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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Opko Health Inc | NASDAQ:OPK | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.0299 | 2.30% | 1.3299 | 1.30 | 1.32 | 1.34 | 1.29 | 1.29 | 3,116,758 | 23:58:50 |
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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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75-2402409
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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4400 Biscayne Blvd.
Miami, FL 33137 (Address of Principal Executive Offices) (Zip Code) |
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(305) 575-4100
(Registrant’s Telephone Number, Including Area Code) |
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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EX-31.1
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Section 302 Certification of CEO
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EX-31.2
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Section 302 Certification of CFO
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EX-32.1
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Section 906 Certification of CEO
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EX-32.2
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Section 906 Certification of CFO
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EX-101.INS
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XBRL Instance Document
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EX-101.SCH
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XBRL Taxonomy Extension Schema Document
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EX-101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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EX-101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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EX-101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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EX-101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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•
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we have a history of losses and may not generate sustained positive cash flow sufficient to fund our operations and research and development programs;
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•
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the risks inherent in developing, obtaining regulatory approvals for and commercializing new, commercially viable and competitive products and treatments;
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•
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our research and development activities may not result in commercially viable products;
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•
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that earlier clinical results of effectiveness and safety may not be reproducible or indicative of future results;
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•
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that we may fail to obtain regulatory approval for hGH-CTP or successfully commercialize
Rayaldee
and hGH-CTP;
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•
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that we may not generate profits or cash flow from our laboratory operations or substantial revenue from our pharmaceutical and diagnostic products;
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•
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that currently available over-the-counter and prescription products, as well as products under development by others, may prove to be as or more effective than our products for the indications being studied;
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•
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our ability to build a successful pharmaceutical sales and marketing infrastructure;
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•
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our ability and our distribution and marketing partners’ ability to comply with regulatory requirements regarding the sales, marketing and manufacturing of our products and product candidates and the operation of our laboratories;
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•
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the performance of our third-party distribution partners, licensees and manufacturers over which we have limited control;
|
•
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our success is dependent on the involvement and continued efforts of our Chairman and Chief Executive Officer;
|
•
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integration challenges for Transition Therapeutics, BioReference, EirGen and other acquired businesses;
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•
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changes in regulation and policies in the United States and other countries, including increasing downward pressure on health care reimbursement;
|
•
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our ability to manage our growth and our expanded operations;
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•
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increased competition, including price competition;
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•
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changing relationships with payers, including the various state and multi-state Blues programs, suppliers and strategic partners;
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•
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efforts by third-party payors to reduce utilization and reimbursement for clinical testing services;
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•
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failure to timely or accurately bill for our services;
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•
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failure in our information technology systems, including cybersecurity attacks or other data security incidents;
|
•
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failure to obtain and retain new clients and business partners, or a reduction in tests ordered or specimens submitted by existing clients;
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•
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failure to establish, and perform to, appropriate quality standards to assure that the highest level of quality is observed in the performance of our testing services;
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•
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failure to maintain the security of patient-related information;
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•
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our ability to obtain and maintain intellectual property protection for our products;
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•
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our ability to defend our intellectual property rights with respect to our products;
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•
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our ability to operate our business without infringing the intellectual property rights of others;
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•
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our ability to attract and retain key scientific and management personnel;
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•
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our need for, and ability to obtain, additional financing;
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•
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adverse results in material litigation matters or governmental inquiries;
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•
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failure to obtain and maintain regulatory approval outside the U.S.;
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•
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legal, economic, political, regulatory, currency exchange, and other risks associated with international operations; and
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•
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our ability to finance and successfully complete construction of a research, development and manufacturing center in Waterford, Ireland.
