On February 24, 2022 OPKO Health, Inc. (NASDAQ: OPK) reported that business highlights and financial results for the three months ended December 31, 2021 (Press release, Opko Health, FEB 24, 2022, View Source [SID1234608980]).

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Business Highlights

Business highlights for the fourth quarter of 2021 and subsequent weeks include the following:

NGENLA (somatrogon) injection granted regulatory approvals in Europe, Japan, Australia and Canada for pediatric growth hormone deficiency. NGENLA is a once-weekly, long-acting recombinant human growth hormone for the long-term treatment of growth hormone deficiency (GHD) in pediatric patients. NGENLA has been approved in the European Union, including Iceland, Norway and Liechtenstein, Japan, Australia and Canada. Under the worldwide agreement with Pfizer Inc., OPKO is eligible to receive a milestone payment after regulatory approvals and pricing determinations are obtained in major markets outside of the U.S. NGENLA became commercially available in Canada to patients with pediatric growth hormone deficiency on February 16, 2022, the product’s first commercial launch.

In the U.S., the Food and Drug Administration (FDA) issued a Complete Response Letter for the Biologics License Application for somatrogon. Pfizer is evaluating the FDA’s comments and intends to work with the Agency to determine an appropriate path forward in the U.S.

RAYALDEE launched in Germany by OPKO’s licensee, Vifor Fresenius Medical Care Renal Pharma (VFMCRP). VFMCRP has initiated the commercial launch of RAYALDEE (extended-release calcifediol) in Germany, the first launch of RAYALDEE outside the U.S. VFMCRP is OPKO’s commercial partner for RAYALDEE in Europe and selected markets outside the U.S. The sales kick-off in Germany began with presentations from several nephrology key opinion leaders. VFMCRP has received marketing authorizations for RAYALDEE in 11 European countries and expects to launch the product in additional markets.

Topline results reported from a Phase 2 clinical trial evaluating RAYALDEE as a treatment for symptomatic COVID-19 outpatients. Topline data indicate that improving vitamin D status with oral RAYALDEE results in earlier resolution of respiratory symptoms associated with mild-to-moderate COVID-19. A preprint manuscript summarizing the topline results is available on medRxiv. This manuscript is currently under review for publication in a peer-reviewed medical journal. We plan to discuss potential next steps with the FDA.

Definitive agreement signed for Sema4 Holdings Corp. (Sema4) to acquire GeneDx, Inc., a leader in genomic testing and analysis. Upon completion of the transaction, OPKO anticipates Sema4 and GeneDx will be one of the largest and most advanced providers of genomic clinical testing in the U.S., with a projected $350 million in pro forma 2022 revenue. Under the terms of the agreement, Sema4 will acquire GeneDx for an upfront payment of $150 million in cash plus 80 million shares of Sema4 common stock, with up to an additional $150 million in revenue-based milestones over the next two years (payable in cash or Sema4 shares at Sema4’s discretion). Based on the closing price of Sema4’s common stock on January 14, 2022, the total upfront consideration is approximately $473 million and the total aggregate consideration including potential milestones is approximately $623 million. As part of the transaction, Sema4 also entered into definitive agreements for a $200 million private placement of Sema4 stock from a syndicate of institutional investors, including Pfizer. The acquisition and the private placement are expected to close in the second quarter of 2022, subject to customary closing conditions including approval by Sema4 stockholders.

BioReference Laboratories (BRL) processed approximately 2.7 million COVID-19 PCR tests in the fourth quarter of 2021 versus 2.2 million in the third quarter of 2021. Demand for COVID-19 PCR tests increased significantly due to the Omicron variant beginning late in the fourth quarter of 2021 and continuing into the first quarter of 2022.

In December 2021, BRL announced a collaboration with MVP Health Care (MVP) to offer MVP’s members medically necessary COVID-19 testing, bloodwork and other diagnostic tests in the comfort of their homes. MVP, the first insurer in New York and Vermont to offer this service, is utilizing Scarlet Health, BRL’s seamlessly integrated digital platform that provides specimen collection for laboratory diagnostic services conducted by a Scarlet Health professional in a patient’s home or office.

