $50.0 million in milestone payments upon the successful development and commercialization of each drug developed by RXi, certain of its affiliates or any of its or their licensees or sublicensees utilizing patents included within the RNAi Assets (each, a “Qualified Drug”). In addition, RXi will also be required to pay us royalties equal to: (a) a mid single-digit percentage of “Net Sales” (as defined in the Asset Purchase Agreement) with respect to each Qualified Drug sold for an ophthalmologic use during the applicable “Royalty Period” (as defined in the Asset Purchase Agreement); and (b) a low single-digit percentage of net sales with respect to each Qualified Drug sold for a non-ophthalmologic use during the applicable Royalty Period.

We have completed strategic deals with numerous institutions and commercial partners. In connection with these agreements, upon the achievement of certain milestones we are obligated to make certain payments and have royalty obligations upon sales of products developed under the license agreements. At this time, we are unable to estimate the timing and amounts of payments as the obligations are based on future development of the licensed products.

We manage our operations in ~~two~~2 reportable segments, pharmaceutical and diagnostics. The pharmaceutical segment consists of our pharmaceutical operations ~~we acquired~~ in Chile, Mexico, Ireland, Israel and Spain,Rayaldee product sales and our pharmaceutical research and development. The diagnostics segment primarily consists of our clinical and genomics laboratory operations ~~we acquired~~ through ~~the acquisitions of~~ BioReference ~~and OPKO Lab~~ and our point-of-care operations. There are no0 significant ~~inter-~~

~~segment~~inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no0 inter-segment allocation of interest expense and income taxes.

Information regarding our operations and assets for our operating segments and the unallocated corporate operations as well as geographic information are as follows:

~~Two customers~~No customer represented more than 10% of our total consolidated revenue during the ~~three and nine~~six months ended ~~September~~June 30, ~~2017.~~2021 and 2020. As of ~~September~~June 30, ~~2017, one customer represented more than 10% of our accounts receivable balance. As of~~2021 and December 31, ~~2016, one~~2020, no customer represented more than 10% of our accounts receivable balance.

We have operating leases for office space, laboratory operations, research and development facilities, manufacturing locations, warehouses and certain equipment. We determine if a contract contains a lease at inception or modification of a contract. Our leases generally do not provide an implicit interest rate, and we therefore use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. We used the incremental borrowing rates as of January 1, 2019 for operating leases that commenced prior to that date. Many of our leases contain rental escalation, renewal options and/or termination options that are factored into our determination of lease payments as appropriate. Variable lease payment amounts that cannot be determined at the commencement of the lease are not included in the right-to-use assets or liabilities.

We elected the use of permitted practical expedients of not recording leases on our Consolidated Balance Sheet when the leases have terms of 12 months or less, and we elected not to separate nonlease components from lease components and instead account for each separate lease component and the nonlease components associated with that lease component as a single lease component.

The following table presents the lease balances within the Condensed Consolidated Balance Sheet as of June 30, 2021 and December 31, 2020:


(in thousands)	Classification on the Balance Sheet	June 30, 2021			December 31, 2020
Assets
Operating lease assets	Operating lease right-of-use assets	$	36,349		$	37,735
Finance lease assets	Property, plant and equipment, net	4,643			5,258

Liabilities
Current
Operating lease liabilities	Current maturities of operating leases	10,102			9,028
Accrued expenses	Current maturities of finance leases	2,084			2,453
Long-term
Operating lease liabilities	Operating lease liabilities	30,605			29,760
Other long-term liabilities	Finance lease liabilities	$	2,559		$	2,805

Weighted average remaining lease term
Operating leases		5.8 years			5.4 years
Finance leases		2.6 years			2.3 years
Weighted average discount rate
Operating leases		5.7		%	5.8		%
Finance leases		5.3		%	3.6		%

The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on our Condensed Consolidated Balance Sheet as of June 30, 2021:


(in thousands)	Operating		Finance
July 1, 2021 through December 31, 2021	$	4,535	$	1,293
2022	10,995		1,648
2023	7,722		1,038
2024	5,700		697
2025	3,726		215
Thereafter	16,367		0
Total undiscounted future minimum lease payments	49,045		4,891
Less: Difference between lease payments and discounted lease liabilities	8,338		248
Total lease liabilities	$	40,707	$	4,643

Expense under operating leases and finance leases was $9.1 million and $1.1 million, respectively, for the three and six months ended June 30, 2021, which includes $1.4 million of variable lease costs. Expense under operating leases and finance leases was $9.7 million and $1.2 million, respectively, for the three and six months ended June 30, 2020, which includes $1.6 million of variable lease costs. Operating lease costs and finance lease costs are included within Operating loss in the Condensed Consolidated Statement of Operations. Short-term lease costs were not material.

