Earnings call transcript: Opko Health Q2 2025 misses EPS, stock drops

Opko Health Inc (OPK) reported a net loss of $148.4 million or $0.19 per share for Q2 2025, significantly missing the EPS forecast of -$0.1133. Revenue for the quarter was $156.8 million, falling short of the expected $165.7 million. Following the earnings release, the company’s stock price dropped 4.85% to $1.34, with further decline observed in aftermarket trading. According to InvestingPro data, the company’s revenue has declined 13.8% over the last twelve months, with a concerning negative EBITDA of $173.4 million.

Key Takeaways

• Opko Health’s Q2 2025 EPS and revenue missed analyst forecasts.
• The company completed a convertible note exchange, reducing debt by $159 million.
• Stock price fell by 4.85% following the earnings announcement.
• Diagnostics segment saw a 1.4% increase in testing volume.
• Revenue guidance for 2025 is set between $640 million and $660 million.

Company Performance

Opko Health’s performance in Q2 2025 was marked by a net loss and revenue shortfall compared to forecasts. The diagnostics segment showed growth, with a 1.4% increase in testing volume, while the pharmaceutical segment contributed $55.7 million to the total revenue. Despite the challenges, the company managed to improve its operating loss slightly from the previous year.

Financial Highlights

• Revenue: $156.8 million (Diagnostics:$101.1 million, Pharmaceuticals: $55.7 million)
• Net Loss: $148.4 million or $0.19 per share (compared to $10.3 million or $0.01 per share in 2024)
• Cash Position: $285 million in cash, cash equivalents, and restricted cash

Earnings vs. Forecast

Opko Health’s actual EPS of -$0.19 missed the forecast of -$0.1133 by a significant margin. Revenue also fell short of the expected $165.7 million, coming in at $156.8 million. This performance marks a notable deviation from expectations, contributing to the stock’s decline.

Market Reaction

The stock price of Opko Health dropped by 4.85% to $1.34 after the earnings announcement, with aftermarket trading showing a further decline of 0.75%. This movement reflects investor disappointment with the company’s earnings miss and revenue shortfall.

Outlook & Guidance

Opko Health provided a revenue guidance range of $640 million to $660 million for 2025. The company anticipates achieving cash flow breakeven in its diagnostics segment and expects a $100 million gain from the sale of oncology assets to LabCorp. Continued investments in R&D and strategic partnerships are expected to drive future growth.

Executive Commentary

Dr. Philip Frost, Chairman and CEO, emphasized the company’s commitment to shareholder value through strategic capital deployment. Dr. Elias Zerhouni highlighted the potential of OPK-88006 for addressing obesity and NASH, while reaffirming the company’s dedication to R&D as a key growth driver.

Risks and Challenges

• Continued net losses could impact investor confidence.
• Market competition in the diagnostics and pharmaceutical sectors remains intense.
• Macroeconomic pressures may affect consumer demand and operational costs.
• Regulatory hurdles could delay product approvals and market entry.

Q&A

Analysts inquired about the potential advantages of the OPK-88006 molecule in treating obesity and NASH. The management addressed questions regarding capital allocation, stock repurchase strategies, and the GLP-2 program for short bowel syndrome, providing insights into the company’s strategic priorities.

Full transcript - Opko Health (OPK) Q2 2025:

Conference Operator: Good day, and welcome to the OpCo Health Second Quarter twenty twenty five Financial Results Conference Call. All participants will be in a listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Yvonne Briggs, Investor Relations, Alliance Advisors: Thank you, operator, and good afternoon. This is Yvonne Briggs with Alliance Advisors IR. Thank you all for joining today’s call to discuss OpCo Health’s financial results for the 2025. 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 are subject to risks and uncertainties that could materially affect the company’s results. These forward looking statements include, without limitation, the various risks described in the company’s SEC filings, including the annual report on Form 10 ks for the year ended 12/31/2024, and subsequently filed SEC reports.

Furthermore, this conference call contains time sensitive information that is accurate only as of the date of the live broadcast, 07/31/2025. Except as required by law, OpCo 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. Doctor. Philip Frost, Chairman and Chief Executive Officer, will open the call.

