OPKO Health - Q3 2023
November 6, 2023
Transcript
Operator (participant)
Hello, and welcome to the OPKO Health Third Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. Please note, this event is being recorded. I would like now to turn the conference over to Yvonne Briggs. Please go ahead.
Yvonne Briggs (Senior VP of Investor Relations)
Thank you, operator. Good afternoon. This is Yvonne Briggs with LHA. Thank you all for joining today's call to discuss OPKO Health's financial results for the third quarter of 2023. I'd like to remind you that any statements made during this call by management, other than statements of historical fact, will be considered forward-looking, and as such, will be subject to risks and uncertainties that can materially affect the company's expected results. Those forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2022, and its subsequently filed SEC reports. This conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, November 6, 2023.
Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Before we begin, let me review the format for today's call. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call. Dr. Elias Zerhouni, Vice Chairman and President of OPKO, will then provide an overview of OPKO's pharmaceutical business as well as BioReference Health. After that, Adam Logal, OPKO's CFO, will review the company's third quarter financial results, and then we'll open up the call to questions. Now I'd like to turn the call over to Dr. Frost.
Phillip Frost (Chairman and CEO)
Good afternoon, and thank you for joining us today. The third quarter was quite active at OPKO, with several key accomplishments. In September, we announced that ModeX was awarded a contract from the Biomedical Advanced Research and Development Authority, known as BARDA, to develop novel multispecific antibodies against viral infectious diseases that are deemed to be public health threats. The BARDA contract provides $59 million of initial funding for the development of multispecific antibodies against known variants of SARS-CoV-2, and another $109 million in funding may be available to develop multispecific antibodies targeting other viral antigens, pathogens that is, such as influenza. This non-dilutive funding provides ModeX with significant financial support to advance its extremely promising pipeline, with the potential to provide benefits for patients worldwide.
This BARDA award represents the second major collaboration for ModeX in 2023 and is further validation of its differentiated and valuable technology platform. You may recall that earlier this year, ModeX entered into an exclusive worldwide license and collaboration agreement with Merck to develop its nanoparticle vaccine candidate for Epstein-Barr virus. As for NGENLA, our once weekly injectable growth hormone therapy, it is now approved in over 48 countries, including the U.S., as we announced in June. Pfizer, our global commercial partner, launched NGENLA in the U.S. in August. In addition to launches today in over 23 major markets, including Japan, Germany, the United Kingdom, and all other priority global markets. We expect to see a material ramp-up in sales for NGENLA as Pfizer increases its market penetration globally.
At our OPKO Biologics unit in Israel, where NGENLA was developed, work is continuing on other long-acting peptides utilizing new technology. One, GLP-2, to treat short bowel syndrome, is being developed into a once-daily oral form jointly with Entera, whose oral peptide delivery system, containing parathyroid hormone, recently successfully completed a phase II trial. We're also considering working with Entera on one of our oxyntomodulin peptides for weight loss. Our profitable OPKO Iberoamerica unit continues to perform well, as does FineTech, our small specialty API company in Israel. EirGen, our pharmaceutical development and manufacturing company in Waterford, Ireland, is also doing well and is about to embark on a growth program. At BioReference Health, our cost-cutting initiatives continue as we are focused on returning this segment to profitability in the near term.
In addition, we are working to increase revenue by enhancing our test menu offering and expanding our customer base. With that overview, I'll turn the call over to Elias to provide further discussion and commentary on our pharmaceutical and diagnostic businesses. Elias?
Elias Zerhouni (Vice Chairman and President)
Thank you, Phil, and good afternoon, everyone. As Phil said, the third quarter has been quite busy for both the pharmaceutical and diagnostic segments of OPKO Health. As Phil mentioned, we were delighted to announce the significant contract awarded to ModeX Therapeutics by the Biomedical Advanced Research and Development Authority, BARDA. You should know that BARDA is part of the Administration for Strategic Preparedness and Response at the U.S. Department of Health and Human Services, and this funding is a part of Project NextGen, which is dedicated to advancing innovative vaccine and therapeutic programs against COVID-19.
