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OPKO HEALTH, INC. (OPK)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue fell to $149.9M from $173.7M YoY and down from $183.6M in Q4 2024; EPS was a loss of $0.10, narrower than $0.12 YoY, but below Wall Street consensus; EBITDA also missed consensus. The quarter reflected volume declines in Diagnostics due to asset sales, partially offset by higher reimbursement and continued cost reductions .
  • OPKO announced a definitive agreement to sell BioReference’s oncology and related clinical testing assets to Labcorp for up to $225M and expanded its buyback authorization by $100M to $200M, positioning Diagnostics for profitability later this year and offering capital return flexibility .
  • Pharma segment progressed ModeX programs (EBV vaccine with Merck; MDX2001 dose escalation) and moved dual GLP‑1/glucagon OPK‑88006 (injectable and oral) toward INDs; BARDA funding continues to support multispecific antibody platforms .
  • FY 2025 guidance was refined: revenues $675–$685M; BARDA revenue lowered; Pfizer profit share trimmed; R&D narrowed; management flagged ~$100M expected operating gain from the Labcorp oncology transaction and ~$90M nonrecurring other expense in Q2 from convertible exchange .
  • Key near-term catalysts: closing of Labcorp oncology sale, ModeX dose-escalation readouts and EBV Phase 1 immunogenicity signals, progress on GLP‑1/glucagon INDs, and execution of the buyback program .

What Went Well and What Went Wrong

What Went Well

  • “We signed a definitive agreement with Labcorp to sell the oncology and related clinical testing assets of BioReference… for up to $225 million,” accelerating the path to Diagnostics profitability and streamlining operations .
  • Management expanded the buyback by $100M to $200M: “We believe OPKO’s shares continue to be significantly undervalued… Our strong cash position provides the ability to return capital to shareholders while adequately funding our pharmaceutical programs” .
  • ModeX pipeline advanced: EBV Phase 1 dosing underway with Merck; MDX2001 reached the fourth dose level; multiple multispecific antibody programs progressing with BARDA support .

What Went Wrong

  • Diagnostics revenue declined to $102.8M from $126.9M YoY, primarily from lower clinical test volume after asset sales, though partially offset by higher reimbursement; segment operating loss of $23.9M persisted despite cost actions .
  • Pfizer gross profit share for NGENLA was $4.5M vs $5.6M YoY; management noted negative quarterly dynamics likely commercial in nature, leading to a slight guide reduction .
  • Nonrecurring restructuring costs (~$7.2M in Q1) and severance/facility closures weighed on Diagnostics; management expects another ~$5M nonrecurring costs in Q2 .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$173.7 $183.6 $149.9
Net Income ($USD Millions)$(81.8) $14.0 $(67.6)
Diluted EPS ($)$(0.12) $0.01 $(0.10)
EBIT ($USD Millions)*$(71.5) $(33.1) $(67.2)
EBITDA ($USD Millions)*$(45.7)*$(9.1)*$(43.7)*
EBIT Margin %*(41.2%)*(18.0%)*(44.8%)*
EBITDA Margin %*(26.3%)*(5.0%)*(29.1%)*
Net Income Margin %*(47.1%)*7.6%*(45.1%)*

Values with asterisks retrieved from S&P Global.

Comparison vs Wall Street Consensus (S&P Global):

MetricQ4 2024 ConsensusQ4 2024 ActualSurpriseQ1 2025 ConsensusQ1 2025 ActualSurprise
Revenue ($USD Millions)$155.42*$183.64 Beat$164.26*$149.95 Miss
Primary EPS ($)$(0.10)*$0.01 Beat$(0.0729)*$(0.0949)*Miss
EBITDA ($USD Millions)$(45.3)*$(9.1)*Beat$(24.9)*$(43.68)*Miss

Values with asterisks retrieved from S&P Global.

Segment Breakdown (Q1 2025):

SegmentRevenue ($M)Costs & Expenses ($M)Operating Income (Loss) ($M)Notes
PharmaceuticalsProducts: $34.8; IP/Other: $12.3 $81.9 $(34.8) RAYALDEE $6.3; BARDA $7.0; Pfizer gross profit share $4.5
DiagnosticsServices: $102.8 $126.8 (incl. $7.3 nonrecurring) $(23.9) Oncology assets pending sale: revenue $25.1; costs $32.4

KPIs and Balance Sheet Highlights:

KPIQ1 2025Prior Quarter/YearNotes
4Kscore test YoY growth14.5% N/AContinued strong urology test performance
Diagnostics headcount1,962 3,099 (Q1 2024) Reflects workforce reduction and footprint consolidation
Annualized cost savings~$19M run-rate from Q1 actions $20M program previously discussed Additional $10M targeted
Cash, equivalents & restricted$449.7M (as of 3/31/25) $431.9M (12/31/24) Includes $51.7M from sale of GeneDx shares
Pro forma shares outstanding~790M 671.6M (2/24/25 reference) Reflects convertible exchange issuance in April