Doctor. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference Health as well as OpCo’s Pharmaceutical business. After that, Adam Logel, OpCo’s Chief Financial Officer, will review the company’s second quarter financial results and discuss OpCo’s financial outlook. And then we’ll open the call to questions. Now I’d like to turn the call over to Doctor.

Frost.

Dr. Philip Frost, Chairman and Chief Executive Officer, OpCo Health: Good afternoon and thank you for joining us. Today, we will report on the continued progress of OpcoHealth strategic initiatives and business performance. We have streamlined BioReference Health’s operations as we prepare to close the sale of its oncology and related clinical testing business to LabCorp. This transaction monetizes certain assets while sharpening BioReference’s focus on its core testing business and improving its financial profile. This is our second transaction with LabCorp to unlock value and accelerate BioReference’s path to profitability.

On the pharmaceutical side, we continue to advance our innovative therapeutic pipeline. MODEX has two programs in Phase I clinical trials with three more expected to enter the clinic late this year and early twenty twenty six. A significant catalyst for our pipeline is the Phase one data from our EBV vaccine partnered with Merck that will guide decisions regarding Phase two testing. We are pleased with the progress of our collaboration with Entera Bio to develop an oral tablet formulation of OPK-eighty eight thousand and six, our GLP-oneglucagon agonist for the treatment of obesity and NASH. Oral administration of this drug candidate has demonstrated encouraging results in animal models with in vivo data presented at the ENDO Annual Meeting in mid July.

OPKO is independently developing OPK-eighty eight-six for subcutaneous administration with in vivo data having been presented at the American Diabetes Association eighty fifth Scientific Sessions in June. We’re also collaborating with Enterobio on a second program to develop an oral form of our GLP-two candidate for short bowel syndrome. Our Latin American business and our Irish Contract Pharmaceutical Development and Manufacturing Unit continued to perform well with increasing revenue and expanding margins even while facing foreign currency headwinds. We’ve taken several strategic steps to improve our balance sheet and have sufficient capital to allocate to our R and D efforts which are partially funded by strategic partners and non dilutive sources. In addition, we have a $200,000,000 common stock repurchase program in place with $141,500,000 remaining capacity as of June 30.

As you’ve noted, we’re committed to maximizing shareholder value through the strategic deployment of capital, additional partnerships, business development initiatives and asset sales. We’re confident that this strategy will continue to add value in the 2025 and beyond. With that overview, I’ll turn the call over to Elias.

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: Well, thank you, Phil and good afternoon everyone. Let’s start with an update on BioReference Health, our Diagnostics segment. We continue to restructure and right size this business toward the goal of reaching and sustaining profitability. You will recall that in March, we announced an agreement with Mabcorp to sell our oncology assets for $225,000,000 with $192,500,000 payable at closing and an earn out of up to $32,500,000 based on performance. And the earn out will be measured six months post close and is based on the number of specified client accounts that are retained.

We expect this transaction to close near the end of the third quarter of this year. With the pending sale of BioReference Oncology and related clinical testing assets to LabCorp, we expect the remaining business to show improving margins through the balance of the year and beyond. Post transaction BioReference will maintain its core clinical testing operations in New York and New Jersey and will continue to offer urology diagnostic services highlighting our proprietary 4Kscore test for prostate cancer risk assessment as well as its clinical services business with correctional facilities on a nationwide basis. The revenue of these operations represented approximately $300,000,000 in 2024. Now reflecting our efforts to drive operational efficiencies, BioReference’s financial results continue to improve.

As I mentioned in our last call, the latest reduction in force and footprint consolidation provided annualized cost savings of approximately $19,000,000 Our headcount stands now at approximately 1,900 for the second quarter. After the close of the oncology transaction, we expect our headcount to decrease to between $14.50 and 1,500 by the fourth quarter. Now to further grow the business, we have focused our efforts on optimizing our test menu and establishing strategic relationships in market to increase testing volumes. By focusing in the local New York and New Jersey physician market, we have really strengthened our position with those who serve this patient base. And this includes ACOs, IPAs, HQHCs, regional health systems and specialty healthcare companies.

