Rayaldee prescriptions are up 140% from Q1 to Q2. 68% insured lives as of Q2 and expectations are to be at 70% by yearend. Rayaldee revenue won't be "recognized" until Q4. $50 million from Vifor.
The company received $50 MILLION DOLLARS from Vifor and RSS can't even make the target bonus of $7500.00. If the investors use the MMIT app, they will realize that the "68% insured lives" is crap. Very suspicious that they won't mention the Rayaldee (lack of) Sales Revenue until after the new hires are in the field and in not until Q4.
They received $10 Million from TESARO for Rolapitant. EirGen received $50 milliom for last year when the deal was first cut.
Q2 2017 OPKO Health Inc Earnings Call MIAMI Aug 9, 2017 (Thomson StreetEvents) -- Edited Transcript of OPKO Health Inc earnings conference call or presentation Tuesday, August 8, 2017 at 8:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Adam E. Logal Opko Health, Inc. - CFO, CAO, SVP and Treasurer * Anne Marie Fields Lippert/Heilshorn & Associates, Inc. - SVP * Philip Frost Opko Health, Inc. - Chairman and CEO * Steven D. Rubin Opko Health, Inc. - EVP of Administration and Director ================================================================================ Conference Call Participants ================================================================================ * Kevin M. DeGeeter Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research * Samuel Brandon Couillard Jefferies LLC, Research Division - Equity Analyst * Yale I-Eh Jen Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research and Senior Biotechnology Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Welcome to the OPKO Second Quarter Business and Financial Update Conference Call. (Operator Instructions) As a reminder, this conference is being recorded, August 8, 2017. I would now like to turn the conference over to Anne Marie Fields with LHA. Please go ahead. -------------------------------------------------------------------------------- Anne Marie Fields, Lippert/Heilshorn & Associates, Inc. - SVP [2] -------------------------------------------------------------------------------- Thank you, operator. Good afternoon. This is Anne Marie Fields with LHA. Thank you all for joining today's call. I'd like to remind you that any statements made during this call, other than statements of historical fact, will be considered forward-looking and as such will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward-looking statements include, without limitation, the various risks described in the company's annual report on Form 10-K for the year ended December 31, 2016, and its subsequent quarterly filings with the SEC. Before we begin, let me review the format for today's call. Dr. Philip Frost, Chairman and Chief Executive Officer of OPKO will open today's call; followed by Steve Rubin, OPKO's Executive Vice President, who will provide an update on the company's various businesses and clinical programs. After which, Adam Logal, OPKO's Chief Financial Officer, will review the company's 2017 second quarter business and financial performance. Dr. Frost will then provide his closing remarks and we will then take your questions. Now I'd like turn the call over to Dr. Frost. -------------------------------------------------------------------------------- Philip Frost, Opko Health, Inc. - Chairman and CEO [3] -------------------------------------------------------------------------------- Good afternoon. I'd like to start the call by giving you a brief overview of OPKO as I see it. Our business units are moving forward nicely. Bio-Reference now has a new, stronger than ever management team in place, with Dr. Greg Henderson as its head. Dr. Ben Solomon is doing a great job as the new leader at our genetics and sequencing unit, GeneDx. Most recently, Vicky Laughman has taken responsibility for running sales. She had previously done a great job helping to build up the laboratory business at Mayo Clinic. We'll continue to add top talent at Bio-Reference and are actively interviewing some terrific candidates. We've developed great alliances for Bio-Reference such as the recently announced one at UCSF, and are working on others that could propel the business forward even more rapidly. The 4Kscore test for prostate cancer has the potential, I believe to become a major diagnostics test and continues to look better and better as new clinical utility trials demonstrate its reliability to predict the presence of aggressive prostate cancer with a simple blood test. Most recently, a study at veterans' hospitals confirmed the 4K's test clinical utility in African-American men, who have a higher incidence of prostate cancer. RAYALDEE uptake and sales are advancing as payers are coming on board. We'll continue to expand our efforts with this great product, for people with chronic kidney disease. Our product development programs are also moving forward and you'll hear more about this from Steve, but I want to emphasize 2, that I've spoken about before, because they are of special interest to me. They happen to be products that address 2 of the largest markets in the pharmaceutical industry, obesity with Type 2 diabetes; and benign prostatic hypertrophy. It's estimated that 50% of men over 60 suffer from symptoms of BPH, that's more than 50 million men in the United States. For obesity and Type 2 diabetes, OPKO has been developing a product, long acting oxyntomodulin for some time, and I've let you know in the past my great enthusiasm for this potential. But -- it was performing well in our Phase I trials but with the acquisition of Transition Therapeutics over a year ago, we got another oxyntomodulin product, which in a completed Phase II trial of 420 patients had already shown safety and efficacy. It controlled blood sugar, lowered cholesterol and triglycerides and decreased weight. The weight loss was directly related to dose. The issue was that at higher doses, nausea and vomiting became a factor. We are now completing plans for another Phase II trial using a dosing schedule that we believe will minimize nausea and vomiting, permitting the administration of higher doses to achieve even greater weight loss than observed in the completed Phase II trial which wasn't bad. We hope to begin this trial in the fourth quarter this year or first quarter next year. The second is a product close to my heart, it's a selective androgen receptor modulator, with several possible uses, but we'll develop it first for benign enlargement of the prostate, benign prostatic hypertrophy or BPH. In a 350-man trial, it increased muscle mass and strength, decreased body fat and lowered the PSA. Now dogs are commonly used to test BPH drugs such as Finasteride, which is on the market but with serious side effects. Our product shrank the prostate by 60% within 6 -- within 3 months. We are now making preparations to begin a dose ranging, Phase IIb trial during the fourth quarter of this year, and because of the uniqueness of this drug candidate, that is decreasing fat mass and increasing muscle mass, while shrinking the prostate size, I am more than enthusiastic about its prospects.
