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Opko Q1 Revenues Up Nearly Ninefold

NEW YORK (GenomeWeb) – Opko Health reported after the close of the markets Monday that its first quarter revenues jumped ninefold compared to Q1 2015. The company said the surge was due in large part to revenues from clinical lab Bio-Reference Laboratories, which Opko acquired in August 2015.

For the three-month period ended March 31, Opko's revenues rose to $291.0 million from $30.1 million a year ago, easily beating Wall Street analysts' consensus estimate for revenues of $266.3 million. Revenues from Bio-Reference accounted for approximately $251.0 million of the total.

"We started 2016 with strong results from our diagnostics business driven by an increase in patient volume at Bio-Reference Laboratories, including our GeneDx business, and continued growth in the utilization of our innovative 4Kscore test" for detecting aggressive prostate cancer, Opko Chairman and CEO Phillip Frost said in a statement.

During a conference call with analysts after the release of the results, Opko Executive Vice President of Finance Steven Rubin said that the company is continuing to pursue broad payor coverage for 4Kscore and has had a number of "positive" meetings with insurers.

He also noted that, following the test's addition to the National Comprehensive Cancer Network's guidelines for prostate cancer early detection last year, it has received a CPT code used for established diagnostics that will go into effect in 2017. Additionally, 4Kscore was recommended for inclusion in the European Association of Urology's guidelines for prostate cancer earlier this year. 

This reimbursement progress, along with the publication of clinical data supporting 4Kscore's utility, "continues to support our efforts as we roll out a 4Kscore test with approximately 200 Bio-Reference Labs sales reps," Rubin said. Prior to the Bio-Reference acquisition, Opko had a 10-person sales force promoting the test. 

"The results have been dramatic," he added. "In April alone, we performed over 4,600 4Kscore tests."

Opko's net loss for the quarter narrowed significantly to $12.0 million, or $.02 a share, from $117.1 million, or $.26 a share, in the same period last year. Analysts had, on average, been expecting Opko to report a loss per share of $.03. 

R&D spending in the first quarter rose 9 percent to $27.8 million from $25.5 million, while SG&A costs soared sixfold to $128.0 million from $17.4 million, primarily due to increased costs associated with Bio-Reference. Included in the SG&A expense this quarter was $17.2 million of severance expense related to the resignation of certain Bio-Reference executives during Q1, $8.9 million of which is a non-cash expense related to the acceleration of stock options.

Opko also reported that amortization of intangible assets rose fourfold in Q1 to $13.4 million from $2.7 million in the year-ago period, including $9.9 million related to the Bio-Reference acquisition.

The firm ended the quarter with $175.0 million in cash and cash equivalents.

Shares of Opko were down slightly to $10.11 in Tuesday morning trading on the Nasdaq.

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