The contract includes an initial $59 million to enable research, development, and clinical evaluation through a phase I study of potent novel ModeX multispecific antibodies against known variants of SARS-CoV-2, which remain a persistent threat for the millions of immunocompromised patients who may not develop sufficient immunity after vaccination and will need that support, if you will, for treatment and prevention of COVID-19. Our proprietary MSTAR multispecific antibodies also reduce the possibility of viral resistance, which has made previous monospecific antibodies ineffective over time. MSTAR is a flexible plug-and-play platform, able to incorporate up to six independent antibody binding sites into a single molecule. This capability dramatically expands the prevention and therapeutic potential of antibodies against many viral diseases, while enabling rapid responses to prevent or treat emerging infections and viral variants.
Based upon the achievement of certain milestones, additional funding up to $109 million may be available from BARDA to develop other multispecific antibodies targeting other viral pathogens such as influenza. As part of the research program, gene-based delivery methods for the multispecific antibodies will be developed using mRNA or DNA vectors to supplement the body's natural protein production processes. The BARDA contract, as Phil mentioned, came about six months after the announcement of our collaboration with Merck to develop MDX2201, our Epstein-Barr virus multivalent nanoparticle vaccine. We're pleased to have secured these two major strategic relationships to date and believe this achievement further validates ModeX's innovative multispecific targeting approaches, increasing the interest in our proprietary technology. As a quick overview, our EBV vaccine program with Merck leverages ModeX nanoparticle-based vaccine platform, enabling simultaneous immunization against four major EBV proteins.
This multivalent approach holds potential to protect against infection by this virus, which affects up to 95% of the global adult population during their lifetime. Importantly, over 200,000 cases of related cancers per year and multiple sclerosis are associated with infection by this virus. We're now working with our partner, Merck, on IND-enabling studies, which are progressing extremely well. In addition, our antiviral multispecific antibodies program, focused on the treatment and prevention of HIV, is progressing. In partnership with the NIH, our first-generation candidate has been evaluated in a phase I trial, and clinical data will be reported in the near future. We have also developed next-generation candidates for long-acting HIV prevention and treatment that offer up to a tenfold improvement in potency and breadth of antiviral activity against the majority of globally circulating HIV strains.
This is an important program, as there are currently no vaccines or antibodies that can provide long-acting protection and treatment for patients who require treatment options beyond small molecule-based therapies. In parallel, we have also advanced our immuno-oncology programs, focused on hard-to-treat solid tumors as well as leukemia and lymphoma. Our multispecific antibody candidates are designed to optimize T cell function while preventing tumor antigen escape. These programs are now in the final IND-enabling preclinical stage, with the expectation that at least one program will enter the clinic in 2024. I also would like to reiterate Phil's comments about NGENLA. We're delighted with the continuing momentum of Pfizer's global launches of the long-acting growth hormone treatment, including the U.S. in August, and Adam will provide further detail on the financials and, we look forward to keeping you updated on the progress here.
So now let me turn to RAYALDEE, our treatment for secondary hyperparathyroidism, or SHPT, in adults with Stage 3 or 4 chronic kidney disease, or CKD, and low vitamin D levels. Sales increased over the prior year quarter as the number of prescriptions continued to grow. More importantly, recently, our team presented several posters highlighting favorable RAYALDEE clinical data at the American Society of Nephrology Kidney Week. One poster reported late-breaking clinical data indicating that early, sustained, and effective treatment of secondary hyperparathyroidism with RAYALDEE is associated with significantly slower progression of CKD in pre-dialysis patients, in effect, delaying the onset of dialysis. Another poster presented data demonstrating that effective control of SHPT was achieved with RAYALDEE in both randomized clinical trials and in a real-world clinical evidence trial, supporting early initiation of SHPT treatment with RAYALDEE to delay disease progression.
