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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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(in Rule 12b-2 of the Exchange Act) (Check one):
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Large accelerated filer
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¨
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Accelerated filer
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ý
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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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Page
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EX-3.1
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Amended and Restated Certificate of Incorporation
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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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•
|
We have a history of operating losses and we do not expect to become profitable in the near future.
|
•
|
Our technologies are in an early stage of development and are unproven.
|
•
|
Our business is substantially dependent on our ability to develop, launch and generate revenue from our pharmaceutical and diagnostic programs.
|
•
|
Our research and development activities, or that of our investees, may not result in commercially viable products.
|
•
|
The results of previous clinical trials may not be predictive of future results, and our current and planned clinical trials may not satisfy the requirements of the United States ("U.S.") Food and Drug Administration ("FDA") or other non-U.S. regulatory authorities.
|
•
|
We may require substantial additional funding, which may not be available to us on acceptable terms, or at all.
|
•
|
We may finance future cash needs primarily through public or private offerings, debt financings or strategic collaborations, which may dilute your stockholdings in the Company.
|
•
|
If our competitors develop and market products that are more effective, safer or less expensive than our future product candidates, our commercial opportunities will be negatively impacted.
|
•
|
The regulatory approval process is expensive, time consuming and uncertain and may prevent us or our collaboration partners from obtaining approvals for the commercialization of some or all of our product candidates.
|
•
|
Failure to recruit and enroll patients for clinical trials may cause the development of our product candidates to be delayed.
|
•
|
Even if we obtain regulatory approvals for our product candidates, the terms of approvals and ongoing regulation of our products may limit how we manufacture and market our product candidates, which could materially impair our ability to generate anticipated revenues.
|
•
|
We may not meet regulatory quality standards applicable to our manufacturing and quality processes.
|
•
|
Even if we receive regulatory approval to market our product candidates, the market may not be receptive to our products.
|
•
|
The loss of Phillip Frost, M.D., our Chairman and Chief Executive Officer, could have a material adverse effect on our business and product development.
|
•
|
If we fail to attract and retain key management and scientific personnel, we may be unable to successfully develop or commercialize our product candidates.
|
•
|
In the event that we successfully evolve from a company primarily involved in development to a company also involved in commercialization, we may encounter difficulties in managing our growth and expanding our operations successfully.
|
•
|
If we fail to acquire and develop other products or product candidates, at all or on commercially reasonable terms, we may be unable to diversify or grow our business.
|
•
|
We have no experience manufacturing our pharmaceutical product candidates other than at our Israeli, Mexican, and Spanish facilities, and we have no experience in manufacturing our diagnostic product candidates. We will therefore likely rely on third parties to manufacture and supply our pharmaceutical and diagnostics product candidates, and we would need to meet various standards to satisfy FDA regulations in order to manufacture on our own.
|
•
|
We currently have no pharmaceutical or diagnostic marketing, sales or distribution capabilities other than in Chile, Mexico, Spain, and Brazil for sales in those countries and our active pharmaceutical ingredients (“APIs”) business in Israel, and the sales force for our laboratory business based in Nashville, Tennessee. If we are unable to develop our sales and marketing and distribution capability on our own or through collaborations with marketing partners, we will not be successful in commercializing our pharmaceutical and diagnostic product candidates.
|
•
|
The success of our business will be heavily dependent on the success of ongoing and planned Phase 3 clinical trials for
Rayaldy
TM
,
Alpharen
TM
and hgH-CTP.
|
•
|
Independent clinical investigators and contract research organizations that we engage to conduct our clinical trials may not be diligent, careful or timely.
|
•
|
The success of our business is dependent on the actions of our collaborative partners.
|
•
|
Our license agreement with TESARO, Inc. (“TESARO”) is important to our business. If TESARO does not successfully develop and commercialize rolapitant, our business could be adversely affected.
|
•
|
If we are unable to obtain and enforce patent protection for our products, our business could be materially harmed.
|
•
|
We do not have an exclusive arrangement in place with Dr. Tom Kodadek with respect to technology or intellectual property that may be material to our business.
|
•
|
If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.
|
•
|
We rely heavily on licenses from third parties.
|
•
|
We license patent rights to certain of our technology from third-party owners. If such owners do not properly maintain or enforce the patents underlying such licenses, our competitive position and business prospects will be harmed.
|
•
|
Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.
|
•
|
Adverse results in material litigation matters or governmental inquiries could have a material adverse effect upon our business and financial condition.
|
•
|
Medicare prescription drug coverage legislation and future legislative or regulatory reform of the health care system may affect our ability to sell our products and provide our services profitably.
|
•
|
Failure to obtain and maintain regulatory approval outside the U.S. will prevent us from marketing our product candidates abroad.
|
•
|
We may not have the funding available to pursue acquisitions.
|
•
|
Acquisitions may disrupt our business, distract our management, may not proceed as planned, and may also increase the risk of potential third party claims and litigation.
|
•
|
We may encounter difficulties in integrating acquired businesses.
|
•
|
Non-U.S. governments often impose strict price controls, which may adversely affect our future profitability.
|
•
|
Political and economic instability in Europe and Latin America and political, economic, and military instability in Israel or neighboring countries could adversely impact our operations.
|
•
|
We are subject to fluctuations in currency exchange rates in connection with our international businesses.
|
•
|
We have a large amount of goodwill and other intangible assets as a result of acquisitions and a significant write-down of goodwill and/or other intangible assets would have a material adverse effect on our reported results of operations and net worth.
|
•
|
Our business may become subject to legal, economic, political, regulatory and other risks associated with international operations.
|
•
|
The market price of our Common Stock may fluctuate significantly.
|
•
|
The conversion and redemption features of our January 2013 convertible senior notes due in 2033 are classified embedded derivatives and may continue to result in volatility in our financial statements, including having a material impact on our result of operations and derivative liability recorded.
|
•
|
Directors, executive officers, principal stockholders and affiliated entities own a significant percentage of our capital stock, and they may make decisions that you may not consider to be in your best interests or in the best interests of our stockholders.
|
•
|
Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.
|
•
|
If we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as they apply to us, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned and our Common Stock price may suffer.
|
•
|
We may be unable to maintain our listing on the New York Stock Exchange ("NYSE"), which could cause our stock price to fall and decrease the liquidity of our Common Stock.
|
•
|
Future issuances of Common Stock and hedging activities may depress the trading price of our Common Stock.
|
•
|
Provisions in our charter documents and Delaware law could discourage an acquisition of us by a third party, even if the acquisition would be favorable to you.
|
•
|
We do not intend to pay cash dividends on our Common Stock in the foreseeable future.