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March 31, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
131,052
|
|
|
$
|
168,733
|
|
Accounts receivable, net
|
238,893
|
|
|
220,284
|
|
||
Inventory, net
|
47,492
|
|
|
47,228
|
|
||
Other current assets and prepaid expenses
|
42,495
|
|
|
47,356
|
|
||
Total current assets
|
459,932
|
|
|
483,601
|
|
||
Property, plant and equipment, net
|
126,256
|
|
|
122,831
|
|
||
Intangible assets, net
|
746,654
|
|
|
763,976
|
|
||
In-process research and development
|
645,058
|
|
|
644,713
|
|
||
Goodwill
|
705,990
|
|
|
704,603
|
|
||
Investments
|
37,285
|
|
|
41,139
|
|
||
Other assets
|
38,893
|
|
|
5,756
|
|
||
Total assets
|
$
|
2,760,068
|
|
|
$
|
2,766,619
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
74,558
|
|
|
$
|
53,360
|
|
Accrued expenses
|
178,866
|
|
|
197,955
|
|
||
Current portion of lines of credit and notes payable
|
11,527
|
|
|
11,981
|
|
||
Total current liabilities
|
264,951
|
|
|
263,296
|
|
||
2033 Senior Notes and estimated fair value of embedded derivatives, net of discount
|
39,285
|
|
|
43,701
|
|
||
Deferred tax liabilities, net
|
159,286
|
|
|
165,331
|
|
||
Other long-term liabilities, principally deferred revenue and line of credit
|
189,576
|
|
|
202,483
|
|
||
Total long-term liabilities
|
388,147
|
|
|
411,515
|
|
||
Total liabilities
|
653,098
|
|
|
674,811
|
|
||
Equity:
|
|
|
|
||||
Common Stock - $0.01 par value, 750,000,000 shares authorized; 559,597,843 and 558,576,051
shares issued at March 31, 2017 and December 31, 2016, respectively |
5,596
|
|
|
5,586
|
|
||
Treasury Stock - 586,760 shares at March 31, 2017 and December 31, 2016
|
(1,911
|
)
|
|
(1,911
|
)
|
||
Additional paid-in capital
|
2,856,645
|
|
|
2,845,096
|
|
||
Accumulated other comprehensive loss
|
(24,953
|
)
|
|
(27,009
|
)
|
||
Accumulated deficit
|
(728,407
|
)
|
|
(729,954
|
)
|
||
Total shareholders’ equity
|
2,106,970
|
|
|
2,091,808
|
|
||
Total liabilities and equity
|
$
|
2,760,068
|
|
|
$
|
2,766,619
|
|
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For the three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Revenues:
|
|
|
|
||||
Revenue from services
|
$
|
255,286
|
|
|
$
|
252,522
|
|
Revenue from products
|
22,231
|
|
|
19,899
|
|
||
Revenue from transfer of intellectual property and other
|
18,579
|
|
|
18,616
|
|
||
Total revenues
|
296,096
|
|
|
291,037
|
|
||
Costs and expenses:
|
|
|
|
||||
Cost of service revenue
|
139,966
|
|
|
137,597
|
|
||
Cost of product revenue
|
14,830
|
|
|
9,939
|
|
||
Selling, general and administrative
|
136,685
|
|
|
128,001
|
|
||
Research and development
|
26,022
|
|
|
27,822
|
|
||
Contingent consideration
|
2,371
|
|
|
1,753
|
|
||
Amortization of intangible assets
|
17,929
|
|
|
13,443
|
|
||
Total costs and expenses
|
337,803
|
|
|
318,555
|
|
||
Operating loss
|
(41,707
|
)
|
|
(27,518
|
)
|
||
Other income and (expense), net:
|
|
|
|
||||
Interest income
|
249
|
|
|
43
|
|
||
Interest expense
|
(1,429
|
)
|
|
(1,787
|
)
|
||
Fair value changes of derivative instruments, net
|
4,037
|
|
|
(1,423
|
)
|
||
Other income (expense), net
|
3,042
|
|
|
546
|
|
||
Other income and (expense), net
|
5,899
|
|
|
(2,621
|
)
|
||
Loss before income taxes and investment losses
|
(35,808
|
)
|
|
(30,139
|
)
|
||
Income tax benefit
|
6,944
|
|
|
20,506
|
|
||
Net loss before investment losses
|
(28,864
|
)
|
|
(9,633
|
)
|
||
Loss from investments in investees
|
(2,131
|
)
|
|
(2,345
|
)
|
||
Net loss
|
$
|
(30,995
|
)
|
|
$
|
(11,978
|
)
|
Loss per share, basic and diluted:
|
|
|
|
||||
Net loss per share
|
$
|
(0.06
|
)
|
|
$
|
(0.02
|
)
|
Weighted average common shares outstanding, basic and diluted
|
