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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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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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the risks inherent in funding, developing and obtaining regulatory approvals of new, commercially-viable and competitive products and treatments;
|
•
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our research and development activities may not result in commercially viable products;
|
•
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that earlier clinical results of effectiveness and safety may not be reproducible or indicative of future results;
|
•
|
that the launch of commercial sales for
Rayaldee
may not be successful;
|
•
|
that we may fail to obtain regulatory approval for or successfully commercialize our product candidates;
|
•
|
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;
|
•
|
our ability to develop a pharmaceutical sales and marketing infrastructure;
|
•
|
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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the performance of our third-party distribution partners, licensees and manufacturers over which we have limited control;
|
•
|
our success is dependent on the involvement and continued efforts of our Chairman and Chief Executive Officer;
|
•
|
integration challenges for Bio-Reference, EirGen and other acquired businesses;
|
•
|
changes in regulation and policies in the United States and other countries, including increasing downward pressure on health care reimbursement;
|
•
|
our ability to manage our growth and our expanded operations;
|
•
|
increased competition, including price competition;
|
•
|
changing relationships with payers, including the various state and multi-state Blues programs, suppliers and strategic partners;
|
•
|
efforts by third-party payors to reduce utilization and reimbursement for clinical testing services;
|
•
|
failure to timely or accurately bill for our services;
|
•
|
failure to obtain and retain new clients and business partners, or a reduction in tests ordered or specimens submitted by existing clients;
|
•
|
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;
|
•
|
failure to maintain the security of patient-related information;
|
•
|
our ability to obtain and maintain intellectual property protection for our products;
|
•
|
our ability to defend our intellectual property rights with respect to our products;
|
•
|
our ability to operate our business without infringing the intellectual property rights of others;
|
•
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our ability to attract and retain key scientific and management personnel;
|
•
|
our need for, and ability to obtain, additional financing;
|
•
|
adverse results in material litigation matters or governmental inquiries;
|
•
|
failure to obtain and maintain regulatory approval outside the U.S.; and
|
•
|
legal, economic, political, regulatory, currency exchange, and other risks associated with international operations.
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|
June 30, 2016
|
|
December 31, 2015
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
156,015
|
|
|
$
|
193,598
|
|
Marketable securities
|
15,634
|
|
|
—
|
|
||
Accounts receivable, net
|
213,372
|
|
|
193,875
|
|
||
Inventory, net
|
42,046
|
|
|
39,681
|
|
||
Other current assets and prepaid expenses
|
78,506
|
|
|
26,904
|
|
||
Total current assets
|
505,573
|
|
|
454,058
|
|
||
Property, plant and equipment, net
|
128,274
|
|
|
131,798
|
|
||
Intangible assets, net
|
804,445
|
|
|
638,152
|
|
||
In-process research and development
|
606,035
|
|
|
792,275
|
|
||
Goodwill
|
691,060
|
|
|
743,348
|
|
||
Investments, net
|
34,249
|
|
|
34,716
|
|
||
Other assets
|
4,385
|
|
|
4,841
|
|
||
Total assets
|
$
|
2,774,021
|
|
|
$
|
2,799,188
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
61,062
|
|
|
$
|
72,535
|
|
Accrued expenses
|
209,848
|
|
|
167,899
|
|
||
Current portion of lines of credit and notes payable
|
10,327
|
|
|
11,468
|
|
||
Total current liabilities
|
281,237
|
|
|
251,902
|
|
||
2033 Senior Notes and estimated fair value of embedded derivatives, net of discount
|
45,233
|
|
|
48,986
|
|
||
Deferred tax liabilities, net
|
207,595
|
|
|
226,036
|
|
||
Other long-term liabilities, principally deferred revenue and line of credit
|
224,316
|
|
|
292,470
|
|
||
Total long-term liabilities
|
477,144
|
|
|
567,492
|
|
||
Total liabilities
|
758,381
|
|
|
819,394
|
|
||
Equity:
|
|
|
|
||||
Common Stock - $0.01 par value, 750,000,000 shares authorized; 548,301,575 and 546,188,516
