March 03, 2014 6:19pm EST
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Fourth Quarter Revenue Increases About 30%; Full Year Revenue More
Than Doubled to $96.5 Million
Company Has Strong Liquidity, Including Cash and Cash Equivalents of
$185.8 million as of December 31, 2013
Launch of 4Kscore ™ Planned in Q1 2014
MIAMI--(BUSINESS WIRE)--
OPKO Health, Inc. (NYSE:OPK), a multi-national biopharmaceutical and
diagnostics company, today reported operating and financial results for
its 2013 fourth quarter and full year ended December 31, 2013.
Financial Highlights
For the fourth quarter of 2013, consolidated revenues increased about
30% to $20.7 million from $16.2 million in the prior year period. For
the year ended December 31, 2013, consolidated revenues more than
doubled to $96.5 million from $47.0 million in the prior year. Revenue
for the year ended December 31, 2013, included $12.5 million of
revenue resulting from a strategic partnership in the field of RNA
interference with RXi Pharmaceuticals Corporation.
Cash and cash equivalents were $185.8 million as of December 31, 2013,
providing OPKO with liquidity to fund research and development and the
Company’s operations.
Cash used in operations was $58.2 million during the year ended
December 31, 2013, as compared with $25.4 million of cash used in
operations during the year ended December 31, 2012. The increase in
cash used in operations during 2013 reflects the full impact of our
August and March 2013 acquisitions of PROLOR Biotech, Inc. and
Cytochroma Inc., respectively. During 2013, we also utilized
approximately $8.8 million for transaction-related expenses.
Net loss for the 2013 fourth quarter was $16.8 million compared to a
net loss of $1.1 million for the 2012 period. The increase in net loss
for the 2013 fourth quarter was principally related to research and
development expenses incurred in connection with our ongoing Phase 3
clinical trials of Rayaldy ™ and human growth hormone
(“hGH-CTP”), and interest expense related to the January 2013
convertible senior notes due in 2033 (the “2033 Senior Notes”), which
expenses were partially offset by $18.9 million in gains recorded on
the successful exit from strategic investments. The 2012 fourth
quarter results also included $9.7 million in net tax benefits
principally related to the acquisition of our laboratory business in
late 2012.
Net loss for the full 2013 year was $114.8 million compared to $31.3
million for the 2012 period. The increase in net loss for the 2013
full year was primarily related to the previously mentioned research
and development expenses related to our Rayaldy ™ and hGH-CTP
clinical trials, interest expense on the 2033 Senior Notes, and
non-recurring costs related to strategic and business development
$36.5 million related to the change in fair value of derivative
instruments, principally related to embedded derivatives that are
part of the 2033 Senior Notes;
$11.5 million on losses from investments in equity method
investees;
$8.7 million loss from early conversion of some of the 2033 Senior
Notes; and
$6.9 million related to the change in fair value of contingent
consideration payable in connection with prior acquisitions.
These expenses were partially offset by $29.9 million in gains recorded
on the successful exit from strategic investments during 2013. OPKO’s
2012 results also included $9.6 million in net tax benefits principally
related to the acquisition of our laboratory business in late 2012.
Phillip Frost, M.D., OPKO's Chairman and Chief Executive Officer,
commented, “From an R&D perspective, all of our programs are
progressing. We made significant strides in 2013 with our ongoing Phase
3 trials for Rayaldy ™ and hGH-CTP; 2014 will be a pivotal year
for our development programs. We look forward to announcing top-line
results for Rayaldy ™ in mid-2014 and filing a NDA during the
first half of 2015. We are also enthusiastic about the planned launch
later this month of our 4Kscore ™ blood test for prostate cancer
which we believe will lead to a great improvement in the diagnosis and
management of prostate cancer.”
“Work has been continuing in our research laboratories on a program to
utilize specific oligonucleotides to up regulate protein production. A
pre-IND meeting has been scheduled with FDA in connection with the
development of the first product to treat Dravet’s Syndrome, a
congenital condition characterized by chronic seizures.”
Dr. Frost added, “During the year, we further strengthened our cash
position by exiting certain strategic investments which provided
attractive returns. Bolstered by our sound financial position, we look
forward to continuing the advance of our robust product development
pipeline of promising diagnostics and pharmaceuticals.”