And in addition, the combination of our menu size and operational agility as a more focused company is instrumental in capitalizing on new revenue streams such as direct to consumer, employer based testing and early phase clinical trials. We are also pleased to announce that on July 25, the FDA granted approval of a supplemental application for the 4Kscore test and this approval specifically enables the performance of the 4Kscore test even when digital rectal examination information is not available. The 4Kscore test is indicated for the assessment of the likelihood of aggressive prostate cancer in men 45 years or older and reported to have age specific elevated or abnormal screening PSC results. In The U. S.

Over ninety percent of PSC screening tests are performed by primary care providers who now be potential users of the 4Kscore test. Excluding the pending and closed listed sales, BioReference’s testing volume grew by 1.4% in the 2025 compared with a year ago period. As for our urology segment, the 4Kids score test continued to perform well with year over year increase in test volume of approximately 12%. Now the aforementioned FDA approval of our supplemental application for the 4Kscore test should provide further opportunities for growth we believe. Now let’s turn to a discussion of our therapeutic segment starting with MODEX.

The Phase one Epstein Barr virus vaccine trial by our Merck collaborators is progressing as planned. This trial will evaluate up to 200 healthy adults for safety and tolerability and is comprised of two parts with a different adjuvant for each. We’re currently waiting for the analysis of the Phase one results that will guide Merck’s decisions on progression to Phase two trials. Several products are advancing in our immuno oncology and immunology portfolio. The most advanced is our first in class MDX-two thousand and one c MetTROP2 CD3CD28 tetra specific T cell engager antibody that has progressed to its fifth dose level in a Phase one clinical trial.

We expect to enroll the highest dose level by the end of the year after which we will focus on assessing signals of efficacy in select tumors known to express high levels of TROC2 or c Met at biologically active doses and thereafter we will focus on the tumors that appear most responsive. Now, two additional programs are expected to enter the clinic late this year or early next year including our MDX-two thousand and three tetra specific T cell engager antibody for lymphoma and leukemia and the MDX-two thousand and four, an immune rejuvenator for multiple oncology and immunology indications. Our immunology portfolio is focused on the use of multi specific antibodies for immune impaired patients, those with cancer, chronic diseases and the elderly. Our most advanced product aims to address the unmet need in such patients at high risk for COVID complications. And we anticipate that Phase one studies will begin early next year.

And this work, as you remember, is funded by BARDA, which is also supporting the advancement of multi specific antibodies to prevent influenza currently at the pre IND stage. And we continue to work collaboratively with BARDA, which contributed non dilutive funding of 59,000,000 last year and an additional $51,000,000 so far this year to advance these programs. Now, as mentioned by Doctor. Frost, moving to OPKO eighty eight thousand and six, our novel long acting GLP-one receptor glucagon receptor dual agonist, we presented a poster on preclinical data at the American Diabetes Association eighty fifth Scientific Session in June and the therapeutic benefits of OPKO-eighty eight thousand six on quantitative biological hallmarks of NASH in mouse models were superior to semaglutide and cervolutide suggesting that OPKO-eighty eight thousand and six could be a promising GLP-one glucagon receptor dual agonist for the treatment of obesity at NASH. We are encouraged by these results in OPKO eighty eight thousand and six therapeutic potential.

As Phil mentioned, our collaboration with Entera Bio continues to advance as we’re in the pre IND stage with an oral version of OPK-eighty eight thousand six. The oral program combines our proprietary long acting oXintermodulin analog and Entera’s proprietary NTAP technology. At the recent ENDO meeting in San Francisco, we presented new pharmacologic and pharmacokinetic in vivo data for oral OPK-eighty eight-six showing excellent bioavailability. In addition, we’re working with Antero Bio on another program for short bowel syndrome, which represents a significant unmet need. Short bowel syndrome patients have a reduced ability to absorb nutrients and fluids and are at risk of malnutrition, unintended weight loss and additional symptoms due to the loss of essential vitamins and minerals.