shares issued at June 30, 2016 and December 31, 2015, respectively |
5,483
|
|
|
5,462
|
|
||
Treasury Stock - 586,760 and 1,120,367 shares at June 30, 2016 and December 31, 2015, respectively
|
(1,911
|
)
|
|
(3,645
|
)
|
||
Additional paid-in capital
|
2,736,816
|
|
|
2,705,385
|
|
||
Accumulated other comprehensive loss
|
(23,431
|
)
|
|
(22,537
|
)
|
||
Accumulated deficit
|
(701,317
|
)
|
|
(704,871
|
)
|
||
Total shareholders’ equity
|
2,015,640
|
|
|
1,979,794
|
|
||
Total liabilities and equity
|
$
|
2,774,021
|
|
|
$
|
2,799,188
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Revenue from services
|
$
|
266,012
|
|
|
$
|
1,908
|
|
|
$
|
518,534
|
|
|
$
|
3,977
|
|
Revenue from products
|
22,807
|
|
|
22,848
|
|
|
42,706
|
|
|
38,334
|
|
||||
Revenue from transfer of intellectual property and other
|
68,281
|
|
|
17,673
|
|
|
86,898
|
|
|
30,202
|
|
||||
Total revenues
|
357,100
|
|
|
42,429
|
|
|
648,138
|
|
|
72,513
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of service revenue
|
140,971
|
|
|
2,505
|
|
|
278,568
|
|
|
4,764
|
|
||||
Cost of product revenue
|
12,468
|
|
|
11,929
|
|
|
22,407
|
|
|
19,991
|
|
||||
Selling, general and administrative
|
117,511
|
|
|
20,937
|
|
|
245,513
|
|
|
38,382
|
|
||||
Research and development
|
31,348
|
|
|
29,570
|
|
|
59,170
|
|
|
55,072
|
|
||||
Contingent consideration
|
10,758
|
|
|
(339
|
)
|
|
12,511
|
|
|
4,836
|
|
||||
Amortization of intangible assets
|
15,778
|
|
|
3,236
|
|
|
29,221
|
|
|
5,901
|
|
||||
Grant repayment
|
—
|
|
|
—
|
|
|
—
|
|
|
25,889
|
|
||||
Total costs and expenses
|
328,834
|
|
|
67,838
|
|
|
647,390
|
|
|
154,835
|
|
||||
Operating income (loss)
|
28,266
|
|
|
(25,409
|
)
|
|
748
|
|
|
(82,322
|
)
|
||||
Other income and (expense), net:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
135
|
|
|
5
|
|
|
178
|
|
|
12
|
|
||||
Interest expense
|
(2,217
|
)
|
|
(986
|
)
|
|
(4,004
|
)
|
|
(3,551
|
)
|
||||
Fair value changes of derivative instruments, net
|
1,235
|
|
|
(16,556
|
)
|
|
(188
|
)
|
|
(66,344
|
)
|
||||
Other income (expense), net
|
5,970
|
|
|
760
|
|
|
6,515
|
|
|
(748
|
)
|
||||
Other income and (expense), net
|
5,123
|
|
|
(16,777
|
)
|
|
2,501
|
|
|
(70,631
|
)
|
||||
Income (loss) before income taxes and investment losses
|
33,389
|
|
|
(42,186
|
)
|
|
3,249
|
|
|
(152,953
|
)
|
||||
Income tax (provision) benefit
|
(15,868
|
)
|
|
(251
|
)
|
|
4,638
|
|
|
(5,760
|
)
|
||||
Income (loss) before investment losses
|
17,521
|
|
|
(42,437
|
)
|
|
7,887
|
|
|
(158,713
|
)
|
||||
Loss from investments in investees
|
(1,988
|
)
|
|
(804
|
)
|
|
(4,333
|
)
|
|
(2,565
|
)
|
||||
Net income (loss)
|
15,533
|
|
|
(43,241
|
)
|
|
3,554
|
|
|
(161,278
|
)
|
||||
Less: Net loss attributable to noncontrolling interests
|
—
|
|
|
(475
|
)
|
|
—
|
|
|
(1,400
|
)
|
||||
Net income (loss) attributable to common shareholders
|
$
|
15,533
|
|
|
$
|
(42,766
|
)
|
|
$
|
3,554
|
|
|
$
|
(159,878
|
)
|
Earnings (loss) per share:
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share, basic
|
$
|
0.03
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.35
|
)
|
Earnings (loss) per share, diluted
|
$
|
0.02
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.00
|
|
|
$
|
(0.35
|
)
|
Weighted average common shares outstanding, basic
|
547,558,800
|
|
|
462,253,161
|
|
|
546,691,117
|
|
|
454,361,137
|
|
||||
Weighted average common shares outstanding, diluted
|
557,040,435
|
|
|
462,253,161
|
|
|
556,735,862
|
|
|
454,361,137
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Net income (loss)
|
$
|
15,533
|
|
|
$
|
(43,241
|
)
|
|
$
|
3,554
|
|
|
$
|
(161,278
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency translation and other comprehensive income (loss)
|
(4,432
|
)
|
|
(694
|
)
|
|
2,510
|
|
|
(4,547
|
)
|
||||
Available for sale investments:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized loss, net of tax
|
(1,889
|
)
|
|
(682
|
)
|
|
(3,404
|
)
|
|
(1,941
|
)
|
||||
Comprehensive income (loss)
|
9,212
|
|
|
(44,617
|
)
|
|
2,660
|
|
|
(167,766
|
)
|
||||
Less: Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
(475
|
)
|
|
—
|
|
|
(1,400
|
)
|
||||
Comprehensive income (loss) attributable to common shareholders
|
$
|
9,212
|
|
|
$
|
(44,142
|
)
|
|
$
|
2,660
|
|
|
$
|
(166,366
|
)
|
|
For the six months ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
3,554
|
|
|
$
|
(161,278
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
46,780
|
|
|
7,685
|
|
||
Non-cash interest
|
1,408
|
|
|
1,681
|
|
||
Amortization of deferred financing costs
|
74
|
|
|
895
|
|
||
Losses from investments in investees
|
4,333
|
|
|
2,565
|
|
||
Equity-based compensation – employees and non-employees
|
26,105
|
|
|
14,090
|
|
||
Revenue from receipt of equity
|
—
|
|
|
(120