FDA approved the Premarket Approval Application (PMA) of the 4Kscore Test. This test is approved for use in men aged 45 years and older who have not had a prior prostate biopsy or are biopsy negative and have an age-specific abnormal total prostate specific antigen (PSA) and/or abnormal digital rectal exam. The 4Kscore Test in the intended use population, when used in conjunction with other clinical factors and patient preferences, can contribute to a properly informed decision as to whether or not to proceed with a prostate biopsy. The regulatory approval provides further validation of the 4Kscore Test as an important diagnostic tool and should assist in expanding reimbursement coverage.
Fourth Quarter Financial Results

Consolidated: Consolidated total revenues for the fourth quarter of 2021 were $401.3 million compared with $494.6 million for the comparable period of 2020. Operating loss for the fourth quarter of 2021 was $63.1 million compared with operating income of $49.3 million for the comparable period of 2020. Net loss for the fourth quarter of 2021 was $73.8 million, or $0.11 per share, compared with net income of $32.3 million, or $0.05 per diluted share, for the comparable period of 2020. Operating loss for the fourth quarter of 2021 included non-recurring legal expenses, as well as expenses related to the GeneDx transaction.

Diagnostics: Revenue from services in the fourth quarter of 2021 were to $362.8 million compared to $457.9 million in the prior-year period, primarily due to a decrease in COVID-19 testing volume. Total costs and expenses were $381.4 million in the fourth quarter of 2021 compared to $388.0 million in the fourth quarter of 2020, resulting in an operating loss of $18.6 million compared to operating income of $69.9 million in the 2020 period. The lower operating income is primarily due to a decline in COVID-19 test volume and increased investment in BRL’s base business and digital health activities, principally related to Scarlet. Included in the fourth quarter 2021 results were revenue of $33.1 million and costs and expenses of $43.4 million at GeneDx compared with revenue of $20.3 million and costs and expenses of $36.6 million for the fourth quarter of 2020.

Pharmaceuticals: Revenue from products in the fourth quarter of 2021 increased nearly 15% to $35.3 million compared to $30.8 million in the fourth quarter of 2020, with the increase primarily attributable to the accelerating growth of OPKO’s international pharmaceutical businesses. Revenue from sales of RAYALDEE in the fourth quarter of 2021 was $7.7 million compared to $10.1 million in the prior-year period. Sales of RAYALDEE were negatively impacted by challenges in onboarding new patients due to the COVID-19 pandemic. Revenue from the transfer of intellectual property was $3.3 million in the fourth quarter of 2021 compared to $5.9 million in the 2020 period. Total costs and expenses were $53.3 million in the fourth quarter of 2021 compared to $45.7 million in the prior-year period, reflecting an increase in the cost of product revenue at OPKO’s international operating companies related to higher sales and ongoing expenses for the somatrogon program to support open-label extension studies, as well as the preparation of applications for marketing approvals. Operating loss was $14.8 million in the fourth quarter of 2021 compared to an operating loss of $9.0 million in the fourth quarter of 2020.

Cash and equivalents: Cash, cash equivalents and marketable securities were $134.7 million as of December 31, 2021. In addition, the Company has $64.8 million available under its line of credit with JP Morgan.
CONFERENCE CALL & WEBCAST INFORMATION

OPKO’s senior management will provide a business update, discuss fourth quarter financial results and answer questions during a conference call and live audio webcast today beginning at 4:30 p.m. Eastern time. Participants are requested to pre-register for the conference call using the link here. Upon registering, participants will receive dial-in numbers, an event passcode and a unique registrant ID to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the start of the call. Alternatively, please dial (888) 869-1189 or (706) 643-5902 and use conference ID 4489338.

To access the live call via webcast, please click on the link OPKO 4Q21 Results Conference Call. Individual investors and investment community professionals who do not plan to ask a question during the call’s Q&A session are encouraged to listen to the call via the webcast.

For those unable to listen to the live conference call, a replay can be accessed for a period of time on OPKO’s website at OPKO 4Q21 Results Conference Call. A telephone replay will be available beginning approximately two hours after the close of the conference call. To access the replay, please dial (855) 859-2056 or (404) 537-3406, and use conference ID 4489338.