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Opko Health Q4 Revenues Up 1 Percent

NEW YORK – Opko Health reported after the close of the market on Wednesday that its fourth quarter revenues grew 1 percent year over year.

For the three months ended Dec. 31, 2019, the company posted total revenues of $224.3 million, up from $221.9 million in the year-ago period, and above the consensus Wall Street estimate of $216.1 million.

Product revenues increased 26 percent year over year to $32 million from $25.4 million in Q4 2018, while service revenues declined 3 percent to $177.9 million from $183.1 million. Revenues from licensing and the transfer of intellectual property rose 8 percent to $14.4 million from $13.4 million.

Highlights during the quarter included the company's 4Kscore prostate cancer receiving a positive local coverage determination from Medicare Administrative Contractor Novitas. Nearly 18,000 4Kscore tests were performed during the fourth quarter, the company said, noting that its premarket approval submission for the test was accepted by the US Food and Drug Administration for review in December. On a conference call following the release of the financial results, BioReference Laboratories Executive Chairman Jon Cohen said the company expects a determination from the FDA this year.

Subsequent to the end of the fourth quarter, orders for the test increased 16 percent in January 2020, the first full month the test was covered by Novitas, Cohen added.

Meantime, volumes in Opko business GeneDx in Q4 2019 increased 9 percent year over year, and the company's whole-exome sequencing business increased 16 percent for the year, Cohen said.

Revenues for BioReference were $178 million in the fourth quarter of 2019, which exceeded guidance from the third quarter, according to Senior VP and CFO Adam Logal.

In the last quarter of 2019, Opko raised $81.3 million from an underwritten public offering of common stock.

Opko's R&D spending for Q4 2019 retreated 31 percent year over year to $23 million from $33.3 million, and its SG&A costs were down 17 percent to $79.1 million from $95.1 million.

Operating expenses during the quarter included a non-cash impairment charge of $91.8 million for goodwill and intangible assets related to the acquisitions of Claros, Curna, and Transition Therapeutics, the Miami-based firm said.

For Q4 2019, Opko posted a net loss of $112.4 million, or $.18 per share, compared to a net loss of $76.1 million, or $.13 per share, in Q4 2018. The analysts' average estimate for net loss per share was $.09.

The recently completed quarter included an income tax expense of $3.4 million. In 2018, the company recorded an income tax benefit of $28.3 million.

The diagnostics segment had an operating loss during the fourth quarter of 2019 of $45.4 million dollars, compared to a loss of $27.3 million in the same quarter of 2018, which Logal attributed to a $38.7 million non-cash impairment charge related to the company's Claros point-of-care device.

For full-year 2019, Opko's total revenues were down 9 percent year over year to $901.9 million from $990.3 million, but above of the consensus Wall Street estimate of $893.7 million.

Its product revenues were up 5 percent year over year to $112.2 million from $107.1 million. Service revenues decreased 12 percent to $716.4 million from $813.3 million, but licensing and the transfer of intellectual property revenues rose 5 percent to $73.3 million from $69.9 million.

Its R&D costs were down 6 percent year over year to $117.9 million from $125.6 million. Its SG&A costs were down 4 percent to $343.3 million from $358.4 million. The firm's asset impairment charges rose to $92.4 million in 2019 compared to $21.8 million in 2018.

Opko's net loss for 2019 was $314.9 million, or $.53 per share, up from a net loss of $153.0 million, or $.27 per share, in 2018. The consensus Wall Street estimate was a loss per share of $.43.

The company finished 2019 with $85.5 million in cash, cash equivalents, and marketable securities.

For Q1 2020, Logal said Opko expects revenues from services to be between $168 million and $173 million, product revenues to be between $30 million and $32 million, and revenues from the transfer of intellectual property to be between $15 million and $18 million. Costs for the first quarter are expected to between $265 million and $275 million, including R&D expenses between $23 million and $28 million.

For the full year's guidance, Opko expects revenues from services to be between $715 million and $740 million, product revenues to be between $130 million and $150 million, and revenues from the transfer of intellectual property to be between $20 million and $30 million. The guidance for revenues from services takes into account the potential impact of the Protecting Access to Medicare Act and the benefit of a full year of revenues from the 4Kscore test after receiving an LCD from Novitas, Logal said.

He said the company expects costs for the year to be between $1.08 billion and $1.13 billion, including R&D expenses between $85 million and $125 million.

The company also announced Wednesday it entered into a $100 million credit facility with Opko Chairman and CEO Philip Frost, which Logal said would provide sufficient liquidity to fund development into 2021.