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Opko Health Q3 Revenues Down 8 Percent

NEW YORK – Opko Health reported after the close of the market on Tuesday that its third quarter revenues were down 8 percent year over year.

For the three months ended Sept. 30, Opko's revenues were $228.8 million compared to $249.8 million in Q3 2018. It beat the consensus Wall Street estimate of $225.4 million.

The firm said it received $181.1 million in revenues from services, down 11 percent from $202.8 million in the same quarter last year. It also received $26.2 million in revenue from products, an increase of 3 percent from $25.4 million in Q3 2018. Licensing and intellectual property revenues were $21.5 million, down a fraction of 1 percent from $21.6 million in the third quarter of 2018.

Utilization of the 4Kscore test for prostate cancer, which measures four kallikrein biomarkers, was nearly 18,000, down slightly from 18,700 tests in the prior year, said Jon Cohen, executive chairman of BioReference Laboratories, an Opko subsidiary, on a conference call following the release of the financial results. Earlier this year, Medicare contractor Novitas proposed a local coverage determination for the test, with the final decision expected in the coming months. Adam Logal, Opko's CFO, said a final positive coverage decision could immediately contribute to sequential revenue growth.

Cohen also noted new leadership in BioReference's women's health and cancer services divisions and said the company is focused on these areas next.

Volumes in the company's GeneDx business increased 6 percent compared to the same quarter in 2018, thanks largely to institutional, hospital, and health-system-based ordering, which increased 21 percent, Cohen said.

Opko's pharma business saw prescriptions of its Rayaldee kidney disease drug increase 83 percent compared to Q3 2018, and revenues from the drug reached $7.4 million this quarter compared to $5.8 million in the same quarter last year.

Logal noted that revenue from services has been impacted by challenges in the payor environment, including rate decreases from the Protecting Access to Medicare Act, prior authorization requirements, and increased denial rates for both clinical and genomic testing. The company saw a decline in testing volumes in the clinical laboratory and an increase in genetic testing volumes, Logal said.

Opko's net loss for Q3 2019 was $62 million, or $.11 per share, compared to a net loss of $27.7 million, or $.5 per share, loss in Q3 2018. The Wall Street consensus was a net loss of $.11 per share.

Logal noted the company received an income tax benefit recording in the third quarter of 2018, which partially accounted for the year-over-year difference in net loss.

The Miami-based company posted $30 million in R&D expenses, down a fraction of 1 percent from $30.2 million in Q3 2018. The company's SG&A costs were trimmed 4 percent to $80.5 million from $84.1 million in the same quarter last year.  

Opko reported $64.7 million in cash and cash equivalents as of Sept. 30. The company raised $75 million from a public offering of common stock after the quarter ended.

For Q4 2019, the company anticipates revenue from services of between $165 and $175 million, product revenues between $25 million and $29 million, and revenue from licensing and intellectual property between $16 million and $18 million, Logal said on the call. The company also expects an operating loss between $42 million and $69 million for the fourth quarter of 2019.