|
)
|
||
Realized gain on equity securities
|
(2,494
|
)
|
|
(216
|
)
|
||
Loss on conversion of 3.00% convertible senior notes
|
—
|
|
|
291
|
|
||
Change in fair value of derivative instruments
|
188
|
|
|
66,344
|
|
||
Change in fair value of contingent consideration
|
12,511
|
|
|
4,836
|
|
||
Deferred income tax benefit
|
(8,999
|
)
|
|
—
|
|
||
Changes in assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Accounts receivable, net
|
(18,388
|
)
|
|
(4,186
|
)
|
||
Inventory, net
|
(1,763
|
)
|
|
(2,547
|
)
|
||
Other current assets and prepaid expenses
|
(14,309
|
)
|
|
1,142
|
|
||
Other assets
|
732
|
|
|
(512
|
)
|
||
Accounts payable
|
(13,205
|
)
|
|
7,101
|
|
||
Foreign currency measurement
|
(405
|
)
|
|
300
|
|
||
Deferred revenue
|
(35,938
|
)
|
|
263,926
|
|
||
Accrued expenses and other liabilities
|
33,452
|
|
|
2,741
|
|
||
Net cash provided by operating activities
|
33,636
|
|
|
204,738
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Investments in investees
|
(5,921
|
)
|
|
(2,345
|
)
|
||
Acquisition of businesses, net of cash
|
—
|
|
|
(94,674
|
)
|
||
Purchase of marketable securities
|
(15,630
|
)
|
|
—
|
|
||
Proceeds from the sale of property, plant and equipment
|
708
|
|
|
—
|
|
||
Capital expenditures
|
(12,866
|
)
|
|
(1,439
|
)
|
||
Net cash used in investing activities
|
(33,709
|
)
|
|
(98,458
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the exercise of Common Stock options and warrants
|
1,912
|
|
|
17,366
|
|
||
Cash from non-controlling interest
|
—
|
|
|
100
|
|
||
Borrowings on lines of credit
|
9,496
|
|
|
11,038
|
|
||
Repayments of lines of credit
|
(49,341
|
)
|
|
(10,022
|
)
|
||
Net cash (used in) provided by financing activities
|
(37,933
|
)
|
|
18,482
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
423
|
|
|
(452
|
)
|
||
Net (decrease) increase in cash and cash equivalents
|
(37,583
|
)
|
|
124,310
|
|
||
Cash and cash equivalents at beginning of period
|
193,598
|
|
|
96,907
|
|
||
Cash and cash equivalents at end of period
|
$
|
156,015
|
|
|
$
|
221,217
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
||||
Interest paid
|
$
|
900
|
|
|
$
|
1,724
|
|
Income taxes paid, net
|
$
|
7,172
|
|
|
$
|
757
|
|
Non-cash financing:
|
|
|
|
||||
Shares issued upon the conversion of:
|
|
|
|
||||
2033 Senior Notes
|
$
|
—
|
|
|
$
|
92,172
|
|
Common Stock options and warrants, surrendered in net exercise
|
$
|
325
|
|
|
$
|
14,239
|
|
Issuance of capital stock to acquire or contingent consideration settlement:
|
|
|
|
||||
EirGen Pharma Limited
|
$
|
—
|
|
|
$
|
33,569
|
|
OPKO Health Europe
|
$
|
313
|
|
|
$
|
1,813
|
|
|
|
|
|
||||
|
|
|
|
||||
|
|
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
(Shares in thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders, basic
|
$
|
15,533
|
|
|
$
|
(42,766
|
)
|
|
$
|
3,554
|
|
|
$
|
(159,878
|
)
|
Add: Interest on 2033 Senior Notes
|
604
|
|
|
—
|
|
|
1,196
|
|
|
—
|
|
||||
Change in FV of embedded derivative income
|
(4,872
|
)
|
|
—
|
|
|
(4,734
|
)
|
|
—
|
|
||||
Net income (loss) attributable to common shareholders, diluted
|
$
|
11,265
|
|
|
$
|
(42,766
|
)
|
|
$
|
16
|
|
|
$
|
(159,878
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator
|
|
|
|
|
|
|
|
||||||||
(Shares in thousands)
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
547,559
|
|
|
462,253
|
|
|
546,691
|
|
|
454,361
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
4,264
|
|
|
—
|
|
|
4,222
|
|
|
—
|
|
||||
Warrants
|
661
|
|
|
—
|
|
|
1,267
|
|
|
—
|
|
||||
2033 Senior Notes
|
4,556
|
|
|
—
|
|
|
4,556
|
|
|
—
|
|
||||
Dilutive potential shares
|
9,481
|
|
|
—
|
|
|
10,045
|
|
|
—
|
|
||||
Weighted average common shares outstanding, diluted
|
557,040
|
|
|
462,253
|
|
|
556,736
|
|
|
454,361
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Earnings (loss) per share, basic
|
$
|
0.03
|
|
|
$
|
(0.09
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.35
|
)
|
Earnings (loss) per share, diluted
|
$
|
0.02
|
|
|
$
|
(0.09
|
)
|
|
$
|
—
|
|
|
$
|
(0.35
|
)
|
(In thousands)
|
June 30,
2016 |
|
December 31,
2015 |
||||
Accounts receivable, net
|
|
|
|
||||
Accounts receivable
|
$
|
262,145
|
|
|
$
|
219,043
|
|
Less: allowance for doubtful accounts
|
(48,773
|
)
|
|
(25,168
|
)
|
||
|
$
|
213,372
|
|
|
$
|
193,875
|
|
Inventories, net
|
|
|
|
||||
Consumable supplies
|
$
|
22,825
|
|
|
$
|
22,265
|
|
Finished products
|
13,944
|
|
|
13,404
|
|
||
Work in-process
|
1,137
|
|
|
1,215
|
|
||
Raw materials
|
5,453
|
|
|
3,848
|
|
||
Less: inventory reserve
|
(1,313
|
)
|
|
(1,051
|
)
|
||
|
$
|
42,046
|
|
|
$
|
39,681
|
|
Other current assets and prepaid expenses
|
|
|
|
||||
Taxes recoverable
|
52,588
|
|
|
3,076
|
|
||
Other receivables
|
13,464
