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

Zacks Equity Research
·4-min read

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 and EPS Surprise

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

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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.

Guidance

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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