This story has been updated with additional details from Opko's conference call to discuss the earnings results.
NEW YORK – Opko Health reported after the close of the market on Thursday that its third quarter revenues were down 10 percent year over year, largely due to a decrease in COVID-19 testing volume.
For the three months ended Sept. 30, Opko's revenues were $385.8 million compared to $428.1 million in Q3 2020. It beat the consensus Wall Street estimate of $302.3 million.
The firm said it received $340.1 million in revenues from diagnostics services in Q3 2021, down 11 percent from $382.5 million in the same quarter last year. The decrease in COVID-19 testing volume was partially offset by improvement in COVID-19 test reimbursement and an increase in clinical and genomic test revenue, the company said in a statement.
It also received $36.9 million in revenues from products, an increase of nearly 29 percent from $28.7 million in Q3 2020, due to accelerating growth in the company's international pharmaceutical business.
Intellectual property and other revenues were $8.8 million, down 48 percent from $16.9 million in the third quarter of 2020.
During the third quarter, Opko subsidiary BioReference Laboratories processed 2.2 million COVID-19 PCR tests and 158,100 COVID-19 serology tests.
In August, Rite Aid, the US Department of Health and Human Services, and BioReference announced a COVID-19 testing program offering students at New York state public schools free COVID testing before or at the start of the 2021-2022 school year.
Women's health specialty testing volume was up 6 percent in the quarter compared to Q3 2020, company officials said on a conference call to discuss the Q3 financial results.
BioReference also acquired the US Ariosa centralized laboratory prenatal testing business from Roche during the quarter. The addition of Ariosa's Harmony noninvasive prenatal test could see BioReference subsidiary GenPath's current NIPT volumes triple, BioReference Chairman Jon Cohen said on the call.
The firm's oncology testing business was up 20 percent year over year, with growth in next-generation sequencing and hematology, he added, while its GeneDx business saw genetic testing increase more than 19 percent due to exome testing.
Meanwhile, BioReference's Scarlet Health home blood-drawing business is now available to 80 percent of customers in the US, Cohen said.
So far during the fourth quarter, BioReference has performed more than 800,000 COVID-19 tests, Cohen noted. The firm saw a surge in COVID-19 retail testing demand in July and August due to the Delta variant, but Cohen said the retail volumes have begun to decrease. As the flu season gets underway, however, the firm anticipates continued clinical testing demand from physicians.
Cohen said there is an "unpredictability factor" when it comes to flu season and future COVID-19 testing demand, depending on whether there is a significant flu season.
The "robust" demand for surveillance testing from professional sports leagues, private and public school systems, large entertainment events, employers, and the travel industry has continued, Cohen said. The firm believes these customers will continue their surveillance testing programs throughout 2022.
Cohen also said the core diagnostics business has continued to rebound, with the majority of accounts close to normalized pre-pandemic levels.
Opko's pharma business saw prescriptions of its Rayaldee kidney disease drug decrease 31 percent from 16,700 to 11,500, and revenues from the drug reached $8.5 million in the recently completed quarter compared to $8.1 million in the same quarter last year.
Opko's net income for Q3 2021 was $28.7 million, or $.04 per share, compared to net income of $23.7 million, or $.04 per share, in Q3 2020. The consensus Wall Street estimate was for a net loss of $.01.
The Miami-based company spent $18.3 million on R&D, down 1 percent from $18.5 million in Q3 2020. The company's SG&A costs were up 5 percent to $105.1 million from $99.9 million in the same quarter last year.
Opko reported $148.6 million in cash, cash equivalents, and marketable securities as of Sept. 30. The company also noted that it has $64.3 million available under its line of credit with JP Morgan.
Opko CFO Adam Logal said on the call that the firm expects to perform between 1.7 million and 2.1 million COVID-19 tests in the fourth quarter of 2021, noting that Opko had capacity "well in excess of these levels should demand increase."
Assuming the base business will remain at current levels, Logal said the company expects overall revenues between $290 million and $320 million, revenue from services between $250 million and $280 million, and revenues from products between $32 million and $36 million. Other revenues are expected to be between $4 million and $6 million.
Logal added that Opko expects an operating loss of $10 million to an operating profit of $10 million in the next quarter, with R&D spending between $17 million and $20 million.