|
|
|
11,946
|
|
||
Prepaid supplies
|
9,534
|
|
|
8,773
|
|
||
Prepaid insurance
|
2,144
|
|
|
2,206
|
|
||
Other
|
776
|
|
|
903
|
|
||
|
$
|
78,506
|
|
|
$
|
26,904
|
|
Intangible assets, net:
|
|
|
|
||||
Customer relationships
|
$
|
450,792
|
|
|
$
|
449,972
|
|
Technologies
|
339,307
|
|
|
151,709
|
|
||
Trade names
|
50,469
|
|
|
50,416
|
|
||
Licenses
|
23,509
|
|
|
23,432
|
|
||
Covenants not to compete
|
16,362
|
|
|
8,612
|
|
||
Product registrations
|
7,836
|
|
|
7,512
|
|
||
Other
|
4,394
|
|
|
5,600
|
|
||
Less: accumulated amortization
|
(88,224
|
)
|
|
(59,101
|
)
|
||
|
$
|
804,445
|
|
|
$
|
638,152
|
|
Accrued expenses:
|
|
|
|
||||
Deferred revenue
|
$
|
73,112
|
|
|
$
|
70,246
|
|
Employee benefits
|
37,121
|
|
|
29,751
|
|
||
Contingent consideration
|
30,294
|
|
|
22,164
|
|
||
Taxes payable
|
10,954
|
|
|
7,605
|
|
||
Capital leases short-term
|
5,069
|
|
|
5,373
|
|
||
Clinical trials
|
10,051
|
|
|
2,505
|
|
||
Milestone payment
|
4,966
|
|
|
5,000
|
|
||
Professional fees
|
1,967
|
|
|
1,506
|
|
||
Other
|
36,314
|
|
|
23,749
|
|
||
|
$
|
209,848
|
|
|
$
|
167,899
|
|
|
|
|
|
(In thousands)
|
June 30,
2016 |
|
December 31,
2015 |
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred revenue
|
$
|
125,348
|
|
|
$
|
162,634
|
|
Line of credit
|
38,135
|
|
|
72,107
|
|
||
Contingent consideration
|
36,340
|
|
|
32,258
|
|
||
Mortgages and other debts payable
|
1,807
|
|
|
2,523
|
|
||
Capital leases long-term
|
8,500
|
|
|
9,285
|
|
||
Other
|
14,186
|
|
|
13,663
|
|
||
|
$
|
224,316
|
|
|
$
|
292,470
|
|
|
2016
|
||||||||||||||
(In thousands)
|
Balance at January 1st
|
|
Purchase accounting adjustments
|
|
Foreign exchange
|
|
Balance at June 30th
|
||||||||
Pharmaceuticals
|
|
|
|
|
|
|
|
||||||||
CURNA
|
$
|
4,827
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,827
|
|
EirGen
|
81,139
|
|
|
—
|
|
|
1,573
|
|
|
82,712
|
|
||||
FineTech
|
11,698
|
|
|
—
|
|
|
—
|
|
|
11,698
|
|
||||
OPKO Chile
|
4,517
|
|
|
—
|
|
|
309
|
|
|
4,826
|
|
||||
OPKO Biologics
|
139,784
|
|
|
—
|
|
|
—
|
|
|
139,784
|
|
||||
OPKO Health Europe
|
7,191
|
|
|
—
|
|
|
130
|
|
|
7,321
|
|
||||
OPKO Renal
|
2,069
|
|
|
—
|
|
|
—
|
|
|
2,069
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Diagnostics
|
|
|
|
|
|
|
|
||||||||
Bio-Reference
|
441,158
|
|
|
(54,300
|
)
|
|
—
|
|
|
386,858
|
|
||||
OPKO Diagnostics
|
17,977
|
|
|
—
|
|
|
—
|
|
|
17,977
|
|
||||
OPKO Lab
|
32,988
|
|
|
—
|
|
|
—
|
|
|
32,988
|
|
||||
|
$
|
743,348
|
|
|
$
|
(54,300
|
)
|
|
$
|
2,012
|
|
|
$
|
691,060
|
|
(In thousands)
|
|
Bio-Reference
|
||
Purchase price:
|
|
|
||
Value of OPKO Common Stock issued to Bio-Reference shareholders
|
|
$
|
947,889
|
|
Value of replacement stock options awards to holders of Bio-Reference stock options
|
|
2,259
|
|
|
Total purchase price
|
|
$
|
950,148
|
|
|
|
|
||
Preliminary value of assets acquired and liabilities assumed:
|
|
|
||
Current assets
|
|
|
||
Cash and cash equivalents
|
|
$
|
15,800
|
|
Accounts receivable
|
|
168,164
|
|
|
Inventory
|
|
19,674
|
|
|
Other current assets, principally deferred tax assets
|
|
99,116
|
|
|
Total current assets
|
|
302,754
|
|
|
Property, plant and equipment
|
|
112,457
|
|
|
Intangible assets:
|
|
|
||
Trade name
|
|
47,100
|
|
|
Customer relationships
|
|
395,200
|
|
|
Technology
|
|
100,600
|
|
|
Other intangible assets
|
|
7,750
|
|
|
Total intangible assets
|
|
550,650
|
|
|
Goodwill
|
|
386,858
|
|
|
Investments
|
|
5,326
|
|
|
Other assets
|
|
13,265
|
|
|
Total assets
|
|
1,371,310
|
|
|
Accounts payable and accrued expenses
|
|
(108,217
|
)
|
|
Income taxes payable
|
|
(1,014
|
)
|
|
Lines of credit and notes payable
|
|
(65,701
|
)
|
|
Capital lease obligations
|
|
(18,293
|
)
|
|
Deferred tax liability (non-current)
|
|
(227,937
|
)
|
|
Total purchase price
|
|
$
|
950,148
|
|
(In thousands)
|
Three months ended June 30, 2015
|
|
Six months ended June 30, 2015
|
Revenues
|
$266,415
|
|
$505,333
|
Net loss
|
(40,252)
|
|
(157,880)
|
Net loss attributable to common shareholders
|
(39,777)
|
|
(156,480)
|
(In thousands)
|
|
EirGen
|
||
Current assets
(1)
|
|
$
|
11,795
|
|
Intangible assets:
|
|
|
||
IPR&D assets
|
|
560
|
|
|
Customer relationships
|
|
34,155
|
|
|
Currently marketed products
|
|
3,919
|
|
|
Total intangible assets
|
|
38,634
|
|
|
Goodwill
|
|
83,373
|
|
|
Property, plant and equipment
|
|
8,117
|
|
|
Other assets
|
|
1,232
|
|
|
Accounts payable and other liabilities
|
|
(6,254
|
)
|
|
Deferred tax liability
|
|
(3,131
|
)
|
|
Total purchase price
|
|
$
|
133,766
|
|
(In thousands)
|
Three months ended June 30, 2015
|
|
Six months ended June 30, 2015
|
Revenues
|
$43,848
|
|
$76,769
|
Net loss
|
(43,420)
|
|
(162,331)
|
Net loss attributable to common shareholders
