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OPKO Health (OPK) Q2 Earnings and Revenues Beat Estimates

Zacks Equity Research
·4 mins read

OPKO Health, Inc. OPK reported second-quarter 2020 adjusted earnings per share (EPS) of 5 cents per share against the Zacks Consensus Estimate of a loss of 7 cents. Notably, the company had reported a loss of 10 cents in the prior-year quarter.

Second-quarter revenues of this Zacks Rank #2 (Buy) company were $301.2 million, which outpaced the Zacks Consensus Estimate by 28.4%. The top line also improved 33% on a year-over-year basis.

Segmental Revenues in Q2

Revenues from Services amounted to $251 million in the reported quarter, up 41% year over year. The upside can be attributed to increased COVID-19 testing volumes. However, lower clinical and genomic test volumes on account of physician office shut-downs and stay-at-home orders associated with the pandemic partially offset the upside.

Revenues from Products rose 2.1% to $29.3 million. Per management, revenues from products include contributions from RAYALDEE worth $8.6 million.

Revenues from Transfer of intellectual property totaled $20.9 million, up 8.9% year over year.

OPKO Health, Inc. Price, Consensus and EPS Surprise

OPKO Health, Inc. Price, Consensus and EPS Surprise
OPKO Health, Inc. Price, Consensus and EPS Surprise

OPKO Health, Inc. price-consensus-eps-surprise-chart | OPKO Health, Inc. Quote

Per management, total RAYALDEE prescriptions reported by IQVIA improved 45% year over year in the second quarter. Further, the open-label Phase 2 trial for RAYALDEE in hemodialysis patients has completed enrollment (it was slower than anticipated owing to the pandemic) with full top-line data anticipated in first-quarter 2021.

Further, on Jun 1, 2020, the FDA authorized OPKO Health to undertake a Phase 2 trial with RAYALDEE as a treatment for patients with mild-to moderate COVID-19.

 

Margin Analysis

Gross profit in the reported quarter was $138.5 million, up 68.5% from the prior-year quarter. Gross margin was 45.9% of net revenues, up 960 basis points (bps) year over year.

Selling, general and administrative expenses totaled $77.7 million, down 12.2% year over year. Research and development expenses amounted to $17.6 million, down 37.8% year over year.

Operating income in the second quarter was $27.2 million, against the year-ago quarter’s loss of $47.2 million.

Financial Update

The company exited the second quarter with cash, cash equivalents and marketable securities of $21.6 million, compared with $85.5 million at the year-end 2019.

Guidance

In the quarter under review, OPKO Health refrained from issuing any guidance.

Summing Up

OPKO Health exited the second quarter on a strong note. RAYALDEE has contributed significantly to the quarter under review. Further, the company’s utilization of the 4Kscore remains strong. Also, the company witnessed strong segmental performance in the quarter under review.

Furthermore, BioReference Laboratories expanded nationwide COVID-19 testing.

Meanwhile, contraction in gross margin remains a woe. Further, OPKO Health faces cut-throat competition in the MedTech space.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Thermo Fisher Scientific Inc. TMO, PerkinElmer, Inc. PKI and West Pharmaceutical Services, Inc. WST, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Thermo Fisher reported second-quarter 2020 adjusted EPS of $3.89, beating the Zacks Consensus Estimate by 45.7%. Revenues of $6.92 billion outpaced the consensus mark by 0.1%.

PerkinElmer reported second-quarter 2020 adjusted EPS of $1.57, surpassing the Zacks Consensus Estimate by 68.8%. Revenues of $811.7 million outpaced the consensus mark by 1.3%.

West Pharmaceuticals reported second-quarter 2020 adjusted EPS of $1.25, outpacing the Zacks Consensus Estimate of 91 cents. Revenues of $527.2 million surpassed the consensus estimate by 6.9%.

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