Opko Health: "Our Most Speculative Buy"


Todd Shaver Image Todd Shaver Founder and Editor-in-Chief, BullMarket.com

Opko Health (OPK) is a biotech company in an industry that is known for companies with years and years of little or no progress (and revenues) and then a big announcement of great success, asserts Todd Shaver, editor of BullMarket.com.

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Luckily, Opko isn’t in the camp of no revenues; in fact, revenues are over $1 billion. The company recently reported earnings for 2Q17; total revenues of $314 million were down 12% year over year from $357 million.

Revenues included a $10 million payment associated with the commercial launch of Varuby—for prevention of nausea associated with chemotherapy—in Europe in comparison to the $50 million payment related to a license for the kidney drug Rayaldee in the same quarter in 2016.

Research and development expenses totaled $33 million, up 4%, while selling, general and administrative expenses amounted to $128 million, up 9% year over year.

Consequently, loss from operations came in at $4 million, highlighting a significant decline from an operating income of $55 million in the prior-year quarter.

The decline can be attributed to a rise in operating expenses owing to the company’s significant investments associated with the commercial launch of Rayaldee along with consistent investments in the pharmaceutical pipeline. The company has $130 million in cash, unchanged from the quarter before.

Released in 2014, the 4Kscore Test is the only blood test that can accurately identify a patient’s risk for aggressive prostate cancer, Opko claims.