|
(42,945)
|
|
(160,931)
|
(in thousands)
|
|
|
|
|
||||
Investment type
|
|
Investment Carrying Value
|
|
Underlying Equity in Net Assets
|
||||
Equity method investments
|
|
$
|
27,429
|
|
|
$
|
16,254
|
|
Variable interest entity, equity method
|
|
620
|
|
|
—
|
|
||
Available for sale investments
|
|
5,312
|
|
|
|
|||
Warrants and options
|
|
888
|
|
|
|
|||
Total carrying value of investments
|
|
$
|
34,249
|
|
|
|
(In thousands)
|
Embedded conversion option
|
|
2033 Senior Notes
|
|
Discount
|
|
Debt Issuance Cost
|
|
Total
|
||||||||||
Balance at December 31, 2015
|
$
|
23,737
|
|
|
$
|
32,200
|
|
|
$
|
(6,525
|
)
|
|
$
|
(426
|
)
|
|
$
|
48,986
|
|
Amortization of debt discount and debt issuance costs
|
—
|
|
|
—
|
|
|
907
|
|
|
74
|
|
|
981
|
|
|||||
Change in fair value of embedded derivative
|
(4,734
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,734
|
)
|
|||||
Balance at June 30, 2016
|
$
|
19,003
|
|
|
$
|
32,200
|
|
|
$
|
(5,618
|
)
|
|
$
|
(352
|
)
|
|
$
|
45,233
|
|
|
June 30, 2016
|
Stock price
|
$9.34
|
Conversion Rate
|
141.4827
|
Conversion Price
|
$7.07
|
Maturity date
|
February 1, 2033
|
Risk-free interest rate
|
0.66%
|
Estimated stock volatility
|
49%
|
Estimated credit spread
|
1,018 basis points
|
(In thousands)
|
June 30, 2016
|
||
Fair value of 2033 Senior Notes:
|
|
||
With the embedded derivatives
|
$
|
45,821
|
|
Without the embedded derivatives
|
$
|
26,818
|
|
Estimated fair value of the embedded derivatives
|
$
|
19,003
|
|
(Dollars in thousands)
|
|
|
|
|
|
Balance Outstanding
|
||||||||
Lender
|
|
Interest rate on
borrowings at June 30, 2016
|
|
Credit line
capacity
|
|
June 30,
2016 |
|
December 31,
2015
|
||||||
JPMorgan Chase
|
|
3.85%
|
|
$
|
175,000
|
|
|
$
|
38,135
|
|
|
$
|
72,107
|
|
Itau Bank
|
|
5.50%
|
|
1,450
|
|
|
1,000
|
|
|
282
|
|
|||
Bank of Chile
|
|
6.60%
|
|
2,500
|
|
|
2,493
|
|
|
2,313
|
|
|||
BICE Bank
|
|
5.50%
|
|
2,000
|
|
|
314
|
|
|
1,502
|
|
|||
BBVA Bank
|
|
5.50%
|
|
2,300
|
|
|
1,436
|
|
|
1,825
|
|
|||
Security Bank
|
|
N/A
|
|
N/A
|
|
|
—
|
|
|
145
|
|
|||
Estado Bank
|
|
5.50%
|
|
2,400
|
|
|
1,353
|
|
|
2,210
|
|
|||
Santander Bank
|
|
5.50%
|
|
3,000
|
|
|
1,325
|
|
|
1,345
|
|
|||
Scotiabank
|
|
5.00%
|
|
1,300
|
|
|
1,287
|
|
|
939
|
|
|||
Corpbanca
|
|
5.00%
|
|
500
|
|
|
318
|
|
|
—
|
|
|||
Banco Bilbao Vizcaya
|
|
2.90%
|
|
278
|
|
|
—
|
|
|
—
|
|
|||
Total
|
|
|
|
$
|
190,728
|
|
|
$
|
47,661
|
|
|
$
|
82,668
|
|
(In thousands)
|
June 30,
2016 |
|
December 31,
2015
|
||||
Current portion of notes payable
|
$
|
1,007
|
|
|
$
|
1,054
|
|
Other long-term liabilities
|
1,849
|
|
|
1,963
|
|
||
Total
|
$
|
2,856
|
|
|
$
|
3,017
|
|
(In thousands)
|
Foreign
currency
|
|
Unrealized
gain (loss) in
Accumulated
OCI
|
|
Total
|
||||||
Balance at December 31, 2015
|
$
|
(21,791
|
)
|
|
$
|
(746
|
)
|
|
$
|
(22,537
|
)
|
Other comprehensive income (loss) before reclassifications
|
2,510
|
|
|
(3,404
|
)
|
|
(894
|
)
|
|||
Balance at June 30, 2016
|
$
|
(19,281
|
)
|
|
$
|
(4,150
|
)
|
|
$
|
(23,431
|
)
|
|
As of June 30, 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
|
$
|
8,084
|
|
|
$
|
1,210
|
|
|
$
|
(3,982
|
)
|
|
$
|
5,312
|
|
Total assets
|
$
|
8,084
|
|
|
$
|
1,210
|
|
|
$
|
(3,982
|
)
|
|
$
|
5,312
|
|
|
As of December 31, 2015
|
||||||||||||||
(In thousands)
|
Amortized
Cost
|
|
Gross
unrealized
gains in
Accumulated
OCI
|
|
Gross
unrealized
losses in
Accumulated
OCI
|
|
Fair
value
|
||||||||
Common stock investments, available for sale
|
$
|
2,978
|
|
|
$
|
904
|
|
|
$
|
(267
|
)
|
|
$
|
3,615
|
|
Total assets
|
$
|
2,978
|
|
|
$
|
904
|
|
|
$
|
(267
|
)
|
|
$
|
3,615
|
|
|
Fair value measurements as of June 30, 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
|
$
|
34,680
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
34,680
|
|
Marketable securities
|
15,634
|
|
|
—
|
|
|
—
|
|
|
15,634
|
|
||||
Common stock investments, available for sale
|
5,312
|
|
|
—
|
|
|
—
|
|
|
5,312
|
|
||||
Common stock options/warrants
|
—
|
|
|
888
|
|
|
—
|
|
|
888
|
|
||||
Total assets
|
$
|
55,626
|
|
|
$
|
888
|
|
|
$
|
—
|
|
|
$
|
56,514
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Embedded conversion option
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19,003
|
|
|
$
|
19,003
|
|
Forward contracts
|
—
|
|
|
206
|
|
|
—
|
|
|
206
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
66,634
|
|
|
66,634
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
206
|
|
|
$
|
85,637
|
|
|
$
|
85,843
|
|
|
Fair value measurements as of December 31, 2015
|
||||||||||||||
(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
|
$
|
84,421
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
84,421
|
|
Common stock investments, available for sale