The European Society for Clinical Nutrition and Metabolism Congress or Aspen accepted our abstract regarding the PKPD of our oral GLP-two tablets for the treatment of short bowel syndrome. And this presentation will take place in September in Prague. Finally, our Latin America Pharmaceutical division and RAYALDEE continue to perform to plan with sustained revenues and margins and Adam will provide you also an update on Engenma. So in summary, we’re pleased with our progress in advancing our first in class therapeutic multi specific antibodies for oncology and immunology indications, as well as our multi vaccine candidate that are progressing in clinical development at Merck and our metabolic disease program with our OPKO eighty eight, eighty thousand and six GLP-one glucagon coaginous in both oral and injectable forms for obesity and NASH as well as an oral GLP-two agonist for short bowel syndrome. We’re confident that the structuring efforts we’re undertaking will position BioReference to be more efficient and profitable following the completion of the second asset sale.

Now, let me turn the call over to Adam to discuss our financial results. Adam?

Adam Logel, Chief Financial Officer, OpCo Health: Thank you, Elias. Let’s begin with our Diagnostics business. Revenue for the 2025 was $101,100,000 including $24,900,000 from the oncology assets being sold. This compares with $129,400,000 in Q2 twenty twenty four with the decline primarily due to the LabCorp transaction that closed in September 2024. Revenue in our non oncology business continues to see steady growth highlighted by an increase in 4Kscore volumes of nearly 12%, which Elias mentioned and has been accelerating throughout the year.

Total costs and expenses were $119,300,000 down from $156,000,000 last year. This includes $29,400,000 related to the oncology assets and approximately $2,000,000 in expected one time costs for severance during the twenty twenty five quarter. As a result, our diagnostic operating loss improved to 18,200,000 compared to $26,600,000 in Q2 twenty twenty four. Depreciation and amortization expense came in at $4,900,000 down from $6,300,000 in 2024. Importantly, as Elias mentioned, the actions we’ve taken throughout the first half of this year and those planned as we close the oncology transaction are expected to deliver over $25,000,000 in annualized cost savings and we remain on track to achieve cash flow breakeven and positive cash from operations in 2025.

Turning to our Pharmaceutical business, revenue was $55,700,000 up $2,900,000 from twenty twenty four’s $52,800,000 Product revenue was $40,700,000 up slightly from twenty twenty four’s $40,500,000 reflecting an increase in our Spanish and Mexican businesses, partially offset by foreign exchange headwinds in Chile. RAYALDEE contributed $7,200,000 in both the 2025 and 2024 periods with improved margins during 2025 due to the lower government rebates. IP transfer revenue rose to $15,000,000 up from $12,300,000 which includes our Pfizer profit share of $6,100,000 compared to $6,300,000 for 2024. While the 2025 gross profit share has been slower than we anticipated, we are optimistic about the efforts Pfizer has made and expect to make throughout the remainder of 2025 on the global commercialization efforts of the program. Globally, the adoption of the long acting form of HGH has been slower than we and the broader market has anticipated.

However, we continue to see trends of accelerated transition to the once weekly formulation. Based on the available market data, Ingenla holds about one third of the global long acting market. And as the market continues to move to the once weekly dosing, we believe Pfizer will continue to grow its portion of the total market. In addition, BARDA funding increased to $6,500,000 from $5,000,000 reflecting the expanded program activity for our infectious disease antibody programs. Cost and expenses were $84,400,000 up from $77,600,000 driven by increased R and D investments.

R and D totaled $29,800,000 up from $23,700,000 primarily due to the MODEX development programs, including our BARDA supported programs. As Elias mentioned, we are making progress within our clinical development program and with spending on our ongoing Phase one trial as well as expenses to support an additional five IND filings within the next twelve months for our GLP-oneglucagon, oncology, immunology and infectious disease programs. As a result, our pharmaceutical operating loss was $28,700,000 compared to $24,800,000 last year. Depreciation and amortization expense was $18,100,000 slightly more than twenty twenty four’s $17,900,000 For our consolidated results, consolidated operating loss improved slightly during 2025 to $60,000,000 compared to $61,700,000 as a result of the improved results at BioReference, partially offset by the increased investments in our pharmaceutical research and development programs. As you’ll recall, we completed our convertible note exchange on 04/01/2025.