In addition, a phase III clinical trial with RAYALDEE in mainland China began in late Q3, managed by Nicoya Therapeutics of Macau, and who is the OPKO's partner for the development and commercialization of RAYALDEE in China, Hong Kong, Macau, and Taiwan, for the treatment of secondary hyperparathyroidism in patients with Stage 3 or 4 CKD. As mentioned by Phil, our pipeline of long-acting products similar to NGENLA, remains active. You heard about OPKO Biologics entering into a research collaboration agreement with Entera Bio Ltd to develop oral peptide tablet formulations for obesity and intestinal malabsorption syndromes. Under the agreement, OPKO will supply its long-acting GLP-2 peptide and certain oxyntomodulin analogs for the development of oral tablet formulations using Entera's proprietary oral delivery technology.
Treatment with glucagon-like peptide-2 analogs has been shown to improve the absorption of nutrients in patients with short bowel syndrome and reduce parenteral support requirements. Oxyntomodulin is a naturally occurring peptide hormone found in the intestine, with glucagon-like peptide-1, GLP-1, and glucagon dual agonist activity that suppresses appetite and reduces weight loss. We have developed several proprietary modified oxyntomodulin analogs as potential candidates for treating obesity, including an injectable PEGylated peptide that demonstrated significant reductions in weight loss and decreased plasma triglyceride levels in the 420 patient phase IIb study. Our injectable oxyntomodulin analog, which completed these phase II studies in the U.S., is being now advanced by Leadermed, our partner in Asia, to initiate phase III studies for diabetics and obesity in China and for diabetics in Southeastern Asia in the first quarter of 2024.
Leadermed also plans to launch clinical studies of the long-acting Factor VII, which uses OPKO Biologics' CTP technology, in the second quarter of 2024. Now, let me shift gears, and I would like to turn to our diagnostic segment. We've made great strides, and we have reduced our operating loss by 41% sequentially from Q2 to Q3 2023, through both expense reduction and revenue growth. So a 41% improvement from Q3 relative to Q2. And we continue to implement our REACH initiative to improve efficiencies, enhance productivity, and reduce costs. And we're particularly focused on driving growth in BioReference in our higher-value specialty testing segments, including oncology, women's health, hospitals and health system, as well as urology, through our proprietary offering, the 4Kscore, while continuing to see growth in the standard clinical testing.
We have finalized new service agreements with several new launch clients starting in the fourth quarter, and particularly in our oncology division, GenPath, which continues to build what I consider a best-in-class cancer testing portfolio by launching innovative testing that is clinically relevant to both physicians and patients, as well as pharmaceutical companies and clinical research institutions. Additionally, in the fourth quarter, we'll be launching a cutting-edge homologous recombination deficiency test, which is really important to provide insights into genomic instability. And because PARP inhibitor therapies are highly related to the presence or absence of genomic instability in terms of their efficacy, it will really guide the eligibility of patients for PARP inhibitor therapies for various cancers. We're also set to unveil an expanded hematological malignancy panel that reinforces our position as the leader in... as a leader in this area.
We've also launched a new service line, offering access to our high-quality, reliable, and comprehensive data assets and analytics. We realized that we had value embedded in the thousands of tests that we have performed in genomics. And this offering caters to a wide range of pharmaceutical and clinical research organizations and has already led to new sources of organic revenues. The 4Kscore test continues to perform, supported by its recent inclusion in the 2023 American Urological Association guidelines for early detection of prostate cancer and follow-up after PSA screening, and for initial and repeat biopsy risk stratification. 4Kscore also received additional coverage under Avalon Healthcare Solutions, which manages many state and regional health plans, as well as Aetna's Medicare Advantage Plan and EmblemHealth.
BioReference has also expanded its market access, and our team has also secured new key payers' participation agreements in recent months, including in-network status with CareSource, one of the largest managed Medicaid payer in the country, as well as all of EmblemHealth patients. In parallel, our revenue collection processes continue to make great strides since the launch of our revenue cycle management program in Q4 of last year. So in conclusion, we expect that these efforts will further improve financial metrics and return the segment to profitability in the next few quarters. I will now turn the call over to Adam Logal to discuss our third quarter financial results. Adam?
