Skip to main content
Premium Trial:

Request an Annual Quote

Opko Grows Q1 Revenues 2 Percent

NEW YORK (360Dx) – Opko Health reported after the close of the market on Tuesday that its first quarter revenues grew 2 percent year over year, as the firm missed the consensus Wall Street estimates on the top and bottom lines.

For the three months ended March 31, Opko's total revenues came in at $296.1 million, up from $291.0 million, but short of the analysts' average estimate of $313.4 million.

Service revenues grew to $255.3 million from $252.5 million, while product revenues rose to $22.2 million from $19.9 million. Revenues from transfer of intellectual property were flat at $18.6 million.

On a conference call following the release of the company's financial results, Steven Rubin, executive vice president, said that the Bio-Reference business continued to post "steady financial progress." The bulk of Bio-Reference's revenues came from traditional reference laboratory testing, as well as growth in the company's 4Kscore test, which measures four prostate-specific kallikreins in blood to identify men who have a high likelihood of developing an aggressive form of prostate cancer.

Rubin said that more than 8,600 prescribers have ordered the 4Kscore test and more than 18,600 tests were performed in Q1, representing growth of more than 100 percent from the first three months of 2016.

Opko was granted a CPT level 1 code last year for the test by the American Medical Association, which became effective on Jan. 1. The test has a national reimbursement rate of $602.10 from the Centers for Medicare & Medicaid Services for 2017, though contradictory coverage determinations by two different Medicare contractors have cast a shadow over the reimbursement for the test.

Initially, Novitas Solutions, the Medicare contractor for New Jersey, where an Opko facility is located, issued a positive coverage decision for 4Kscore. Palmetto GBA then issued a negative coverage determination, leading Novitas to pull its positive determination.

Since then, Opko has been awaiting a final positive local draft determination for the 4KScore test by Novitas. That has not happened yet, though on the call Opko officials said that Novitas has and continues to pay Medicare claims for the test.

"On that basis, we're now going to embark on a very vigorous marketing program in an attempt to dramatically increase the utilization of [4Kscore] and the revenues from the test," Opko Chairman and CEO Philip Frost said.

Opko also has successfully completed a second prospective blinded clinical trial involving Veterans Affairs hospitals across the country. The cohort for the trial comprised primarily of African-American men, who have the highest cancer rate in the world, and 4Kscore was able to accurately identify those men in the trial who had a risk for high-grade prostate cancer, Rubin said.

Opko is also preparing its Claros 1 point-of-care platform for the quantitative immunodiagnostics market. It previously said that it anticipates filing a premarket approval submission for the platform and a PSA test that would run on Claros 1 with the US Food and Drug Administration in the first half of this year.

On the call, Rubin pushed back that timeline to the second half of the year.

Opko reduced its R&D spending 6 percent year over year to $26.0 million from $27.8 million in Q1 2016, but increased its SG&A costs 7 percent to $136.7 million from $128.0 million.

The firm posted a net loss of $31.0 million, or $.06 per share, for the quarter, compared to a net loss of $12.0 million, or $.02 per share, in the year-ago period. It missed the consensus Wall Street estimate of a loss of $.04 per share.

The company exited Q1 2017 with $131.1 million in cash, cash equivalents, and marketable securities. 

Shares of Opko were down almost 8 percent on the Nasdaq in early morning trading on Wednesday to $6.96.