As a result, we recorded approximately $92,000,000 of expense during the 2025, while our 2024 net loss benefited from an increase in the value of one of our investments, which resulted in a gain of $60,000,000 during 2024. As a result, our net loss for Q2 twenty twenty five was $148,400,000 or $0.19 per share compared to $10,300,000 or $01 per share in Q2 twenty twenty four. As we think about our balance sheet and capital allocation, we ended the quarter with approximately $285,000,000 in cash, cash equivalents and restricted cash. We remain focused on optimizing our capital structure, while maintaining our investments into our innovative R and D programs. As I mentioned, we completed the convertible note exchange earlier this quarter using approximately $65,000,000 in cash and issuing 121,000,000 shares, eliminating over $159,000,000 in principal debt, which meaningfully improved our overall debt position.

Under our expanded share repurchase authorization, as Phil mentioned, we repurchased approximately 13,600,000.0 shares during Q2 twenty twenty five and have approximately $142,000,000 remaining authorized, which represents more than 13% of our current share count at recent trading ranges. Cash used in operations during Q2 increased from our normal levels due to certain working capital adjustments, including a negotiated lease exit for one of our bio reference facilities as well as income taxes paid on our transactions that closed in 2024. We also invested approximately $8,000,000 into Entera Bio related to our oral GLP-one program. Looking forward, we expect to close our second LabCorp transaction later this year, which will bring in $192,500,000 at closing with potential proceeds of up to $225,000,000 As we move to our outlook, we continue to execute our multi phase plan to drive profitability in our Diagnostics business by reducing the fixed infrastructure costs and improving our operational efficiency. Following the Oncology transaction, the remaining BioReference business is expected to reach cash flow positive and profitability during 2025.

This will exclude non recurring and non cash items and we have not adjusted our outlook for the closing of the oncology transaction, but we’ll do so once the closing date is certain. For the full year 2025 outlook, we expect total revenue to be between $640,000,000 and $660,000,000 revenue from services of $4.00 $5,000,000 to $425,000,000 including $95,000,000 to $105,000,000 from our oncology assets revenue from products of $160,000,000 to $170,000,000 and other revenue of $65,000,000 to $75,000,000 including our Pfizer profit share of $28,000,000 support from BARDA of $30,000,000 to $35,000,000 Total costs and expenses are expected to be between $835,000,000 and $865,000,000 excluding $15,000,000 to $20,000,000 of one time restructuring costs for our Diagnostics business. This includes $125,000,000 to $135,000,000 in expenses related to our oncology assets. It includes $120,000,000 to $130,000,000 of research and development spending, which will be partially offset by 30,000,000 to $35,000,000 in BARDA funding. We expect depreciation and amortization expense to be approximately $90,000,000 and we also anticipate a $100,000,000 gain on the oncology transaction, which will reduce operating expenses and increase operating income in the quarter which we closed.

With that, I’d like to open up the call for questions. Operator?

Conference Operator: Certainly. We will now begin the question and answer session. Our first question comes from Maury Raycroft with Jefferies. Please go ahead.

James, Analyst, Jefferies: Hi, this is James on for Maury. Congrats on the update. Thanks for taking our questions. Given that new prescriptions and total prescriptions for ANGELLA were up in 2Q, do you expect that the $6,100,000 in ANGELLAGENEOTROPE in profit share in 2Q is due to lower gross to net from co pay assistance in 1Q carrying over to 2Q? And have you received any insights from Pfizer on 2Q sales or do you plan to follow-up with them for clarification?

And I have a follow-up.

Adam Logel, Chief Financial Officer, OpCo Health: Hey, James. Thanks for the questions. And we definitely saw an improvement in The U. S. Market as it relates to the prescription trends that you identified.

We continue to see some of the international markets that are in the early days of launches continuing to work through some of the higher cost inventory that’s set out there. So we expect the remainder of the year to pick back up to the traditional levels, but we saw strength broadly across all of the geographic markets for Ingenla. So we’re pretty optimistic of where that’s headed.

James, Analyst, Jefferies: Got it. Thanks. And then a follow-up is, how is EBITDA margin for the Diagnostics business tracking in 2Q versus 1Q? And how are you setting expectations for EBITDA profitability in 3Q, 4Q? And kind of going along with that, this approval with the supplemental application for the four ks score test, can you talk about implications for growth in four ks score test sales in the coming quarters?