Adam Logal (Senior VP and CFO)
Thank you, Elias, and good afternoon, everyone. Starting with our pharmaceutical segment, revenue increased to $46.9 million for the third quarter of 2023, from $36.9 million for the comparable period of 2022. Revenue from RAYALDEE and our international pharmaceutical businesses increased by $8.3 million, reflecting improvements in overall prescriptions and net price, as well as improvements in our foreign currency exchange rates in Chile and Mexico. Further, revenue increased as a result of our gross profit share payments from Pfizer, due to increased revenue from the HGH franchise in the European and Japanese regions, before considering any U.S. profit share generated from the launch of NGENLA.
In the U.S., as a result of the initial launch in mid-August, Pfizer delayed in reporting our gross profit share amounts, and as such, none are included in our third quarter results, but will be caught up in future periods. Costs and expenses were $72.3 million for the third quarter of 2023, compared to $65.2 million for the 2022 period, reflecting principally increased revenues and the costs associated. Research and development expenses for the third quarter of 2023 were $18.9 million, compared to $17.6 million for the comparable period of 2022. This increase reflects activities for our ModeX development programs, partially offset by decreased spending on our NGENLA development activities.
The resulting operating loss for the quarter ended September 30, 2023, was $25.4 million, or $2.9 million improvement from the operating loss of $28.3 million for the third quarter of 2022. Amortization expense related to intangible assets was $16.5 million for both the 2023 and 2022 quarters. Moving to our diagnostic segment, we reported revenue of $131.7 million compared to $142.9 million for the 2022 period. This decline reflects lower COVID-19 testing volumes. Cost and expenses decreased by $31.6 million to $160.8 million for the third quarter of 2023, down from $192.3 million for the 2022 period.
Operating loss for our diagnostic segment improved by $20.4 million or 41% to $29.1 million, compared with $49.5 million for the prior year. Depreciation and amortization expense included in operating loss were $8.4 million and $8.7 million for the 2023 and 2022 periods, respectively. Sequentially, revenues increased by $4.6 million or 3.6%, while costs and expenses declined by $10.5 million, or 6%, reflecting the focused commercial efforts and expense reduction initiatives Elias described earlier. The team at BioReference continues to focus on growing the specialty lines of business while reducing costs and expenses, while enhancing operating efficiencies to continue to improve our operating margins in return to profitability.
Turning to our consolidated results for the third quarter, we reported an operating loss of $64.4 million compared to $87.8 million for the 2022 quarter. Net loss for the third quarter was $84.5 million, or $0.11 per share, compared to a net loss of $86.1 million or $0.11 per share for the 2022 quarter. Net loss for both periods were negatively impacted by the mark-to-market losses from our holdings in GeneDx stock, with declines of $8.3 million and $30.6 million, respectively, while the 2022 period benefited from an income tax benefit of $40 million. As we look at the quarter ahead, we're providing the financial guidance with the following assumptions.
For our pharmaceutical segment, for the first nine months of 2023, Pfizer reported approximately $349 million of global GENOTROPIN sales. For the fourth quarter, we have assumed $8 million-$10 million in gross profit share from our partnership with Pfizer. We assume a stable foreign exchange rate for ex-U.S. pharmaceutical business, and we expect R&D expenses to reflect higher activities related to ModeX, partially offset by our recently announced BARDA agreement, as well as lower costs and expenses related to the wind down of our clinical operations for the ongoing open label pediatric extension studies for NGENLA.
For our diagnostic segment, we have assumed consistent core testing volumes with growth in our higher margin oncology, women's health, and urology specialty lines of testing, as well as a slight increase in the average per-patient collection amounts due to our revenue cycle management initiatives, partially offset by the impact to the year-end holiday season. Further, we anticipate our costs and expenses in the diagnostic segment to be aligned with the sequential quarters level of spend. As a result, we expect the following for the fourth quarter: total revenues between $170 million and $180 million. Revenue from services between $126 million and $132 million. Revenue from product sales between $33 million and $36 million, and other revenue between $8 million and $12 million, inclusive of the estimated Pfizer gross profit share.
We expect Q4 2023 costs and expenses to be between $235 million and $245 million, including R&D expense between $18 million and $22 million, and depreciation and amortization expense of $26 million. That concludes our prepared remarks. Thank you all for your attention. And now, operator, let's open the call for questions.