|
(1)
|
As of
September 30, 2013
and
December 31, 2012
, total assets include
$5.9 million
and
$5.6 million
, respectively, and total liabilities include
$8.7 million
and
$5.5 million
, respectively related to SciVac Ltd ("SciVac"), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Products
|
$
|
16,563
|
|
|
$
|
11,495
|
|
|
$
|
50,708
|
|
|
$
|
30,051
|
|
Revenue from services
|
2,770
|
|
|
100
|
|
|
9,050
|
|
|
332
|
|
||||
Revenue from transfer of intellectual property
|
1,308
|
|
|
200
|
|
|
16,080
|
|
|
400
|
|
||||
Total revenues
|
20,641
|
|
|
11,795
|
|
|
75,838
|
|
|
30,783
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Costs of revenues
|
11,952
|
|
|
7,487
|
|
|
36,812
|
|
|
19,028
|
|
||||
Selling, general and administrative
|
13,572
|
|
|
7,322
|
|
|
39,875
|
|
|
17,428
|
|
||||
Research and development
|
11,085
|
|
|
3,621
|
|
|
30,552
|
|
|
12,942
|
|
||||
Contingent consideration
|
252
|
|
|
556
|
|
|
4,173
|
|
|
2,665
|
|
||||
Amortization of intangible assets
|
2,790
|
|
|
2,178
|
|
|
8,192
|
|
|
6,277
|
|
||||
Total costs and expenses
|
39,651
|
|
|
21,164
|
|
|
119,604
|
|
|
58,340
|
|
||||
Operating loss from continuing operations
|
(19,010
|
)
|
|
(9,369
|
)
|
|
(43,766
|
)
|
|
(27,557
|
)
|
||||
Other income and (expense), net:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
88
|
|
|
49
|
|
|
237
|
|
|
123
|
|
||||
Interest expense
|
(3,409
|
)
|
|
(393
|
)
|
|
(10,148
|
)
|
|
(975
|
)
|
||||
Fair value changes of derivative instruments, net
|
(27,793
|
)
|
|
169
|
|
|
(38,691
|
)
|
|
1,309
|
|
||||
Other income (expense), net
|
(7,787
|
)
|
|
55
|
|
|
2,571
|
|
|
(30
|
)
|
||||
Other income and (expense), net
|
(38,901
|
)
|
|
(120
|
)
|
|
(46,031
|
)
|
|
427
|
|
||||
Loss from continuing operations before income taxes
and investment losses
|
(57,911
|
)
|
|
(9,489
|
)
|
|
(89,797
|
)
|
|
(27,130
|
)
|
||||
Income tax provision (benefit)
|
1,290
|
|
|
(128
|
)
|
|
2,258
|
|
|
89
|
|
||||
Loss from continuing operations before investment losses
|
(59,201
|
)
|
|
(9,361
|
)
|
|
(92,055
|
)
|
|
(27,219
|
)
|
||||
Loss from investments in investees
|
(1,600
|
)
|
|
(468
|
)
|
|
(7,861
|
)
|
|
(1,464
|
)
|
||||
Loss from continuing operations
|
(60,801
|
)
|
|
(9,829
|
)
|
|
(99,916
|
)
|
|
(28,683
|
)
|
||||
Income from discontinued operations, net of tax
|
—
|
|
|
183
|
|
|
—
|
|
|
183
|
|
||||
Net loss
|
(60,801
|
)
|
|
(9,646
|
)
|
|
(99,916
|
)
|
|
(28,500
|
)
|
||||
Less: Net loss attributable to noncontrolling interests
|
(803
|
)
|
|
—
|
|
|
(2,309
|
)
|
|
—
|
|
||||
Net loss attributable to common shareholders before
preferred stock dividend
|
(59,998
|
)
|
|
(9,646
|
)
|
|
(97,607
|
)
|
|
(28,500
|
)
|
||||
Preferred stock dividend
|
—
|
|
|
(560
|
)
|
|
(420
|
)
|
|
(1,680
|
)
|
||||
Net loss attributable to common shareholders
|
$
|
(59,998
|
)
|
|
$
|
(10,206
|
)
|
|
$
|
(98,027
|
)
|
|
$
|
(30,180
|
)
|
Loss per share, basic and diluted:
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
$
|
(0.17
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.10
|
)
|
Income from discontinued operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss per share
|
$
|
(0.17
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
(0.10
|
)
|
Weighted average number of common shares outstanding,
basic and diluted
|
360,638,527
|
|
|
298,103,882
|
|
|
336,942,515
|
|
|
297,762,469
|
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Net loss attributable to common shareholders
|
$
|
(59,998
|
)
|
|
$
|
(10,206
|
)
|
|
$
|
(98,027
|
)
|
|
$
|
(30,180
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency translation
|
367
|
|
|
1,960
|
|
|
(1,395
|
)
|
|
2,570
|
|
||||
Available for sale investments:
|
|
|
|
|
|
|
|
||||||||
Change in other unrealized gains, net
|
40
|
|
|
322
|
|
|
1,869
|
|
|
5,527
|
|
||||
Less: reclassification adjustments for gains
included in net loss, net of tax
|
—
|
|
|
—
|
|
|
(4,593
|
)
|
|
—
|
|
||||
Comprehensive loss
|
$
|
(59,591
|
)
|
|
$
|
(7,924
|
)
|
|
$
|
(102,146
|
)
|
|
$
|
(22,083
|
)
|
|
Common Stock
|
|
Treasury
|
|
Additional
Paid-In
Capital
|
|
Accumulated Other
Comprehensive
Income
|
|
Accumulated
Deficit
|
|
Noncontrolling
Interests
|
|
Total
|
||||||||||||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
|
|
|||||||||||||||||||||||
Balance at December 31, 2012
|
305,560,763
|
|
|
$
|
3,056
|
|
|
(2,293,056
|
)
|
|
$
|
(7,457
|
)
|
|
$
|
565,201
|
|
|
$
|
7,356
|
|
|
$
|
(388,770
|
)
|
|
$
|
(492
|
)
|
|
$
|
178,894
|
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,411
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,411
|
|
|||||||
Exercise of Common Stock options
|
3,604,783
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
4,399
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,435
|
|
|||||||
Exercise of Common Stock warrants
|
1,213,679
|
|
|
12
|
|
|
—
|
|
|
—
|
|
|
614
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
626
|
|
|||||||
Series D Preferred Stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,015
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,015
|
)
|
|||||||
Conversion of Series D Preferred Stock
