OPKO Health Inc.’s OPK company, BioReference Laboratories, Inc., recently inked a COVID-19 testing agreement for players and staff along with stadium employees and league staff for the 2021 Major League Baseball (MLB) season. Notably, OPKO Health’s BioReference platform is the one of the largest full-service clinical laboratories in the United States. Through BioReference, the company operates in five highly specialized laboratory divisions that have been raking in strong revenues lately.
The announcement is likely to bolster OPKO Health’s BioReference platform further.
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Notably, with respect to COVID-19 response efforts, the company built a specific expertise in offering testing with reasonable turnaround times.
On the basis of the agreement with MLB, BioReference will offer on-site rapid PCR point-of-care COVID-19 testing to all 30 MLB teams with the support of Mesa Biotech’s Accula System. Notably, testing commenced from Apr 1 and will continue throughout the season.
Per management, following this announcement, BioReference is now lending support to all five major professional men’s sports league in the United States, thereby ensuring the return to a safe, full MLB season in 2021.
Per a report by Medgadget, the global COVID-19 diagnostics market was worth $19.41 billion in 2020 and is anticipated to reach $23.67 billion by 2027, witnessing a CAGR of 2.9% during the forecast period (2020-2027). Hence, this announcement is a well-timed one for OPKO Health’s BioReference.
Notably, COVID-19 testing was a strong contributor to OPKO Health’s 2020 growth and profitability. Per the fourth-quarter 2020 earnings call, BioReference Laboratories continues to be a leading provider of COVID-19 polymerase chain reaction (PCR) testing services. In fourth-quarter 2020, BioReference Laboratories processed 4.3 million COVID-19 PCR tests and currently has the capacity to process more than 100,000 PCR tests per day. In addition, BioReference Laboratories performed around 220,000 COVID-19 serology tests to measure SARS-CoV-2 antibody levels and presently has substantial additional capacity.
In March 2021, BioReference expanded its COVID-19 school testing program to lend support to the return to in-person classroom instruction throughout the United States. Notably, BioReference lends support to two of the largest school systems in the United States, offering testing services to around 200 schools every day and has tested approximately 400,000 public school students, principals and teachers to date.
Shares of the company have gained 15.1% on a year-to-date basis against the industry’s decline of 5%.
Zacks Rank and Key Picks
Currently, OPKO Health carries a Zacks Rank # 3 (Hold).
Some better-ranked stocks from the broader medical space are Hologic, Inc. HOLX, Hill-Rom Holdings, Inc. HRC and Cantel Medical Corp. CMD, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic’s long-term earnings growth rate is expected at 15.4%.
Hill-Rom Holdings’ long-term earnings growth rate is estimated at 7.3%.
Cantel Medical’s long-term earnings growth rate is estimated at 19%.
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