558,434,153
|
|
|
545,823,434
|
|
|
For the three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net loss
|
$
|
(30,995
|
)
|
|
$
|
(11,978
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Change in foreign currency translation and other comprehensive income
|
2,592
|
|
|
6,943
|
|
||
Available for sale investments:
|
|
|
|
||||
Change in unrealized loss, net of tax
|
(536
|
)
|
|
(1,516
|
)
|
||
Comprehensive loss
|
$
|
(28,939
|
)
|
|
$
|
(6,551
|
)
|
|
For the three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(30,995
|
)
|
|
$
|
(11,978
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
25,730
|
|
|
22,199
|
|
||
Non-cash interest
|
640
|
|
|
749
|
|
||
Amortization of deferred financing costs
|
56
|
|
|
37
|
|
||
Losses from investments in investees
|
2,131
|
|
|
2,345
|
|
||
Equity-based compensation – employees and non-employees
|
9,693
|
|
|
17,307
|
|
||
Realized loss (gain) on equity securities and disposal of fixed assets
|
(2,997
|
)
|
|
—
|
|
||
Change in fair value of derivative instruments
|
(4,037
|
)
|
|
1,423
|
|
||
Change in fair value of contingent consideration
|
2,371
|
|
|
1,753
|
|
||
Deferred income tax benefit
|
(9,236
|
)
|
|
(22,244
|
)
|
||
Changes in assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Accounts receivable, net
|
(17,771
|
)
|
|
(9,924
|
)
|
||
Inventory, net
|
(50
|
)
|
|
(152
|
)
|
||
Other current assets and prepaid expenses
|
4,692
|
|
|
(6,883
|
)
|
||
Other assets
|
(235
|
)
|
|
1,447
|
|
||
Accounts payable
|
19,539
|
|
|
(349
|
)
|
||
Foreign currency measurement
|
(69
|
)
|
|
(253
|
)
|
||
Deferred revenue
|
(17,357
|
)
|
|
(17,809
|
)
|
||
Accrued expenses and other liabilities
|
(16,024
|
)
|
|
13,126
|
|
||
Net cash used in operating activities
|
(33,919
|
)
|
|
(9,206
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Investments in investees
|
—
|
|
|
(250
|
)
|
||
Purchase of marketable securities
|
—
|
|
|
—
|
|
||
Proceeds from the sale of property, plant and equipment
|
3,095
|
|
|
—
|
|
||
Capital expenditures
|
(9,537
|
)
|
|
(9,812
|
)
|
||
Net cash used in investing activities
|
(6,442
|
)
|
|
(10,062
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the exercise of Common Stock options and warrants
|
1,866
|
|
|
2,154
|
|
||
Borrowings on lines of credit
|
7,825
|
|
|
5,248
|
|
||
Repayments of lines of credit
|
(7,517
|
)
|
|
(7,349
|
)
|
||
Net cash provided by financing activities
|
2,174
|
|
|
53
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
506
|
|
|
590
|
|
||
Net decrease in cash and cash equivalents
|
(37,681
|
)
|
|
(18,625
|
)
|
||
Cash and cash equivalents at beginning of period
|
168,733
|
|
|
193,598
|
|
||
Cash and cash equivalents at end of period
|
$
|
131,052
|
|
|
$
|
174,973
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
||||
Interest paid
|
$
|
550
|
|
|
$
|
623
|
|
Income taxes paid, net
|
$
|
848
|
|
|
$
|
1,505
|
|
Non-cash financing:
|
|
|
|
||||
Shares issued upon the conversion of:
|
|
|
|
||||
Common Stock options and warrants, surrendered in net exercise
|
$
|
696
|
|
|
$
|
35
|
|
Issuance of capital stock to acquire or contingent consideration settlement:
|
|
|
|
||||
OPKO Health Europe
|
$
|
—
|
|
|
$
|
313
|
|
|
|
|
|
||||
|
|
|
|
(In thousands)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Accounts receivable, net
|
|
|
|
||||
Accounts receivable
|
$
|
283,780
|
|
|
$
|
256,552
|
|
Less: allowance for doubtful accounts
|
(44,887
|
)
|
|
(36,268
|
)
|
||
|
$
|
238,893
|
|
|
$
|
220,284
|
|
Inventories, net
|
|
|
|
||||
Consumable supplies
|
$
|
23,920
|
|
|
$
|
23,448
|
|
Finished products
|
19,733
|
|
|
16,143
|
|
||
Work in-process
|
4,368
|
|
|
3,896
|
|
||
Raw materials
|
5,500
