Earnings call transcript Q1 2023

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Operator

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

Yvonne Briggs

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

the I'd risks than that call like and the as risks will annual forward-looking in statements you company's on XX, made be forward-looking, SEC that include, to the subject described various could will during in affect Those the to company's December the be results. for any expected filings, subsequently considered by XX-K uncertainties of statements limitation, statements including other report Form such, ended reports. historical the the in and without filed year SEC facts and management remind XXXX materially

as XXXX. date May to circumstances obligation forward-looking conference date live broadcast, reflect as the Except to of any or the OPKO This time-sensitive revise accurate contains call undertakes X, of statements events by information of required law, that update no this call. the or only after is

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

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

Phillip Frost

cause strategy of This develop development nanoparticle to the multi-targeting simultaneously In mononucleosis of sclerosis. key cause virus entered used as leading multiple of which to the and March, certain proteins an collaboration is provides into technology agreement agreement a first-in-class Merck the malignancies Good engaging license EBV infect afternoon, also you has ModeX's implicated us our the viral infection, Epstein-Barr of announced been prevent we X exclusive and thank cells. multivalent by represents and ModeX that by The joining to early vaccine. validation for worldwide today. with

we We're delighted and are to vaccine. have the ideal few entered agreement into future as of for Elias our will development terms this partner commercialization a of minutes. in EBV with believe they Merck the detail the transaction the

hormone, United once-weekly Pfizer or in injections. approved NGENLA growth that's sales expected Pfizer hormone for the daily ease in this now as and the with on of countries growth detail major during or burden launch the XX standard been and growth markets NGENLA sales to payments Kingdom. profit priority launched over Somatrogon, looking remainder market continues versus of to forward drive in royalty including We're and has further Japan, injectable significant As to Adam XX from a continues patient's Pfizer. for penetration countries a will the is XX, another product more the all provide to grow. of the gross share new international NGENLA to by expects and year, OPKO's markets covering year-end. launches Germany

and also status to the FDA somatrogon's a forthcoming commercial look from response progress international with We definitive in in of expectation regulatory the updates markets. forward providing on the U.S.

the we're business. the rightsize our As ongoing we Diagnostics references costs and as pleased division, with for experience our turnaround reduce by

with its continues health laboratory, as arrangements. to specialty on As venture higher innovation joint partnerships seeking urology focus testing value well including BioReference to additional national as and a leading in and women's growth or oncology, segments, drive

European product and American base grow its profitable continues and business from Spain, into other veterinary expanding markets. France to is Our its Ibero in currently line

Elias? turn now our over I'll overview, to further provide Elias brief laboratory the that call and pharmaceutical discussion on and to businesses. With commentary

Elias Zerhouni

everyone. Frost, Dr. and you, Thank afternoon, good

recently license as mentioned Merck, announced discussion Frost. by with first and collaboration a of start Dr. with me our agreement worldwide exclusive Let

time multivalent advance associated EBV nanoparticle development the of the of leading has of life partner also all multiple X% sclerosis. and our cause worldwide. the infects is to a cancer the global Epstein-Barr of up to their been It cases with population recently virus, strategy about vaccine. adult has in of And and during implicated our Securing been is development XX% infectious mononucleosis MDX-XXXX,

the and role there no Despite in diseases, for vaccines are causing virus life-threatening prevalence currently of this FDA-approved treatments or its EBV.