Supplemental cash flow information is as follows:


(in thousands)	For the six months ended June 30,
	2021		2020
Operating cash out flows from operating leases	$	6,484	$	9,804
Operating cash out flows from finance leases	45		86
Financing cash out flows from finance leases	769		1,026
Total	$	7,298	$	10,916

NOTE 1417 SUBSEQUENT EVENTS

On ~~October 12, 2017, EirGen, our wholly-owned subsidiary, and Japan Tobacco Inc. (“JT”)~~July 6, 2021, we entered into ~~a Development and~~an Exclusive License Agreement ~~granting JT~~(the “CAMP4 Agreement”) with CAMP4 Therapeutics Corporation (“CAMP4”), pursuant to which we granted to CAMP4 an exclusive license to develop, manufacture, commercialize or improve therapeutics utilizing the ~~exclusive rights~~AntagoNAT technology, an oligonucleotide platform developed under OPKO CURNA, which includes the molecule for the ~~development~~treatment of Dravet syndrome, together with any derivative or modification thereof (the “Licensed Compound”) and ~~commercialization of~~ ~~Rayaldee~~any pharmaceutical product that comprises or contains a Licensed Compound, alone or in ~~Japan (the “JT Territory”~~combination with one or more other active ingredients (“Licensed Product”)., worldwide. The ~~license~~License grant ~~to JT~~ covers ~~the~~human pharmaceutical, prophylactic, and therapeutic and preventative use of the Product for (i) SHPT in non-dialysis and dialysis patients with CKD, (ii) rickets, and (iii) osteomalacia (the “JT Initial Indications”), as well as such additional indications as may be added to the scope of the license subject to the terms of the Agreement (the “JT Additional Indications”, and together with the JT Initial Indications, the “JT Field”).certain diagnostic uses.

~~OPKO will receive~~We received an initial upfront payment of ~~$6 million. OPKO will receive another $6~~$1.5 million ~~upon~~and 3,373,008 shares of CAMP4’s Series A Prime Preferred Stock (“Preferred Stock”), which equates to approximately 5% of the ~~initiation~~outstanding shares of ~~OPKO’s planned phase 2 study for~~ ~~Rayaldee~~ ~~in dialysis patients in the U.S. OPKO is also~~CAMP4, and are eligible to receive up to ~~an additional aggregate amount~~$3.5 million in development milestone payments for Dravet syndrome products, and $4 million for non-Dravet syndrome products, as well as sales milestones of ~~$31~~up to $90 million for Dravet syndrome products and up to $90 million for non-Dravet syndrome products. We may also receive double digit royalty payments on the net sales of royalty bearing products, subject to adjustment. In addition, upon achievement of certain development milestones, we will be eligible to receive equity consideration of up to 5,782,299 shares of Preferred Stock in connection with Dravet syndrome products and up to 1,082,248 shares of Preferred stock in connection with non-Dravet syndrome products. In connection with our acquisition of CURNA, we agreed to pay future consideration to the sellers upon the achievement of certain ~~regulatory~~events. As a result of our execution of the CAMP4 Agreement, we will have to pay a percentage of any payments received to the former CURNA stockholders.

Unless earlier terminated, the CAMP4 Agreement will remain in effect on a Licensed Product-by-Licensed Product and ~~development milestones by JT~~country by-country basis until such time as the royalty term expires for a Licensed Product in a country, and expires in its entirety upon the expiration of the royalty term for the last Licensed Product in the ~~JT Territory,~~last country. CAMP4’s royalty obligations expire on the later of (i) the expiration, invalidation or abandonment date of the last patent right in connection with the royalty bearing product, or (ii) ten (10) years after a royalty bearing product’s first commercial sale in a country. In addition to termination rights for material breach and ~~$75~~bankruptcy, CAMP4 is permitted to terminate the Agreement after a specified notice period.

