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OPKO Health (OPK) Reports Loss in Q1, Misses Revenue Estimates

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OPKO Health, Inc. (OPK - Free Report) incurred adjusted loss of 14 cents per share in first-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 7 cents. The company had incurred a loss of 8 cents per share in the year-ago quarter.

Revenues totaled $222.5 million, which missed the Zacks Consensus Estimate by 9.9%. Further, the top line decreased 12.9% on a year-over-year basis.

Segment Revenues in Q1

Revenues from Services grossed $178.9 million in the reported quarter, down 15.3% year over year.

Revenues from Products decreased 9.3% to $25.3 million. Per management, revenues from products include $5.8 million contributions from RAYALDEE.

Revenues from Transfer of intellectual property came in at $18.3 million, up 16.6% year over year.

OPKO Health, Inc. Price, Consensus and EPS Surprise

 

OPKO Health, Inc. Price, Consensus and EPS Surprise | OPKO Health, Inc. Quote

RAYALDEE Update

Per management, total RAYALDEE prescriptions reported by IQVIA improved 121% year over year in the first quarter. Further, management at OPKO Health announced that RAYALDEE marketing authorization applications filed by Vifor Fresenius have been accepted for review in several European countries.

Margin Analysis

Gross profit in the reported quarter came in at $78.5 million, down 22.1% from the prior-year quarter. Gross margin was 35.3% of net revenues, down 420 bps year over year.

Selling, general and administrative expenses totaled $95.2 million, up 4% year over year. Research and development expenses amounted to $36.5 million, up 10.9% year over year.  
               
Operating loss in the first quarter was $75.3 million, wider than the year-ago quarter’s loss of $42.6 million.

Guidance

For the second quarter of 2019, management expects revenues from Services between $170 million and $180 million.

Product revenues are expected within $27-$29 million, including revenues for RAYALDEE between $6.5 million and $7 million.

Revenues from Transfer of intellectual property are anticipated in the band of $17 million to $22 million.

OPKO Health expects costs and expenses to be between $280 million and $290 million, including research and development expenses of $38-$43 million in the second quarter.

Summing Up

OPKO Health exited the first quarter on a dull note. Adjusted loss per share was wider than expected and revenues missed the Zacks Consensus Estimate. Contribution from RAYALDEE has been significant in the quarter under review. Further, OPKO Health’s utilization of the 4Kscore remains strong, with nearly 19,400 tests registered in the first quarter.

Furthermore, OPKO Health announced that the FDA has approved the company’s point-of-care Sangia Total PSA Test using the Claros 1 Analyzer. These apart, the company’s clinical development programs look promising with a robust pipeline of candidates. Several metabolic and endocrinology programs that are underway should provide OPKO Health a competitive advantage.

Meanwhile, the gross margin looks pressed at the moment. Moreover, the company faces cutthroat competition in the MedTech space. Sluggishness in the Product revenue segment remains a concern.

Zacks Rank

Currently, OPKO Health carries a Zacks Rank #2 (Buy).

Earnings of MedTech Majors at a Glance

Some other top-ranked stocks which reported solid results this earning season are Stryker Corporation (SYK - Free Report) , DENTSPLY SIRONA Inc. (XRAY - Free Report) and CONMED Corporation (CNMD - Free Report) , each carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stryker delivered first-quarter 2019 adjusted earnings per share of $1.88, beating the Zacks Consensus Estimate by 2.2%. Revenues of $3.52 billion were in line with the Zacks Consensus Estimate.

DENTSPLY reported adjusted earnings per share (EPS) of 49 cents in the first quarter of 2019, beating the Zacks Consensus Estimate of 38 cents. Revenues came in at $946.2 million and surpassed the Zacks Consensus Estimate of $917.1 million.

CONMED posted first-quarter 2019 adjusted earnings per share of 57 cents, which beat the Zacks Consensus Estimate of 54 cents. Revenues were $218.4 million, surpassing the Zacks Consensus Estimate of $213 million.

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