NEW YORK (360Dx) – Opko Health reported after the close of the market on Friday that its third quarter revenues grew about 2 percent year over year.
For the three months ended Sept. 30, the company recorded total revenues of $249.8 million compared to $246 million in Q3 2017. It fell short of the consensus Wall Street estimate of $264 million.
Service revenues were up almost 1 percent year over year to $202.8 million from $200.9 million while product revenues grew 11 percent to $25.4 million from $22.8 million. Revenues from the transfer of IP slid 3 percent to $21.6 million from $22.3 million.
Utilization of the 4Kscore test – which uses four prostate-specific biomarkers to measure the risk of aggressive prostate cancer – in the quarter was about 18,700 tests, slightly down from 18,900 in the prior-year, Opko said, adding that it continues working with Medicare administrator Novitas on a local coverage determination for the test. Novitas, meanwhile, has continued to provide coverage of 4Kscore to Medicare beneficiaries, despite its draft local coverage determination of non-coverage issued in May, the company noted.
"While the final coverage determination is yet to be made, we remain optimistic it will ultimately go in our favor," said Steven Rubin, Opko's executive vice president, during a conference call to discuss the Q3 earnings results.
The company presented results of multiple studies on the clinical utility of the 4Kscore test at the American Urological Association meeting in May and at the American Society of Clinical Oncology meeting in June, according to Rubin. The company also saw a 15 percent increase in the number of urologists using the test during the quarter, he noted.
"We remain focused on driving adoption across targeted physicians and are pleased at the increasing body of evidence that supports its clinical utility," Rubin said.
Additionally, the US Food and Drug Administration is currently reviewing the firm's premarket approval application for Sangia, a point-of-care PSA test using the company's Claros 1 immunoassay analyzer, and a decision is anticipated in the first half of 2019. The test is the first for use on the company's Claros 1 platform, according to Rubin.
Opko expects to submit a testosterone test using the Claros 1 platform to the FDA for 510K clearance early next year. The company is also developing a vitamin D test and a parathyroid hormone test using the platform, Rubin said.
Despite headways made on its 4Kscore and other tests in its pipeline, Q3 was also challening for Opko on several fronts. During the quarter Opko and its Chairman and CEO Philip Frost were among 20 defendants charged by the US Securities and Exchange Commission with participating in market manipulation schemes that generated more than $27 million in unlawful stock sales. The company's shares were halted from trading on the Nasdaq for several days as a result, and several class action lawsuits were filed against Opko.
"We have spent considerable time over the past two months working closely with our advisors to address the allegations in the compliant," Rubin said. He added that the company disagrees with the complaint allegations.
In Opko's BioReference Laboratories business, the company has seen sequential growth for five consecutive quarters, Rubin said, adding that Geoff Monk, who joined the lab as general manager in May, has strengthened the management team in recent months.
"We have new leaders and focus in the clinical lab space, the compliance space, and the service operations space. We have realigned groups to focus on our core needs and recently added our last executive team member to lead payor relations and marketing," Rubin said, though he did not name the new executives.
The company's GeneDx subsidiary saw strong year-over-year volume growth, Rubin said, and testing volumes related to neurological disorders grew 42 percent year over year, while exome testing volumes grew 35 percent year over year.
"Many GeneDx tests continue to be added and updated as part of our test menu overhaul," he said. "Going back to the example of neurologic disorders, new tests launched during the third quarter already consistently account for over 10 percent of test volumes within that division."
During Q3, the firm lowered its R&D spending 7 percent to $30.2 million from $32.5 million a year ago, and it sliced its SG&A costs 19 percent to $84.1 million from $103.2 million.
It posted a loss of $27.7 million, or $.05 per share, in Q3 2018, down from a loss of $35.9 million, or $.06 per share, a year ago and beat the consensus Wall Street estimate of a loss of $.08 per share.
The Miami-based firm finished the third quarter with $43.7 million in cash, cash equivalents, and marketable securities.
Opko also said that on Friday that it had secured about $150 million of additional capital, comprising a private placement of common stock resulting in $92.5 million in proceeds and an unsecured credit line of $60 million.
Opko shares were up 19 percent at $3.68, in Monday mid-day trading.