|
|
|
4,686
|
|
||
Less: inventory reserve
|
(6,029
|
)
|
|
(945
|
)
|
||
|
$
|
47,492
|
|
|
$
|
47,228
|
|
Other current assets and prepaid expenses
|
|
|
|
||||
Taxes recoverable
|
16,391
|
|
|
16,187
|
|
||
Other receivables
|
12,509
|
|
|
13,021
|
|
||
Prepaid supplies
|
7,630
|
|
|
6,952
|
|
||
Prepaid insurance
|
2,117
|
|
|
3,688
|
|
||
Other
|
3,848
|
|
|
7,508
|
|
||
|
$
|
42,495
|
|
|
$
|
47,356
|
|
Intangible assets, net:
|
|
|
|
||||
Customer relationships
|
$
|
444,091
|
|
|
$
|
443,560
|
|
Technologies
|
340,455
|
|
|
340,397
|
|
||
Trade names
|
50,458
|
|
|
50,442
|
|
||
Licenses
|
23,520
|
|
|
23,506
|
|
||
Covenants not to compete
|
16,355
|
|
|
16,348
|
|
||
Product registrations
|
8,040
|
|
|
7,641
|
|
||
Other
|
5,345
|
|
|
5,289
|
|
||
Less: accumulated amortization
|
(141,610
|
)
|
|
(123,207
|
)
|
||
|
$
|
746,654
|
|
|
$
|
763,976
|
|
Accrued expenses:
|
|
|
|
||||
Deferred revenue
|
$
|
73,862
|
|
|
$
|
73,434
|
|
Employee benefits
|
43,032
|
|
|
43,792
|
|
||
Clinical trials
|
6,920
|
|
|
5,935
|
|
||
Taxes payable
|
3,391
|
|
|
4,430
|
|
||
Contingent consideration
|
303
|
|
|
259
|
|
||
Capital leases short-term
|
3,329
|
|
|
3,025
|
|
||
Milestone payment
|
4,916
|
|
|
4,865
|
|
||
Professional fees
|
4,418
|
|
|
4,035
|
|
||
Other
|
38,695
|
|
|
58,180
|
|
||
|
$
|
178,866
|
|
|
$
|
197,955
|
|
|
|
|
|
(In thousands)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred revenue
|
$
|
71,241
|
|
|
$
|
89,016
|
|
Line of credit
|
39,242
|
|
|
38,809
|
|
||
Contingent consideration
|
47,149
|
|
|
44,817
|
|
||
Mortgages and other debts payable
|
1,462
|
|
|
717
|
|
||
Capital leases long-term
|
8,483
|
|
|
7,216
|
|
||
Other
|
21,999
|
|
|
21,908
|
|
||
|
$
|
189,576
|
|
|
$
|
202,483
|
|
|
2017
|
||||||||||
(In thousands)
|
Balance at January 1
|
|
Foreign exchange and other
|
|
Balance at March 31st
|
||||||
Pharmaceuticals
|
|
|
|
|
|
||||||
CURNA
|
$
|
4,827
|
|
|
$
|
—
|
|
|
$
|
4,827
|
|
EirGen
|
78,358
|
|
|
1,206
|
|
|
79,564
|
|
|||
FineTech
|
11,698
|
|
|
—
|
|
|
11,698
|
|
|||
OPKO Chile
|
4,785
|
|
|
46
|
|
|
4,831
|
|
|||
OPKO Biologics
|
139,784
|
|
|
—
|
|
|
139,784
|
|
|||
OPKO Health Europe
|
6,936
|
|
|
107
|
|
|
7,043
|
|
|||
OPKO Renal
|
2,069
|
|
|
—
|
|
|
2,069
|
|
|||
Transition Therapeutics
|
3,360
|
|
|
28
|
|
|
3,388
|
|
|||
|
|
|
|
|
|
||||||
Diagnostics
|
|
|
|
|
|
||||||
BioReference
|
401,821
|
|
|
—
|
|
|
401,821
|
|
|||
OPKO Diagnostics
|
17,977
|
|
|
—
|
|
|
17,977
|
|
|||
OPKO Lab
|
32,988
|
|
|
—
|
|
|
32,988
|
|
|||
|
$
|
704,603
|
|
|
$
|
1,387
|
|
|
$
|
705,990
|
|
(In thousands)
|
|
Transition Therapeutics
|
||
Cash and cash equivalents
|
|
$
|
15,878
|
|
IPR&D assets
|
|
41,000
|
|
|
Goodwill
|
|
3,453
|
|
|
Other assets
|
|
634
|
|
|
Accounts payable and other liabilities
|
|
(1,035
|
)
|
|
Deferred tax liability
|
|
(1,400
|
)
|
|
Total purchase price
|
|
$
|
58,530
|
|
(In thousands)
|
Embedded conversion option
|
|
2033 Senior Notes
|
|
Discount
|
|
Debt Issuance Cost
|
|
Total
|
||||||||||
Balance at December 31, 2016
|
$
|
16,736
|
|
|
$
|
31,850
|
|
|
$
|
(4,612
|
)
|
|
$
|
(273
|
)
|
|
$
|
43,701
|
|
Amortization of debt discount and debt issuance costs
|
—
|
|
|
—
|
|
|
492
|
|
|
37
|
|
|
529
|
|
|||||
Change in fair value of embedded derivative
|
(4,945
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,945
|
)
|
|||||
Balance at March 31, 2017
|
$
|
11,791
|
|
|
$
|
31,850
|
|
|
$
|
(4,120
|
)
|
|
$
|
(236
|
)
|
|
$
|
39,285
|
|
|
March 31, 2017
|
Stock price
|
$8.00
|
Conversion Rate
|
141.4827
|
Conversion Price
|
$7.07
|
Maturity date
|
February 1, 2033
|
Risk-free interest rate
|
1.23%
|
Estimated stock volatility
|
49%
|
Estimated credit spread
