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Opko Posts Big Q3 Revenue Gain on Acquisitions

NEW YORK (GenomeWeb) – Opko Health yesterday reported a massive jump in third quarter revenues as the company benefitted from its recent acquisitions of clinical lab Bio-Reference Laboratories and specialty pharmaceutical manufacturer EirGen earlier this year.

For the three-month period ended Sept. 30, Miami, Florida-based Opko reported consolidated revenues of $143 million compared with $19.8 million in the same period last year, in line with analysts' consensus estimate. 

Opko's diagnostic services revenues surged to $103.7 million during the quarter, up from $2.4 million in the year-ago quarter. In August, Opko closed its $1.47 billion acquisition of Bio-Reference Labs, the third-largest full-service clinical laboratory in the US.

"Our acquisition of Bio-Reference Laboratories has significantly enhanced our financial position and has given us a leadership position in the diagnostics business, while also providing critical strategic assets we can leverage in … genomics, as well as in reaching providers of all kinds," Steven Rubin, executive vice president of administration at Opko, said during a conference call following the release of the financial results.

Opko CFO Adam Logal noted during the call that Bio-Reference Labs contributed $102 million in revenues during the quarter, although he declined to provide guidance on its future performance. Rubin added that Bio-Reference Labs' marketing and managed care contracts are expected to help Opko make inroads with its 4Kscore Test for determining a prostate cancer patient's probability of having aggressive disease.

Opko CEO and Chairman Phillip Frost noted during the call that prior to the Bio-Reference Labs acquisition, the company had a sales force of eight to 10 individuals promoting 4Kscore. Bio-Reference is now in the process of training roughly 100 of its roughly 400 salespeople to begin supporting the test at the start of 2016, he added.

During the third quarter, Opko signed testing service contracts, including ones for the 4Kscore Test, with Stratose, Three Rivers Provider Network, and Fortified Provider Network. 

Late in the second quarter, the National Comprehensive Cancer Network included 4Kscore as a recommended test in its updated guidelines for prostate cancer early detection, which the company said will continue to bolster its efforts to secure reimbursement from payors.

Opko reported net income of $128.2 million, or $.25 a share, in the third quarter compared with a net loss of $48.7 million, or $.11 per share, in Q3 2014. Analysts had, on average, been expecting the firm to report a loss of $.02 per share. 

Its third quarter R&D costs dropped to $18.9 million from $20.5 million, while SG&A expenses jumped to $55.2 million from $14 million.

At the end of the quarter, Opko had cash, cash equivalents, and marketable securities totaling $212.1 million.

During mid-Tuesday trading on the Nasdaq, shares of Opko were up 5 percent at $10.45.