In June 2021, we announced that EirGen entered into a definitive agreement to sell 1 of its facilities in Waterford, Ireland to Horizon Therapeutics plc for $65 million ~~upon the achievement~~in cash less certain assumed and accrued liabilities relating to transferred employees. The facility previously housed EirGen’s sterile-fill-finish business and is no longer a core component of ~~certain sales based milestones by JT in the JT Territory. OPKO will also receive tiered, double digit royalty payments at rates ranging from low double digits to mid-teens~~our ongoing operations and business strategy. The transaction closed on net Product sales within the JT Territory and in the JT Field. JT will, at its sole cost and expense, be responsible for performing all development activities necessary to obtain all regulatory approvals for ~~Rayaldee~~ ~~in Japan and for all commercial activities pertaining to~~ ~~Rayaldee~~ ~~in Japan, except for certain preclinical expenses which OPKO has agreed to reimburse JT up to a capped amount.~~July 19, 2021.

We have reviewed all subsequent events and transactions that occurred after the date of our ~~September~~June 30, ~~2017~~2021 Condensed Consolidated Balance Sheet, ~~date,~~ through the time of filing this Quarterly Report on Form 10-Q.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

You should read this discussion together with the unaudited Condensed Consolidated Financial Statements, related ~~Notes,~~notes, and other financial information included elsewhere in this ~~report~~Quarterly Report on Form 10-Q together with our audited consolidated financial statements, related notes, and other information contained in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2020 (the “Form 10-K”). The following discussion contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors,” in Part ~~II,~~I, Item 1A of ~~our~~the Form 10-K ~~for the year ended December 31, 2016,~~ and as described from time to time in our other ~~reports filed~~filings with the Securities and Exchange Commission. These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements.

	~~75-2402409~~
Delaware		75-2402409
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)



4400 Biscayne Blvd.
Miami	FL	33137
(Address of Principal Executive Offices) (Zip Code)

(305)	575-4100
(Registrant’s Telephone Number, Including Area Code)



PART I. FINANCIAL INFORMATION		Page
Item 1.	Financial Statements
Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2017~~2021 and December 31, ~~2016~~2020 (unaudited)		67
Condensed Consolidated Statements of Operations for the three and ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 (unaudited)		78
Condensed Consolidated Statements of Comprehensive ~~Loss~~Income (Loss) for the three and ~~nine~~six months ended ~~September 30, 2017~~June30, 2021 and ~~2016~~2020 (unaudited)		89
Condensed Consolidated Statements of Equity for the three and six months ended June 30, 2021 and 2020 (unaudited)		10
Condensed Consolidated Statements of Cash Flows for the ~~nine~~six months ended ~~September~~June 30, ~~2017~~2021 and ~~2016~~2020 (unaudited)		912
Notes to Condensed Consolidated Financial Statements (unaudited)		1013
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3844
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	5362
Item 4.	Controls and Procedures	5463
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	5564
Item 1A.	Risk Factors	5566
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5566
Item 3.	Defaults Upon Senior Securities	5566
Item 4.	Mine Safety Disclosures	5566
Item 5.	Other Information	5566
Item 6.	Exhibits	5667
Signatures		5768



ý☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



¨☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	September 30, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	100,362		$	168,733
Accounts receivable, net	233,916			220,284
Inventory, net	46,954			47,228
Other current assets and prepaid expenses	49,324			47,356
Total current assets	430,556			483,601
Property, plant and equipment, net	142,437			122,831
Intangible assets, net	714,552			763,976
In-process research and development	648,377			644,713
Goodwill	715,573			704,603
Investments	32,196			41,139
Other assets	38,299			5,756
Total assets	$	2,721,990		$	2,766,619
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	66,536		$	53,360
Accrued expenses	176,300			197,955
Current portion of lines of credit and notes payable	16,112			11,981
Total current liabilities	258,948			263,296
2033 Senior Notes, net of discount	28,590			43,701
Deferred tax liabilities, net	118,799			165,331
Other long-term liabilities, principally deferred revenue, contingent consideration and line of credit	226,617			202,483
Total long-term liabilities	374,006			411,515
Total liabilities	632,954			674,811
Equity:
Common Stock - $0.01 par value, 750,000,000 shares authorized; 559,955,118 and 558,576,051 shares issued at September 30, 2017 and December 31, 2016, respectively	5,600			5,586
Treasury Stock - 549,907 and 586,760 shares at September 30, 2017 and December 31, 2016, respectively	(1,791		)	(1,911		)
Additional paid-in capital	2,883,026			2,845,096
Accumulated other comprehensive loss	(5,422		)	(27,009		)
Accumulated deficit	(792,377		)	(729,954		)
Total shareholders’ equity	2,089,036			2,091,808
Total liabilities and equity	$	2,721,990		$	2,766,619