|
620 basis points
|
(In thousands)
|
March 31, 2017
|
||
Fair value of 2033 Senior Notes:
|
|
||
With the embedded derivatives
|
$
|
41,329
|
|
Without the embedded derivatives
|
$
|
29,538
|
|
Estimated fair value of the embedded derivatives
|
$
|
11,791
|
|
(Dollars in thousands)
|
|
|
|
|
|
Balance Outstanding
|
||||||||
Lender
|
|
Interest rate on
borrowings at March 31, 2017
|
|
Credit line
capacity
|
|
March 31,
2017 |
|
December 31,
2016
|
||||||
JPMorgan Chase
|
|
2.74%
|
|
$
|
175,000
|
|
|
$
|
39,242
|
|
|
$
|
38,809
|
|
Itau Bank
|
|
5.50%
|
|
1,450
|
|
|
395
|
|
|
419
|
|
|||
Bank of Chile
|
|
6.60%
|
|
2,500
|
|
|
1,566
|
|
|
1,619
|
|
|||
BICE Bank
|
|
5.50%
|
|
2,000
|
|
|
592
|
|
|
1,538
|
|
|||
BBVA Bank
|
|
5.50%
|
|
2,300
|
|
|
686
|
|
|
1,063
|
|
|||
Security Bank
|
|
N/A
|
|
N/A
|
|
|
—
|
|
|
—
|
|
|||
Estado Bank
|
|
5.50%
|
|
2,400
|
|
|
2,010
|
|
|
1,870
|
|
|||
Santander Bank
|
|
5.50%
|
|
3,000
|
|
|
2,266
|
|
|
1,196
|
|
|||
Scotiabank
|
|
5.00%
|
|
1,300
|
|
|
864
|
|
|
789
|
|
|||
Corpbanca
|
|
5.00%
|
|
500
|
|
|
—
|
|
|
18
|
|
|||
Banco Bilbao Vizcaya
|
|
2.90%
|
|
267
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
|
|
$
|
190,717
|
|
|
$
|
47,621
|
|
|
$
|
47,321
|
|
(In thousands)
|
March 31,
2017 |
|
December 31,
2016
|
||||
Current portion of notes payable
|
$
|
3,361
|
|
|
$
|
3,681
|
|
Other long-term liabilities
|
2,022
|
|
|
2,090
|
|
||
Total
|
$
|
5,383
|
|
|
$
|
5,771
|
|
(In thousands)
|
Foreign
currency
|
|
Unrealized
gain (loss) in
Accumulated
OCI
|
|
Total
|
||||||
Balance at December 31, 2016
|
$
|
(28,128
|
)
|
|
$
|
1,119
|
|
|
$
|
(27,009
|
)
|
Other comprehensive income (loss) before reclassifications
|
2,592
|
|
|
(536
|
)
|
|
2,056
|
|
|||
Net other comprehensive loss
|
2,592
|
|
|
(536
|
)
|
|
2,056
|
|
|||
Balance at March 31, 2017
|
$
|
(25,536
|
)
|
|
$
|
583
|
|
|
$
|
(24,953
|
)
|
|
As of March 31, 2017
|
||||||||||||||
(In thousands)
|
Amortized
Cost
|
|
Gross
unrealized
gains in
Accumulated
OCI
|
|
Gross
unrealized
losses in
Accumulated
OCI
|
|
Fair
value
|
||||||||
Common stock investments, available for sale
|
$
|
3,409
|
|
|
$
|
671
|
|
|
$
|
(88
|
)
|
|
$
|
3,992
|
|
Total assets
|
$
|
3,409
|
|
|
$
|
671
|
|
|
$
|
(88
|
)
|
|
$
|
3,992
|
|
|
As of December 31, 2016
|
||||||||||||||
(In thousands)
|
Amortized
Cost
|
|
Gross
unrealized
gains in
Accumulated
OCI
|
|
Gross
unrealized
losses in
Accumulated
OCI
|
|
Fair
value
|
||||||||
Common stock investments, available for sale
|
$
|
3,409
|
|
|
$
|
1,313
|
|
|
$
|
(194
|
)
|
|
$
|
4,528
|
|
Total assets
|
$
|
3,409
|
|
|
$
|
1,313
|
|
|
$
|
(194
|
)
|
|
$
|
4,528
|
|
|
Fair value measurements as of March 31, 2017
|
||||||||||||||
(In thousands)
|
Quoted
prices in
active
markets for
identical
assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
4,016
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,016
|
|
Common stock investments, available for sale
|
3,992
|
|
|
—
|
|
|
—
|
|
|
3,992
|
|
||||
Common stock options/warrants
|
—
|
|
|
3,072
|
|
|
—
|
|
|
3,072
|
|
||||
Forward contracts
|
—
|
|
|
47
|
|
|
—
|
|
|
47
|
|
||||
Total assets
|
$
|
8,008
|
|
|
$
|
3,119
|
|
|
$
|
—
|
|
|
$
|
11,127
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Embedded conversion option
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,791
|
|
|
$
|
11,791
|
|
Contingent consideration
|
—
|
|
|
—
|
|
|
47,452
|
|
|
47,452
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
59,243
|
|
|
$
|
59,243
|
|
|
Fair value measurements as of December 31, 2016
|
||||||||||||||
(In thousands)
|
Quoted
prices in
active
markets for
identical
assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
5,314