Our provide innovative approach potential X proteins. upon a to this platform efforts ModeX complete previous EBV vaccine leverages protection and to target biologics improves multi-targeted holds major against This infection.

upfront commercial the and to up $XX of of and an of terms OPKO prespecified the Under to achievement million receive is the million milestones. additional upon payment eligible agreement, an development received $XXX.X

of In as filing the on the product of MDX-XXXX global Merck drug clinical as new receive royalties will after ModeX investigational commercialization. and sales. regulatory eligible activities MDX-XXXX, up will advance responsible to we're to an up launch application, well commercial addition, Merck be which all and for upon to double-digit jointly

IND. reimbursed the by to incurred as uptaking Merck to program be Expenses OPKO prior to for by well this will prior the OPKO responsibility full

We benefiting MDX-XXXX as are this this about ModeX only validates But with vaccines approach Along with on does. multi-targeting which Frost it unmet of we're need. in both with important vaccine what is patients excited relying and medical Merck, as addresses the goal antibodies, globally. our not advancing an said, collaboration of Dr. multi-specific

continues platforms. pharmaceutical make In business, with other to proprietary progress the parts of other ModeX

to advanced. patents provides provide We've quarter, to technologies X. We technologies have of STEALTH, go these to multi-specific been targets plug-and-play the the date. is flexibility multi-specific believe competitive following over advantage MSTAR a including to During up and these that total platform a with other a beyond MSTAR all and filed XX X technologies

we our in targets of partner maximize to progress our pipeline. in-house to therapeutic order seek evaluate we the which and will which value we keep candidates, As we

the trispecific example, we both NIH partnership to Phase HIV. a with funding prevent for have For I to provide and treat our candidate

antibodies and that or still working can drug vaccines toxicity significant next-generation and including to current long-acting and due believe despite great treat progress treatment lifelong limitations, can increasing medical impact to on that provide candidates viral there are suppression. their drug resistance protection we're prevent is petrospecific there targeting infection addition, and We including have candidates In as of therapies efficacy potency. HIV with HIV, X no a need

therapies addition to will have population ongoing existing will the be evolution particular, risk set multi-specific around pandemic of these pandemic do in a conditions require patients need address remain immune at world concern the the today. post-pandemic will continuous It of program to, a but and because that COVID variance In to systems. the of the in we believe of even -- of suppressed on human we help or virus unclear will appearance the the worked address to the efforts, what is antibody

interest can that prevent patients these those a risk particular we exploring of in populations. at maybe So development candidates antibody vulnerable in have the COVID treat can and

technology prevent of that selection resistance. allows it our of strains the of The viral optimize potency to future is is which advantage for emergence and modular, antibodies and against platform rational current

are antibodies funded testing Our and late is development SARS-CoV-X multi-specific in partially the currently preclinical by DARPA.

a B-cell and large does the with care the XXXX. solid a for antibodies, in sustain malignancies to also T of of hard-to-treat remission preclinical in the the not value the potential In tumors, tumors have lymphoma. for leukemia has and of are Oncology engager current proposition of clinic clinical focused but goal primarily on stage programs entering also number oncology, standard multi-specific treatment we of antibodies patients. multifunctional demonstrate We in efficacy cell solid multi-specific believe the that

for new and both to opko.com you modex.com. and refer our me updates Let evolution, portfolio information website as reachable publications or more on at

me Let RAYALDEE. turn now to

payment to a launch granted receive continue of milestone royalties. We're and $XX million RAYALDEE approval, up million plus with Germany, and our achieve was to certain additional We pricing to which sales pricing an in to RAYALDEE milestones from million in international of to tier milestones triggered double-digit tied up payments our regulatory . In partners. $X $XXX milestone eligible

In Drug sales-based in low-digit application received Nicoya on of Nicoya's by milestone regulatory to a the a related certain payment of Evaluation as Center double million achievement royalty additional and eligible sales China. payments We're addition, milestones $X.X we net receive tiered well $XXX to up China. an development, IND to for of upon the submission to in as RAYALDEE's million

currently Now protein the population. is results clearly news in renewed interest of the including to complementary of today our be present, antibodies actually could that disease approach near now our companies today on given Eli molecules patient larger or Alzheimer's the mobilize affecting plaques in those with can program used use potential the partnerships plaques primarily is that used deposits the exploring in And the in of with is potentially Lilly the based be that strategic very the effective. to future