|
11,290,320
|
|
|
113
|
|
|
—
|
|
|
—
|
|
|
24,273
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24,386
|
|
|||||||
Conversion of 3.00% convertible senior
notes
|
2,396,145
|
|
|
24
|
|
|
—
|
|
|
—
|
|
|
20,815
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,839
|
|
|||||||
Issuance of Common Stock in connection
with OPKO Brazil acquisition at $6.73
per share
|
64,684
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
435
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
436
|
|
|||||||
Issuance of Common Stock in connection
with Cytochroma acquisition at $7.16
per share
|
20,517,030
|
|
|
205
|
|
|
—
|
|
|
—
|
|
|
146,697
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
146,902
|
|
|||||||
Issuance of Common Stock in connection
with PROLOR acquisition at $8.49 per
share and fair value of stock
options and warrants exchanged
|
63,670,805
|
|
|
637
|
|
|
—
|
|
|
—
|
|
|
586,006
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
586,643
|
|
|||||||
Issuance of Common Stock in connection
with Farmadiet's first Deferred Payment
at $7.52 per share
|
585,703
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
4,399
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,404
|
|
|||||||
Net loss attributable to common
shareholders before preferred stock
dividend
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(97,607
|
)
|
|
—
|
|
|
(97,607
|
)
|
|||||||
Net loss attributable to noncontrolling
interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,309
|
)
|
|
(2,309
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,119
|
)
|
|
—
|
|
|
—
|
|
|
(4,119
|
)
|
|||||||
Balance at September 30, 2013 (unaudited)
|
408,903,912
|
|
|
$
|
4,089
|
|
|
(2,293,056
|
)
|
|
$
|
(7,457
|
)
|
|
$
|
1,357,235
|
|
|
$
|
3,237
|
|
|
$
|
(486,377
|
)
|
|
$
|
(2,801
|
)
|
|
$
|
867,926
|
|
|
For the nine months ended September 30,
|
||||||
|
2013
|
|
2012
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(99,916
|
)
|
|
$
|
(28,500
|
)
|
Income from discontinued operations, net of tax
|
—
|
|
|
(183
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
10,648
|
|
|
7,447
|
|
||
Non-cash interest on convertible senior notes
|
4,250
|
|
|
—
|
|
||
Amortization of deferred financing costs
|
993
|
|
|
—
|
|
||
Losses from investments in investees
|
7,861
|
|
|
1,464
|
|
||
Equity-based compensation – employees and non-employees
|
7,411
|
|
|
3,281
|
|
||
Provision for bad debts
|
810
|
|
|
11
|
|
||
Provision for inventory obsolescence
|
1,529
|
|
|
1,520
|
|
||
Revenue from receipt of equity
|
(12,680
|
)
|
|
(159
|
)
|
||
Realized gain on sale of equity securities
|
(10,953
|
)
|
|
—
|
|
||
Loss on conversion of 3.00% convertible senior notes
|
8,688
|
|
|
—
|
|
||
Loss on sale of property, plant and equipment
|
56
|
|
|
—
|
|
||
Change in fair value of derivatives instruments
|
38,691
|
|
|
(1,309
|
)
|
||
Change in fair value of contingent consideration
|
4,173
|
|
|
2,665
|
|
||
Deferred income tax benefit
|
(197
|
)
|
|
—
|
|
||
Changes in assets and liabilities of continuing operations, net of the
effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(724
|
)
|
|
(184
|
)
|
||
Inventory
|
952
|
|
|
(4,443
|
)
|
||
Prepaid expenses and other current assets
|
(2,081
|
)
|
|
(1,312
|
)
|
||
Other assets
|
525
|
|
|
77
|
|
||
Accounts payable
|
2,303
|
|
|
(331
|
)
|
||
Foreign currency measurement
|
(1,409
|
)
|
|
(204
|
)
|
||
Accrued expenses
|
6,928
|
|
|
459
|
|
||
Cash used in operating activities of continuing operations
|
(32,142
|
)
|
|
(19,701
|
)
|
||
Cash used in operating activities of discontinued operations
|
—
|
|
|
14
|
|
||
Net cash used in operating activities
|
(32,142
|
)
|
|
(19,687
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Investments in investees
|
(13,341
|
)
|
|
(2,700
|
)
|
||
Proceeds from sale of equity securities
|
11,628
|
|
|
—
|
|
||
Acquisition of businesses, net of cash
|
20,528
|
|
|
(10,512
|
)
|
||
Purchase of marketable securities
|
(50,027
|
)
|
|
(28,923
|
)
|
||
Maturities of short-term marketable securities
|
25,016
|
|
|
10,000
|
|
||
Proceeds from the sale of property, plant and equipment
|
631
|
|
|
—
|
|
||
Capital expenditures
|
(2,991
|
)
|
|
(1,064
|
)
|
||
Net cash used in investing activities
|
(8,556
|
)
|
|
(33,199
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Issuance of 3.00% convertible senior notes, net, including related parties
|
170,184
|
|
|
—
|
|
||
Payment of Series D dividends, including related parties
|
(3,015
|
)
|
|
—
|
|
||
Proceeds from the exercise of Common Stock options and warrants
|
5,061
|
|
|
1,702
|
|
||
Borrowings on lines of credit
|
24,613
|
|
|
29,389
|
|
||
Repayments of lines of credit
|
(27,706
|
)
|
|
(26,108
|
)
|
||
Net cash provided by financing activities
|
169,137
|
|
|
4,983
|
|
||
Effect of exchange rate on cash and cash equivalents
|
34
|
|
|
(185
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
128,473
|
|
|
(48,088
|
)
|
||
Cash and cash equivalents at beginning of period
|
27,361
|
|
|
71,516
|
|
||
Cash and cash equivalents at end of period
|
$
|
155,834
|
|
|
$
|
23,428