|
3,615
|
|
|
—
|
|
|
—
|
|
|
3,615
|
|
||||
Common stock options/warrants
|
—
|
|
|
5,338
|
|
|
—
|
|
|
5,338
|
|
||||
Forward contracts
|
—
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||
Total assets
|
$
|
88,036
|
|
|
$
|
5,347
|
|
|
$
|
—
|
|
|
$
|
93,383
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Embedded conversion option
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
23,737
|
|
|
$
|
23,737
|
|
Contingent consideration
|
—
|
|
|
—
|
|
|
54,422
|
|
|
54,422
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
78,159
|
|
|
$
|
78,159
|
|
|
June 30, 2016
|
||||||||||||||||||
(In thousands)
|
Carrying
Value
|
|
Total
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
2033 Senior Notes
|
$
|
26,582
|
|
|
$
|
26,818
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,818
|
|
|
June 30, 2016
|
||||||
(In thousands)
|
Contingent
consideration
|
|
Embedded
conversion
option
|
||||
Balance at December 31, 2015
|
$
|
54,422
|
|
|
$
|
23,737
|
|
Total losses for the period:
|
|
|
|
||||
Included in results of operations
|
12,511
|
|
|
(4,734
|
)
|
||
Foreign currency impact
|
14
|
|
|
—
|
|
||
Payments
|
(313
|
)
|
|
—
|
|
||
Balance at June 30, 2016
|
$
|
66,634
|
|
|
$
|
19,003
|
|
(In thousands)
|
Balance Sheet Component
|
|
June 30,
2016 |
|
December 31,
2015 |
||||
Derivative financial instruments:
|
|
|
|
|
|
||||
Common Stock options/warrants
|
Investments, net
|
|
$
|
888
|
|
|
$
|
5,338
|
|
Embedded conversion option
|
2033 Senior Notes, net of discount and estimated fair value of embedded derivatives
|
|
$
|
19,003
|
|
|
$
|
23,737
|
|
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.
|
|
$
|
(206
|
)
|
|
$
|
9
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Derivative gain (loss):
|
|
|
|
|
|
|
|
||||||||
Common Stock options/warrants
|
$
|
(3,730
|
)
|
|
$
|
(2,446
|
)
|
|
$
|
(4,716
|
)
|
|
$
|
1,425
|
|
2033 Senior Notes
|
4,872
|
|
|
(14,220
|
)
|
|
4,734
|
|
|
(67,950
|
)
|
||||
Forward contracts
|
93
|
|
|
110
|
|
|
(206
|
)
|
|
181
|
|
||||
Total
|
$
|
1,235
|
|
|
$
|
(16,556
|
)
|
|
$
|
(188
|
)
|
|
$
|
(66,344
|
)
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
(In thousands)
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Revenue from services:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diagnostics
|
266,012
|
|
|
1,848
|
|
|
518,534
|
|
|
3,857
|
|
||||
Corporate
|
—
|
|
|
60
|
|
|
—
|
|
|
120
|
|
||||
|
$
|
266,012
|
|
|
$
|
1,908
|
|
|
$
|
518,534
|
|
|
$
|
3,977
|
|
Product revenues:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
22,807
|
|
|
$
|
22,848
|
|
|
$
|
42,706
|
|
|
$
|
38,334
|
|
Diagnostics
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
22,807
|
|
|
$
|
22,848
|
|
|
$
|
42,706
|
|
|
$
|
38,334
|
|
Revenue from transfer of intellectual property:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
68,281
|
|
|
$
|
17,673
|
|
|
$
|
86,898
|
|
|
$
|
30,202
|
|
Diagnostics
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
68,281
|
|
|
$
|
17,673
|
|
|
$
|
86,898
|
|
|
$
|
30,202
|
|
Operating income (loss):
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
35,345
|
|
|
$
|
(4,660
|
)
|
|
$
|
34,015
|
|
|
$
|
(42,584
|
)
|
Diagnostics
|
10,374
|
|
|
(7,098
|
)
|
|
8,019
|
|
|
(15,575
|
)
|
||||
Corporate
|
(17,453
|
)
|
|
(12,905
|
)
|
|
(41,286
|
)
|
|
(22,882
|
)
|
||||
Less: Operating loss attributable to noncontrolling interests
|
—
|
|
|
(746
|
)
|
|
—
|
|
|
(1,281
|
)
|
||||
|
$
|
28,266
|
|
|
$
|
(25,409
|
)
|
|
$
|
748
|
|
|
$
|
(82,322
|
)
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
2,987
|
|
|
$
|
2,371
|
|
|
$
|
5,848
|
|
|
$
|
4,138
|
|
Diagnostics
|
21,573
|
|
|
1,754
|
|
|
40,893
|
|
|
3,501
|
|
||||
Corporate
|
20
|
|
|
27
|
|
|
39
|
|
|
46
|
|
||||
|
$
|
24,580
|
|
|
$
|
4,152
|
|
|
$
|
46,780
|
|
|
$
|
7,685
|
|
Net income (loss) from investment in investees:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
391
|
|
|
$
|
(804
|
)
|
|
$
|
(4,430
|
)
|
|
$
|
(2,565
|
)
|
Diagnostics
|
(2,379
|
)
|
|
—
|
|
|
97
|
|
|
—
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(1,988
|
)
|
|
$
|
(804
|
)
|
|
$
|
(4,333
|
)
|
|
$
|
(2,565
|
)
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
266,044
|
|
|
$
|
2,525
|
|
|
$
|
518,482
|
|
|
$
|
5,019
|
|
Ireland
|
71,789
|
|
|
19,376
|
|
|
93,932
|
|
|
31,480
|
|
||||
Chile
|
9,597
|
|
|
8,698
|
|
|
16,580
|
|
|
15,150
|
|
||||
Spain
|
4,324
|
|
|
4,920
|
|
|
8,347
|
|
|
8,857
|
|
||||
Israel
|
4,420
|
|
|
5,942
|
|
|
9,162
|
|
|
10,155
|
|
||||
Mexico
|
926
|
|
|
968
|
|
|
1,635
|
|
|
1,852
|
|
||||
|
$
|
357,100
|
|
|
$
|
42,429
|
|
|
$
|
648,138
|
|
|
$
|
72,513
|
|
(In thousands)
|
June 30,
2016 |
|
December 31,
2015 |
||||
Assets:
|
|
|
|
||||
Pharmaceutical