My view of the big picture is, we have a great business in our Bio-Reference Laboratories, at which we continue to invest in new management talent, new systems and better controls. As time goes on, we expect to see better results for all financial parameters, particularly cash flow. Against that backdrop, we're marketing and selling 2 great products, RAYALDEE for chronic kidney disease and the 4Kscore test, which stands out among a variety of tests for aggressive prostate cancer for its clinical utility and reliability. With RAYALDEE and 4K, we will continue to invest in new studies and marketing so that both products will achieve the commercial success they deserve. I think you can see why we're so enthusiastic, and I'll now pass you on to Steve, who will provide more detail. -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [4] -------------------------------------------------------------------------------- Thank you, Phil. Good afternoon, and thank you all for joining us on today's call. Throughout the first half of 2017, we've made important advancement across all of our business units. This includes: steady progress with a core BRL revenue base; prescription growth and reimbursement gains with RAYALDEE; and ongoing progress on a number of new drug development drug programs. I'll discuss Opko's progress across our diagnostics and pharmaceutical businesses. Then I'll turn the call over to Adam for a review of our financial performance. In our diagnostic business, Bio-Reference Laboratories continues to make progress, with the bulk of its revenue coming from traditional reference lab testing. We continue to invest in new systems that provide better financial data and more information about customers, products, sales and importantly, billing and collections. Our new leadership team has hit the ground running and is introducing new programs that we believe will provide both short and long-term growth opportunities. We have great confidence in the outlook for BRL, and with the synergies across diagnostic product lines. We look forward to growth of the number of patients being served, improved 4Kscore sales and progression of the Claros point-of-care PSA test towards regulatory approval. Let's turn now to an update to the 4Kscore test, our blood test that provides a man with an elevated PSA test result, with a personalized prediction of his chance of developing an aggressive form of prostate cancer. Last year, we have leveraged our BRL sales force and significantly increased the number of reps promoting the test. With a strong market access foundation in place, we believe it's time to invest in sales and marketing programs that should drive 4Kscore utilization to another, higher level. To that end, we've recently created a small, urology-focused sales force to complement the larger BRL sales team. Our new marketing program will include a regional television ad campaign. In addition, we hope to shortly have data on additional studies that are intended to expand the clinical utility of the test. Moving now to the Claros 1 point of care system, this is our novel instrument and [chip] system to provide rapid, high-performance blood test results. Claros 1 can run immunoassay tests in the physician's office or hospital nurses' station, using a single drop of blood from a finger stick, negating the need for a full blood draw or a centralized reference laboratory for many common tests to provide results to patients at the point of care. We successfully completed our analytical validation of the total PSA test and presented our development data at the American Association of Clinical Chemistry last week in San Diego. We remain on track to file a PMA with the FDA by the end of the year. We plan to leverage BRL's marketing, sales and distribution resources for the launch of the Claros 1 system with a PSA test in the United States in 2018. We continue to advance development of our other Claros 1 tests, with the aim to expand application in a number of important indications. In particular, we will work on advancing tests where there are synergies with our products and programs, such as a new test for testosterone. GeneDx, our genetic testing unit, continues to actively expand its innovative service offerings and its relationships with health care providers. We recently extended GeneDx relationship with the University of California Health System, for genetic, genomic and molecular testing services. UC Health is one of the nation's leaders in genomics and precision medicine in both the clinic and the lab, and they selected GeneDx to supplement their own robust offering of genetic, genomic, and molecular testing services across all of the various UC Health campuses. In addition to its new client facing test ordering portal, GeneDx has developed a unique, clinician-focused portal that allows end users to better manage and track their data at a cohort or individual level, in a protective and compliant manner. GeneDx continues to work to better understand the genetic causes of a variety of diseases through research, in a robust, whole exome and whole genome sequencing program. We look forward to ongoing progress with GeneDx as patient volumes grow in its higher margin business. Turning now to our pharmaceutical business. I am pleased to report that the RAYALDEE launch continues to build momentum. RAYALDEE is the first and only therapy approved by FDA that both raises 25-hydroxy vitamin D and lowers parathyroid hormone levels, with a safety profile similar to placebo. Total prescriptions of RAYALDEE in Q2 as reported by IMS, increased by 140% compared to the first quarter of 2017. Week-over-week increases in total prescriptions have been observed since the start of the year. The number of nephrologists prescribing RAYALDEE in Q2 is almost double compared to Q1. RAYALDEE's sales have been driven by a sales force comprised of approximately 35 field-based specialists plus 5 regional managers. Given the sales traction achieved and greater market access for the product, we are in the process of expanding the size of the sales force to a total of approximately 70 strong. Commercial and government insurance reimbursement for RAYALDEE continues to improve, driven by our internal market access team. More than 68% of all insured lives have access to RAYALDEE by the end of Q2. And we continue to forecast that more than 70% of insured lives will have access by year-end. As expected, the Kidney Disease Improving Global Outcomes or KDIGO organization updated its clinical practice guideline, the diagnostic evaluation prevention and treatment of chronic kidney disease, mineral and bone disorder, just prior to the end of Q2. The updated guideline amended the 2009 KDIGO guideline -- clinical practice guideline and presented revised positions on current standards of care for the treatment of SHPT in patients with CKD stages 3 or 4. Active Vitamin D therapies, including Calcitriol, are no longer suggested for routine use in stage 3 or 4 CKD.