Adam Logel, Chief Financial Officer, OpCo Health: Yes. So let me pull the EBITDA question apart. So when we think about the Diagnostics segment, we’re continuing to see quarter over quarter improvements and a lot of the steps we’ve taken to drive costs down are bearing fruit. If you were to look at the $18,200,000 operating loss that resulted in Q2, consider the $2,000,000 of non recurring expenses in there, you start to see that $4,500,000 comes from the oncology business that is set to close later this year and depreciation and amortization expense of $4,900,000 It gets you to about a $6,000,000 or a couple of million dollar a month loss in that segment. A lot of the costs, as Elias mentioned, are expected to come out when we close the oncology transaction in a couple of months’ time and get our headcount even further down.

We’ve been pretty judicious about making sure we maintain that business with the infrastructure, if I referenced, that’s required to get through the closing. But once the closing occurs, we’ll be able to bring the overall cost structure down as we planned. We feel we’re on track to deliver those cost savings and to get to that cash flow positive basis this year, both from an EBITDA and a cash position. As it relates to four ks scores, so we’ve seen really good upward growth on the test this year so far. We mentioned it’s about 12% up.

I think July that really has started to accelerate and that is before we have the FDA label change and really opens up the market for us to think about primary care docs being able to order the test. So we think the upside is meaningful. And as I mentioned, being at 12% and meaningfully higher in July, we think, again, the opportunity is pretty important. That test has strong margin profile with a relatively small sales force calling on docs today.

James, Analyst, Jefferies: Got it. Thanks so much for answering my questions. I’ll hop back in the queue.

Adam Logel, Chief Financial Officer, OpCo Health: Thanks, James.

Conference Operator: Our next question comes from Edward Tenthoff with Piper Sandler. Please go ahead.

Edward Tenthoff, Analyst, Piper Sandler: Great. Thank you very much. So my question has to do with the obesity efforts. And specifically with an increasingly crowded landscape, how do you envision oxytin modulin differentiating either as an injectable or with the oral formulation that’s partnered with Entera? Thanks.

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: Yes. Thanks for the question. I mean, fundamentally, we think there is a differentiation because, what we found out actually and we studied the molecule that we created that not only is it effective in obesity, but glucagon increases the metabolism, but more importantly, glucagon has an effect downstream of glucagon on FGF21 which rises with our molecule. FGF21 is known actually to be anti fibrosis or correct fibrosis as we know from other molecules that have been developed around FGF21. So, we believe based on the results we have and then the preclinical data that show really a very good profile for the drug.

Number one, we believe that it will have merits for, NASH patients combined with obesity and diabetes. So, we will have to look at that. The second advantage obviously is that with Entera we can create an oral form of the molecule. And frankly that is something that in the information that we have from physicians is welcome because they like to stabilize the patient and convert them into oral forms to maintain the weight loss and maintain the effect over time without having to continue with the injectable. So those are the two aspects.

It has a biological aspect that we believe will be very valuable in NASH. And then it has a not just the convenience, it really a stabilization aspect of the regimen that you have to keep patients on to maintain the obesity reduction and the metabolic improvements that you hope to achieve.

Edward Tenthoff, Analyst, Piper Sandler: That’s very helpful. And then when it comes to actually proving that out in the Phase I study, are there endpoints you’re envisioning or different patient populations? Or how do you think you can actually tease that out in the clinical trials?

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: So that’s a great question. So our plan is to really go into patients who have biomarker evidence of NASH and are obese, okay? And really go into that Phase one data on that population of patients that will eventually be of interest if we get both safety and some sign of signal of efficacy with biomarkers. We’re not going to do a biopsy study. We don’t want to do that until we have good evidence that both the dose and the effect are really differentiating, okay?

So that’s the idea. And we’re basically focused on patients who have for example liver stiffness, liver fat and evidence that they are not only obese but they have a fatty liver that could lead to fibrosis eventually and liver failure. So those are the patients we’re going to focus on in Phase one with a cost that is quite reasonable. But then obviously, these developments are quite expensive. We’re not going to pursue that all on our own and we have a lot of interest coming our way about potential collaborations once we achieve the data that we need to have to really create the value of the asset forward.

Edward Tenthoff, Analyst, Piper Sandler: That’s really helpful. Thanks for the color, Elliot.

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: Thank you.

Conference Operator: Our next question comes from Yale Jen with Laidlaw and Company. Please go ahead.