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,314
|
|
Common stock investments, available for sale
|
4,528
|
|
|
—
|
|
|
—
|
|
|
4,528
|
|
||||
Common stock options/warrants
|
—
|
|
|
4,017
|
|
|
—
|
|
|
4,017
|
|
||||
Forward contracts
|
—
|
|
|
39
|
|
|
—
|
|
|
39
|
|
||||
Total assets
|
$
|
9,842
|
|
|
$
|
4,056
|
|
|
$
|
—
|
|
|
$
|
13,898
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Embedded conversion option
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
16,736
|
|
|
$
|
16,736
|
|
Contingent consideration
|
—
|
|
|
—
|
|
|
45,076
|
|
|
45,076
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
61,812
|
|
|
$
|
61,812
|
|
|
March 31, 2017
|
||||||||||||||||||
(In thousands)
|
Carrying
Value
|
|
Total
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
2033 Senior Notes
|
$
|
27,494
|
|
|
$
|
29,538
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
29,538
|
|
|
March 31, 2017
|
||||||
(In thousands)
|
Contingent
consideration
|
|
Embedded
conversion
option
|
||||
Balance at December 31, 2016
|
$
|
45,076
|
|
|
$
|
16,736
|
|
Total losses for the period:
|
|
|
|
||||
Included in results of operations
|
2,371
|
|
|
(4,945
|
)
|
||
Foreign currency impact
|
5
|
|
|
—
|
|
||
Balance at March 31, 2017
|
$
|
47,452
|
|
|
$
|
11,791
|
|
(In thousands)
|
Balance Sheet Component
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Derivative financial instruments:
|
|
|
|
|
|
||||
Common Stock options/warrants
|
Investments, net
|
|
$
|
3,072
|
|
|
$
|
4,017
|
|
Embedded conversion option
|
2033 Senior Notes, net of discount and estimated fair value of embedded derivatives
|
|
$
|
11,791
|
|
|
$
|
16,736
|
|
Forward contracts
|
Unrealized gains on forward contracts are recorded in Other current assets and prepaid expenses. Unrealized (losses) on forward contracts are recorded in Accrued expenses.
|
|
$
|
47
|
|
|
$
|
39
|
|
|
Three months ended March 31,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Derivative gain (loss):
|
|
|
|
||||
Common Stock options/warrants
|
$
|
(955
|
)
|
|
$
|
(986
|
)
|
2033 Senior Notes
|
4,945
|
|
|
(138
|
)
|
||
Forward contracts
|
47
|
|
|
(299
|
)
|
||
Total
|
$
|
4,037
|
|
|
$
|
(1,423
|
)
|
|
For the three months ended March 31,
|
||||||
(In thousands)
|
2017
|
|
2016
|
||||
Revenue from services:
|
|
|
|
||||
Pharmaceutical
|
$
|
—
|
|
|
$
|
—
|
|
Diagnostics
|
255,286
|
|
|
252,522
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
255,286
|
|
|
$
|
252,522
|
|
Revenue from products:
|
|
|
|
||||
Pharmaceutical
|
$
|
22,231
|
|
|
$
|
19,899
|
|
Diagnostics
|
—
|
|
|
—
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
22,231
|
|
|
$
|
19,899
|
|
Revenue from transfer of intellectual property:
|
|
|
|
||||
Pharmaceutical
|
$
|
18,579
|
|
|
$
|
18,616
|
|
Diagnostics
|
—
|
|
|
—
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
18,579
|
|
|
$
|
18,616
|
|
Operating (loss) income:
|
|
|
|
||||
Pharmaceutical
|
$
|
(22,637
|
)
|
|
$
|
(1,330
|
)
|
Diagnostics
|
(3,101
|
)
|
|
(2,355
|
)
|
||
Corporate
|
(15,969
|
)
|
|
(23,833
|
)
|
||
|
$
|
(41,707
|
)
|
|
$
|
(27,518
|
)
|
Depreciation and amortization:
|
|
|
|
||||
Pharmaceutical
|
$
|
6,775
|
|
|
$
|
2,861
|
|
Diagnostics
|
18,925
|
|
|
19,320
|
|
||
Corporate
|
30
|
|
|
18
|
|
||
|
$
|
25,730
|
|
|
$
|
22,199
|
|
Loss from investment in investees:
|
|
|
|
||||
Pharmaceutical
|
$
|
(1,814
|
)
|
|
$
|
(2,050
|
)
|
Diagnostics
|
(317
|
)
|
|
(295
|
)
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
(2,131
|
)
|
|
$
|
(2,345
|
)
|
Revenues:
|
|
|
|
||||
United States
|
$
|
255,641
|
|
|
$
|
252,438
|
|
Ireland
|
20,717
|
|
|
22,144
|
|
||
Chile
|
10,121
|
|
|
6,983
|
|
||
Spain
|
4,505
|
|
|
4,023
|
|
||