So Alzheimer's provide with disease. they therapies because now are and these of interest synergy for emerging potentially programs existing high do

Laboratories. BioReference which I'd previously name segment Now and Diagnostics for what is discuss to Health, like new was called to turn BioReference the our

reducing profitability. XXXX, post-COVID productivity has expanding reach costs. into focus to and which, this enhance We're Our our efficiencies, division returning remains and effective been on to reduce date, initiative to improve costs

example, to For economic benefits XX realize of of to XX productive productive centers we're ones, strategically less patient located. more out are starting new shifting more which the

present have the health also in which primarily force been past. entering and specialty our increased we we systems addition, the not vertical sales the In and on have diagnostics pharmaceutical are in market

segments health, These innovation. continues include to we and segments specialty higher-value testing special as women's Our through ventures. our grow portfolio oncology, urology enhance

HPV patients This only offer GenPath more of risk CINtec approved stain, care laboratories division test precancer development guide quickly the the to women's health test results, to was high-risk for cancer. one dual for The the the management. have who a example, our allows of triage cervical For stain accurately biomarker first health cytology. and providers commercial their for risk PLUS high dual assess and is

a driver new for from like enhance valuable and As one their patients. its care provide tests and to providers is information to I portfolio key innovative BioReference mentioned, offer to health this Roche for growth

the expanded proprietary to management team tests now a which cancer the test score guidelines patient's of is use and blood prostate our focusing provide and the consideration direct new also is importantly, of help evaluate terms more fact recent selling these to for the team urologists. is warranted patients. urology, urology like actually In XK accounts. validated guidelines of a is Urology The our on American XKscore in aggressive that of the marketing a likelihood Association they driving clinical commercial And test have or

our reach expand services. going care urgent and to centers this access we other complete we a to test services, as those menu are hospital as to we're our of expanding for hospital as clinical want well services, clinical services where to offer services others so And

over closer to As working next to getting towards. hopefully, our is of we're we BioReference returning implement in environment, a we're the X our what growth strategy, pandemic post goal which quarters, profitable

our the Adam? now results. call will financial quarter first Logal, CFO, turn our over to discuss Adam I to

Adam Logal

This million. increase development Starting the Elias. the our upfront activities first Revenue you, Merck, our of segment. to Germany and $XX to in of with million Thank reflects for from candidate received Pharmaceutical in related from million achieved EBV $XX.X China. $X.X quarter RAYALDEE $XXX.X and payment million by milestones XXXX pricing increased

International addition, approximately In Pharmaceutical our revenue business $X.X increased million.

the licensed of of reflects programs. related expenses XXXX were Research $XX.X expense inclusive months Total research over for a $XX.X program period and was to $X million million. revenue Costs ModeX compared the our primarily XXXX million million were the $XX.X EBV of the to to for for and from of $XX.X activities XXXX $XX.X payment million, milestone development of development Sanofi development and the the XXXX increase payment for period. remaining Costs million and million and milestone expenses X include the Sanofi Merck. expenses XXXX, first comparable $XX.X to

intangible operating million million from expense resulting of and operating for improvement XXXX. $XX.X XX loss Amortization million, from related from XXXX was of the quarter quarters. the $XX.X first and $XX a assets The million the ended the $XX.X respectively, our million, quarter was $XX.X to March income XXXX

from segment. This $XXX.X which period. April to XXXX GeneDx, sold shifted volume to from million as COVID the decline reflects the revenue for in million XXXX to rapid testing period the Moving the $XXX.X XXXX. our included reported away also has lower Diagnostics QX of revenue at-home testing market We we compared XXXX of and

identifying the in resources commercial our during growth in of to We've As in Elias our verticals begin returns operating yielding verticals and and expect remains maximizing investments higher-growth strategically invested XXXX. profitable specialty our focus discussed, half second of the on BioReference efficiency. those

discussed, number near- our that program expect identified we as also medium-term continue to programs and Elias We throughout XXXX. And realize at execute to expense a reduction growth of BioReference. we've

expect profitable initiatives We return will to these BioReference growth.

