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OPKO Health (OPK) Q2 Earnings and Revenues Beat Estimates

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OPKO Health, Inc. (OPK - Free Report) incurred adjusted loss of 10 cents per share in the second quarter of 2019, narrower than the Zacks Consensus Estimate of a loss of 11 cents. The company had incurred a loss of 4 cents per share a year ago.

Second-quarter revenues of this Zacks Rank #4 (Sell) company totaled $226.4 million, which surpassed the Zacks Consensus Estimate of $223.9 million. Further, the top line declined 14.1% on a year-over-year basis.

Segmental Revenues in Q2

Revenues from Services grossed $178.5 million in the reported quarter, down 17.4% year over year.

Revenues from Products inched up 0.7% to $28.7 million. Per management, revenues from products include $5.7 million contributions from RAYALDEE.

Revenues from Transfer of intellectual property came in at $19.2 million, up 0.5% year over year.

OPKO Health, Inc. Price, Consensus and EPS Surprise

OPKO Health, Inc. Price, Consensus and EPS Surprise

OPKO Health, Inc. price-consensus-eps-surprise-chart | OPKO Health, Inc. Quote

RAYALDEE Update

Per management, total RAYALDEE prescriptions reported by IQVIA improved 92% year over year in the second 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 $82.2 million, down 27.6% from the prior-year quarter. Gross margin was 36.3% of net revenues, down a significant 680 basis points (bps) year over year.

Selling, general and administrative expenses totaled $88.5 million, up 0.9% year over year. Research and development expenses amounted to $28.3 million, down 3.1% year over year.  

Operating loss in the second quarter was $47.2 million, much wider than the year-ago quarter’s loss of $5.1 million.

Guidance

OPKO Health did not issue any guidance. However, the company expects improved cash contributions and financial performance owing to RAYALDEE strength in the second half of 2019.

Summing Up

OPKO Health exited the second quarter on a strong note. Contribution from RAYALDEE has been significant in the quarter under review. Further, OPKO Health’s utilization of the 4Kscore remains strong, with nearly 18,800 tests registered in the second 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 will likely lend OPKO Health a competitive advantage.

Meanwhile, the company’s gross margin is quite pressed at the moment. Moreover, the quarterly revenues dropped on a year-over-year basis. Sluggishness in the Services revenue segment remains a concern. Also, OPKO Health faces cut-throat competition in the MedTech space.

Earnings of MedTech Majors at a Glance

A few top-ranked companies, which posted solid results this earnings season, are Stryker Corporation (SYK - Free Report) , Baxter International Inc. (BAX - Free Report) and Intuitive Surgical, Inc. (ISRG - Free Report) . While Stryker and Baxter each carry a Zacks Rank #2 (Buy), Intuitive Surgical sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Stryker delivered second-quarter 2019 adjusted EPS of $1.98, beating the Zacks Consensus Estimate by 2.6%. Its revenues of $3.65 billion surpassed the Zacks Consensus Estimate by 1.4%.

Baxter delivered second-quarter 2019 adjusted EPS of 89 cents, which surpassed the Zacks Consensus Estimate of 81 cents by 9.9%. Its revenues of $2.84 billion outpaced the consensus estimate of $2.79 billion by 1.9%.

Intuitive Surgical reported second-quarter 2019 adjusted EPS of $3.25, which beat the Zacks Consensus Estimate of $2.85. Its revenues of $1.1 billion surpassed the Zacks Consensus Estimate of $1.03 billion.

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