	For the three months ended September 30,						For the nine months ended September 30,
	2017			2016			2017			2016
Revenues:
Revenue from services	$	229,035		$	259,025		$	740,992		$	777,559
Revenue from products	22,795			20,569			73,992			63,275
Revenue from transfer of intellectual property and other	11,665			18,441			58,819			105,338
Total revenues	263,495			298,035			873,803			946,172
Costs and expenses:
Cost of service revenue	135,203			138,554			419,070			417,121
Cost of product revenue	16,107			12,626			44,441			35,033
Selling, general and administrative	131,336			124,845			396,359			370,358
Research and development	32,329			24,424			90,944			83,594
Contingent consideration	(11,213		)	3,093			(4,475		)	15,604
Amortization of intangible assets	18,023			18,116			53,904			47,337
Total costs and expenses	321,785			321,658			1,000,243			969,047
Operating loss	(58,290		)	(23,623		)	(126,440		)	(22,875		)
Other income and (expense), net:
Interest income	249			163			634			341
Interest expense	(1,840		)	(2,018		)	(4,771		)	(6,022		)
Fair value changes of derivative instruments, net	(7,550		)	(5,701		)	1,969			(5,889		)
Other income (expense), net	597			(2,972		)	3,105			3,543
Other income and (expense), net	(8,544		)	(10,528		)	937			(8,027		)
Loss before income taxes and investment losses	(66,834		)	(34,151		)	(125,503		)	(30,902		)
Income tax benefit	24,405			19,988			42,309			24,626
Net loss before investment losses	(42,429		)	(14,163		)	(83,194		)	(6,276		)
Loss from investments in investees	(4,013		)	(814		)	(11,771		)	(5,147		)
Net loss	$	(46,442	)	$	(14,977	)	$	(94,965	)	$	(11,423	)
Loss per share, basic and diluted:
Loss per share	$	(0.08	)	$	(0.03	)	$	(0.17	)	$	(0.02	)
Weighted average common shares outstanding, basic and diluted	559,405,309			552,229,266			559,065,232			548,550,641



	2017
(In thousands)	Balance at January 1		Foreign exchange and other		Balance at September 30th
Pharmaceuticals
CURNA	$	4,827	$	—	$	4,827
EirGen	78,358		9,639		87,997
FineTech	11,698		—		11,698
OPKO Chile	4,785		217		5,002
OPKO Biologics	139,784		—		139,784
OPKO Health Europe	6,936		853		7,789
OPKO Renal	2,069		—		2,069
Transition Therapeutics	3,360		261		3,621

Diagnostics
BioReference	401,821		—		401,821
OPKO Diagnostics	17,977		—		17,977
OPKO Lab	32,988		—		32,988
	$	704,603	$	10,970	$	715,573



(In thousands)	Embedded conversion option			2033 Senior Notes		Discount			Debt Issuance Cost			Total
Balance at December 31, 2016	$	16,736		$	31,850	$	(4,612	)	$	(273	)	$	43,701
Amortization of debt discount and debt issuance costs	—			—		1,514			111			1,625
Change in fair value of embedded derivative	(3,185		)	—		—			—			(3,185		)
Reclassification of embedded derivatives to equity	(13,551		)	—		—			—			(13,551		)
Balance at September 30, 2017	$	—		$	31,850	$	(3,098	)	$	(162	)	$	28,590



(In thousands)	Foreign currency			Unrealized gain (loss) in Accumulated OCI			Total
Balance at December 31, 2016	$	(28,128	)	$	1,119		$	(27,009	)
Other comprehensive income (loss) before reclassifications	21,646			(749		)	20,897
Reclassification adjustments for losses included in net loss, net of tax				690			690
Net other comprehensive income (loss)	21,646			(59		)	21,587
Balance at September 30, 2017	$	(6,482	)	$	1,060		$	(5,422	)



	As of September 30, 2017
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI			Fair value
Common stock investments, available for sale	$	2,048	$	1,308	$	(248	)	$	3,108
Total assets	$	2,048	$	1,308	$	(248	)	$	3,108