Nutritional Vitamin D supplements, which are used by the majority of patients with stage 3 or 4 CKD, remain characterized as an unproven treatment for SHPT. We are aggressively educating nephrologists about the revised guideline through our dedicated medical science liaison team, and believe the changes in the recommended standard of care create a significant opportunity for RAYALDEE sales. Further, a new review of RAYALDEE published in Expert Review of Endocrinology & Metabolism, highlights the clinical benefits of RAYALDEE. As previously announced, we are advancing the clinical development of RAYALDEE in partnership with Vifor Fresenius Medical Care Renal Pharma. Our planned Phase II clinical trial of a higher strength RAYALDEE for dialysis patients is expected to begin in Q4. Now that we have received favorable feedback on the trial's design from the U.S. Food and Drug Administration. Further through this partnership, we filed a new drug submission for RAYALDEE in Canada on May 8, and are preparing a new product registration submission for Mexico. We continue to prepare for a final Phase III clinical study for Fermagate, a magnesium-based calcium free, phosphate binder for hyperphosphatemia in CKD patients on dialysis. Our recently completed preclinical studies have demonstrated Fermagate's ability to limit vascular calcification, a leading cause of morbidity and mortality in CKD. Previously, Fermagate has been shown to be safe and effective in treating hyperphosphatemia in Phase II and Phase III trials. We are also enthusiastic to be moving forward with the initiation of Phase IIa clinical study later this year, with our NK-1 antagonist for uremic pruritus or extreme itching, which is a problem for about half of the patients on dialysis. Moving on to our long-acting human growth hormone product, hGH-CTP, which is partnered with Pfizer for worldwide commercialization, our global pediatric Phase III hGH-CTP global study in 220 pre-pubertal growth hormone deficient children is underway, and we continue enrolling patients. This is a pivotal, noninferiority study, comparing a single weekly dose of hGH-CTP, with daily injections of currently marketed growth hormone. This study is using the pen device. The pediatric segment represents approximately 80% of the commercial market for treatment of hGH deficiency. Data from our pediatric hGH-CTP Phase II study affirmed that a single weekly injection of our drug has the potential to replace 7 daily injections of currently marketed growth hormone in pediatric patients. The study provided pharmacokinetic and pharmacodynamic data supporting a once weekly treatment with hGH-CTP with an acceptable safety profile. Patients in the Phase II extension have been exposed to hGH-CTP for more than 3 years, providing long-term safety data. In addition, we have initiated the pediatric hGH-CTP registration study in Japan. This study will assess the pharmacokinetics and compare efficacy of weekly hGH-CTP to daily GENOTROPIN in Japanese, pre-pubertal, pediatric growth hormone deficient subjects. With respect to the adult hGH-CTP Phase III study, as previously announced, we completed a post hoc sensitivity analysis to evaluate the influence of outliers on the primary endpoint results using preplanned, multiple statistical analysis protocol. OPKO intends to seek a meeting to discuss possible next steps with FDA. We continue to be excited about the opportunities for OPK88004, a once daily, oral selective androgen receptor modulator, or SARM, for patients with benign prostate hyperplasia or BPH. We recently held a pre-IND meeting with FDA regarding this program, and in the fourth quarter we expect to initiate a Phase II dose ranging study in patients with BPH. The study we are planning will involve 80 to 120 BPH patients, with the goal to identify adequate doses to reduce prostate size over a 4-month treatment period. We will also examine for improvement in secondary endpoints such as PSA, lean body mass, fat mass and physical function. Turning now to OPK88003, a once weekly, GLP1-glucagon dual agonist for the treatment of Type 2 diabetes and obesity. As previously reported, data from a Phase II study with 420 diabetes subjects showed that OPK88003 was superior in weight loss compared with the approved extended release exenatide and placebo. In addition, the data also showed improvement in the lipid profile and similar reduction in HbA1c levels compared to the approved once weekly product. Based on the promising efficacy data and safety profile, we are planning to initiate a dose escalation, Phase IIb trial to optimize a dosing regimen that should achieve further weight loss, improve lipid profile and safety. We are currently completing the manufactured product and expect the trial to begin in early 2018. Let me now update you on our long-acting Factor VIIA CTP for the treatment of bleeding episodes in hemophilia A or B patients, with inhibitors, to Factor VIII or Factor IX. We are nearing completion of the Phase IIa dose escalation study of intravenous Factor VIIa to determine safety, and explore efficacy endpoints in 24 patients. We are also nearing completion of the Phase I study in healthy male subjects assessing the acute safety, tolerability, pharmacokinetic and pharmacodynamic profiles of a single, subcutaneous administration of this drug. Top line data from both of these studies, as well as preclinical data were presented at the Intravenous Society of Thrombosis and Hemostasis that was held in Germany last month. Overall, Factor VIIa-CTP in both IV and subcutaneous administration demonstrated a favorable safety profile and local tolerance following a single administration, with no unexpected adverse events considered to be related to the drug. So in closing, we are pleased with the progress we've made across all business segments these past months, in particular our sizable revenue provides increasing cash flow that helps fund