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
||||
Interest paid
|
$
|
3,126
|
|
|
$
|
613
|
|
Income taxes paid, net
|
$
|
316
|
|
|
$
|
515
|
|
RXi common stock received
|
$
|
12,500
|
|
|
$
|
—
|
|
Non-cash financing:
|
|
|
|
||||
Shares issued upon the conversion of:
|
|
|
|
||||
Series D Preferred Stock
|
$
|
24,386
|
|
|
$
|
—
|
|
3.00% convertible senior notes
|
$
|
20,839
|
|
|
$
|
—
|
|
Common Stock warrants, net exercised
|
$
|
815
|
|
|
$
|
7
|
|
Issuance of Common Stock, Common Stock options and warrants to
acquire PROLOR
|
$
|
586,643
|
|
|
$
|
—
|
|
Issuance of Common Stock to acquire:
|
|
|
|
||||
Cytochroma
|
$
|
146,902
|
|
|
$
|
—
|
|
OPKO Brazil
|
$
|
436
|
|
|
$
|
—
|
|
Farmadiet
|
$
|
4,404
|
|
|
$
|
805
|
|
(In thousands)
|
September 30,
2013 |
|
December 31,
2012
|
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable
|
$
|
22,506
|
|
|
$
|
21,636
|
|
Less: allowance for doubtful accounts
|
(1,134
|
)
|
|
(474
|
)
|
||
|
$
|
21,372
|
|
|
$
|
21,162
|
|
Inventories, net:
|
|
|
|
||||
Finished products
|
$
|
14,775
|
|
|
$
|
17,963
|
|
Work in-process
|
1,450
|
|
|
688
|
|
||
Raw materials
|
4,426
|
|
|
4,923
|
|
||
Less: inventory reserve
|
(1,135
|
)
|
|
(1,313
|
)
|
||
|
$
|
19,516
|
|
|
$
|
22,261
|
|
Prepaid expenses and other current assets:
|
|
|
|
||||
Prepaid supplies
|
$
|
839
|
|
|
$
|
443
|
|
Prepaid insurance
|
843
|
|
|
301
|
|
||
Pharmsynthez Note Receivable and Purchase Option
|
6,755
|
|
|
—
|
|
||
Other receivables
|
3,818
|
|
|
886
|
|
||
Taxes recoverable
|
2,992
|
|
|
1,493
|
|
||
Other
|
4,304
|
|
|
4,750
|
|
||
|
$
|
19,551
|
|
|
$
|
7,873
|
|
Intangible assets, net:
|
|
|
|
||||
Technologies
|
$
|
52,947
|
|
|
$
|
52,810
|
|
Customer relationships
|
22,883
|
|
|
23,088
|
|
||
Product registrations
|
9,861
|
|
|
9,637
|
|
||
Tradenames
|
3,702
|
|
|
3,746
|
|
||
Covenants not to compete
|
8,667
|
|
|
8,662
|
|
||
Other
|
1,177
|
|
|
367
|
|
||
Less: accumulated amortization
|
(21,904
|
)
|
|
(14,072
|
)
|
||
|
$
|
77,333
|
|
|
$
|
84,238
|
|
Accrued expenses:
|
|
|
|
||||
Taxes payable
|
$
|
3,225
|
|
|
$
|
1,614
|
|
Deferred revenue
|
7,040
|
|
|
1,518
|
|
||
Clinical trials
|
3,543
|
|
|
50
|
|
||
Professional fees
|
7,203
|
|
|
675
|
|
||
Employee benefits
|
6,416
|
|
|
3,319
|
|
||
Deferred acquisition payments, net of discount
|
5,335
|
|
|
6,172
|
|
||
Contingent consideration
|
3,695
|
|
|
5,126
|
|
||
Interest payable related to the Notes
|
925
|
|
|
—
|
|
||
Other
|
5,887
|
|
|
6,182
|
|
||
|
$
|
43,269
|
|
|
$
|
24,656
|
|
|
|
|
|
(In thousands)
|
September 30,
2013 |
|
December 31,
2012
|
||||
Other long-term liabilities:
|
|
|
|
||||
Contingent consideration – Cytochroma
|
$
|
51,447
|
|
|
$
|
—
|
|
Contingent consideration – Farmadiet
|
542
|
|
|
532
|
|
||
Contingent consideration – OPKO Diagnostics
|
12,976
|
|
|
11,310
|
|
||
Contingent consideration – FineTech
|
—
|
|
|
2,578
|
|
||
Contingent consideration – CURNA
|
549
|
|
|
510
|
|
||
Deferred acquisition payments, net of discount
|
—
|
|
|
3,931
|
|
||
Mortgages and other debts payable
|
3,350
|
|
|
5,150
|
|
||
Deferred tax liabilities
|
164,892
|
|
|
9,777
|
|
||
Other, including deferred revenue
|
1,006
|
|
|
380
|
|
||
|
$
|
234,762
|
|
|
$
|
34,168
|
|
(In thousands)
|
Cytochroma
|
|
PROLOR
|
||||
Current assets
(1)
|
$
|
1,224
|
|
|
$
|
21,500
|
|
Intangible assets:
|
|
|
|
||||
In-process research and development
|
191,530
|
|
|
590,200
|
|
||
Patents
|
210
|
|
|
—
|
|
||
Total intangible assets
|
191,740
|
|
|
590,200
|
|
||
Goodwill
|
2,411
|
|
|
139,784
|
|
||
Property, plant and equipment
|
306
|
|
|
1,057
|
|
||
Other assets
|
—
|
|
|
371
|
|
||
Accounts payable and accrued expenses
|
(1,069
|
)
|
|
(9,866
|
)
|
||
Deferred tax liability
|
—
|
|
|
(156,403
|
)
|
||
Total purchase price
|
$
|
194,612
|
|
|
$
|
586,643
|
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
(In thousands)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Revenues
|
$
|
20,641
|
|
|
$
|
13,976
|
|
|
$
|
75,838
|
|
|
$
|
37,327
|
|
Net loss
|
$
|
(75,858
|
)
|
|
$
|
(15,745
|
)
|
|
$
|
130,118
|
|
|
$
|
(43,864
|
)
|
Net loss attributable to common shareholders
|
$
|
(75,055
|
)
|
|
$
|
(16,302
|
)
|
|
$
|
(128,229
|
)
|
|
$
|
(45,534
|
)
|
Basic and diluted loss per share
|
$
|
(0.19
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.12
|
)
|
(Dollars in thousands, except per share prices)
Investee name
|
|
Year
invested
|
|
Accounting method
|
|
Ownership at
September 30,
2013
|
|
Investment
|
|
Underlying equity in net assets
|
|
Closing share price
at September 30, 2013
for investments
available for sale
|
||||||||
Sorrento
|
|
2009
|
|
Equity method
|
|
14
|
%
|
|
$
|
2,300
|
|
|
$
|
821
|
|
|
|
|
||
Cocrystal
|
|
2009
|
|
Equity method
|
|
16
|
%
|
|
2,500
|
|
|
358
|
|
|
|
|
||||
Neovasc
|
|
2011
|
|
Equity method
|
|
6
|
%
|
|
3,798
|
|
|
454
|
|
|
|
|
||||
Fabrus
|
|
2010
|
|
VIE, equity method
|
|
13
|
%
|
|
650
|
|
|
(108
|
)
|
|
|
|
||||
BZNE common stock
|
|
2012
|
|
VIE, equity method
|
|
11
|
%
|
|
1,276
|
|
|
(1,184
|
)
|
|
|
|
||||
RXi
|
|
2013
|
|
Equity method
|
|
19
|
%
|
|
15,000
|
|
|
2,847
|
|
|
|
|
||||
Pharmsynthez