	As of December 31, 2016
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI			Fair value
Common stock investments, available for sale	$	3,409	$	1,313	$	(194	)	$	4,528
Total assets	$	3,409	$	1,313	$	(194	)	$	4,528



	September 30, 2017
(In thousands)	Contingent consideration			Embedded conversion option
Balance at December 31, 2016	$	45,076		$	16,736
Total losses for the period:
Included in results of operations	(4,475		)	(3,185		)
Foreign currency impact	3			—
Payments	(303		)	—
Reclassification of embedded derivatives to equity	—			(13,551		)
Balance at September 30, 2017	$	40,301		$	—



~~Delaware~~


(In thousands)	Balance Sheet Component	September 30, 2017			December 31, 2016			(In thousands)	Balance Sheet Component	June 30, 2021		December 31, 2020
Derivative financial instruments:								Derivative financial instruments:

Common Stock options/warrants	Investments, net	$	2,020		$	4,017		Common Stock options/warrants	Investments, net	$	68	$	74
Embedded conversion option	2033 Senior Notes, net of discount and estimated fair value of embedded derivatives	$	—		$	(16,736	)

Forward contracts	Unrealized gains on forward contracts are recorded in Other current assets and prepaid expenses. Unrealized (losses) on forward contracts are recorded in Accrued expenses.	$	(264	)	$	39		Forward contracts	Unrealized gains on forward contracts are recorded in Other current assets and prepaid expenses. Unrealized (losses) on forward contracts are recorded in Accrued expenses.	$	358	$	(1,040)



	Three months ended September 30,						Nine months ended September 30,
(In thousands)	2017			2016			2017			2016
Derivative gain (loss):
Common Stock options/warrants	$	(342	)	$	(12	)	$	(854	)	$	(4,728	)
2033 Senior Notes	(6,829		)	(5,795		)	3,185			(1,061		)
Forward contracts	(379		)	106			(362		)	(100		)
Total	$	(7,550	)	$	(5,701	)	$	1,969		$	(5,889	)


Research and Development Expenses	Three months ended June 30,
	2021		2020
External expenses:
PMA studies	$	31	$	57
Research and development employee-related expenses	2,742		2,163
Other internal research and development expenses	1,250		1,565
Total research and development expenses	$	4,023	$	3,785



Cost of Revenue	For the three months ended September 30,
(In thousands)	2017		2016		Change
Cost of service revenue	$	135,203	$	138,554	$	(3,351	)
Cost of product revenue	16,107		12,626		3,481
Total cost of revenue	$	151,310	$	151,180	$	130


									For the six months ended June 30,
Revenues	Nine months ended September 30,
(In thousands)	2017		2016		Change			(In thousands)	2021		2020		Change		% Change
Revenues:								Revenues:
Revenue from services	$	740,992	$	777,559	$	(36,567	)	Revenue from services	$	904,149	$	421,811	$	482,338	114	%
Revenue from products	73,992		63,275		10,717			Revenue from products	69,608		60,430		9,178		15	%
Revenue from transfer of intellectual property and other	58,819		105,338		(46,519		)	Revenue from transfer of intellectual property and other	13,816		30,433		(16,617)		(55)	%
Total revenues	$	873,803	$	946,172	$	(72,369	)	Total revenues	987,573		512,674		474,899		93	%
Costs and expenses:								Costs and expenses:
Cost of revenue								Cost of revenue	656,414		302,909		353,505		117	%
Selling, general and administrative								Selling, general and administrative	225,522		153,852		71,670		47	%
Research and development								Research and development	37,537		39,369		(1,832)		(5)	%
Contingent Consideration								Contingent Consideration	(1,059)		251		(1,310)		(522)	%
Amortization of intangible assets								Amortization of intangible assets	25,151		29,874		(4,723)		(16)	%

Total costs and expenses								Total costs and expenses	943,565		526,255		417,310		79	%
Income (loss) from operations								Income (loss) from operations	44,008		(13,581)		57,589		(424)	%


