OPKO Health, Inc. Q2 FY2026 earnings call

• Pipeline and Clinical Development Progress

  • MODX platform: 5 assets are already in clinical trials, with a 6th (in vivo CAR-T asset MDX3001) on track to enter first-in-human trials by end-2026 or early 2027. The program is differentiated from traditional CAR-T by using multi-specific antibody targeting and lipid nanoparticles to generate engineered CAR-T cells directly in the patient's body. Promising preclinical data was published in May 2026.
  • Merck-collaborated MDX2201 (EBV vaccine): Phase 1 is complete, late-stage data analysis is ongoing, with data expected to inform Phase 2 design by end-2026, and potential Phase 2 initiation in 2027. The program is fully funded by Merck.
  • MDH2001 (lead immuno-oncology tetraspecific for solid tumors): Dose escalation and regimen optimization is on track to conclude by Q3/early Q4 2026, with early data expected to be presented late 2026/early 2027. Development of a subcutaneous formulation is underway.
  • MDX2003 (next-generation B-cell cancer tetraspecific): Phase 1 is open and enrolling patients; exploration of an autoimmune indication path is underway in parallel.
  • MDX2004 (first-in-class tri-specific for exhausted T-cells in heavily pretreated cancer): Phase 1 is enrolling, with preliminary data expected in 2027.
  • MDX2301 (multi-specific COVID-19 antibody, fully funded by BARDA): Phase 1 enrollment is on track to complete in Q3 2026, with early results expected late 2026/early 2027. A BARDA-supported broad-coverage influenza multi-specific program is in pre-IND work.
  • OPCO88006 (once-weekly dual GLP-1 glucagon agonist for MASH): Phase 1/2a trial is open and enrolling in the U.S., with single-dose tolerability/pharmacokinetics assessment in healthy volunteers, followed by 16-week safety/efficacy assessment in MASH patients.
  • OpcoBiologics pipeline: Oral PTH for hypoparathyroidism (50-50 collaboration with EnteraBio) reported positive preclinical results, with IND submission planned for late 2026. Once-weekly growth hormone antagonist OPCO8801001 for acromegaly is on track to enter clinical trials by end-2026.
  • Regeneron collaboration: Four initial discovery programs are advancing, with Regeneron funding all development and Opco eligible for over $1 billion in milestones plus tiered royalties up to low double-digits.

• Commercial Operations Updates

  • Engenla (long-acting growth hormone, partnered with Pfizer): Approved and commercialized in over 50 markets for pediatric growth hormone deficiency, with label expansion trials ongoing to expand market reach, and it contributes consistent recurring cash flow with steady commercial growth.
  • Rialdi (innovative vitamin D): Performs to plan, contributes positively to operating cash flow, with strong performance in international markets driving year-to-date global product sales growth of 7%.
  • BioReference Diagnostics: Post divestment of oncology assets to LabCorp, the business has streamlined its footprint and shifted to higher-margin core services, with the 4K score prostate cancer test as a key growth driver. The company received an $18.4 million earn-out payment from LabCorp in Q2 2026, and is on track to reach full-year 2026 operating profitability/breakeven.
  • International pharmaceutical business: Delivers sustainable profitable growth with top-line expansion and ongoing operating efficiency improvements.

1. Diagnostics Segment (BioReference Health): Q2 2026 revenue was $74.5 million, down from $101.1 million in Q2 2025, due to the 2025 sale of oncology testing assets to LabCorp. Retained core business revenue saw a ~$1.7 million year-over-year decline, driven by test mix changes from shifting unprofitable esoteric testing to strategic partners. The 4K score test contributed $6.2 million of Q2 2026 revenue. Total costs and expenses were $69.8 million (down from $119.3 million in Q2 2025), including a $18.1 million gain from the LabCorp earn-out payment that offset operating expenses. The segment posted operating income of $4.8 million in Q2 2026, compared to an $18.2 million operating loss in Q2 2025. Depreciation and amortization was $3.9 million, down from $4.9 million in Q2 2025. This segment contributed 45.5% of total Q2 2026 consolidated revenue.

2. Pharmaceutical Segment: Q2 2026 revenue was $89 million, up from $55.7 million in Q2 2025. Product sales reached $42.9 million (up from $40.7 million YoY), with Rialdi contributing $8.1 million (up from $7.2 million YoY), Pfizer profit share for Engenla reaching $6.4 million (up from $6.1 million YoY), and BARDA funding at $5 million (down from $6.5 million YoY). A $29.4 million one-time revenue from Series A2 preferred shares received for the Rialdi greater China partnership brought total IP and other revenue to $46.1 million (up from $15 million YoY). Total costs and expenses were $88.2 million, up from $84.4 million YoY, driven by increased R&D investment of $32.7 million (up from $29.8 million YoY). The segment posted operating income of $8.8 million in Q2 2026, compared to a $28.7 million operating loss in Q2 2025. Depreciation and amortization was $18.5 million, slightly up from $18.1 million in Q2 2025. This segment contributed 54.5% of total Q2 2026 consolidated revenue.

Consolidated Results: Total Q2 2026 revenue was $163.6 million, up from $156.8 million in Q2 2025. Consolidated operating loss improved to $7 million from $60 million YoY, and net loss improved to $8.4 million ($0.01 per share) from $148.4 million ($0.19 per share) YoY (the 2025 net loss included a $91.7 million one-time expense related to convertible notes exchange). Ending cash, cash equivalents and restricted cash totaled over $300 million. The company repurchased 9.7 million shares for ~$13 million in Q2 2026, with $94 million remaining in authorized repurchase capacity.