our commercial efforts and our clinical programs. We have a robust development pipeline of promising product candidates that we continue to advance towards commercialization in markets with significant opportunities, but limited treatment options. Throughout the balance of the year, and into 2018, we expect to achieve a number of important clinical milestones. We plan to: File a PMA for the Claros 1 PSA test and a 510(k) for the Claros 1 testosterone test; initiate a Phase II study of a higher dose RAYALDEE as a treatment for CKD patients on hemodialysis; initiate a Phase IIa clinical study of OPK88002, our NK-1 inhibitor for pruritus in dialysis patients; initiate a Phase II dose ranging study of OPK88004, our SARM, for patients with benign prostate hyperplasia or an enlarged prostate; initiate a Phase IIb study of our oxyntomodulin, OPK8803, to evaluate weight loss and glucose control; and initiate a Phase IIa study of OPK88001, our AntagoNAT for the treatment of Dravet syndrome.
We continue to focus on 5 key business objectives at Opko. We will continue to grow revenue from our core diagnostic business; we will increase contributions from newer products such as RAYALDEE; we will meaningfully increase the utilization of the 4Kscore tests; grow patient volumes for GeneDx; and advance our clinical development programs towards commercialization. We look forward to keeping you apprised of our progress with all of these programs, and expect that our execution will drive value over time. We continue to believe that OPKO Health offers a unique opportunity to invest in a company with diversified risk and potentially significant products at advanced stages of development. With that overview, let me turn the call over to Adam for a discussion of our second quarter 2017 financial performance. Adam? -------------------------------------------------------------------------------- Adam E. Logal, Opko Health, Inc. - CFO, CAO, SVP and Treasurer [5] -------------------------------------------------------------------------------- Thank you, Steve, and good afternoon, everyone. Revenue for the quarter ended June 30, 2017 totaled $314 million, and our net loss was $17.5 million, reflecting our ongoing investments in research and development of our pharmaceutical pipeline, along with investment in the commercial launch activities for RAYALDEE. Investment in our pipeline during the quarter was approximately $32.6 million, and the commercial launch of RAYALDEE resulted in an investment of approximately $8 million, contributing to our loss for the quarter. The comparable period of 2016 includes a $50 million benefit from our licensing transaction with Vifor Fresenius for RAYALDEE, which contributed to our total revenue of $357 million and net income of $15.5 million during that period. Our revenue cycle management program is in full swing at Bio-Reference, and we have seen overall improvement in the collection rates and turnaround within our main clinical lab business, a trend that we began to see in March and continued through Q2. And we expect to accelerate that through the second half of the year. We anticipate these improvements will result in increased levels of profitability within our diagnostics segment at an increasing pace during the second half of the year. Offsetting this progress, we continue to experience pricing headwinds within our genomics business, which resulted in an overall decrease in revenue from our services, despite increased volumes. We anticipate that these pricing decreases have now stabilized, so that the coming quarter's revenue from service should be reflective of our expected increase in volumes. We have not yet recognized revenue from RAYALDEE in our financial statements, and we are continuing to develop our estimates for our net sales price. As we continue to bring new insurance formularies online, we will gain a greater ability to estimate how RAYALDEE will be used among the various Medicare Part D, and commercial insurance formularies. We estimate that the earliest we will begin recognizing revenue will be in the fourth quarter of 2017. We continue to defer revenue related to product shipped to our wholesale customers until we build sufficient experience in the utilization of RAYALDEE at the retail pharmacy channel. Our balance sheet remains in a strong position to continue the development of our ongoing R&D programs as well as support the launch of RAYALDEE in the U.S. At June 30, 2017, we had approximately $130 million in cash, cash equivalents and marketable securities on our balance sheet, with an additional $50 million in availability under our credit facilities. I'd like to turn the call back now to Phil for any closing remarks. Phil? -------------------------------------------------------------------------------- Philip Frost, Opko Health, Inc. - Chairman and CEO [6] -------------------------------------------------------------------------------- Thank you. Are there any questions? ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question is from the line of Kevin DeGeeter with Landenburg. -------------------------------------------------------------------------------- Kevin M. DeGeeter, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research [2] -------------------------------------------------------------------------------- A few questions on Bio-Reference, to begin. First off, it looks like PAMA is likely to be implemented potentially in January. Just any updated thoughts on how implementation of that legislation may impact Bio-Reference? -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [3] -------------------------------------------------------------------------------- With PAMA, I think across the board, we're active within ACLA, and ACLA has been pushing hard as an organization to get a deferral in place, because we continue to think that there are certain laboratory segments, that are not included in the current