OPKO HEALTH, INC. Q1 FY2025 earnings call

• In March, OPKO announced the sale of BioReference's health oncology and related clinical testing business to Labcorp, unlocking value and enhancing BioReference's path to profitability. BioReference's core clinical testing in NY and NJ was ~$320M in 2024.
• OPKO-88006, a dual-GLP-1 glucagon agonist, showed promising outcomes in animal models for obesity and MASH; collaboration with Entera Bio for oral formulation of OPKO-88006.
• ModeX has two Phase 1 clinical trials: an Epstein-Barr virus vaccine candidate with Merck and MDX2001 tetraspecific antibody for solid tumor cancers.
• Latin American business EirGen Pharma and Irish contract pharmaceutical unit showed revenue and profit growth. A $100 million increase to the common stock repurchase program and a note exchange agreement to bolster capital structure.

Diagnostics Segment:

• In 2024, BioReference's core clinical testing in New York and New Jersey generated approximately $320 million in revenue. Q1 2025 Diagnostics revenue was $102.8 million. Costs and expenses led to an operating loss of $23.9 million. The sale of BioReference's health oncology and related clinical testing business to Labcorp is expected to close later, with the remaining BioReference business having an annualized revenue of between $310 million and $320 million.

Pharmaceutical Segment:

• Q1 2025 revenue was $47.1 million. Product revenue (including Rayaldee) was $34.8 million. R&D expenses increased due to ModeX development activities and BARDA-supported programs, resulting in an operating loss of $34.8 million.

• Pharmaceutical: Expect Pfizer to continue growing sales of NGENLA and the HGH franchise; stable foreign currency for ex-US pharmaceutical businesses; R&D expenses to reflect higher ModeX activities.
• Diagnostics: Executing profitability program, expecting $5M nonrecurring costs in Q2, additional $10M annualized cost savings; Labcorp transaction to make remaining BioReference cash flow positive and profitable. Full-year revenue guidance: $675-$685M, services $400-$500M, products $165-$175M, other revenue $75-$85M; R&D $120-$130M; nonrecurring Diagnostics costs ~$15M.

• Uncertain commercial dynamics affecting NGENLA sales.
• Foreign currency fluctuations impacting ex-US pharmaceutical businesses.
• Tariff impacts on supply chain and operations.
• Uncertainty regarding BARDA funding milestones for some programs.

Q: What are some possible explanations for the negative dynamics for NGENLA?

A: Likely related to commercial environments, expected to be a first quarter only event.

Q: Could you provide a rough timeline about development program of the GLP-1/glucagon tablet candidate?

A: Expect IND filing later this year/early next year, clinical results by end of 2026, once weekly dosing in trials.

Q: Could you elaborate on the tariff situation impact?

A: Monitoring supply chain, manageable risk with minor impact on cost structure.

Q: Is NGENLA being a one-quarter issue based on?

A: Based on script data showing growing franchise, expected to rebound to historical norms.

Q: If the oncology asset had not been sold, could you have reached cash flow breakeven this year?

A: Could have through other exit strategies to reach cash flow breakeven.