• Q3 2026 Guidance:

  • Total revenue expected between $141 million and $142 million, with diagnostic service revenue of $75 million to $78 million, pharmaceutical product revenue of $40 million to $44 million, and IP/other revenue of $16 million to $20 million (including $8 million to $10 million Pfizer profit share).
  • Total costs and expenses expected between $180 million and $190 million, with R&D investment of $34 million to $38 million (partially offset by $5 million to $7 million in BARDA and collaboration funding). Depreciation and amortization is expected to be ~$22 million.

• Full Year 2026 Guidance (updated from prior guidance):

  • Total revenue guidance increased to a range of $560 million to $585 million, with diagnostic service revenue of $296 million to $306 million, pharmaceutical product revenue of $164 million to $174 million, and partner/IP revenue of $100 million to $105 million (including $34 million to $37 million Pfizer profit share). The pharmaceutical product revenue guidance was increased to reflect stronger-than-expected performance, while diagnostic service revenue guidance was adjusted slightly downward due to slower maturation of new revenue lines and delayed 4K score reimbursement approvals.
  • Total costs and expenses guidance was reduced to a range of $710 million to $740 million (excluding future one-time items), driven primarily by the gain from the LabCorp earn-out and diagnostic cost rationalization.
  • Full-year R&D investment is maintained at $125 million to $135 million, offset by $18 million to $22 million in BARDA funding plus collaboration reimbursements from Regeneron. Depreciation and amortization is expected to be ~$95 million.
  • Management maintains confidence in full-year Engenla profit share guidance, as performance through the first half of 2026 is in line with expectations.

• Diagnostic segment: Core revenue has seen a small year-over-year decline, and 4K score test adoption and revenue growth are delayed by pending Medicare reimbursement approval that is not expected to impact results until 2027. New diagnostic revenue verticals are taking longer to mature than initially expected.
• Clinical trial enrollment: MASH trial recruitment faces challenges due to high competition from numerous ongoing industry trials in this indication.
• Pipeline risk: All early-stage clinical and preclinical assets carry inherent risk of failed safety or efficacy readouts that could delay or halt development.
• Operational: The diagnostics segment faced unexpected Q2 2026 cost headwinds from higher-than-projected employee benefit costs and professional fees, though management still expects to hit 2026 profitability targets.

Q: What is the indication and partnership strategy for the in vivo CAR-T program MDX3001, and what key endpoints will be evaluated for OPCO88006 to justify advancing to larger MASH studies?

A: For MDX3001, the company will initially pursue autoimmune disease indications targeting B-cell depletion, leveraging strong preclinical data in non-human primate and humanized mouse models. Management is actively discussing partnerships with big Pharma that have expertise in autoimmune disease, oncology, or anti-viral indications to support clinical and commercial development, and discussions are in early stages. For OPCO88006, the company aims to demonstrate a competitive profile vs. existing competitors by evaluating dose tolerability in healthy volunteers, then changes in MASH biomarkers, fatty liver levels, and weight after 16 weeks of treatment in F2/F3 MASH patients to decide on advancing to larger Phase 2 trials.

Q: What is the enrollment status and plan for MDX2001, the lead immuno-oncology candidate, and when will data be released?

A: To date, 39 patients have been enrolled in the Phase 1 dose-escalation trial, which initially enrolled a broad range of solid tumor patients to assess safety, pharmacokinetics, and immunogenicity. The company is now narrowing enrollment to prioritize indications more likely to respond, including non-small cell lung cancer, renal carcinoma, and ovarian cancer, and is developing a subcutaneous formulation in parallel to enable higher dosing and better patient convenience. Data is expected to be released in late 2026 or early 2027, with total additional enrollment expected to total tens of patients at the signal-seeking stage.

Q: What is the development prioritization strategy for MDX2003, between oncology and autoimmune indications?

A: MDX2003, a tetraspecific targeting CD19 and CD20 on B-cell cancers, will prioritize oncology (specifically B-cell lymphomas) first, as this indication has existing clinical proof of concept, and the asset addresses the common problem of immune escape seen with current single-target therapies. After safety and dose data is generated from oncology trials, the company will advance development for autoimmune indications, and may potentially develop separate formulations for the two indication areas.

Q: When will 4K score test growth accelerate, and what drove the full-year cost guidance reduction?

A: Significant 4K score volume and revenue growth from primary care adoption will not occur until Medicare reimbursement approval is finalized, which is expected to be a 2027 and beyond impact, though current reimbursement for other payer groups is going well. The majority of the full-year cost guidance reduction comes from the $18.1 million gain from the LabCorp earn-out payment, with additional savings from headcount reduction (down from 3,300 two years ago to ~1,400 currently), exiting unprofitable low-demand esoteric testing (partnering those with external providers), and streamlining the diagnostic footprint in the New York/New Jersey region.

Q: Why was full-year diagnostic revenue guidance adjusted downward, and pharmaceutical guidance upward?

A: The small downward adjustment to diagnostic revenue comes from slower-than-expected maturation of new diagnostic revenue verticals and delayed Medicare reimbursement confirmation for the 4K score test, both of which are not material to 2026 results. Pharmaceutical revenue guidance was increased because Rialdi is outperforming expectations in international markets (Spain, Mexico, Chile), and the CDMO business in Ireland is also tracking ahead of plan.