Business Highlights
Finalizing Steps Toward 4Kscore ™ Launch: In
February 2014, OPKO announced successful initial results of the
clinical validation study of the 4Kscore™ test currently
underway at 21 large urology centers in the United States. The study,
involving more than 1,200 men, is now more than 50% complete and
supports the U.S. launch of the 4Kscore™ test later this month.
Completed Patient Recruitment In The Second Phase 3 Trial of Rayaldy™ :
This trial is the second of two identical randomized,
double-blind, placebo-controlled, multi-site studies for Rayaldy™
-- to treat patients with secondary hyperparathyroidism (SHPT), stage
3 or 4 chronic kidney disease (CKD) and vitamin D deficiency. Top-line
results from both trials are expected in mid-2014.
Positive Pre-Clinical Results on Long-acting Factor VIIa-CTP
Presented at the 7th Annual Congress of the European Association for
Haemophilia and Allied Disorders (EAHAD); Orphan Drug Designation also
Granted by FDA. Preclinical data presented at EAHAD on February
26-28 in Brussels, showed that OPKO’s long-acting Factor VIIa-CTP
exhibited a four times longer half-life and a four times improved drug
exposure versus Novo Nordisk’s $1.7 billion Factor VIIa product,
NovoSeven. Additionally, on February 27, 2014, the FDA granted orphan
drug designation to OPKO’s long-acting Factor VIIa-CTP for the
treatment and prophylaxis of bleeding episodes in patients with
hemophilia A or B with inhibitions against Factors VIII or IX.
TESARO Achieves Successful Primary Endpoints in Phase 3 Trials of
Rolapitant. TESARO recently announced that two Phase 3 trials of
oral rolapitant, one in patients receiving moderately emetogenic
chemotherapy (MEC) and one in patients receiving cisplatin-based
highly emetogenic chemotherapy (HEC), each met the primary endpoint of
complete response (CR) in the delayed (24 to 120 hour) timeframe
following chemotherapy. Enrollment in the third and final Phase 3
trial of oral rolapitant, which is being conducted in patients
receiving cisplatin-based HEC, is expected to conclude during the
first quarter of 2014. TESARO anticipates that results from this study
will be available in the second quarter of 2014. Further, the clinical
trial of intravenous (IV) rolapitant is well underway, and TESARO
anticipates finalizing the dose that will provide comparable exposure
to the oral formulation by the end of the first quarter of 2014.
OPKO has continued to grow its Latin American presence with the early
January 2014 acquisition of Laboratorio Arama de Uruguay Limitada
("Arama"). Arama broadens the global commercial prospects for OPKO’s
product pipeline by establishing a footprint in Uruguay that may
facilitate the Company’s future commercial expansion into neighboring
Argentina, as well as by providing another platform to commercialize
the 4Kscore™ product.
OPKO Investee, Neovasc, Successfully Completes First Human Implant
of Tiara™ Transcatheter Mitral Valve: In early February 2014,
Neovasc Inc., announced that a human implantation of its Tiara™
transcatheter mitral valve was successfully performed on January 30th
by physicians at St. Paul's Hospital in Vancouver, BC. The transapical
procedure resulted in the elimination of mitral regurgitation (MR) and
significantly improved heart function in the patient, without the need
for cardiac bypass support and with no procedural complications.
OPKO’s investment in Neovasc continues to appreciate.
Exit from Sorrento Therapeutics: In mid-December 2013, OPKO
reported the highly successful exit of its investment in Sorrento
Therapeutics, Inc. The sale of Sorrento shares added to OPKO's cash
position and represented an approximate ten-fold return of OPKO's 2009
investment.
About OPKO Health, Inc.
We are a multi-national biopharmaceutical and diagnostics company that
seeks to establish industry-leading positions in large and rapidly
growing medical markets by leveraging our discovery, development and
commercialization expertise and our novel and proprietary technologies.
