OPKO Health(US:OPK)2021-07-28 16:00Revenue and Growth - Revenue from services for the six months ended June 30, 2021 increased by $482.3 million compared to 2020 due to COVID-19 testing volumes [237]. - For the three months ended June 30, 2021, total revenues reached $442.4 million, a 47% increase from $301.2 million in 2020 [241]. - Revenue from services for the three months ended June 30, 2021 was $397.2 million, up 58% from $251.0 million in 2020 [241]. - Total revenues for the three months ended June 30, 2021, increased by 54% to $397.2 million compared to $257.2 million in the same period of 2020 [242]. - Revenue from services rose by 58% to $397.2 million, driven by increased clinical test volume and COVID-19 testing, which accounted for 56.4% of total volume [244]. - Total revenues for the six months ended June 30, 2021, increased by 93% to $987.6 million compared to $512.7 million in the same period of 2020 [270]. - Revenue from services for the six months ended June 30, 2021, rose by 114% to $904.1 million, driven by increased clinical test volume and COVID-19 testing [272]. - Revenue from products in the pharmaceuticals segment increased by 21% to $35.7 million, attributed to higher sales across international operations [254]. Costs and Expenses - Cost of revenue for the three months ended June 30, 2021 was $292.9 million, an 80% increase from $162.7 million in 2020 [241]. - Cost of revenue increased by 85% to $267.8 million, primarily due to higher labor and material costs associated with COVID-19 testing [248]. - Cost of revenue for the six months ended June 30, 2021, increased by 117% to $656.4 million, primarily due to labor and material costs associated with COVID-19 testing [277]. - Selling, general and administrative expenses rose by 52% to $87.8 million, influenced by increased variable billing and compensation costs related to higher testing volumes [249]. - Selling, general and administrative expenses for the six months ended June 30, 2021, were $225.5 million, a 47% increase from $153.9 million in 2020 [270]. - Other income (expense), net for the three months ended June 30, 2021, was an expense of $11.8 million, compared to income of $18.2 million in 2020 [266]. - The company reported a loss from operations of $20.1 million for the six months ended June 30, 2021, compared to a loss of $16.3 million in the same period of 2020, primarily due to increased legal and accounting fees [290]. Testing and Operations - Genomic and routine clinical test volume increased by 39.0% and 13.4% respectively for the six months ended June 30, 2021 compared to the same period in 2020 [237]. - The company performed 2.8 million diagnostic molecular tests for COVID-19 during the three months ended June 30, 2021, compared to 2.2 million in the same period of 2020 [244]. - BioReference performed 6.9 million diagnostic molecular tests for COVID-19 during the six months ended June 30, 2021, compared to 2.3 million tests in the same period of 2020 [272]. - The company expects to continue seeing substantial demand for COVID-19 testing as infections persist and new clients emerge [237]. Financial Position and Cash Flow - Total cash and cash equivalents as of June 30, 2021 were approximately $65.8 million, with cash provided by operations amounting to $10.6 million [298]. - As of June 30, 2021, the company had cash and cash equivalents of $65.8 million, with a weighted average interest rate of less than 1% for the six months ended June 30, 2021 [336]. - The principal outstanding balances under BioReference's Credit Agreement and lines of credit amounted to $16.2 million at a weighted average interest rate of approximately 5.4% [336]. - The company has a total of $420.946 million in known contractual obligations due over various periods, including open purchase orders, operating leases, and finance leases [325]. Legal and Regulatory Matters - The Company is involved in various legal proceedings, with no material changes reported during the current quarter compared to the previous Annual Report [342]. - The Sharon Claim, a class action filed in 2018, is currently closed pending resolution of U.S.-based class actions, with a settlement agreement reached for both NASDAQ and TASE class members [343]. - The Avraham Claim sought approximately USD $6.1 million in damages and was dismissed on June 24, 2021, with a payment of approximately USD $14,000 to the plaintiff's counsel [344]. - The Company is vigorously defending against a lawsuit filed by MabVax Therapeutics Holdings, Inc., which includes claims for actual and punitive damages [345]. - BioReference is cooperating with a CID from the U.S. Department of Justice regarding potential violations of the Anti-Kickback Statute and False Claims Act, covering the period from January 1, 2011, to November 26, 2019 [346]. Research and Development - Research and development expenses remained stable at $4.0 million, focusing on clinical and genomics testing services [250]. - Research and development expenses for the six months ended June 30, 2021, totaled $37.5 million, a slight decrease of 5% from $39.4 million in 2020 [270]. - Research and development expenses decreased to $30.6 million for the six months ended June 30, 2021, down from $32.6 million in 2020, mainly due to reduced expenses related to the Somatrogon program [286]. Agreements and Milestones - The company received an initial upfront payment of $1.5 million and 3,373,008 shares of CAMP4's Series A Prime Preferred Stock, equating to approximately 5% of CAMP4's outstanding shares [227]. - EirGen received an initial upfront payment of $5 million and is eligible for up to an additional $115 million upon achieving certain milestones for the Nicoya Product in Greater China [230]. - The company is eligible for up to $3.5 million in development milestone payments for Dravet syndrome products and $4 million for non-Dravet syndrome products, along with sales milestones of up to $90 million for each category [310]. - The company has received non-refundable payments of $55 million to date and is eligible for an additional $227 million based on regulatory and sales milestones tied to the VFMCRP Agreement [316]. - The company has a potential contingent consideration of up to $144.1 million based on the achievement of certain milestones, including successful clinical trials and revenue targets [326]. Risk Factors and Uncertainties - The COVID-19 pandemic presents significant uncertainty that could adversely affect the company's financial condition and cash flows, particularly in diagnostics testing services [323]. - The company has historically not generated sustained positive cash flow and may need additional funding to support clinical trials or acquisitions [322]. - The company has not reported any material changes to its risk factors as disclosed in the previous Annual Report [350].