|
$
|
1,283,339
|
|
|
$
|
1,234,752
|
|
Diagnostics
|
1,408,619
|
|
|
1,421,034
|
|
||
Corporate
|
82,063
|
|
|
143,402
|
|
||
|
$
|
2,774,021
|
|
|
$
|
2,799,188
|
|
Goodwill:
|
|
|
|
||||
Pharmaceutical
|
$
|
253,237
|
|
|
$
|
251,225
|
|
Diagnostics
|
437,823
|
|
|
492,123
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
691,060
|
|
|
$
|
743,348
|
|
Revenues
|
For the three months ended June 30,
|
|
|
||||||||
(In thousands)
|
2016
|
|
2015
|
|
Change
|
||||||
Revenue from services
|
$
|
266,012
|
|
|
$
|
1,908
|
|
|
$
|
264,104
|
|
Revenue from products
|
22,807
|
|
|
22,848
|
|
|
(41
|
)
|
|||
Revenue from transfer of intellectual property and other
|
68,281
|
|
|
17,673
|
|
|
50,608
|
|
|||
Total revenues
|
$
|
357,100
|
|
|
$
|
42,429
|
|
|
$
|
314,671
|
|
Cost of Revenue
|
For the three months ended June 30,
|
|
|
|||||||
(In thousands)
|
2016
|
2015
|
|
Change
|
||||||
Cost of service revenue
|
$
|
140,971
|
|
$
|
2,505
|
|
|
$
|
138,466
|
|
Cost of product revenue
|
12,468
|
|
11,929
|
|
|
539
|
|
|||
Total cost of revenue
|
$
|
153,439
|
|
$
|
14,434
|
|
|
$
|
139,005
|
|
Research and Development Expenses
|
For the three months ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
External expenses:
|
|
|
|
||||
Phase 3 clinical trials
|
$
|
2,946
|
|
|
$
|
3,707
|
|
Manufacturing expense for biological products
|
7,903
|
|
|
7,748
|
|
||
Earlier-stage programs
|
1,843
|
|
|
1,706
|
|
||
Research and development employee-related expenses
|
7,848
|
|
|
6,984
|
|
||
Other internal research and development expenses
|
11,475
|
|
|
9,916
|
|
||
Third-party grants and funding from collaboration agreements
|
(667
|
)
|
|
(491
|
)
|
||
Total research and development expenses
|
$
|
31,348
|
|
|
$
|
29,570
|
|
Revenues
|
For the six months ended June 30,
|
|
|
||||||||
(In thousands)
|
2016
|
|
2015
|
|
Change
|
||||||
Revenue from services
|
$
|
518,534
|
|
|
$
|
3,977
|
|
|
$
|
514,557
|
|
Revenue from products
|
42,706
|
|
|
38,334
|
|
|
4,372
|
|
|||
Revenue from transfer of intellectual property and other
|
86,898
|
|
|
30,202
|
|
|
56,696
|
|
|||
Total revenues
|
$
|
648,138
|
|
|
$
|
72,513
|
|
|
$
|
575,625
|
|
Cost of Revenue
|
For the six months ended June 30,
|
|
|
|||||||
(In thousands)
|
2016
|
2015
|
|
Change
|
||||||
Cost of service revenue
|
$
|
278,568
|
|
$
|
4,764
|
|
|
$
|
273,804
|
|
Cost of product revenue
|
22,407
|
|
19,991
|
|
|
2,416
|
|
|||
Total cost of revenue
|
$
|
300,975
|
|
$
|
24,755
|
|
|
$
|
276,220
|
|
Research and Development Expenses
|
For the six months ended June 30,
|
||||||
|
2016
|
|
2015
|
||||
External expenses:
|
|
|
|
||||
Phase 3 clinical trials
|
$
|
5,789
|
|
|
$
|
6,989
|
|
Manufacturing expense for biological products
|
14,939
|
|
|
14,101
|
|
||
Earlier-stage programs
|
3,039
|
|
|
4,472
|
|
||
Research and development employee-related expenses
|
14,548
|
|
|
15,191
|
|
||
Other internal research and development expenses
|
22,322
|
|
|
15,276
|
|
||
Third-party grants and funding from collaboration agreements
|
(1,467
|
)
|
|
(957
|
)
|
||
Total research and development expenses
|
$
|
59,170
|
|
|
$
|
55,072
|
|
Contractual obligations
(In thousands)
|
|
Remaining six months ending December 31,
2016 |
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
|
Total
|
||||||||||||||
Open purchase orders
|
|
$
|
51,954
|
|
|
$
|
2,405
|
|
|
$
|
5
|
|
|
$
|
5
|
|
|
$
|
9
|
|
|
$
|
—
|
|
|
$
|
54,377
|
|
Operating leases
|
|
9,791
|
|
|
12,209
|
|
|
10,021
|
|
|
8,529
|
|
|
4,543
|
|
|
8,322
|
|
|
53,415
|
|
|||||||
Capital leases
|
|
2,740
|
|
|
4,182
|
|
|
2,949
|
|
|
1,805
|
|
|
1,045
|
|
|
876
|
|
|
13,597
|
|
|||||||
2033 Senior Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,200
|
|
|
—
|
|
|
—
|
|
|
32,200
|
|
|||||||
Deferred payments
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
20,000
|
|
|||||||
Mortgages and other debts payable
|
|
1,778
|
|
|
299
|
|
|
250
|
|
|
242
|
|
|
239
|
|
|
934
|
|
|
3,742
|
|
|||||||
Lines of credit
|
|
9,526
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,135
|
|
|
—
|
|
|
47,661
|
|
|||||||
Severance payments
|
|
6,327
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,327
|
|
|||||||
Interest commitments
|
|
609
|
|
|
1,026
|
|
|
1,017
|
|
|
204
|
|
|
1,323
|
|
|
55
|
|
|
4,234
|
|
|||||||
Total
|
|
$
|
87,725
|
|
|
$
|
25,121
|
|
|
$
|
19,242
|
|
|
$
|
47,985
|
|
|
$
|
45,295
|
|
|
$
|
10,187
|
|
|
$
|
235,554
|
|
•
|
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. 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 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 2.1
(1)
|
Agreement and Plan of Merger, dated June 3, 2015, by and among, Opko Health, Inc., Bamboo Acquisition, Inc. and Bio-Reference Laboratories, Inc.