Israel
|
4,217
|
|
|
4,743
|
|
||
Mexico
|
865
|
|
|
706
|
|
||
Other
|
30
|
|
|
—
|
|
||
|
$
|
296,096
|
|
|
$
|
291,037
|
|
(In thousands)
|
March 31,
2017 |
|
December 31,
2016 |
||||
Assets:
|
|
|
|
||||
Pharmaceutical
|
$
|
1,286,571
|
|
|
$
|
1,294,916
|
|
Diagnostics
|
1,345,894
|
|
|
1,408,522
|
|
||
Corporate
|
127,603
|
|
|
63,181
|
|
||
|
$
|
2,760,068
|
|
|
$
|
2,766,619
|
|
Goodwill:
|
|
|
|
||||
Pharmaceutical
|
$
|
253,204
|
|
|
$
|
251,817
|
|
Diagnostics
|
452,786
|
|
|
452,786
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
705,990
|
|
|
$
|
704,603
|
|
Revenues
|
For the three months ended March 31,
|
|
|
||||||||
(In thousands)
|
2017
|
|
2016
|
|
Change
|
||||||
Revenue from services
|
$
|
255,286
|
|
|
$
|
252,522
|
|
|
$
|
2,764
|
|
Revenue from products
|
22,231
|
|
|
19,899
|
|
|
2,332
|
|
|||
Revenue from transfer of intellectual property and other
|
18,579
|
|
|
18,616
|
|
|
(37
|
)
|
|||
Total revenues
|
$
|
296,096
|
|
|
$
|
291,037
|
|
|
$
|
5,059
|
|
Cost of Revenue
|
For the three months ended March 31,
|
|
|
|||||||
(In thousands)
|
2017
|
2016
|
|
Change
|
||||||
Cost of service revenue
|
$
|
139,966
|
|
$
|
137,597
|
|
|
$
|
2,369
|
|
Cost of product revenue
|
14,830
|
|
9,939
|
|
|
4,891
|
|
|||
Total cost of revenue
|
$
|
154,796
|
|
$
|
147,536
|
|
|
$
|
7,260
|
|
Research and Development Expenses
|
For the three months ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
External expenses:
|
|
|
|
||||
Phase 3 clinical trials
|
$
|
4,614
|
|
|
$
|
2,843
|
|
Manufacturing expense for biological products
|
6,394
|
|
|
10,555
|
|
||
Earlier-stage programs
|
1,994
|
|
|
1,196
|
|
||
Research and development employee-related expenses
|
6,666
|
|
|
6,700
|
|
||
Other internal research and development expenses
|
6,889
|
|
|
7,329
|
|
||
Third-party grants and funding from collaboration agreements
|
(535
|
)
|
|
(801
|
)
|
||
Total research and development expenses
|
$
|
26,022
|
|
|
$
|
27,822
|
|
Contractual obligations
(In thousands)
|
|
Remaining nine months ending December 31,
2017 |
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
|
Total
|
||||||||||||||
Open purchase orders
|
|
$
|
80,366
|
|
|
$
|
2,285
|
|
|
$
|
5
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
82,665
|
|
Operating leases
|
|
14,946
|
|
|
15,972
|
|
|
13,236
|
|
|
8,336
|
|
|
5,747
|
|
|
6,594
|
|
|
64,831
|
|
|||||||
Capital leases
|
|
2,572
|
|
|
3,086
|
|
|
2,613
|
|
|
1,916
|
|
|
977
|
|
|
649
|
|
|
11,813
|
|
|||||||
2033 Senior Notes
|
|
—
|
|
|
—
|
|
|
31,850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,850
|
|
|||||||
Deferred payments
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|||||||
Mortgages and other debts payable
|
|
3,261
|
|
|
366
|
|
|
360
|
|
|
360
|
|
|
360
|
|
|
676
|
|
|
5,383
|
|
|||||||
Lines of credit
|
|
8,379
|
|
|
—
|
|
|
—
|
|
|
39,242
|
|
|
—
|
|
|
—
|
|
|
47,621
|
|
|||||||
Severance payments
|
|
13,316
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,316
|
|
|||||||
Interest commitments
|
|
766
|
|
|
1,012
|
|
|
206
|
|
|
34
|
|
|
34
|
|
|
19
|
|
|
2,071
|
|
|||||||
Total
|
|
$
|
128,606
|
|
|
$
|
27,721
|
|
|
$
|
53,270
|
|
|
$
|
49,897
|
|
|
$
|
7,118
|
|
|
$
|
7,938
|
|
|
$
|
274,550
|
|
•
|
Unit of account – Most intangible assets are valued as single global assets rather than multiple assets for each jurisdiction or indication after considering the development stage, expected levels of incremental costs to obtain additional approvals, risks associated with further development, amount and timing of benefits expected to be derived in the future, expected patent lives in various jurisdictions and the intention to promote the asset as a global brand.