regulation, particularly around hospital outreach business. With that being said, if it does implement, Medicare represents about 15% of our overall Bio-Reference revenue. And I think the clinical lab fee schedule would potentially put pricing pressure on our overall business, of 1% to 2% of overall revenues. So it's an important piece of legislation, but from an overall impact perspective, we do think we're taking preparatory steps in case it does go into place. -------------------------------------------------------------------------------- Kevin M. DeGeeter, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research [4] -------------------------------------------------------------------------------- Terrific. And I believe you called out, or mentioned that you're initiating a regional ad campaign. Can you just provide a little bit more specifics with regard to just scope and how you're thinking about how aggressive you may want to be with the direct ad campaign, as you build up coverage and payer decisions, both for Medicare and from private paying. -------------------------------------------------------------------------------- Philip Frost, Opko Health, Inc. - Chairman and CEO [5] -------------------------------------------------------------------------------- Okay. Well, we've been -- we're very careful about timing on launching our direct-to-consumer campaign. Because we wanted to make sure that we had our clinical trials lined up, and the data in, and we wanted to make sure that the urologists were solidly behind the product, so that they wouldn't be blindsided if they started getting calls about the product. And we think that by now, most urologists are quite familiar with the product, and many primary care physicians are as well. And I think that once we go to TV advertising and radio advertising, for example, that will not only alert the public at large, but it will help educate the primary care physicians who might not yet be aware of it. So we're looking forward to that part of the marketing effort. --------------------------------------------------------------------------------
Kevin M. DeGeeter, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research [4] -------------------------------------------------------------------------------- Terrific. And I believe you called out, or mentioned that you're initiating a regional ad campaign. Can you just provide a little bit more specifics with regard to just scope and how you're thinking about how aggressive you may want to be with the direct ad campaign, as you build up coverage and payer decisions, both for Medicare and from private paying. -------------------------------------------------------------------------------- Philip Frost, Opko Health, Inc. - Chairman and CEO [5] -------------------------------------------------------------------------------- Okay. Well, we've been -- we're very careful about timing on launching our direct-to-consumer campaign. Because we wanted to make sure that we had our clinical trials lined up, and the data in, and we wanted to make sure that the urologists were solidly behind the product, so that they wouldn't be blindsided if they started getting calls about the product. And we think that by now, most urologists are quite familiar with the product, and many primary care physicians are as well. And I think that once we go to TV advertising and radio advertising, for example, that will not only alert the public at large, but it will help educate the primary care physicians who might not yet be aware of it. So we're looking forward to that part of the marketing effort. -------------------------------------------------------------------------------- Kevin M. DeGeeter, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research [6] -------------------------------------------------------------------------------- And one more for me, then I'll get back in the queue. I think, it seems we'll get a readout from the Factor VIIa program, shortly here. As you think about next potential steps there, your thoughts on really 2 topics: First, the competitive landscape, there are a lot of new products, both late stage with other (inaudible) products such as the one from Roche, and also from potentially gene therapy. Is VIIa a program that with a strong profile, that you would look to move forward internally, and how do you define what is an appropriate bar to measure a commercially competitive product in that space? -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [7] -------------------------------------------------------------------------------- We still have very high expectations for the product. There are some innovative therapies out there, but there is, as you also know, there's questions about those, including questions of whether -- or how soon those therapies will be adopted. Our product, as you know, is just taking the same clotting factor that's been administered for years, and just making it last longer. So we think that for one, physicians, at least from the start will be more comfortable. Second, even if those therapies make it to market, there will be bleed throughs, and the Roche product for example, won't be usable at the acute stage, and you'll still need (inaudible) surgeries and the bleed through. So we think it's still a very significant opportunity, certainly the alternative new therapies out there are exciting and will create headwind. But from our analysis, we think it's certainly a very worthwhile project. -------------------------------------------------------------------------------- Operator [8] -------------------------------------------------------------------------------- Our next question is from the line of Brandon Couillard with Jefferies. -------------------------------------------------------------------------------- Samuel Brandon Couillard, Jefferies LLC, Research Division - Equity Analyst [9] -------------------------------------------------------------------------------- Adam, back on the Bio-Reference business, any chance you can break out the impact of the pricing pressure in the genomic services segment on BRLI growth overall? Because if I do the math, and assume that 4Kscore contributed a couple million dollars of revenue in the second quarter, it would suggest that the BRLI business was down, I guess about 5% overall. -------------------------------------------------------------------------------- Adam E. Logal, Opko Health, Inc. - CFO, CAO, SVP and Treasurer [10] -------------------------------------------------------------------------------- Yes, the GeneDx business, on a comparative quarter was down pretty substantially, Brandon. So I think that what you're seeing is, we did see patient overall volume growth there. But those pricing headwinds really pushed it down. -------------------------------------------------------------------------------- Samuel Brandon Couillard, Jefferies LLC, Research Division - Equity Analyst [11] -------------------------------------------------------------------------------- Okay, and you alluded to some new initiatives that you think could reaccelerate revenue growth. When do you expect to -- we could begin to see some of that impact? And can you elaborate on what some of those are? -------------------------------------------------------------------------------- Adam E. Logal, Opko Health, Inc. - CFO, CAO, SVP and Treasurer [12] -------------------------------------------------------------------------------- Yes, so I think where we saw the pricing pressures start for GeneDx was in the third quarter of last year. So the comparative quarters going forward. We should see that growth start in the third quarter, and really accelerate into the fourth quarter on topline revenue growth. The patient volumes on the clinical lab business have been consistent with prior years. But we've got some activities there that will help accelerate patient volumes there as well. -------------------------------------------------------------------------------- Samuel Brandon Couillard, Jefferies LLC, Research Division - Equity Analyst [13] -------------------------------------------------------------------------------- Understood. And then, a couple on 4Kscore. First off, I noticed you reduced the list price for the 4Kscore test down to $595. Could you give us a sense of the rationale for that? And perhaps, what percentage of the list price most payers are reimbursing at? And then secondly, any update you might have for us, in terms of your most recent dialogue with Novitas on a formal coverage policy. -------------------------------------------------------------------------------- Adam E. Logal, Opko Health, Inc. - CFO, CAO, SVP and Treasurer [14] -------------------------------------------------------------------------------- Sure. So as it relates to the list price, so we did bring the list price down to be consistent, or more consistent with where the Medicare reimbursement rate is. Now that's -- now that the 4Kscore has a Level 1 CPT code, the way our, or the majority of our insurance contracts are structured, is when you have a test on the clinical lab fee schedule, we're getting paid as a percentage of that Medicare reimbursement. So the higher list price had if anything a negative impact on utilization for patients who didn't have insurance coverage. So we are pretty consistently getting reimbursed across the board on our 4Kscore tests that we're doing, and our average reimbursement is not far off from the Medicare fee schedules. So just over $600. -------------------------------------------------------------------------------- Philip Frost, Opko Health, Inc. - Chairman and CEO [15] -------------------------------------------------------------------------------- You might mention that the Medicare reimbursement is actually scheduled to go up in 2018. -------------------------------------------------------------------------------- Adam E. Logal, Opko Health, Inc. - CFO, CAO, SVP and Treasurer [16] -------------------------------------------------------------------------------- Yes, so in with PAMA, as Phil mentioned, if PAMA goes into effect, 4Kscore will be one of the tests that actually benefits from that legislation, as our reimbursement rates will go up about 20% from there. You had a second question, I can't -- I'm sorry. -------------------------------------------------------------------------------- Samuel Brandon Couillard, Jefferies LLC, Research Division - Equity Analyst [17] -------------------------------------------------------------------------------- Yes, Novitas -------------------------------------------------------------------------------- Adam E. Logal, Opko Health, Inc. - CFO, CAO, SVP and Treasurer [18] -------------------------------------------------------------------------------- Yes. So Novitas continues to reimburse for the test, and our conversations and dialogue with them have been very positive, they're supporters of the test, and think that it's a benefit to the Medicare beneficiary. So they continue to pay for it. They have not come out with a timeline to issue a coverage decision. However, they are paying for 98-plus-percent of all tests adjudicated. -------------------------------------------------------------------------------- Philip Frost, Opko Health, Inc. - Chairman and CEO [19] -------------------------------------------------------------------------------- And we're continuing to do all kinds of trials that we think will eventually satisfy all of the (inaudible), in terms of positive coverage. But the -- and the trials are important because they're necessary for the marketing in general, anyway. So it's not as though were doing them specially for that purpose, but and the trials continue to have great results and demonstrate time and time again the clinical utility of the product which is what the payers are interested in.
