On February 27, 2019 OPKO Health, Inc. (NASDAQ: OPK) reported business highlights and financial results for the three months ended December 31, 2018 (Press release, Opko Health, FEB 27, 2019, View Source [SID1234533812]).
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Business Highlights
RAYALDEE total prescriptions reported by IQVIA increased 166% in 4Q 2018 compared with 4Q 2017: Total prescriptions were approximately 9,300 during the fourth quarter of 2018. As of January 1, 2019, approximately 80% of prospective U.S. patients have access to RAYALDEE under their insurance plans. The Company continues to increase its commercial reach through expansion of its sales force.
Topline data from the global Phase 3 clinical trial for hGH-CTP in growth hormone deficient children is expected by the end of 2019; Enrollment completed in Japanese registration study: The global pediatric study is a pivotal, non-inferiority design comparing a single weekly administration of hGH-CTP with daily injections of a currently marketed growth hormone product. The global and Japanese pediatric studies utilize the pen device and formulation that will be launched commercially upon approval. The pediatric segment represents more than 80% of the commercial market for treatment of hGH deficiency.
RAYALDEE line extension trial initiated in hemodialysis patients with SHPT: Together with its partners, Vifor Fresenius and Japan Tobacco, OPKO is developing RAYALDEE for patients with Stage 5 CKD who have secondary hyperparathyroidism (SHPT) and vitamin D insufficiency and are undergoing regular hemodialysis. A Phase 2 trial in this population is currently underway in the United States.
Topline data from the Phase 2b study with OPK88003, a once-weekly oxyntomodulin dual GLP1-Glucagon agonist for type 2 diabetes and obesity, is anticipated during 1Q 2019: The last patient, last visit of this Phase 2b dose-escalation study occurred in February 2019. In an earlier, 420-patient Phase 2 trial in patients with type 2 diabetes, OPK88003 was similar to exenatide extended-release (Ex ER) in reducing HbA1c levels. OPK88003 showed statistically significantly greater weight loss and lowering of total cholesterol and triglycerides compared to once-weekly Ex ER, with a good safety profile.
Appointed Jon R. Cohen, M.D. Executive Chairman and promoted Geoff Monk as President, both for BioReference Laboratories: Dr. Cohen brings more than 30 years of healthcare experience as a seasoned strategic leader with extensive and diverse experience; his track record of expanding existing business and developing new ventures, while dealing effectively with the payor universe, is well recognized in the diagnostics industry.
4Kscore utilization remained strong during 4Q 2018 with nearly 20,000 tests performed: The 4Kscore test is a blood test that gives a man with elevated prostate specific antigen (PSA) levels a personalized prediction of his chance of having or developing an aggressive form of prostate cancer. The Company is pursuing U.S. Food and Drug Administration (FDA) approval with a submission expected in the first half of 2019. OPKO announced on January 31, 2019 that Novitas Solutions, Inc. issued a notice of a future non-coverage determination for 4Kscore effective March 20, 2019. The Company is currently making efforts to have the determination rescinded or reversed.
FDA approved Claros point-of-care (POC) PSA test: On February 1, 2019, OPKO announced that the FDA approved the Company’s point-of-care Sangia Total PSA Test using the Claros 1 Analyzer. The Company is taking steps to obtain CLIA waiver for the test and analyzer, which would permit the test to be performed by most medical office personnel with minimal training, and is also planning for scale up of manufacturing capacity during 2019. OPKO plans to expand the testing menu and the next test under development is testosterone, with clinical trials currently scheduled to commence in mid-2019.
Financial Highlights
Net loss for the fourth quarter of 2018 of $76.1 million compared to $217.9 million for the comparable quarter of 2017. Net loss for both periods included unusual or non-cash items consisting of:
During the fourth quarter of 2018, the Company recorded $21.8 million of non-cash impairment to Goodwill and in-process research and development related to its active pharmaceutical ingredient business and the suspension of the Phase 2b clinical trial for its selective androgen receptor antagonist for benign prostatic hyperplasia. In the comparable period of 2017, the Company recorded a $13.2 million impairment resulting from the discontinuation by its licensee of the intravenous formulation of VARUBI;
During the fourth quarter of 2018, the Company incurred approximately $8.0 million of expenses related to defense and investigation of actions brought by the U.S. Securities and Exchange Commission (SEC) and related civil lawsuits. The Company reached a settlement agreement with the SEC in the fourth quarter of 2018, which was finalized in January 2019; and
During the fourth quarter of 2017, the Company recorded $73.3 million of adjustments to revenue from services.
Consolidated revenues for the fourth quarter of 2018 were $221.9 million compared with $161.0 million for the comparable period of 2017. During the 2018 quarter, revenue from services was $183.1 million, revenue from products was $25.4 million, including RAYALDEE revenue of $6.0 million, and revenue from licensing and intellectual property was $13.4 million.
During the fourth quarter of 2018, total operating expenses were $311.9 million, including the aforementioned impairment charges of $21.8 million as well as continued investment in the Company’s pharmaceutical pipeline, with R&D expense of $33.3 million.
The Company recorded a $28.3 million income tax benefit during the fourth quarter of 2018 primarily as a result of valuation allowance releases in foreign jurisdictions. The comparable period of 2017 includes a $61.2 million income tax provision, principally as a result of the Tax Cuts and Jobs Act ($31.8 million) as well as recording a valuation allowance against U.S. based deferred tax assets.
Subsequent to the close of the fourth quarter, on February 5, 2019, OPKO completed the sale of $200 million aggregate principal amount of 4.5% Convertible Senior Notes due 2025.
CONFERENCE CALL & WEBCAST INFORMATION
OPKO’s senior management will provide a business update and discuss results in greater detail in a conference call and live audio webcast at 4:30 p.m. Eastern time today. The conference call dial-in and webcast information is as follows:
DOMESTIC DIAL-IN: 866-634-2258
INTERNATIONAL DIAL-IN: 330-863-3454
PASSCODE: 4254518
WEBCAST: View Source
For those unable to participate in the live conference call or webcast, a replay will be available beginning approximately two hours after the close of the conference call. To access the replay, dial 855-859-2056 or 404-537-3406. The replay passcode is 4254518. The replay can be accessed for a period of time on OPKO’s website at View Source