Operator (participant)
We will now begin the question-and-answer session. To ask a question, you may press star, then one on your touch tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Jeffrey Cohen of Ladenburg Thalmann & Co. Please go ahead.
Jeffrey Cohen (Director of Research)
Oh, hey, good afternoon, and thank you for taking our questions. Yeah. A couple to start with. So, is the phase III from Nicoya available online as far as any discussions regarding endpoints and timelines of the trial? And any flavor on the trial as far as number of enrollees and how that's going, or number of centers and how that's going?
Charlie Bishop (CEO of OPKO Renal)
Hi, this is Charlie Bishop. The trial in China has only very recently begun, so we don't have a good estimate as to the timeline and how recruitment is gonna go. We haven't released information on the trial design or the total number of subjects that are gonna be involved, but that could change during the course of the study.
Jeffrey Cohen (Director of Research)
Okay. Got it. That's helpful. And I guess one for Adam, as far as the assumptions for for Q4, when you talk about the NGENLA revenue versus Q3, I'm assuming then the... if if those are unchanged at 49 and 14, then you're talking about greater than $2.7 million from the U.S. And I guess that's the first question. Coupled with that, maybe talk about the the timeline of Pfizer payments from from Q3. Is it is it one quarter in arrears or we don't know yet?
Adam Logal (Senior VP and CFO)
Yeah, so it's always gonna be one quarter in arrears from the cash payments coming in. You know, just from the -- we had about $5 million in sales without any inclusion from the U.S., and the guide we gave today was $8 million-$10 million for the fourth quarter. So, you know, I think you can imply the math there.
Jeffrey Cohen (Director of Research)
Okay, perfect. That's very helpful. And then, I heard stable on FX. Those are your assumptions for the fourth quarter as compared to the third quarter?
Adam Logal (Senior VP and CFO)
Yeah. That, that's right.
Jeffrey Cohen (Director of Research)
Okay, got it. And then, I guess, finally, as far as the income tax benefit, right? There's a $40 million income tax benefit for the writedowns on GeneDx. Can you use that? Did you use any of that? And how—what are the parameters around using that?
Adam Logal (Senior VP and CFO)
Yeah, so that benefit was actually that came from last year. But we would be able to use them when we dispose the shares, but not during the interim.
Jeffrey Cohen (Director of Research)
Okay. You could take the loss when shares are sold. Okay, got it. And then, could you make available, or is it on your website, the two posters that were presented at ASN a few days ago?
Charlie Bishop (CEO of OPKO Renal)
Yeah, they should be up there, Jeff, but I'll, I'll make sure you get them.
Jeffrey Cohen (Director of Research)
Okay, perfect. That does it for us for now. Thanks for taking the questions.
Adam Logal (Senior VP and CFO)
Thanks.
Operator (participant)
The next question comes from Maury Raycroft from Jefferies. Please go ahead.
Maury Raycroft (Equity Research Analyst)
Hi, thanks for taking my questions. I was gonna ask one on NGENLA, too. Just wondering if you anticipate being able to break out NGENLA U.S. revenue and profit share details in the fourth quarter update, or more like sometime first half 2024. Is there any perspective you can share on how the U.S. launch is going so far?
Adam Logal (Senior VP and CFO)
We won't break the regions out individually. We'll tell you what the total amounts are. You know, it's not just related to one country. The regions are kind of split the globe into 1/3, so any one country is not gonna be broken out for the profit share amounts that we talk about. As the launch goes, you know, it's early days. I think they, the Pfizer team has plans to get on formularies as quickly as possible, which is the major lift in any U.S. launch. But you know, we're feeling good about the way the product has grown in the international markets and expect the U.S. should follow suit.
Maury Raycroft (Equity Research Analyst)
Okay, that's helpful. And are there any more specifics you can share on your collaboration with Entera Bio for oral development of your GLP-2 peptide and oxyntomodulin analogs? Specifically, is there any more you can say on the economics and timelines for next steps? And, yeah, I'll stop there.
Phillip Frost (Chairman and CEO)
The relationship is in a very early stage, and so far, we're cooperating with the idea that we will be partners in it, but we haven't defined in financial terms exactly what that means.
