On May 9, 2016 OPKO Health, Inc. (NYSE:OPK), a multinational biopharmaceutical and diagnostics company, reported financial and operating results for the three months ended March 31, 2016 (Filing, Q1, Opko Health, 2016, MAY 9, 2016, View Source [SID:1234512436]).
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Business Highlights
Vifor Fresenius Medical Care Renal Pharma and OPKO Health Enter into Agreement for OPKO’s RAYALDEE: VFMCRP, a common company of Galenica and Fresenius Medical Care, and OPKO Health, have entered into a collaboration and license agreement for the development and commercialization of RAYALDEE in Europe, Canada, Mexico, Australia, South Korea and certain other markets for the treatment of secondary hyperparathyroidism (SHPT) in patients with chronic kidney disease (CKD) and vitamin D insufficiency. Under the terms of the agreement, VFMCRP will make an upfront payment to OPKO of $50 million, plus up to an additional $52 million in regulatory and launch milestones, and $180 million in sales-based milestones. In addition, VFMCRP will pay OPKO tiered, double-digit royalties on sales of the product. The parties will also collaborate to develop and commercialize a new dosage form of RAYALDEE for the treatment of SHPT in dialysis patients, and OPKO has granted VFMCRP an option to acquire rights to the US market for dialysis patients. If VFMCRP exercises its option for rights to the US dialysis market for the new dosage form, VFMCRP will pay OPKO up to $550 million in additional milestones, as well as double-digit royalties.
RAYALDEE New PDUFA Date Set for October 22, 2016: OPKO resubmitted the New Drug Application (NDA) for RAYALDEE following receipt of a complete response letter (CRL) from the U.S. Food and Drug Administration on March 29, 2016, in which the FDA indicated the NDA could not be approved due to deficiencies observed during a facility inspection of OPKO’s third party manufacturer. The observations were not specific to RAYALDEE manufacturing, and the CRL did not cite any safety, efficacy or labeling issues with regard to RAYALDEE, nor did it request any additional studies to be conducted prior to FDA approval.
Key Executive Additions — New Leadership at Bio Reference Laboratories and Senior Vice President of Pharmaceutical Sales: Gregory Henderson, M.D., Ph.D. was appointed President, Bio Reference Laboratories; James Demarco was appointed Senior Vice President of Pharmaceutical Sales; Ronald Trust, Ph.D. was named Vice President of Regulatory Affairs – OPKO expects to make key additional commercial hires in 2Q 2016.
4Kscore Recommended in 2016 European Association of Urology Prostate Cancer Guidelines: The European Association of Urology (EAU) Prostate Cancer Guidelines Panel included the 4Kscore in the 2016 EAU Guidelines for Prostate Cancer. The panel concluded that the 4Kscore, as a blood test with greater specificity over the PSA test, is indicated for use prior to a first prostate biopsy or after a negative biopsy to assist patients and physicians in further defining the probability of high grade cancer.
Topline Phase 3 Results for hGH-CTP in Adults Expected 2H 2016; Pediatric Phase 3 Initiation Anticipated in 2H 2016: OPKO expects to report top line results from its Phase 3 trial evaluating the safety and efficacy of once weekly injections of hGH-CTP with a primary endpoint of superiority compared with placebo in decreasing fat mass in adults with growth hormone deficiency (GHD) in the second half of 2016. The trial is a randomized, double-blind, placebo controlled, multicenter, global study in adults with GHD. The study is divided into two treatment periods: a 26 week, double blind, placebo controlled period, followed by a 26 week, open label extension period. A Phase 3 trial in pediatric patients is anticipated to commence in the second half of 2016.
First Patient Dosed in Phase 2a Clinical Trial of Long Acting Factor VIIa for the Treatment of Hemophilia: In February 2016, the first patient was dosed in OPKO’s Phase 2a clinical trial for its long acting Factor VIIa. The study is a dose escalation study to determine safety and explore efficacy endpoints of OPKO’s long-acting version of coagulation Factor VIIa (Factor VIIa-CTP) for the treatment of bleeding episodes in hemophilia A or B patients with inhibitors to Factor VIII or Factor IX. The study is intended to enroll 24 patients in the United States.
First Patient Dosed in Clinical Study for Long Acting Oxyntomodulin for Obesity and Diabetes: In March 2016 the first patient was enrolled in OPKO’s Phase 1 single dose escalation study evaluating the safety and pharmacokinetics of a long acting oxyntomodulin (MOD-6031) in healthy, overweight or obese subjects. The study is intended to enroll 40 subjects. Oxyntomodulin is a peptide hormone that acts as a dual GLP-1/glucagon receptor agonist, with the potential to promote weight loss while improving glycemic control. Oxyntomodulin has been shown to increase energy expenditure, while reducing food intake and body weight, although its clinical utility is limited by its short circulating half life. OPKO’s MOD-6031 has been designed, using a proprietary bifunctional hydrolysable linker, as a long acting version of oxyntomodulin for the treatment of Type 2 Diabetes and obesity, and is intended to reduce the required dosing frequency by prolonging the half life, while improving the hormone’s pharmacokinetic and pharmacodynamic profiles.
"We started 2016 with strong results from our diagnostics business driven by an increase in patient volume at Bio-Reference Laboratories, including our GeneDx business, and continued growth in the utilization of our innovative 4Kscore Test. On the pharmaceutical side, we are looking forward to the launch of RAYALDEE and our collaboration with a leader in the chronic kidney disease field that will allow us to expand the reach of this product to patients outside the US and expand development of the product for patients undergoing dialysis. We are steadily building our commercial team as we work with the FDA to finalize regulatory approval for RAYALDEE. We also made progress advancing our earlier stage development programs including the next program utilizing our CTP technology, with the first patients being administered our long acting Factor VIIa-CTP, and the initiation of a Phase 1 clinical trial for long acting oxyntomodulin," stated Phillip Frost, M.D., Chairman and Chief Executive Officer of OPKO.
Financial Highlights
Consolidated revenues for the three months ended March 31, 2016 increased to $291.0 million from $30.1 million for the three months ended March 31, 2015. The 2016 period include revenue from Bio-Reference Laboratories and EirGen which were acquired in August and May 2015, respectively.
Net loss for the three months ended March 31, 2016 was $12.0 million compared with net loss of $117.1 for the 2015 period. Net loss during the three month periods include significant non-recurring and/or non-cash activities, including:
• $20.5 million of income tax benefit, primarily reflecting a change in the statutory tax rate in Israel during 2016;
• $17.2 million of severance expense related to the resignation of certain Bio-Reference executives during the first quarter of 2016, which is included in selling, general and administrative expense. Of this expense, $8.9 million is a non-cash expense related to the acceleration of stock options;
• The first three months of 2015 include $25.9 million of non-recurring operating expense related to the repayment of a grant to the Office of the Chief Scientist in Israel related to the Pfizer transaction; and,
• Other income and (expense) was ($2.6) million and ($53.9) million in the 2016 and 2015 periods, respectively, primarily related to the change in fair value of derivative instruments. The change in fair value is principally related to an embedded derivative in OPKO’s January 2013 convertible senior notes due in 2033.
Cash, cash equivalents and marketable securities were $175.0 million as of March 31, 2016.