Yale Jen, Analyst, Laidlaw and Company: Good afternoon and thanks for taking the questions. I just want to follow-up what Ed just mentioned earlier. What’s your estimate of the size in terms of patient both have obesity as well as NASH? Would that be the specific sort of indication you’re going to explore in the Phase one study when you presumably start later this year or early next year?

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: Yes. The answer is a great question. The answer is yes. We’re focused on that population. We’re going to try to focus on the patients that have biomarkers that indicate that they’re in what we call F2, F3, F4 MATCH, degrees of MATCH, stages of MATCH.

And those are the patients we’re going to focus on. We’re going to look for as any Phase one for safety signals and dosing ranges and we’re not really looking for definitive efficacy, but we will look for biomarker trends that will help us. Now in terms of total number of patients, hard to me to tell you the number, but the exact number, but we’re thinking between one hundred and one hundred and seventy patients to do the full

Yale Jen, Analyst, Laidlaw and Company: Phase Okay, great. That’s very helpful. Maybe one follow-up question here, which is that in terms of the collaboration you have, you have both A8-six and also you have a compound addressing short bowel syndrome. Just like to know a little bit get a little bit more color in terms of what’s the difference between these two compounds and specifically for the Schorbauer syndrome compound that we probably not have too much ideas about.

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: Right. So the GLP-one Glucagon Receptor Co agonist is completely different than the GLP-two, right. GLP-two is a separate molecule and not at all in physiologically, not at all comparable to the GLP-one. I mean, they have closed names, but they’re not. And so the GLP-two has a huge function in actually intestinal absorption regulation.

And that’s why it’s really something that a lot of people want to develop for people who have short bowel syndrome, malnutrition, tendons with that. So it’s an unmet need that has not been served very well. People get infusions of parenteral nutrition, infusion of food supplements and so on and it’s not as good as effective and that’s why the program was developed to address that unmet need, which is a completely separate population, completely different than the obesity MASP population we’re trying to address with the GLP-one glucagon. And now our collaboration with Entera is obviously adding an option which is an oral version, which we find to be quite attractive, to offer a spectrum of approaches from injectable to oral and vice versa.

Yale Jen, Analyst, Laidlaw and Company: Maybe squeeze one more in here which is when you anticipate this program to enter clinical study, would that be next year? Thanks.

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: Yes, I think so. When exactly I don’t know, depends on FDA, depends on regulatory. Yes, I mean, definitely next year.

Yale Jen, Analyst, Laidlaw and Company: Okay, great. Thanks.

Conference Operator: Thank you. Our next question comes from Yi Chen with H. C. Wainwright and Company. Please go ahead.

Yi Chen, Analyst, H.C. Wainwright and Company: Thank you for taking my question. My question is related to the long acting GLP-one receptor glucagonal receptor agonist. So today, many patients taking GLP-one drugs, they discontinue treatment due to GI side effects. And also, the current GLP-one drug cause lean muscle mass loss as well as fat loss, which is a big problem for elderly patients. So does your dual agonist has the potential to improve either of these two aspects of the current GLP-one drugs on the market today?

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: I hope that on GI side effects, we will be able to titrate properly and that’s an open question. I can’t tell you it will or will not. I think when you look at the data of others who have GLP-one glucagon molecules, you might have the hope that that will be the case. But every molecule is different. Ours is really on a preclinical basis has a very good profile.

Now in terms of mean muscle mass, I don’t think there will be a major difference. There may be one because glucagon is enhancing metabolism. But I don’t think anybody knows the answer exactly. Some trials by Oringer Ingelheim and others seem to show a little bit better profile, but I really wouldn’t stick my neck out here and say we will definitely have better profiles on both of these counts, but I hope that we will because of the difference in metabolic action. Okay.

Thank you.

Conference Operator: Thank you. Our next question comes from Michael Petusky with Barrington Research. Please go ahead.

Michael Petusky, Analyst, Barrington Research: Hey, good evening. Adam, I was writing as fast as I could, but not as quick as you were talking. What the I don’t think it’s in the release. What was the BARDA revenue in the quarter? Was it 5.6%, did you say?