Maury Raycroft (Equity Research Analyst)
Got it. Understood. And, I know there are a couple studies, ongoing with Leadermed too, and wanted to just check on those if there's any perspective or status update on those studies you can provide.
Elias Zerhouni (Vice Chairman and President)
Well, those are supposed to start in the next quarter.
Maury Raycroft (Equity Research Analyst)
Okay.
Elias Zerhouni (Vice Chairman and President)
The Leadermed studies, both for the Factor VII in the second quarter and for the other in the first quarter, 2024. Yeah.
Maury Raycroft (Equity Research Analyst)
Got it. Okay. And maybe last question, related to BioReference. You provided some good perspective on the new products and market segments and, talked about the expanded customer base. And you aim to get to a profitability in the next few quarters. What specific goals, either on the revenue or expense side, are you aiming to achieve the next few quarters that we should be focused on?
Elias Zerhouni (Vice Chairman and President)
On the revenue side, we—you know, the one thing that we want to increase is the volume that goes through our infrastructure, so that, you know, breaking even means having enough volume to have an optimal profile. So that's the— And we have a plan to increase the daily what we call accessions, by a minimum of 2000 and reaching for 5000, which will bring us to break even, maybe like territory, you know, above zero. So that's the quantitative objective. In terms of the qualitative, we will be announcing all the new customers we've signed, and particularly in oncology, over the next few days, few weeks. And that really brings a different aspect because it changes the revenue per accession, and that's what we're aiming for.
We already reached a better number in the third quarter than we did in the second quarter, and hopefully that will be the next parameters that we will track, is the revenue per accession. And then when you include high-value tasks like the oncology tasks and the specialty tasks, that number should go up and come to our cost number. We will continue to bring our cost per test down as well. So those are the three pillars, if you will. And the fourth one, which has been doing well, is trying to capture more revenue through revenue cycle management, which really didn't exist before, because, you know, the problem of denials and pre-authorizations is not as large, maybe.
But, we've made a lot of progress in reducing denials and unbillables, and that continues to advance quarter-to-quarter. So quantitative volume increase, qualitative in terms of the product mix, and then better revenue capture.
Adam Logal (Senior VP and CFO)
Yeah, Maury, I think, yeah, I think along those lines, you know, Elias did a good job of capturing those. You know, the sequential improvement in operating results are really the main measure for us. I think all of the revenue capture and revenue growth is going to result in better operating margins, and we plan to continue to see better operating results sequentially. We had a good step up from Q2 to Q3, and expect that to continue gradually.
Maury Raycroft (Equity Research Analyst)
Got it. Okay, thanks for taking my questions.
Operator (participant)
Our next question comes from Edward Tenthoff from [Piper Sandler]. Please go ahead.
Edward Tenthoff (Biotech Equity Research Analyst)
Great, thank you, and congrats on the progress on really all fronts, and intrigued by the new collaboration for the GLP. Just to kind of understand a little bit better, so with respect to Pfizer, say that you will recognize, is this all of the revenues or just the U.S. revenues that are one quarter delayed? Thank you.
Adam Logal (Senior VP and CFO)
Yeah. Hey, Ted. So, yeah, so Pfizer was just delayed in reporting the gross profit share for the U.S. region. So we'll have a bit of a catch-up quarter. You know, we stayed conservative in our guide just because we don't have the data yet to quantify how the U.S. numbers will get reflected, but we do believe that we'll see that it'll be a one quarter kind of catch up and then routine after that.
Edward Tenthoff (Biotech Equity Research Analyst)
I got you. So is that $8 million-$10 million in guidance sort of reflective of Q3 and Q4, or is that kind of what you would anticipate just for the fourth quarter? Thanks so much for answering the questions.
Adam Logal (Senior VP and CFO)
Yeah, yeah. So it's just what we would expect for a normal quarter. It doesn't have a catch-up of unexpected because it's unknown to us at this point.
Edward Tenthoff (Biotech Equity Research Analyst)
Because you don't know. Sure. That's helpful, Adam. Thanks so much, everybody.
Operator (participant)
The next question comes from Yale Jen, from Laidlaw & Company. Please go ahead.