-------------------------------------------------------------------------------- Samuel Brandon Couillard, Jefferies LLC, Research Division - Equity Analyst [20] -------------------------------------------------------------------------------- If I can sneak one more in. Adam, what were the 4Kscore volumes in the second quarter? And then I'll jump back in the queue. -------------------------------------------------------------------------------- Adam E. Logal, Opko Health, Inc. - CFO, CAO, SVP and Treasurer [21] -------------------------------------------------------------------------------- It was essentially flat with the first quarter, so just over 18,700 tests. -------------------------------------------------------------------------------- Operator [22] -------------------------------------------------------------------------------- (Operator Instructions) Our next question is from Yale Jen with Laidlaw & Company. -------------------------------------------------------------------------------- Yale I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research and Senior Biotechnology Analyst [23] -------------------------------------------------------------------------------- Just wonder, what would be the objective to build another urologist targeted sales teams in the organization? Is that in addition to the original sales reps in that specialty space? Or what the sort of major objective might be? -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [24] -------------------------------------------------------------------------------- So Yale, as you remember, we had a purely, we wanted to [staff] ourselves out of our lab in Nashville. We had a small, 10-person sales force dedicated solely to the urologist. Most of those have been pulled in to the larger BRL team, where their roles are not only selling 4K, but the whole suite of services that BRL offers. The sales efforts around 4K are a little bit different than reference laboratory sales, and the thought being is we would like to have a targeted, kind of guerrilla sales force, that can go out to particular areas that we've identified that have high levels of PSAs or high levels of biopsies and really go after those, what we think are high users that we haven't had access to before. Now keep in mind, the BRL sales force is largely northeast-centric, just by nature of the geography of that business. And so having this targeted sales force along with the -- but that will be small, so if we keep, let's call it the same number of being 7 to 10, and with the advertising, we think we can really generate some sales. -------------------------------------------------------------------------------- Yale I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research and Senior Biotechnology Analyst [25] -------------------------------------------------------------------------------- Okay. That's helpful. And in the prepared remarks, you mentioned, you are going to expand the RAYALDEE sales force. Just curious, what kind of pace that you're planning to have? And what will be the metrics you will use to further justify or further evaluate this, the performance of the reps? -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [26] -------------------------------------------------------------------------------- So the pace we're actually in the hiring process now. We hope to obviously have them on board by the fourth quarter. And so it's pretty active pace to bring them on board. And measurements are the typical metrics that you'd like to see, which are increase in prescriptions and increase in refills. We are targeting the sales force growth around those areas where we have reimbursements. So we want to make sure that, in the physicians that were visiting, we have solid reimbursement in those areas, so there's no frustration, as well as, again similar to what I mentioned for 4K, exposure to large nephrology practices or large prescribers of the previously utilized products, we think should be previously utilized products of nutritional and activated Vitamin D. -------------------------------------------------------------------------------- Yale I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research and Senior Biotechnology Analyst [27] -------------------------------------------------------------------------------- Okay, again that's helpful. And the last question I have is the, for the Factor VII, I think the follow-up to the earlier question that, and I assume you guys are going to talk, provide more colors, in terms of the [2] study, the final data, of the first 2 study. But let's just assume that the data looks promising, what might be the future step you may take, of moving this program forward, or is there any other sort of alternative you are thinking about? -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [28] -------------------------------------------------------------------------------- So I mean, adopting these -- these are both -- these studies are single escalating dose, which gives us, gives you some indication, and then certainly on the IV side, which was in the hemophiliac patients. So the next step, assuming we have safety [at longer] doses, is we will move into a Phase II, hopefully, /Phase III after talking to the FDA, pick your typical doses, let's say 3 or 4 doses to move forward. And then as we've mentioned in the past, is we'd like to then roll that into a single dose and convert the whole study into a 3. -------------------------------------------------------------------------------- Yale I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research and Senior Biotechnology Analyst [29] -------------------------------------------------------------------------------- And this will be used predominantly as a prophylactic instead of on demand basis? -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [30] -------------------------------------------------------------------------------- It will be both. So we're going to bring both the IV and the subcu into development, because you will have again bleed throughs and you will have high use for surgery. And keep in mind, NovoSeven, which is the only -- well, it's not the only, but it's the leading inhibitor product in the market today, with $1.7 billion of sales, has no prophylactic use. And so most of that is either used for bleeds or surgeries. And so that provides us, a very big opportunity to allow both. So we're going to develop both the subcu which can, we hope, be proven to be useful prophylactically as well as the IV. -------------------------------------------------------------------------------- Yale I-Eh Jen, Laidlaw & Company (UK) Ltd., Research Division - MD of Healthcare Research and Senior Biotechnology Analyst [31] -------------------------------------------------------------------------------- So the subcu will be for prophylactic and IV may be used for on demand? Would that be the general way of looking at that? -------------------------------------------------------------------------------- Steven D. Rubin, Opko Health, Inc. - EVP of Administration and Director [32] -------------------------------------------------------------------------------- Correct. -------------------------------------------------------------------------------- Operator [33] -------------------------------------------------------------------------------- And that is all the time we have for today. Dr. Frost, please proceed with your presentation or closing remarks. -------------------------------------------------------------------------------- Philip Frost, Opko Health, Inc. - Chairman and CEO [34] https://finance.yahoo.com/news/edited-transcript-opk-earnings-conference-124832570.html
At least, the IMS data is accurate. WHY DIDN'T WE GET PAID IF WE HAD A 140% INCREASE? My bonus went down from last quarter.
We have not yet recognized revenue from RAYALDEE in our financial statements, and we are continuing to develop our estimates for our net sales price. As we continue to bring new insurance formularies online, we will gain a greater ability to estimate how RAYALDEE will be used among the various Medicare Part D, and commercial insurance formularies. We estimate that the earliest we will begin recognizing revenue will be in the fourth quarter of 2017. We continue to defer revenue related to product shipped to our wholesale customers until we build sufficient experience in the utilization of RAYALDEE at the retail pharmacy channel. Our balance sheet remains in a strong position to continue the development of our ongoing R&D programs as well as support the launch of RAYALDEE in the U.S. At June 30, 2017, we had approximately $130 million in cash, cash equivalents and marketable securities on our balance sheet, with an additional $50 million in availability under our credit facilities. Why didn't we get PAID our full commissions?