|
|
2013
|
|
Equity method
|
|
11
|
%
|
|
5,036
|
|
|
5,156
|
|
|
|
|
||||
TESARO
|
|
2010
|
|
Investment available for sale
|
|
1
|
%
|
|
56
|
|
|
|
|
|
$
|
38.74
|
|
|||
Neovasc options
|
|
2011
|
|
Investment available for sale
|
|
N/A
|
|
|
925
|
|
|
|
|
CA
|
$
|
2.35
|
|
|||
BZNE Note and conversion feature
|
|
2012
|
|
VIE, investment available for sale
|
|
N/A
|
|
|
1,700
|
|
|
|
|
|
|
|
||||
ChromaDex
|
|
2012
|
|
Investment available for sale
|
|
1
|
%
|
|
1,320
|
|
|
|
|
|
$
|
0.81
|
|
|||
Plus unrealized/realized gains on investments, options and warrants, net
|
|
2,708
|
|
|
|
|
|
|
||||||||||||
Less accumulated losses in investees
|
|
(12,579
|
)
|
|
|
|
|
|
||||||||||||
Total carrying value of equity method investees and investments, available for sale
|
|
$
|
24,690
|
|
|
|
|
|
|
(In thousands)
|
September 30,
2013 |
|
December 31,
2012
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
136
|
|
|
$
|
174
|
|
Accounts receivable, net
|
205
|
|
|
387
|
|
||
Inventories, net
|
1,653
|
|
|
1,092
|
|
||
Prepaid expenses and other current assets
|
185
|
|
|
199
|
|
||
Total current assets
|
2,179
|
|
|
1,852
|
|
||
Property, plant and equipment, net
|
1,410
|
|
|
1,539
|
|
||
Intangible assets, net
|
1,122
|
|
|
1,154
|
|
||
Goodwill
|
841
|
|
|
796
|
|
||
Other assets
|
312
|
|
|
231
|
|
||
Total assets
|
$
|
5,864
|
|
|
$
|
5,572
|
|
Liabilities
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,129
|
|
|
$
|
1,108
|
|
Accrued expenses
|
5,969
|
|
|
2,859
|
|
||
Notes payable
|
1,284
|
|
|
—
|
|
||
Total current liabilities
|
8,382
|
|
|
3,967
|
|
||
Other long-term liabilities
|
279
|
|
|
1,529
|
|
||
Total liabilities
|
$
|
8,661
|
|
|
$
|
5,496
|
|
(In thousands)
|
Embedded conversion option
|
|
Convertible Notes
|
|
Discount
|
|
Total
|
||||||||
Balance at December 31, 2012
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of 3.00% convertible notes
|
59,204
|
|
|
175,000
|
|
|
(59,204
|
)
|
|
175,000
|
|
||||
Amortization of debt discount
|
—
|
|
|
—
|
|
|
4,866
|
|
|
4,866
|
|
||||
Debt discount write-off associated with conversion
of debt
|
—
|
|
|
—
|
|
|
5,368
|
|
|
5,368
|
|
||||
Change in fair value of embedded derivative
|
41,818
|
|
|
—
|
|
|
—
|
|
|
41,818
|
|
||||
Conversion
|
(1,199
|
)
|
|
(16,936
|
)
|
|
—
|
|
|
(18,135
|
)
|
||||
Balance at September 30, 2013
|
$
|
99,823
|
|
|
$
|
158,064
|
|
|
$
|
(48,970
|
)
|
|
$
|
208,917
|
|
|
September 30, 2013
|
|
Issuance Date
|
||||
Stock price
|
$
|
8.81
|
|
|
$
|
6.20
|
|
Conversion Rate
|
141.4827
|
|
|
141.4827
|
|
||
Conversion Price
|
$
|
7.07
|
|
|
$
|
7.07
|
|
Maturity date
|
February 1, 2033
|
|
|
February 1, 2033
|
|
||
Risk-free interest rate
|
1.50
|
%
|
|
1.12
|
%
|
||
Estimated stock volatility
|
40
|
%
|
|
40
|
%
|
||
Estimated credit spread
|
948 basis points
|
|
|
944 basis points
|
|
(In thousands)
|
September 30, 2013
|
|
Issuance Date
|
||||
Fair value of Notes:
|
|
|
|
||||
With the embedded derivatives
|
$
|
210,105
|
|
|
$
|
175,000
|
|
Without the embedded derivatives
|
$
|
110,282
|
|
|
$
|
115,796
|
|
Estimated fair value of the embedded derivatives
|
$
|
99,823
|
|
|
$
|
59,204
|
|
(Dollars in thousands)
|
|
|
|
|
|
Balance Outstanding
|
|||||||||
Lender
|
|
Interest rate on
borrowings
|
|
Credit line
capacity
|
|
September 30,
2013 |
|
December 31,
2012
|
|||||||
Itau Bank
|
|
8.04
|
%
|
|
$
|
3,000
|
|
|
$
|
2,207
|
|
|
$
|
2,738
|
|
Bank of Chile
|
|
7.80
|
%
|
|
3,000
|
|
|
1,967
|
|
|
2,292
|
|
|||
BICE Bank
|
|
5.50
|
%
|
|
1,500
|
|
|
867
|
|
|
2,451
|
|
|||
Corp Banca
|
|
5.50
|
%
|
|
—
|
|
|
28
|
|
|
1,248
|
|
|||
BBVA Bank
|
|
8.29
|
%
|
|
2,500
|
|
|
1,230
|
|
|
2,823
|
|
|||
Penta Bank
|
|
9.48
|
%
|
|
800
|
|
|
992
|
|
|
833
|
|
|||
Security Bank
|
|
7.56
|
%
|
|
1,500
|
|
|
1,063
|
|
|
—
|
|
|||
BCI
|
|
5.50
|
%
|
|
1,000
|
|
|
1,216
|
|
|
—
|
|
|||
Estado Bank
|
|
6.88
|
%
|
|
2,000
|
|
|
1,732
|
|
|
1,963
|
|
|||
Sabadell Bank
|
|
7.60
|
%
|
|
203
|
|
|
—
|
|
|
3
|
|
|||
Bilbao Vizcaya Bank
|
|
4.90
|
%
|
|
406
|
|
|
91
|
|
|
377
|
|
|||
Banco Popular
|
|
8.25
|
%
|
|
406
|
|
|
—
|
|
|
260
|
|
|||
Santander Bank
|
|
6.00
|
%
|
|
203
|
|
|
—
|
|
|
—
|
|
|||
Banesto
|
|
5.80
|
%
|
|
203
|
|
|
4
|
|
|
163
|
|
|||
Banca March
|
|
6.25
|
%
|
|
270
|
|
|
—
|
|
|
44
|
|
|||
Total
|
|
|
|
$
|
16,991
|
|
|
$
|
11,397
|
|
|
$
|
15,195
|
|
(In thousands)
|
September 30,
2013 |
|
December 31,
2012
|
||||
Current portion of lines of credit and notes payable
|
$
|
1,796
|
|
|
$
|
2,331
|
|
Other long-term liabilities
|
3,350
|
|
|
3,916
|
|
||
Total mortgage notes and other debt payables
|
$
|
5,146
|
|
|
$
|
6,247
|
|
(In thousands)
|
Foreign
currency
|
|
Unrealized
gains in
Accumulated
OCI
|
||||
Balance at December 31, 2012
|
$
|
3,196
|
|
|
$
|
4,160
|
|
Other comprehensive income before reclassifications, net of tax
(1)
|
(1,395
|
)
|
|
1,869
|
|
||
Amounts reclassified from accumulated other comprehensive income, net of tax
(1)
|
—
|
|
|
(4,593
|
)
|
||
Net other comprehensive income
|
(1,395
|
)
|
|
(2,724
|
)
|
||
Balance at September 30, 2013
|
$
|
1,801
|
|
|
$
|
1,436
|
|
(1)
|
Effective tax rate of
38.47%
.