|
•
|
Estimated useful life – The asset life expected to contribute meaningful cash flows is determined after considering all pertinent matters associated with the asset, including expected regulatory approval dates (if unapproved), exclusivity periods and other legal, regulatory or contractual provisions as well as the effects of any obsolescence, demand, competition, and other economic factors, including barriers to entry.
|
•
|
Probability of Technical and Regulatory Success (“PTRS”) Rate – PTRS rates are determined based upon industry averages considering the respective program’s development stage and disease indication and adjusted for specific information or data known at the acquisition date. Subsequent clinical results or other internal or external data obtained could alter the PTRS rate and materially impact the estimated fair value of the intangible asset in subsequent periods leading to impairment charges.
|
•
|
Projections – Future revenues are estimated after considering many factors such as initial market opportunity, pricing, sales trajectories to peak sales levels, competitive environment and product evolution. Future costs and expenses are estimated after considering historical market trends, market participant synergies and the timing and level of additional development costs to obtain the initial or additional regulatory approvals, maintain or further enhance the product. We generally assume initial positive cash flows to commence shortly after the receipt of expected regulatory approvals which typically may not occur for a number of years. Actual cash flows attributed to the project are likely to be different than those assumed since projections are subjected to multiple factors including trial results and regulatory matters which could materially change the ultimate commercial success of the asset as well as significantly alter the costs to develop the respective asset into commercially viable products.
|
•
|
Tax rates – The expected future income is tax effected using a market participant tax rate. In determining the tax rate, we consider the jurisdiction in which the intellectual property is held and location of research and manufacturing infrastructure. We also consider that any repatriation of earnings would likely have U.S. tax consequences.
|
•
|
Discount rate – Discount rates are selected after considering the risks inherent in the future cash flows; the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry, as well as expected changes in standards of practice for indications addressed by the asset.
|
Exhibit 3.1
(1)
|
Amended and Restated Certificate of Incorporation.
|
Exhibit 3.2
(2)
|
Amended and Restated By-Laws.
|
Exhibit 3.3
(3)
|
Certificate of Designation of Series D Preferred Stock.
|
Exhibit 4.3
(4)
|
Indenture, dated as of January 30, 2013, between OPKO Health, Inc. and Wells Fargo Bank, National Association.
|
Exhibit 31.1
|
Certification by Phillip Frost, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
Exhibit 31.2
|
Certification by Adam Logal, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
Exhibit 32.1
|
Certification by Phillip Frost, Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
Exhibit 32.2
|
Certification by Adam Logal, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
Exhibit 10.21
(5)
|
Amendment No. 3 to Credit Agreement, dated as of March 17, 2017, among BioReference Laboratories, Inc. and certain of its subsidiaries and JPMorgan Chase Bank, N.A.
|
Exhibit 101.INS
|
XBRL Instance Document
|
Exhibit 101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Exhibit 101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Exhibit 101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Exhibit 101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Exhibit 101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
(1)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2013 for the Company’s three month period ended September 30, 2013, and incorporated herein by reference.
|
(2)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2008, and incorporated herein by reference.
|
(3)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 24, 2009, and incorporated herein by reference.
|
(4)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2013, and incorporated herein by reference.
|
(5)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 23, 2017, and incorporated herein by reference.
|
Date: May 9, 2017
|
|
OPKO Health, Inc.
|
|
|
|
|
|
/s/ Adam Logal
|
|
|
Adam Logal
|
|
|
Senior Vice President, Chief Financial Officer,
|
|
|
Chief Accounting Officer and Treasurer
|
Exhibit Number
|
Description
|
|
|
Exhibit 31.1
|
Certification by Phillip Frost, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
|
|
Exhibit 31.2
|
Certification by Adam Logal, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
|
|
Exhibit 32.1
|
Certification by Phillip Frost, Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
|
|
Exhibit 32.2
|
Certification by Adam Logal, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2017.
|
|
|
Exhibit 101.INS
|
XBRL Instance Document
|
|
|
Exhibit 101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
Exhibit 101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
Exhibit 101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
Exhibit 101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
Exhibit 101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
1 Year Opko Health Chart |
1 Month Opko Health Chart |
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