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This article was originally published on Simply Wall St News
OPKO Health, Inc. (NASDAQ:OPK) a healthcare company, engages in the diagnostics and pharmaceuticals businesses in the United States, Ireland, Chile, Spain, Israel, Mexico, and internationally. Their CEO has been continuously buying shares, and we were curious as to why that might be.
Before we get to the analysis of Opko, please note, that this is a higher risk company that may not be suitable for all investors!
There are a few potential developments of interest to shareholders. Opko has a diverse pipeline in various stages before market. Their closest to market solution is Somatrogon, a long-acting human growth hormone (hGH) molecule, is a once-weekly injectable intended to replace the daily injection used by adults and children with Growth Hormone Deficiency. The addressable market for this drug is estimated at US$4b and Opco is partnered with Pfizer (NYSE:PFE) regarding this medicine.
The FDA approval of Somatrogon is expected by Q4 2021.
Their pipeline can be seen more clearly in the chart below.
The company is also active in testing and the production of test kits for COVID-19.
Their main laboratory BioReference Laboratories (BRL) processed approximately 2.8 million COVID-19 PCR tests and has current capacity to process more than 100,000 PCR tests per day. In addition, during the second quarter BRL performed approximately 132,000 COVID-19 serology tests to measure SARS-CoV-2 antibody levels and currently has significant additional capacity.
In their recent Q2 highlights, Opko outlines revenue from diagnostics to be US$397.2m, up from US$251m year over year, mainly due to an increase in volume of clinical and genomic COVID-19 testing. Opko estimates that testing demand will be widely present in the period ahead.
Finally, revenue from the pharmaceuticals segment was US$35.7m in Q2 2021, compared to US$29.3m in Q2 2020.
Perhaps the most interesting aspect of Opko are their insider transactions. Insider activities in the last 12 months warranted a deeper look.
The Last 12 Months Of Insider Transactions At OPKO Health
Over the last year, we can see that the biggest insider purchase was by the 85-year-old Chairman & CEO Phillip Frost for US$2.4m worth of shares, at about US$4.81 per share. But he didn't stop there. He has been buying stock in the company he manages for most of the last 12 months. Two more insiders have also bought some shares and most importantly, no-one was selling.
This and past activities have contributed to the fact that OPKO Health insiders now own 35% of the company, worth about US$870m.
The chart below shows insider transactions (by companies and individuals) over the last year.
OPKO Health is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Opko is a mid-cap company with a diversified product pipeline and running a core diagnostics services laboratory. The company is currently waiting approval for their long-acting human growth hormone Somatrogon which they hope can address part of a market worth US$4b.
Opko's revenues have been stimulated by test demand for COVID-19, and they have used the opportunity to expand on some growth prospects.
Companies which have a lot of insider buying action are worth following, and Opko's CEO has been relentlessly buying stock in the company he manages. This has bumped the overall insider ownership to a 35% stake.
Smaller companies carry with them a decent amount of risk and investors should get better acquainted with the company. If deciding whether to invest, think about taking a well measured portfolio stake, as opposed to a large position.
Of course, the future is what matters most. So if you are interested in OPKO Health, you should check out this free report on analyst forecasts for the company.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
Simply Wall St analyst Goran Damchevski and Simply Wall St have no position in any of the companies mentioned. This article is general in nature. It does not constitute a recommendation to buy or sell any stock and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.