|
|
As of September 30, 2013
|
||||||||||||||||||
(In thousands)
|
Amortized
Cost
|
|
Gross
unrealized
gains in
Accumulated
OCI
|
|
Gross
unrealized
losses in
Accumulated
OCI
|
|
Gain/(Loss)
in
Accumulated
Deficit
|
|
Fair
value
|
||||||||||
Common stock investments, available for sale
|
$
|
1,376
|
|
|
$
|
1,417
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,793
|
|
BZNE Note and conversion feature
|
1,700
|
|
|
53
|
|
|
—
|
|
|
287
|
|
|
2,040
|
|
|||||
Neovasc common stock options
|
925
|
|
|
714
|
|
|
(202
|
)
|
|
181
|
|
|
1,618
|
|
|||||
U.S. Treasury securities
|
25,004
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,004
|
|
|||||
Total assets
|
$
|
29,005
|
|
|
$
|
2,184
|
|
|
$
|
(202
|
)
|
|
$
|
468
|
|
|
$
|
31,455
|
|
|
As of December 31, 2012
|
||||||||||||||||||
(In thousands)
|
Amortized
Cost
|
|
Gross
unrealized
gains in
Accumulated
OCI
|
|
Gross
unrealized
losses in
Accumulated
OCI
|
|
Gain/(Loss)
in
Accumulated
Deficit
|
|
Fair
value
|
||||||||||
Common stock investments, available for sale
|
$
|
2,051
|
|
|
$
|
6,185
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,236
|
|
BZNE Note and conversion feature
|
1,700
|
|
|
53
|
|
|
—
|
|
|
287
|
|
|
2,040
|
|
|||||
Neovasc common stock options
|
925
|
|
|
293
|
|
|
—
|
|
|
176
|
|
|
1,394
|
|
|||||
Neovasc common stock warrants
|
659
|
|
|
194
|
|
|
—
|
|
|
(375
|
)
|
|
478
|
|
|||||
Total assets
|
$
|
5,335
|
|
|
$
|
6,725
|
|
|
$
|
—
|
|
|
$
|
88
|
|
|
$
|
12,148
|
|
|
Fair value measurements as of September 30, 2013
|
||||||||||||||
(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
|
$
|
116,477
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
116,477
|
|
U.S. Treasury securities
|
—
|
|
|
25,004
|
|
|
—
|
|
|
25,004
|
|
||||
Certificates of deposit
|
—
|
|
|
827
|
|
|
—
|
|
|
827
|
|
||||
Pharmsynthez Note Receivable and Purchase Option
|
—
|
|
|
6,755
|
|
|
—
|
|
|
6,755
|
|
||||
Common stock investments, available for sale
|
2,793
|
|
|
—
|
|
|
—
|
|
|
2,793
|
|
||||
BZNE Note and conversation feature
|
—
|
|
|
—
|
|
|
2,040
|
|
|
2,040
|
|
||||
Neovasc common stock options
|
—
|
|
|
1,618
|
|
|
—
|
|
|
1,618
|
|
||||
Total assets
|
$
|
119,270
|
|
|
$
|
34,204
|
|
|
$
|
2,040
|
|
|
$
|
155,514
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward contracts
|
$
|
—
|
|
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
(25
|
)
|
Embedded conversion option
|
—
|
|
|
—
|
|
|
99,823
|
|
|
99,823
|
|
||||
Deferred acquisition payments, net of discount
|
—
|
|
|
—
|
|
|
5,335
|
|
|
5,335
|
|
||||
Contingent consideration:
|
|
|
|
|
|
|
|
||||||||
CURNA
|
—
|
|
|
—
|
|
|
549
|
|
|
549
|
|
||||
OPKO Diagnostics
|
—
|
|
|
—
|
|
|
12,976
|
|
|
12,976
|
|
||||
FineTech
|
—
|
|
|
—
|
|
|
2,862
|
|
|
2,862
|
|
||||
Cytochroma
|
—
|
|
|
—
|
|
|
51,447
|
|
|
51,447
|
|
||||
Farmadiet
|
—
|
|
|
—
|
|
|
1,375
|
|
|
1,375
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
(25
|
)
|
|
$
|
174,367
|
|
|
$
|
174,342
|
|
|
Fair value measurements as of December 31, 2012
|
||||||||||||||
(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
|
$
|
18,716
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,716
|
|
Certificates of deposit
|
—
|
|
|
820
|
|
|
—
|
|
|
820
|
|
||||
Common stock investments, available for sale
|
8,236
|
|
|
—
|
|
|
—
|
|
|
8,236
|
|
||||
BZNE Note and conversation feature
|
—
|
|
|
—
|
|
|
2,040
|
|
|
2,040
|
|
||||
Neovasc common stock options
|
—
|
|
|
1,394
|
|
|
—
|
|
|
1,394
|
|
||||
Neovasc common stock warrants
|
—
|
|
|
478
|
|
|
—
|
|
|
478
|
|
||||
Total assets
|
$
|
26,952
|
|
|
$
|
2,692
|
|
|
$
|
2,040
|
|
|
$
|
31,684
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward contracts
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
—
|
|
|
$
|
10
|
|
Deferred acquisition payments, net of discount
|
—
|
|
|
—
|
|
|
10,103
|
|
|
10,103
|
|
||||
Contingent consideration:
|
|
|
|
|
|
|
|
||||||||
CURNA
|
—
|
|
|
—
|
|
|
510
|
|
|
510
|
|
||||
OPKO Diagnostics
|
—
|
|
|
—
|
|
|
12,974
|
|
|
12,974
|
|
||||
FineTech
|
—
|
|
|
—
|
|
|
5,262
|
|
|
5,262
|
|
||||
Farmadiet
|
—
|
|
|
—
|
|
|
1,310
|
|
|
1,310
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
10
|
|
|
$
|
30,159
|
|
|
$
|
30,169
|
|
|
September 30, 2013
|
||||||||||||||||||
(In thousands)
|
Carrying
Value
|
|
Total
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
Notes
|
$
|
109,094
|
|
|
$
|
110,282
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
110,282
|
|
|
September 30, 2013
|
||||||||||||||
(In thousands)
|
BZNE Note
and
conversion
feature
|
|
Contingent
consideration
|
|
Deferred
acquisition
payments, net
of discount
|
|
Embedded
conversion
option
|
||||||||
Balance at December 31, 2012
|
$
|
2,040
|
|
|
$
|
20,056
|
|
|
$
|
10,103
|
|
|
$
|
—
|
|
Additions
|
—
|
|
|
47,710
|
|
|
—
|
|
|
59,204
|
|
||||
Total losses (gains) for the period:
|
|
|
|
|
|
|
|
||||||||
Included in results of operations
|
—
|
|
|
4,204
|
|
|
597
|
|
|
41,818
|
|
||||
Conversion of the Notes
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,199
|
)
|
||||
Payments
|
—
|
|
|
(2,761
|
)
|
|
(5,365
|
)
|
|
—
|
|
||||
Balance at September 30, 2013
|
$
|
2,040
|
|
|
$
|
69,209
|
|
|
$
|
5,335
|
|
|
$
|
99,823
|
|
|
December 31, 2012
|
||||||||||
(In thousands)
|
BZNE Note
and
conversion
feature
|
|
Contingent
consideration
|
|
Deferred
acquisition
payments, net
of discount
|
||||||
Balance at December 31, 2011
|
$
|
—
|
|
|
$
|
18,002
|
|
|
$
|
—
|
|
Additions
|
1,700
|
|
|
1,234
|
|
|
9,673
|
|
|||
Total losses (gains) for the period:
|
|
|
|
|
|
||||||
Included in results of operations
|
1,563
|
|
|
820
|
|
|
430
|
|
|||
Included in Other comprehensive loss
|
53
|
|
|
—
|
|
|
—
|
|
|||
Transfer out to equity method investment
|
(1,276
|
)
|
|
—
|
|
|
—
|
|
|||
Balance at December 31, 2012
|
$
|
2,040
|
|
|
$
|
20,056
|
|
|
$
|
10,103
|
|
(In thousands)
|
Balance Sheet Component
|
|
September 30,
2013 |
|
December 31,
2012 |
||||
Derivative financial instruments:
|
|
|
|
|
|
||||
Pharmsynthez Note Receivable and
Purchase Option
|
Prepaid expenses and other current assets
|
|
$
|
6,755
|
|
|
$
|
—
|
|
Neovasc common stock options/warrants
|
Investments, net
|
|
$
|
1,618
|
|
|
$
|
1,872
|
|
Embedded conversion option
|
3.00% convertible senior notes, net of discount
and estimated fair value of embedded
derivatives
|
|
$
|
99,823
|
|
|
$
|
—
|
|
Forward contracts (1)
|
Current portion of lines of credit and notes
payable
|
|
$
|
3,899
|
|
|
$
|
1,294
|
|
(1)
|
The effect on loss in the forward contracts is recorded in Accrued expenses. The effect on income in the forward contracts is recorded in Prepaid expenses and other current assets.