Adam Logel, Chief Financial Officer, OpCo Health: Yes. So BARDA revenue in the quarter, let me make sure I get it right. It was 6.5%,

Michael Petusky, Analyst, Barrington Research: yes,

Adam Logel, Chief Financial Officer, OpCo Health: for the quarter.

Michael Petusky, Analyst, Barrington Research: 5,000,000 even or $5,600,000

Adam Logel, Chief Financial Officer, OpCo Health: $6,500,000

Michael Petusky, Analyst, Barrington Research: Sorry, 6,500,000.0. Okay. Thank you. And the guide for revenue for BARDA for the year?

Adam Logel, Chief Financial Officer, OpCo Health: Sure. So it was 30,000,000 to $35,000,000 for the year.

Michael Petusky, Analyst, Barrington Research: Thank you. And then, I guess, as you sort of think about the go forward after the oncology deal closes, does your assumption of sort of cash flow breakeven etcetera, does that require a higher revenue run rate than sort of the, let’s call it, 300,000,000 annualized that will be left post the close? Like essentially, that top line have to grow in order to sort of achieve or can it sort of roughly stay around this level?

Adam Logel, Chief Financial Officer, OpCo Health: Yes. So we’ve got plans for the revenue to grow, but achieving cash flow breakeven and being positive is not dependent on us achieving our growth plan.

Michael Petusky, Analyst, Barrington Research: And then I just want to I guess, obviously, you’ve got cash on the balance sheet. You’ll have more cash on the balance sheet presumably in the next ninety days or so. Could you guys just talk about capital allocation priorities for in terms of that balance sheet cash? Thanks.

Adam Logel, Chief Financial Officer, OpCo Health: Yes. So I’ll start us off, Mike, and let Elias and others weigh in. As we kind of laid out early this year, we think about cash really for dollar for dollar of what we’re spending or investing in the operations and R and D programs for us to be investing back into the balance sheet. That’s been pretty close to where we’ve been this year for the first half. I think when we did the debt exchange in April that accelerated the use of cash for our balance sheet strengthening a little bit faster than probably what we planned in January.

But I’d say this year, we expected to use a little over $100,000,000 in investing in R and D. We remain on track with that. As it relates to how much cash we’ve put in our stock buyback program as well as the convertible debt exchanges. We’re approaching $80,000,000 so far this year and would expect to continue to buy back shares as opportunities exist. As we think forward, it’s probably not going to continue at that same accelerated pace, on the capital side.

We’ll also be mindful of how we are able to partner any of our R and D programs to continue to try to find non dilutive sources of cash to fund those programs and accelerate those like we did with our relationships with BARDA. So hopefully that helps.

Michael Petusky, Analyst, Barrington Research: It does. Can I just ask maybe just a slight Stock obviously is in my opinion hasn’t reacted much to sort of some of the improvements that you guys are making. It seemed like you’re on the path to making particularly in the lab business. And I’m just curious, does that create, I guess, any extra urgency in terms of sort of completing the common share repurchase?

Adam Logel, Chief Financial Officer, OpCo Health: Yes. I mean, I think the Board has authorized us go up to that $200,000,000 So we have about 142,000,000 or $141,500,000 left to deploy. And I don’t think we will be shy about using it as the balance sheet allows.

Dr. Elias Zerhouni, Vice Chairman and President, OpCo Health: Awesome. Thanks guys.

Conference Operator: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Doctor. Frost for any closing remarks.

Dr. Philip Frost, Chairman and Chief Executive Officer, OpCo Health: Thank you. Thank you all for your good questions and for participating in general. I’ll close by observing that many of the things that we have talked about at previous meetings have really come to fruition. We have emphasized in the past the use of our assets in such a way that will be beneficial for the company and the shareholders. And the disposition of the two parts of our reference so far are good examples of that.

And the remaining part is certainly becoming a more valuable asset, which we’re very happy about. So far as the expenditures are concerned, which are major for us, they’re largely for R and D and we consider those as Adam mentioned investments. And we consider them to be interesting and good investments in the sense that the many of the projects are quite novel. They’re on the high risk side, I would say. And so we can’t guarantee anything, but we also believe that the potential returns for these projects are significant.

And it’s for that reason that we feel good about what we’re doing. So I’ll leave you with those thoughts. And again, thank you once again and look forward to being with you again in a quarter from now.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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