was that $XX segment the to which Operating our loss compared million Diagnostics quarter for losses for year, included from were by the prior from million offset $XX.X GeneDx

Turning consolidated to results. our financial

share. or from for for XXXX levels to million compared net a for quarter per loss an stock the or of $XX.X $XX.X during price million $XX.X million realizing the of XXXX XXXX compares the For the loss to operating from million GeneDx first of quarter, of XXXX GeneDx's first first loss $XX.X we $X.XX for share loss as benefited the as an $X.XX sales for well quarter. XXXX quarter of operating This loss reported as was of quarter. Net the per achieved appreciation a milestone March XX. in Net

at As the providing ahead, we following quarter guidance. the we're look financial

not For our Pharmaceuticals NGENLA in million. in by $XX FDA assumed segment, our approval of financial a we've the Approval would the forecast. of milestone payment result

have of approval U.S. be will region the also assumed profit not as not in the certain. timing NGENLA We share gross for the that is

share forward, will the both in consisting of region profit quarter European of a XXXX, GENOTROPIN for franchise and Japanese HTH and first the European gross and profit shifted to regions During the going gross the NGENLA. share

assume FX over on a businesses we also as a XX ex XX% and last those our business a for our have rate pharmaceutical stable impacts. months seen FX U.S. result the We of impact

testing XXXX, our we and higher-margin For current testing specialty have our oncology core assumed Diagnostics levels COVID volumes testing. will we growth segment, health at decline and with and to urology women's remain of in lines continue and throughout consistent assume

carefully R&D with to our initiatives new continue manage programs commercial We investments and align available in resources. cash to our

and $X total $XX quarter with we million; sales $XX and the between and $XXX and between million; result, million a million million revenue product $X for As between of expect from from revenue million. million, the $XXX other services following between second million XXXX: revenue $XXX and revenues $XXX

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

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

Operator

[Operator Instructions].

Thalmann. question is Ladenburg Jeffrey from The first Cohen with

Jeffrey Cohen

we Merck items. firstly, into little ModeX guess, could dig bit? And and I X guess a I

anticipate don't walk it perhaps line? share think and the through, us you far IND cost I be as what all that to again, you filing, cost as could as Firstly, I into far an as time would caught

thus anyone can as there as And data looking MS is talk as out little then far? about what to or far there has well? secondly, a bit out Parkinson's And you Merck

Elias Zerhouni

Jeff. Thanks,

upfront. we terms In a the sharing. have there no I sharing, is $XX cost of mean real cost million

by that beyond a that products reason disruption. IND currently, committee between continue of all the because we need And But by have reimbursed program and close without We OPKO to steering and that the to joint advanced really we continue now will so is incurred are we Merck. IND. expenses that actually are is the IND, very much have simple

expenses go those between with continue to CMC collaboration has incur by this and so IND do their to to for Merck and Merck forward them asked -- with and be and fully And us the in approval to with others expenses. and reimbursed such obviously expenses as now

may things. in the at it's IND, the beyond But asked be certain control of can't or point, to really to of not comment. I continue terms do in may And this Merck. We

the cost to assumed IND is pretty that fundamentally, by on time. much until Merck So ModeX [indiscernible] us

In terms of MS.