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
||||||||||||
(In thousands)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Derivative gain (loss):
|
|
|
|
|
|
|
|
||||||||
Pharmsynthez Note Receivable and Purchase Option
|
$
|
(147
|
)
|
|
$
|
—
|
|
|
$
|
2,452
|
|
|
$
|
—
|
|
Neovasc common stock options/warrants and BZNE Note
conversion feature
|
(545
|
)
|
|
201
|
|
|
700
|
|
|
1,368
|
|
||||
Notes
|
(26,943
|
)
|
|
—
|
|
|
(41,818
|
)
|
|
—
|
|
||||
Forward contracts
|
(158
|
)
|
|
(32
|
)
|
|
(25
|
)
|
|
(59
|
)
|
||||
Total
|
$
|
(27,793
|
)
|
|
$
|
169
|
|
|
$
|
(38,691
|
)
|
|
$
|
1,309
|
|
(In thousands)
Days until maturity
|
|
Contract value
|
|
Fair value at
September 30, 2013
|
|
Effect on income (loss)
|
||||||
0 to 30
|
|
$
|
1,133
|
|
|
$
|
1,139
|
|
|
$
|
6
|
|
31 to 60
|
|
1,058
|
|
|
1,039
|
|
|
(19
|
)
|
|||
61 to 90
|
|
945
|
|
|
939
|
|
|
(6
|
)
|
|||
91 to 120
|
|
272
|
|
|
271
|
|
|
(1
|
)
|
|||
121 to 180
|
|
516
|
|
|
511
|
|
|
(5
|
)
|
|||
More than 180
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
3,924
|
|
|
$
|
3,899
|
|
|
$
|
(25
|
)
|
(In thousands)
Days until maturity
|
|
Contract value
|
|
Fair value at
December 31, 2012
|
|
Effect on income (loss)
|
||||||
0 to 30
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
31 to 60
|
|
581
|
|
|
577
|
|
|
(4
|
)
|
|||
61 to 90
|
|
341
|
|
|
339
|
|
|
(2
|
)
|
|||
91 to 120
|
|
212
|
|
|
210
|
|
|
(2
|
)
|
|||
121 to 180
|
|
170
|
|
|
168
|
|
|
(2
|
)
|
|||
More than 180
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
$
|
1,304
|
|
|
$
|
1,294
|
|
|
$
|
(10
|
)
|
|
For the three months ended September 30,
|
|
For the nine months ended September 30,
|
||||||||||||
(In thousands)
|
2013
|
|
2012
|
|
2013
|
|
2012
|
||||||||
Product revenues:
|
|
|
|
|
|
|
|
||||||||
Pharmaceuticals
|
$
|
16,563
|
|
|
$
|
11,495
|
|
|
$
|
50,708
|
|
|
$
|
30,051
|
|
Diagnostics
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
16,563
|
|
|
$
|
11,495
|
|
|
$
|
50,708
|
|
|
$
|
30,051
|
|
Revenue from services:
|
|
|
|
|
|
|
|
||||||||
Pharmaceuticals
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diagnostics
|
2,710
|
|
|
43
|
|
|
8,870
|
|
|
173
|
|
||||
Corporate
|
60
|
|
|
57
|
|
|
180
|
|
|
159
|
|
||||
|
$
|
2,770
|
|
|
$
|
100
|
|
|
$
|
9,050
|
|
|
$
|
332
|
|
Revenue from transfer of intellectual property:
|
|
|
|
|
|
|
|
||||||||
Pharmaceuticals
|
$
|
913
|
|
|
$
|
—
|
|
|
$
|
14,720
|
|
|
$
|
—
|
|
Diagnostics
|
395
|
|
|
200
|
|
|
1,360
|
|
|
400
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
1,308
|
|
|
$
|
200
|
|
|
$
|
16,080
|
|
|
$
|
400
|
|
Operating (loss) income:
|
|
|
|
|
|
|
|
||||||||
Pharmaceuticals
|
$
|
(11,126
|
)
|
|
$
|
(1,755
|
)
|
|
$
|
(7,171
|
)
|
|
$
|
(5,072
|
)
|
Diagnostics
|
(399
|
)
|
|
(3,810
|
)
|
|
(16,783
|
)
|
|
(12,835
|
)
|
||||
Corporate
|
(6,606
|
)
|
|
(3,804
|
)
|
|
(17,393
|
)
|
|
(9,650
|
)
|
||||
Less: Operating loss attributable to noncontrolling interests
|
(879
|
)
|
|
—
|
|
|
(2,419
|
)
|
|
—
|
|
||||
|
$
|
(19,010
|
)
|
|
$
|
(9,369
|
)
|
|
$
|
(43,766
|
)
|
|
$
|
(27,557
|
)
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
Pharmaceuticals
|
$
|
2,020
|
|
|
$
|
1,780
|
|
|
$
|
5,417
|
|
|
$
|
4,805
|
|
Diagnostics
|
1,717
|
|
|
841
|
|
|
5,110
|
|
|
2,510
|
|
||||
Corporate
|
31
|
|
|
44
|
|
|
121
|
|
|
132
|
|
||||
|
$
|
3,768
|
|
|
$
|
2,665
|
|
|
$
|
10,648
|
|
|
$
|
7,447
|
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
4,078
|
|
|
$
|
300
|
|
|
$
|
25,130
|
|
|
$
|
732
|
|
Chile
|
7,993
|
|
|
6,781
|
|
|
24,216
|
|
|
19,669
|
|
||||
Spain
|
4,026
|
|
|
1,997
|
|
|
13,503
|
|
|
1,997
|
|
||||
Israel
|
3,099
|
|
|
1,516
|
|
|
9,666
|
|
|
4,661
|
|
||||
Mexico
|
1,445
|
|
|
1,201
|
|
|
3,323
|
|
|
3,724
|
|
||||
|
$
|
20,641
|
|
|
$
|
11,795
|
|
|
$
|
75,838
|
|
|
$
|
30,783
|
|
(In thousands)
|
September 30,
2013 |
|
December 31,
2012 |
||||
Assets:
|
|
|
|
||||
Pharmaceuticals
|
$
|
1,087,950
|
|
|
$
|
142,299
|
|
Diagnostics
|
114,434
|
|
|
112,422
|
|
||
Corporate
|
180,598
|
|
|
35,109
|
|
||
|
$
|
1,382,982
|
|
|
$
|
289,830
|
|
Goodwill:
|
|
|
|
||||
Pharmaceuticals
|
$
|
174,734
|
|
|
$
|
32,844
|
|
Diagnostics
|
47,606
|
|
|
47,606
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
222,340
|
|
|
$
|
80,450
|
|
Contractual obligations
(In thousands)
|
|
Remaining Three Months ending December 31,
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
Thereafter
|
|
Total
|
||||||||||||||||
Open purchase orders
|
|
$
|
5,065
|
|
|
$
|
175
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,240
|
|
Operating leases
|
|
653
|
|
|
2,210
|
|
|
1,513
|
|
|
1,264
|
|
|
573
|
|
|
283
|
|
|
372
|
|
|
6,868
|
|
||||||||
3.00% convertible senior notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
208,917
|
|
|
208,917
|
|
||||||||
Deferred payments
|
|
—
|
|
|
5,335
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,335
|
|
||||||||
Mortgages and other debts payable (1)
|
|
1,385
|
|
|
575
|
|
|
483
|
|
|
370
|
|
|
332
|
|
|
272
|
|
|
1,729
|
|
|
5,146
|
|
||||||||
Lines of credit
|
|
11,397
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,397
|
|
||||||||
Interest commitments
|
|
1,472
|
|
|
4,882
|
|
|
4,863
|
|
|
4,847
|
|
|
4,835
|
|
|
4,851
|
|
|
475
|
|
|
26,225
|
|
||||||||
Total
|
|
$
|
19,972