Guidance Changes

MetricPeriodPrevious Guidance (Q4 2024)Current Guidance (Q1 2025)Change
Total Revenues ($M)FY 2025$675–$700 $675–$685 Lowered
Revenue from Services ($M)FY 2025$405–$425 (incl. assets held for sale) $405–$425; assets being sold $95–$105 Maintained; clarified assets range
Revenue from Products ($M)FY 2025$165–$175 $165–$175 Maintained
Other Revenue ($M)FY 2025$80–$95 $75–$85 Lowered
Pfizer Gross Profit Share ($M)FY 2025$35–$45 $30–$40 Lowered
BARDA Revenue ($M)FY 2025$40–$48 $38–$44 Lowered
Costs & Expenses ($M)FY 2025$825–$875 (excl. nonrecurring) $825–$875 (excl. nonrecurring) Maintained
R&D Expense ($M)FY 2025$120–$140; BARDA offset $40–$48 $120–$130; BARDA offset $37–$43 Narrowed down
D&A Expense ($M)FY 2025~$90 ~$90 Maintained
Nonrecurring Restructuring ($M)FY 2025$4–$8 in Q1 $10–$14 full-year; additional ~$5 in Q2 Increased
Expected Gain on Labcorp Oncology TransactionFY 2025Not disclosed~+$100M to operating income upon close New disclosure
Nonrecurring Other Expense (Convertible Exchange)Q2 2025Not disclosed~$(90)M New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Diagnostics restructuring/profitabilityMajor asset sale to Labcorp; gain booked; path to profitability Improved focus; cost reduction; breakeven glide path Oncology sale to Labcorp; further headcount cuts; cost savings; profitability later this year Improving execution; nearing profitability
NGENLA profit share dynamicsGrowing franchise globally Lower Q4 profit share vs prior year; catch-up noted prior Q1 profit share lighter; believed to be one-quarter commercial issue; guide trimmed Temporary headwind; cautious near term
ModeX oncology (MDX2001)Dose escalation underway Dose escalation progressing; safety/tolerability read 2H25 Fourth dose level; Phase Ib early 2026 Steady progress; approaching efficacy stage
EBV vaccine (Merck)Merck collaboration; BARDA funding increased Phase 1 initiated; $12.5M milestone Dosing underway; immunogenicity biomarker signals anticipated from cohorts Advancing; potential 2025 biomarker insight
GLP‑1/glucagon OPK‑88006Oral bioavailability animal data shared Subcu and oral toward IND by year-end IND later 2025/early 2026; once-weekly subcu; oral once-daily; initial focus on MASH/F3–F4 Advancing toward clinical entry
Tariffs/macro supply chainNot highlightedNot highlightedManagement monitoring; manageable risk; minimal impact expected Watchful; low impact currently

Management Commentary

  • Phillip Frost: “We believe OPKO shares continue to be significantly undervalued and our strong cash position provides the ability to return capital to shareholders while adequately funding our pharmaceutical programs.”
  • Elias Zerhouni: “Our stated objective… remains to reach profitability within this year” for BioReference; headcount down to ~1,962 from 3,099 in Q1 2024; ~$19M annualized cost savings initiated in Q1 .
  • Adam Logal: “We anticipate closing our second transaction with LabCorp later this year… and expect to realize a gain on the LabCorp transaction of approximately $100 million,” while guiding for Q2 nonrecurring other expense of ~$90M from the convertible exchange .

Q&A Highlights

  • NGENLA profit share shortfall: Management views Q1 weakness as likely commercial/gross-to-net related and expects normalization; trimmed FY profit share guide to $30–$40M .
  • GLP‑1/glucagon program: IND targeted later 2025/early 2026; subcu once‑weekly and oral once‑daily; initial differentiation in MASH/F3–F4 fibrosis patient segments .
  • EBV Phase 1: Merck testing adjuvants across cohorts; Phase 1 focuses on safety/tolerability with immunogenicity biomarkers to indicate potential efficacy .
  • Capital structure and share count: April 1 convertible exchange retired ~$159.2M principal, issued ~121M shares; pro forma shares a little over ~790M; remaining convertible principal ~$129M .
  • Tariffs/supply chain: Impact considered manageable; minimal expected impact on pharma COGS and R&D operations .

Estimates Context

  • Q1 2025 vs consensus: Revenue $149.95M vs $164.26M consensus → miss; Primary EPS $(0.0949) vs $(0.0729) → miss; EBITDA $(43.68)M vs $(24.9)M → miss. Management cited Diagnostics volume reductions from prior asset sales and a one‑quarter NGENLA profit share issue as drivers .
  • Q4 2024 vs consensus: Revenue $183.64M vs $155.42M → beat; EPS $0.01 vs $(0.10) → beat; EBITDA $(9.1)M vs $(45.3)M → beat, aided by GeneDx gains and BARDA/IP revenue contributions .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Diagnostics pivot is working: cost reductions, headcount down 37% YoY, and oncology divestiture set the stage for segment profitability later in 2025; watch for ~$100M operating gain at close .
  • Pharma pipeline de‑risks the story: EBV vaccine Phase 1 under Merck, MDX2001 advancing toward efficacy, and GLP‑1/glucagon progressing to IND with an initial focus on MASH—multiple shots on goal .
  • Near-term financials: Expect Q2 nonrecurring $(90)M other expense from the convertible exchange; full-year revenues narrowed to $675–$685M with lower BARDA and Pfizer profit share assumptions .
  • NGENLA monitoring: Q1 profit share shortfall viewed as transitory; script data growth supports rebound; still, FY guide trimmed—track quarterly gross profit share trajectory .
  • Capital allocation: Expanded $200M buyback plus strong cash ($449.7M) create flexibility to offset dilution and support programs; monitor repurchase execution .
  • Execution catalysts: Closing of Labcorp oncology sale, ModeX dose-escalation completion, EBV immunogenicity signals, and GLP‑1/glucagon INDs could drive narrative and re‑rating .
  • Risk watch: Restructuring costs and tariff/currency headwinds; Diagnostics demand mix and Pfizer profit share variability remain key sensitivities .

Citations:
Financials and segment data: . Transaction and buyback: . Pipeline and BARDA: . Guidance: . Q&A details: .

Values with asterisks retrieved from S&P Global.