Yale Jen (Senior Managing Director and Senior Biotech Analyst)
Good afternoon, and thanks for taking the questions. Congrats on the ModeX collaboration, I mean, supported by BARDA. My question is that in terms of the COVID as well as the future influenza antibodies, are those mostly just for immunocompromised patients or that will have a broader usage?
Elias Zerhouni (Vice Chairman and President)
No, that's a good question. No, the COVID antibody we're developing is really a multi-specific that will address both active patients who get the COVID when there is a surge. But there is a background need, which is the need of immunocompromised patients, estimated between 20 million and 30 million patients in the U.S., who will need this continuously. So we think the market will have both a baseline, which is the immunocompromised patients, and then surges that may occur during that interval of time. You follow? So it's two components. It's a multifunctional antibody for all COVID-19 infections. Yeah.
Yale Jen (Senior Managing Director and Senior Biotech Analyst)
Maybe just a little bit to early, just curious. In terms of this product, if be successful, would that be something OPKO would consider to launch, or this is a very much stockpiling type of product?
Elias Zerhouni (Vice Chairman and President)
It's too early to say. It really depends on what we're doing now that we've been funded $59 million to reach the end of phase I. And you'll have to really wait for the profile of the product and then decide what you would want to do. But we haven't decided that. It's too early right now.
Yale Jen (Senior Managing Director and Senior Biotech Analyst)
Okay, great. And maybe the last question here is, talk about the oxyntomodulin in terms of the, the usage for obesity as well as, type 2 diabetes. Given this, obesity currently is a very hot field right now. Could you give us a little bit color in terms of, of oxyntomodulin's effect, clinical effect so far been known in the obesity space? And thanks.
Elias Zerhouni (Vice Chairman and President)
Basically, the phase II trial showed a significant weight loss and in at the doses that we were giving. And we believe that the new analogs of oxyntomodulin that we have developed will have a better profile. And obviously we're developing one for the oral formulation that Entera has the technology for. We want to do the feasibility studies of that and then decide how to proceed. The injectable form can also be done with the new analogs that we are formulating. And that decision as to how far you go on that, really, again, is going to have to wait for some results.
Yale Jen (Senior Managing Director and Senior Biotech Analyst)
Okay, great. Thanks a lot and congrats on the progresses.
Elias Zerhouni (Vice Chairman and President)
Thank you. Thank you, Jen.
Operator (participant)
Our next question comes from Dipesh Patel of H.C. Wainwright & Co. Please go ahead.
Dipesh Patel (Equity Research Associate)
Thank you. This is Dipesh on behalf of Yi Chen. Just a trend question from me. Can you provide more clarity around the prescription trend of NGENLA, as well as the BioReference testing volume growth/decrease?
Adam Logal (Senior VP and CFO)
So as far as the trend goes for prescriptions for NGENLA, so globally, it continues to do very well. I think it's slow-going and similar for most newly launched products in the U.S. market. So I think the trend lines are all positive, and we think there's great opportunity. Sorry, can you repeat the second question for me?
Dipesh Patel (Equity Research Associate)
Yeah, the second one was if you could just provide some more color around the BioReference's testing volume growth or decrease.
Adam Logal (Senior VP and CFO)
Sure.
Elias Zerhouni (Vice Chairman and President)
Okay. Go ahead, Adam.
Adam Logal (Senior VP and CFO)
Yeah, I was gonna say, it was, it was effectively the total patient volume year-over-year was consistent. There it was, it was plus or minus, you know, about 0.5%. Sequentially, it continues to be a stable business as well. We're seeing good growth in the specialty lines of testing that the team has been focused on.
Dipesh Patel (Equity Research Associate)
Great. Thank you very much.
Operator (participant)
This concludes our question and answer session. I would like to turn the conference back over to Dr. Frost for any closing remarks.
Phillip Frost (Chairman and CEO)
I'd like to thank everybody for attending our conference call, and if you have any further questions, feel free to call any one of us. We'll try to respond. And then we'll look forward to meeting together again at the end of next quarter. Thank you.
Operator (participant)
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.