|
|
|
$
|
13,177
|
|
|
$
|
6,859
|
|
|
$
|
6,481
|
|
|
$
|
5,740
|
|
|
$
|
5,406
|
|
|
$
|
211,493
|
|
|
$
|
269,128
|
|
(1)
|
Excludes
$1.3 million
of consolidated liabilities related to SciVac, as to which there is no recourse against us.
|
•
|
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 programs 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
|
•
|
Tax rates – The expected future income is tax effected using a market participant tax rate. Our recent valuations typically use a U.S. tax rate (and applicable state taxes) after considering the jurisdiction in which the intellectual property is held and location of research and manufacturing infrastructure. We also considered that any earnings repatriation 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
|
Amended and Restated Certificate of Incorporation.
|
Exhibit 3.2
(1)
|
Amended and Restated By-Laws.
|
Exhibit 4.3
(2)
|
Indenture, dated as of January 30, 2013, between OPKO Health, Inc. and Wells Fargo Bank, National Association.
|
Exhibit 10.1
(3)
|
Amendement to OPKO Health, Inc. 2007 Equity Incentive Plan.
|
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 September 30, 2013.
|
Exhibit 31.2
|
Certification by Juan F. Rodriguez, 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 September 30, 2013.
|
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 September 30, 2013.
|
Exhibit 32.2
|
Certification by Juan F. Rodriguez, 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 September 30, 2013.
|
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
|
*
|
As provided in Rule 406T of Regulation S-T, this information is furnished herewith and not filed for purposes of sections 11 and 12 of the Securities Act of 1933, as amended, or section 18 of the Securities Exchange Act of 1934, as amended.
|
(1)
|
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.
|
(2)
|
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.
|
(3)
|
Filed w
ith the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on August 30, 2013, and incorporated herein by reference.
|
Date: November 11, 2013
|
|
OPKO Health, Inc.
|
|
|
|
|
|
/s/ Adam Logal
|
|
|
Adam Logal
|
|
|
Vice President, Finance, Chief Accounting
|
|
|
Officer and Treasurer
|
Exhibit Number
|
Description
|
|
|
Exhibit 3.1
|
Amended and Restated Certificate of Incorporation.
|
|
|
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 September 30, 2013.
|
|
|
Exhibit 31.2
|
Certification by Juan F. Rodriguez, 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 September 30, 2013.
|
|
|
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 September 30, 2013.
|
|
|
Exhibit 32.2
|
Certification by Juan F. Rodriguez, 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 September 30, 2013.
|
|
|
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
|
*
|
As provided in Rule 406T of Regulation S-T, this information is furnished herewith and not filed for purposes of sections 11 and 12 of the Securities Act of 1933, as amended, or section 18 of the Securities Exchange Act of 1934, as amended.
|
|
|
|
|
|
where
|
|
|
|
|
c
1
|
|
-
|
|
the adjusted Conversion Price.
|
c
|
|
-
|
|
the Conversion Price in effect on the data immediately preceding the record date for the distribution.
|
M
|
|
-
|
|
the Fair Value per share of Common Stock on the record date for the distribution.
|
F
|
|
-
|
|
the Fair Value on the record date for the distribution of the portion of the assets, debt securities, rights, warrants or options no distributed applicable to one share of Common Stock.
|
|
|
|
|
|
|
Opko Health, Inc.
|
|
||
|
By:
|
/s/ Phillip Frost, M.D.
|
|
|
|
|
Name:
|
Phillip Frost, M.D.
|
|
|
|
Title:
|
Chief Executive Officer
|
|
|
|
|
|
By:
|
|
/s/ Steven D. Rubin
|
Name:
|
|
Steven D. Rubin
|
Title:
|
|
Executive Vice President – Administration
|
(1)
|
I have reviewed this Quarterly Report on Form 10-Q of OPKO Health, Inc.;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
(5)
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: November 11, 2013
|
/s/ Dr. Phillip Frost, M.D.
|
|
Dr. Phillip Frost, M.D.
|
|
Chief Executive Officer
|
(1)
|
I have reviewed this Quarterly Report on Form 10-Q of OPKO Health, Inc.;
|
(2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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(5)
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: November 11, 2013
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/s/ Juan F. Rodriguez
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Juan F. Rodriguez
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Chief Financial Officer
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Date: November 11, 2013
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/s/ Dr. Phillip Frost, M.D.
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Dr. Phillip Frost, M.D.
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Chief Executive Officer
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Date: November 11, 2013
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/s/ Juan F. Rodriguez
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Juan F. Rodriguez
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Chief Financial Officer
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