The updated guideline amended the 2009 KDIGO guideline -- clinical practice guideline and presented revised positions on current standards of care for the treatment of SHPT in patients with CKD stages 3 or 4. Active Vitamin D therapies, including Calcitriol, are no longer suggested for routine use in stage 3 or 4 CKD.[/QUOTE] Liar. Do you think KDIGO will sue Opko for lying on a taped investor call?
On tomorrow's earnings call, can we expect an announcement on how well Rayaldee sales are going versus forecast? After all it's been well over a year since the FDA approval and we are still on the edge of our seats waiting for the numbers, we do see the IMS data. Dr Phil, do us a favor and turn up the mike or pay for a production company to get the Opko rotary phones to work so we can hear you loud and clear.
Q3 earnings RAYALDEE total prescriptions increased 66% in Q3 2017 compared with Q2 2017 4Kscore utilization increased 19% in Q3 2017 compared with Q3 2016 4Kscore TV ads in the Northeast to begin November 21 Submitted a Premarket Approval (PMA) application with FDA for Claros point-of-care (POC) prostate specific antigen (PSA) test Exclusive agreement with Japan Tobacco to develop and commercialize RAYALDEE in Japan Enrollment for global pediatric Phase 3 hGH-CTP clinical trial continues; Japanese pediatric registration trial underway Intravenous VARUBI ® approved by US FDA with launch expected November 2017; addresses 90% of the market for chemotherapy induced nausea and vomiting (CINV); OPKO to receive double digit royalties Plans to initiate four Phase 2 programs in late 2017 or early 2018 Consolidated revenue for the three months ending September 30, 2017 was $263.5 million compared to $298.0 million for the comparable 2016 period Net loss for the three months ending September 30, 2017, was $46.4 million compared to net loss of $15.0 million for the comparable 2016 period as OPKO invested heavily this quarter in future growth https://edge.media-server.com/m6/p/34uvb594
Q3 Earnings call New leadership in BioReference Labs. 4kScore DTC ads runs for 3 months just in the NE area. 19k 4kScore done. Clarios pre-marketing application to FDA. 16% of Nephrologists have prescribed Rayaldee. Sales force "not large enough"...impact in 2018. --------------------------------------------------------------------- - RAYALDEE commercial activities continue to progress: Total prescriptions for RAYALDEE, as reported by IMS, increased 66% during the three months ended September 30, 2017 compared to the three months ended June 30, 2017. OPKO expanded its field based sales force from 35 to 71 as of October 1st. The commercial and medical science liaison teams now total more than 80 professionals. In early November 2017, OPKO participated in the American Society of Nephrology meeting, the largest nephrology meeting of the year, and presented four posters highlighting the impact of RAYADEE in Stage 3 and Stage 4 chronic kidney disease patients. - RAYALDEE line extension in dialysis patients with secondary hyperparathyroidism (SHPT): Together with its partner, Vifor Fresenius, OPKO is developing RAYALDEE for Stage 5 chronic kidney disease (CKD) patients with SHPT undergoing dialysis and anticipates initiating a Phase 2 trial shortly in dialysis centers around the country and abroad. WHEN?? Financial Highlights Consolidated revenues for the three months ended September 30, 2017 were $263.5 million compared to $298.0 million for the comparable period of 2016. During the three months ended September 30, 2017, operating expenses included significant investment in the commercial activities supporting the launch of RAYALDEE of $8.3 million, as well as continued investment in the Company's pharmaceutical pipeline with R&D expense increasing to $32.3 million. Cash, cash equivalents and marketable securities were $100.3 million as of September 30, 2017. http://files.shareholder.com/downloads/OPKO/5554478306x0x957689/D6720A48-1289-42FF-A8C8-E4B6AEEDAB65/OPKO_Health_Inc_September_2017.v2.pdf Page 11 is crap and lies. Total prescriptions in Q2 increased by 140% compared to 1Q 2017 5000 scripts filled. 66% increase. $6.7 m shipped into trades (recognize some portion of it in Q4 sales numbers). Dr. Frost loves SARMs and the Diabetes candidate. Maybe a Cialis and SARM combo study in 2019? BioReference is a major component to the company's cash flow. Missed the market in the first 9 months. Should improve in Q4. Management change should improve business. Rayaldee should improve the cash flow next year. (Time stamp 35:00) Rayaldee $8 million - $10 million commercial costs per quarter (doesn't think that number will increase. It will be awhile for before their is a breakeven. Q3 scripts looked promising. No RAISES. If data submitted to the FDA is approved for the hGH deficiency product, they still need to do a BLA study. 600 repeat Rayaldee prescibers. Some dose escalation done by physicians. Mark 47:00 (reach and frequency slowed the launch). Expanded sales force will help with increasing awareness. "Education and reach/frequency were the issues". OMG. Nothing about reimbursement issues.
