OPKO Health(US:OPK)2022-08-04 23:29Financial Data and Key Metrics Changes - The company reported an operating loss of $10.7 million for Q2 2022, compared to an operating income of $5.6 million in Q2 2021 [47] - The net loss for Q2 2022 was $101.7 million, or $0.14 per diluted share, compared to a net loss of $16.2 million, or $0.03 per diluted share in the prior year [47] - The diagnostic segment revenue decreased to $186.8 million from $397.2 million in the same period last year, primarily due to reduced COVID testing [42] Business Line Data and Key Metrics Changes - The pharmaceutical segment reported revenues of $123.1 million for Q2 2022, up from $45.2 million in Q2 2021, driven by milestone payments for NGENLA [45] - Revenue from product sales in the pharmaceutical segment increased to $35.9 million, including $6.2 million from RAYALDEE, compared to $35.7 million in the prior year [45] - The diagnostic segment experienced an operating loss of $57.5 million, contrasting with an operating income of $30 million in Q2 2021 [44] Market Data and Key Metrics Changes - The company performed approximately 1 million COVID-19 tests in Q2 2022, down from 2.1 million in Q1 2022 and 3 million in Q2 2021 [31][42] - The shift from lab-based PCR testing to point-of-care testing has negatively impacted overall gross margins and operating margins [42][44] - The company has access to over 85 million lives through its Preferred Lab Network agreements with major health plans [32] Company Strategy and Development Direction - The company is focusing on a three-pronged strategy to return to its margin profile and increase growth, including cost reduction initiatives and pursuing revenue opportunities in oncology and women's health [26][28] - The integration of ModeX Therapeutics is proceeding smoothly, with expectations of advancing both ModeX and OPKO's proprietary pipelines [7][15] - The company is adapting its BioReference business to a post-COVID environment by restructuring its organization for efficiency [30] Management's Comments on Operating Environment and Future Outlook - Management noted a significant decline in COVID testing demand and the need to adjust the cost structure accordingly [25][44] - The company anticipates performing between 3.3 million and 3.5 million COVID PCR tests for the year, without expecting a new surge in testing [48] - Management expressed optimism about the potential of the ModeX acquisition and its impact on future growth [61] Other Important Information - The company closed the acquisition of ModeX Therapeutics, issuing approximately 90 million shares valued at about $219 million [37] - The company recorded a non-cash mark-to-market adjustment of $71.2 million related to the decline in Sema4's stock price [41] - The company expects total revenue for 2022 to be between $950 million and $1 billion [50] Q&A Session Summary Question: What percentage of COVID-19 testing is done within surveillance contracts and their durability? - Management indicated that the majority of COVID testing is now through surveillance contracts, with a significant drop in public testing [53][54] Question: Clarification on the ModeX pipeline and potential partnerships? - Management confirmed interest in partnerships beyond EBV and highlighted multiple oncology assets in development [56][57] Question: Will there be an R&D Day? - Management expressed interest in holding an R&D Day in the fall, pending scheduling [58]