Denmark cancer. is of . many the army very the study may There know, evidence evidence for the just disease were and is the correlation potential also strongest indications. you lupus, it that causation recruits suspicion, that for a of other suggested But Parkinson's, not we the Alzheimer's strong that indicated as As are not years followed million is and MS strong there cancer, suspicion, be XX there beyond in is that very, that have a as connection body MS also

Jeffrey Cohen

gross area? the out far -- well? have BioReference by And may the BioReference then testing going a as sounds you I like that activity this effect as into on as that's end secondly, of menu any of there perhaps the And It in by could call areas bit that some test is talk specific expansion profitability little as the and as to as commentary. toward side on about you And far could dig any you expect you wonder around the as turn could perhaps genomic on if I then guess, year. the, far margins

Elias Zerhouni

a great question. it's So

situation the don't So and I with line I turnaround expenses when they future a manage revenues by priority our as get banking to with are. priority that should #X materialized, we costs looked -- our on haven't at So in revenues #X, think BioReference, is other. do way obviously, each revenues are those line mean, numbers, all and that's we right? bring our to in on you

you call The second is would growth potential. what part

one, not We're but XK. multiple So XK. Number there. develop think, mean, verticals we silo have I is to I continuing silos,

Can new oncology we is mentioned #X a I a are with going our are controlled. call the can to multiple second test to conjunction residual with right from ways? at example, disease Is effective done drugs at does in tests. patient If what with Jeff, that that really level. or toxic for talk what the there that a be is And disease my they not only give residual CINtec. What or cancer the is, look question by the now disease market menu. mean? we of looking is and at The many I drugs disease any very techniques evidence But DNA gone? have minimal vacation blood in whether to you in very oncologists,

can change there can residual is monitor of again that patient increase you you disease, or therapy, the whatever. over amount whenever then the actually an And time in so treatment start

excellent. because say, our can a you the liquid that goal field are in is tumors, full cancer imagine primarily that's that where portfolio would provide to So we I serves

in and with oncology been I We there. report can we turnaround, some have push that context, that success to second working we think have large we very want quarter. the groups so we have And fast in that. a Hopefully, now

women's of is terms In fields, obviously evolution. other in field health a

an an we at offering test and looking marketed. will have We be have considered that how that cancer ovarian exactly

We including not to reference provide testing, are the us also that to is source health provide thinking in management, that ability for menu, system relationships, maximized. a comprehensive have another the we

eligible certain have and looking in very not already we gotten field. in because is therapies Last population. companies and at that and of patients mutations asking there clinical are enormous market to this look X panels patients but angles that be Others pharma. we pharma Others pharma, so their diagnostic with, really providing at like the us trials, exploitation that would of I'm are that Number the data we X genome. for I'm on. In have enter have us A to would least, there asking from clinical the contracts the identify amount the identify for underserved especially in they specific trials us for are familiar

equilibration areas also, have costs. I Adam, So expect because revenues I there's just versus be and where we're to But and we really of that, mentioned revenues do on an don't terms I we'll of well by think but see myself don't not in what know. as indeed, you to where as areas by cutting you'll want expenses, report there tell investing quarter-by-quarter I we're able that as

Operator

Jefferies. The Raycroft next question comes with from Maury

Maurice Raycroft

NGENLA's efforts about between hormone? the can for are wondering that to if say you provide with was FDA? of there you else nature is any can pediatric provide I you growth on more Pfizer's update approval ongoing the Pfizer And anything timing for specifics related an for and if are efforts there FDA -- can

Elias Zerhouni

what remains all a can not at expect we somewhat But said to, That's we if much a decision optimistic hands before, as forthcoming communicate. certainly year, we this guided unfortunately, this Maury, Everybody definitive can't as are say point. for and highly somewhat this can approval. I summer. pretty on tied our we

Maurice Raycroft

about expectations Pfizer with that you this if dynamics your given the I And think around is are United and existing launch on And what presence Genotropin? that? Pfizer's approved in could anything latest gets year how States, general, it in could do quickly there launch? guess, thoughts say you

Steven Rubin

depends of and much whether to how hands Commercialization be Pfizer in is able on things done. they'll a this of year the lot they've prework XXX% launch

I'm guidance again, So in the we approval limited hand. get until in

Maurice Raycroft

is And maybe you're that in And metrics anything if about has I hearing to any how there? if wanted share the NGENLA last you Europe, perception can ask possible? on question that been just on that, dynamics