This press release contains "forward-looking statements," as that
term is defined under the Private Securities Litigation Reform Act of
1995 (PSLRA), which statements may be identified by words such as
"expects," "plans," "projects," "will," "may," "anticipates,"
"believes," "should," "intends," "estimates," and other words of similar
meaning, including statements regarding expected financial performance,
continued revenue growth and our ability to build a profitable business,
whether we have sufficient liquidity to fund our research and
development and operations, our product development efforts, including
whether the Phase 3 clinical trials for Rayaldy™, hGH-CTP, rolapitant,
and our clinical validation study for the 4Kscore™ will be completed on
a timely basis or at all and whether the data will support approval,
validation and/or reimbursement for our products, our ability to
enroll in our 4Kscore™ study more than 1,200 patients referred for a
prostate biopsy, the expected timing for launch of our products in
development, including the 4Kscore™, Rayaldy™, and hGH-CTP, the expected
timing of our clinical trials, enrollment in clinical trials, and
disclosure of results for the trials, our ability to market and sell any
of our products in development, including Rayaldy™, the 4Kscore™,
hGH-CTP, and a treatment for Dravet’s Syndrome, the timing for
submission of a NDA by us for Rayaldy™ and by TESARO for rolapitant,
whether TESARO will identify a dose of IV rolapitant that provides
comparable exposure to the oral formulation, whether the 4Kscore™ has
great potential in the diagnosis and treatment of prostate cancer,
expectations regarding the performance of companies in which we have a
strategic investment and whether we will monetize and realize a profit
from our strategic investments, and whether we will continue to solidify
our broad development pipeline across a growing operating platform, as
well as other non-historical statements about our expectations, beliefs
or intentions regarding our business, technologies and products,
financial condition, strategies or prospects. Many factors could cause
our actual activities or results to differ materially from the
activities and results anticipated in forward-looking statements. These
factors include those described in our Annual Reports on Form 10-K filed
and to be filed with the Securities and Exchange Commission and in our
other filings with the Securities and Exchange Commission, as well as
the risks inherent in funding, developing and obtaining regulatory
approvals of new, commercially-viable and competitive products and
treatments, that earlier clinical results of effectiveness and safety
may not be reproducible or indicative of future results, that Rayaldy™,
rolapitant, hGH-CTP, and/or any of our compounds or diagnostic products
under development, including our 4Kscore™ test, may fail, may not
achieve the expected results or effectiveness and may not generate data
that would support the approval or marketing of products for the
indications being studied or for other indications, that currently
available over-the-counter and prescription products, as well as
products under development by others, may prove to be as or more
effective than our products for the indications being studied. In
addition, forward-looking statements may also be adversely affected by
general market factors, competitive product development, product
availability, federal and state regulations and legislation, the
regulatory process for new products and indications, manufacturing
issues that may arise, patent positions and litigation, among other
factors. The forward-looking statements contained in this press release
speak only as of the date the statements were made, and we do not
undertake any obligation to update forward-looking statements. We intend
that all forward-looking statements be subject to the safe-harbor
provisions of the PSLRA .
TABLE 1
OPKO Health, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31,
(in millions)
Cash and cash equivalents
$
185.8
$
27.4
Other current assets
56.9
51.3
242.7
78.7
In-process R&D and Goodwill
1,019.7
92.0
Other assets
129.1
119.1
Total Assets
$
1,391.5
$
289.8
Current liabilities
$
91.8
$
52.4
2033 Senior Notes, net
211.9
-
Other long-term liabilities, principally contingent consideration
and deferred tax liabilities
214.8
34.1
518.5
86.5
Series D Preferred Stock and Equity
873.0
203.3
Total Liabilities, Series D Preferred Stock and Equity
TABLE 2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
For the Three
Months Ended
For the
Year Ended
December 31,
December 31,
Revenues
$
20.7
$
16.2
$
96.5
$
47.0
Costs and expenses
(56.5
)
(25.8
)
(176.1
)
(84.3
)
Operating loss from continuing operations
(35.8
(9.6
)
(79.6
)
(37.3
)
Other income and (expense), net
21.4
(0.3
)
(24.6
)
0.1
(14.4
)
(9.9
)
(104.2
)
(37.2
)
Benefit from/(Provision for) income taxes
0.6
9.7
(1.7
Loss from continuing operations before investment losses
(13.8
)
(0.2
)
(105.9
)
(27.6
)
Loss from investments in investees
(3.5
(11.4
)
(2.1
)
Loss from continuing operations
(17.3
)
(0.8
)
(117.3
)
(29.7
)
Income from discontinued operations, net of tax
Net Loss
(29.6
)
Less: Net loss attributable to noncontrolling interests
0.5
-
2.9
0.5
Preferred stock dividend
(0.4
)
(2.2
)
Net loss attributable to common shareholders
$
(16.8
(1.1
(114.8
(31.3
)
Basic and diluted earnings per share
$
(0.04
(0.00
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