Contractual obligations (In thousands)	Remaining three months ending December 31, 2017		2018		2019		2020		2021		Thereafter		Total		Contractual obligations (In thousands)	Remaining six months ending December 31, 2021		2022		2023		2024		2025		Thereafter		Total
Open purchase orders	$	97,863	$	8,446	$	274	$	34	$	—	$	—	$	106,617	Open purchase orders	$	134,832	$	660	$	—	$	—	$	—	$	—	$	135,492
Operating leases	5,271		18,231		15,027		9,388		6,164		6,853		60,934		Operating leases	4,501		10,457		7,076		4,926		3,013		10,734		40,707
Capital leases	887		3,404		3,026		2,367		1,438		800		11,922
2033 Senior Notes	—		—		31,850		—		—		—		31,850
Deferred payments	5,000		5,000		5,000		—		—		—		15,000
Finance leases															Finance leases	1,183		1,573		997		680		210		—		4,643
2033 Senior Notes, 2025 and 2023 Convertible Notes															2033 Senior Notes, 2025 and 2023 Convertible Notes	—		—		58,050		—		116,009		—		174,059

Mortgages and other debts payable	3,412		416		410		409		409		755		5,811		Mortgages and other debts payable	599		1,016		815		723		241		193		3,587
Lines of credit	12,623		—		—		93,311		—		—		105,934		Lines of credit	16,197		—		—		—		—		—		16,197
Severance payments	5,101		—		—		—		—		—		5,101

Interest commitments	257		1,019		291		39		37		23		1,666		Interest commitments	3,516		6,638		20,048		6,535		573		—		37,310
Total	$	130,414	$	36,516	$	55,878	$	105,548	$	8,048	$	8,431	$	344,835	Total	$	167,825	$	22,297	$	86,986	$	12,864	$	120,047	$	10,927	$	420,946




Exhibit ~~3.1(1)~~10.1		~~Amended and Restated Certificate~~Form of ~~Incorporation.~~
~~Exhibit 3.2(2)~~	~~Amended and Restated By-Laws.~~
~~Exhibit 3.3(3)~~	~~Certificate of Designation of Series D Preferred Stock.~~
~~Exhibit 4.3(4)~~	~~Indenture,~~Exchange Agreement, dated as of ~~January 30, 2013, between OPKO Health, Inc. and Wells Fargo Bank, National Association.~~
Exhibit 10.1*	~~Amendment No. 4 to Credit Agreement by and between Bio-Reference Laboratories, Inc. and certain of its subsidiaries and JPMorgan Chase Bank, N.A. dated August 7, 2017~~
Exhibit 10.2*	~~Commitment Letter~~May 6, 2021, by and between OPKO Health Inc. and ~~Veterans Accountable Care Group, LLC, dated August 15, 2017~~the applicable Noteholder (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on May 7, 2021).
Exhibit 10.2		Asset Purchase Agreement, dated June 16, 2021, among EirGen Pharma Limited, Horizon Therapeutics Ireland DAC, and OPKO Health, Inc. (with respect to certain sections).
Exhibit 10.3*		License Agreement by and among EirGen Pharma Limited and Nicoya Macua Limited, dated June 18, 2021.
Exhibit 10.4*		Exclusive License Agreement by and between OPKO Health, Inc. and CAMP4 Therapeutics Corporation, dated July 6, 2021.
Exhibit 31.1		Certification by Phillip Frost, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended ~~September 30, 2017.~~June 3 0 , 2021.
Exhibit 31.2		Certification by Adam Logal, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended ~~September~~June 30, ~~2017.~~2021.
Exhibit 32.1		Certification by Phillip Frost, Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended ~~September~~June 30, ~~2017.~~2021.
Exhibit 32.2		Certification by Adam Logal, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended ~~September~~June 30, ~~2017.~~2021.
Exhibit 101.INS		Inline XBRL Instance Document
Exhibit 101.SCH		Inline XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB		inline XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
Exhibit 104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


⁽¹⁾	Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2013 for the Company’s three month period ended September 30, 2013, and incorporated herein by reference.


⁽²⁾	~~Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2008, and incorporated herein by reference.~~


⁽³⁾	~~Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 24, 2009, and incorporated herein by reference.~~


⁽⁴⁾	~~Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2013, and incorporated herein by reference.~~


Date: July 29, 2021		OPKO Health, Inc.

~~Date: November 8, 2017~~		~~OPKO Health, Inc.~~

	/s/ Adam Logal
		Adam Logal
		Senior Vice President and Chief Financial ~~Officer,~~
		~~Chief Accounting~~ Officer ~~and Treasurer~~