Adam Logal

Yes.

team and But Pfizer. they're countries launching. a the there's share. now, Maury, that there's regulatory that, partners as prospects a to of and getting So think to enthused be have our I approvals to about need lot number we know I where not continues beyond we the at highlighted, online coming

Operator

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

Yale Jen

want still directions. I finished into the get just the some pretty much ongoing? to that the whether part of revenue in savings and you've cost business, sense terms Or growth diagnostic that more

Elias Zerhouni

No.

working still are cost We savings, Jen. on

entire year We are continuously, on structure and since basically going obviously ago, working the through a cost it.

more about hear subsequent the that You'll in quarters.

focused growth. just So we're not on

still amount product We we cost to price areas taking on in enormous the understand understanding and doing stopping costs, reduce many an that this to continuing are And our our accession, margins actually and cost per test action not are ongoing, at test, our by structure is point. contribution mix. of per accession, work

Yale Jen

is has you understanding been but said, -- probably all that mineral number as in them. not of, you're been liquid question of disease testing, identified, next my a tumors the is of MRD, residual there's terms the has The

to you do others? So outside there with development new over explore the continue what's and guys

Elias Zerhouni

a tumors. very good we the I've grasp a are good point, at That's and of in have think looked confident We we liquid that. very data.

sensitivity you mean, leukemia, there myeloma, is a think very liquid when confident. I we're tumors I good about talk

into other you tumors types is a where problem have component. solid of The more

a You're good at disease circulate to not that sure result. you DNA always minimal residual will the give

expanding in liquid it's we're if main look revenue oncology, our the again, carefully. very in we are arena. really you really slowly, cancer focusing, But strong, where So very but at

Yale Jen

is line year? that revenues in question when in last the wait that something Or next for think or the record for those P&L? profit And Adam you that NGENLA separate will until a will is the you sharing eventually,

Adam Logal

So thanks, Yale.

expect some once it would individually break that disclosures. the it in becomes material, I of out we So

we region You become would profit a or expect it into perhaps, year. the that be share, year but gross later could next and once significant, U.S. in more have will this it

Yale Jen

Congrats on progress. all the

Operator

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

Yi Chen

give its on do you color how what trajectory? some forecast clinical you and sales us additional Could be and would the its utility

Elias Zerhouni

you hear. couldn't test Which I are referring to? Sorry,

Yi Chen

The Roche otology test? Diagnostics CINtec PLUS

Elias Zerhouni

Well, you good EVX I'll positive the at in HPV we the tell test. if a where you, high-risk know the have are sort when of EVX We're marketing. if a those the need and response a for you to from getting are beginning variance understand of the It's reflection result, present you really cells. it's

so that's happens. And what really

over Our CINtec, second just for numbers X% We results, the experience suspicious So HPV are. all tell quarter. I so require far move started it. marketing is about cannot right? the a you really in all [indiscernible] about to what

Yi Chen

mean, at I by for HPV to physician a is test this prescribed high whoever infection? he considers risk

Elias Zerhouni

patient make who yes. wait OB/GYNs, decision, can ones X whether extension immediate the or for need often. If the are repeating us positive to we few are the test. give months be how act decide a they have it's negative can years. -- or they right have a to And a followed ordering away it's how result, result, to if If whether more that test, they a needs procedure before followed, fast, generally an maybe

prevention, X% need but I it's the low patients to as I'm told, have for the would applicable that that. if -- guarantee cervical I what is percentage it's said, look at for of who a you these the you So test. be cancer cannot that X% market total to tests

Operator

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

Phillip Frost

And to thank to Bye. for you again. with Thanks after session. we quarter. the participating being this forward like next again everyone in look I'd

Operator

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

You may disconnect. now

OPKO Health (OPK) 3 May 232023 Q1 Earnings call transcript