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OPKO Health (OPK) Reports Q1 Loss, Lags Revenue Estimates

Zacks Equity Research

OPKO Health, Inc. OPK incurred adjusted loss of 9 cents per share in first-quarter 2020, in line with the Zacks Consensus Estimate. Notably, the company had reported a loss of 14 cents in the prior-year quarter.

First-quarter revenues of this Zacks Rank #2 (Buy) company totaled $211.5 million, which missed the Zacks Consensus Estimate by 2.1%. Also, the top line declined 4.9% on a year-over-year basis.

Segmental Revenues in Q1

Revenues from Services grossed $170.8 million in the reported quarter, down 4.5% year over year. The decline can be attributed to COVID-19 as lockdowns resulted in a substantial decline in the company’s routine and genetic testing businesses since the beginning of March.

Revenues from Products rose 22.9% to $31.1 million. Per management, revenues from products include $9.9-million contributions from RAYALDEE.

Revenues from Transfer of intellectual property came in at $9.6 million, plunging 47.5% year over year.

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 78% year over year in the first quarter. Further, the open-label Phase 2 trial for RAYALDEE in hemodialysis patients is on track to complete enrollment in third-quarter 2020 with full top-line data anticipated in first-quarter 2021.

Margin Analysis

Gross profit in the reported quarter came in at $71.2 million, down 9.3% from the prior-year quarter. Gross margin was 33.7% of net revenues, down 4160 basis points (bps) year over year.

Selling, general and administrative expenses totaled $76.1 million, down 20.1% year over year. Research and development expenses amounted to $21.8 million, down 40.3% year over year.

Operating loss in the first quarter was $40.7 million, noticeably narrower than the year-ago quarter’s loss of $75.3 million.

Financial Update

The company exited the first quarter with cash, cash equivalents and marketable securities of $34.5 million, compared with $85.5 million at the year-end 2019.

Net cash used in operating activities for the three months ended Mar 31, 2020, came in at $43.4 million, narrower than $48.9 million in the year-ago period.


In the quarter under review, OPKO Health did not issue any guidance.

Summing Up

OPKO Health exited the first quarter on a weak note. Nonetheless, RAYALDEE has contributed significantly to the quarter under review. Further, the company’s utilization of the 4Kscore remains strong.

Furthermore, BioReference Laboratories widened nationwide COVID-19 testing.

Meanwhile, sluggishness in revenues from Services is a concern. Contraction in gross margin remains a woe. OPKO Health also faces cut-throat competition in the MedTech space.

Other Key Picks

Some other top-ranked stocks in the broader medical space are Aphria Inc. APHA, Biogen Inc. BIIB and Eli Lilly and Company LLY.

Aphria reported third-quarter fiscal 2020 adjusted EPS of 2 cents, beating the Zacks Consensus Estimate of a loss of 4 cents. Net revenues of $64.4 million surpassed the consensus mark by 14.6%. The company carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Biogen currently carries a Zacks Rank #2. It reported first-quarter 2020 adjusted EPS of $9.14, surpassing the Zacks Consensus Estimate by 18.1%. Revenues of $3.53 billion outpaced the consensus mark by 3.2%.

Eli Lilly reported first-quarter 2020 EPS of $1.75, outpacing the Zacks Consensus Estimate by 12.9%. Revenues of $145.3 million surpassed the consensus estimate by 6.3%. The company currently sports a Zacks Rank #1.

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