|
Exhibit 2.2
(2)
|
Arrangement Agreement, dated June 29, 2016, by and among OPKO Health, Inc., OPKO Global Holdings, Inc. and Transition Therapeutics, Inc.
|
Exhibit 3.1
(3)
|
Amended and Restated Certificate of Incorporation.
|
Exhibit 3.2
(4)
|
Amended and Restated By-Laws.
|
Exhibit 3.3
(5)
|
Certificate of Designation of Series D Preferred Stock.
|
Exhibit 4.3
(6)
|
Indenture, dated as of January 30, 2013, between OPKO Health, Inc. and Wells Fargo Bank, National Association.
|
Exhibit 10.1
(7)
|
OPKO Health, Inc. 2016 Equity Incentive Plan.
|
Exhibit 10.2
(+)
|
Development and License Agreement between OPKO Health, Inc. and Vifor Fresenius Medical Care Renal Pharma Ltd. dated May 8, 2016.
|
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 June 30, 2016.
|
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 June 30, 2016.
|
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 June 30, 2016.
|
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 June 30, 2016.
|
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
|
(+)
|
Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission.
|
(1)
|
Filed as Annex A to the Company’s Registration Statement on Form S-4 filed with the Securities and Exchange Commission on July 2, 2015, and incorporated herein.
|
(2)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 30, 2016, and incorporated herein by reference.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
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.
|
(6)
|
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.
|
(7)
|
Filed with the Company’s Definitive Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on March 25, 2016, and incorporated herein by reference.
|
Date: August 8, 2016
|
|
OPKO Health, Inc.
|
|
|
|
|
|
/s/ Adam Logal
|
|
|
Adam Logal
|
|
|
Senior Vice President, Chief Financial Officer,
|
|
|
Chief Accounting Officer and Treasurer
|
(+)
|
Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission.
|
A.
|
OPKO is the owner of all right, title and interest in and to the Product.
|
B.
|
VF, directly or through one of its Affiliates, desires to develop, commercialize, distribute, sell, market and promote the Product in the Field in the Territory, and OPKO is willing to grant VF the right to conduct such activities, all on the terms and subject to the conditions set forth in this Agreement.
|
C.
|
OPKO and VF desire to work together to develop the Product, promote the Product, and to optimize its sales and commercial success in the Territory.
|
(i)
|
provide general oversight for the activities of the JDC;
|
(ii)
|
subject to Article 8, provide a forum for the Parties to share information, knowledge and planning on the on-going development and commercialization of the Products in and outside the Territory;
|
(iii)
|
review the Development Plan updates or amendments, including Additional Indications as contemplated by Section 4.1;
|
(iv)
|
monitor the development of and process for seeking and obtaining Regulatory Approval with respect to the Products in the Territory in the Field based on the updates provided by the JDC;
|
(v)
|
support VF’s development of a strategy for commercialization of the Products for use in the Field in the Territory and exchange information on best practices for commercialization activities for use in the Field;
|
(vi)
|
discuss reasonable measures to align on a Global Branding Strategy and master documents (for example, training materials) and coordinate activities with respect to certain key opinion leaders;
|
(vii)
|
monitor and discuss OPKO’s supply of Product for the Territory under the Supply Agreement;
|
(viii)
|
discuss a reimbursement strategy for the Product in the Territory;
|
(ix)
|
perform such other activities as are expressly allocated to the JSC in this Agreement; and
|
(x)
|
provide a forum for discussing and attempting to resolve any issues involving the interpretation or application of this Agreement.
|
(i)
|
[***] between the parties;
|
(ii)
|
provide a forum for the Parties to share information, knowledge and planning on the on-going development, regulatory strategy and Regulatory Approval activities for the Products relevant to the Field in and outside the Territory;
|
(iii)
|
review and discuss the Development Plan updates or amendments;
|
(iv)
|
review and exchange pharmacovigilance information and reports for Products in and outside the Field and in accordance with the pharmacovigilance agreement;
|
(v)
|
monitor development activities for Products in the Field in the Territory, including with respect to operational matters such as enrollment strategies, site selection, and clinical trial vendor strategies;
|
(vi)
|
review and facilitate the exchange of all information (other than any information relating to the process development or manufacturing of Product) relating to or arising from all development, regulatory strategy and Regulatory Approval activities described in subsections (iv) - (vi) above for Products in the Field in and outside the Territory;
|
(vii)
|
discuss and review a regulatory strategy and plan for obtaining Regulatory Approvals for the Products in the Field in the Territory;
|
(viii)
|
with input from OPKO with respect to its strategy for clinical trials, support development and implementation of a strategy for clinical trials with respect to Products in the Field in the Territory;
|
(ix)
|
discuss and coordinate post-approval changes to regulatory filings and documentation, including any changes to the registered detail for Products in the Field in and outside the Territory;
|
(x)
|
provide on a quarterly basis updates on its activities and achievements to the JSC for review and comment;
|
(xi)
|
perform such other activities as are expressly allocated to the JDC in this Agreement; and
|
(xii)
|
review and discuss any Third Party to be retained by either Party to perform material activities (e.g., regulatory, manufacturing, clinical or quality activities) with respect to Products in the Territory.
|
(i)
|
by mutual agreement of the Parties;
|
(ii)
|
upon a material breach of this Agreement by the other Party where such breach is not cured within [***] days (or [***] days for any
|
(iii)
|
upon the bankruptcy or insolvency, or the making or seeking to make or arrange an assignment for the benefit of creditors of the other Party, or the initiation of proceedings in voluntary or involuntary bankruptcy, the institution of any reorganization, arrangement or other readjustment of debt plan of the other Party not involving the Bankruptcy Code, the appointment of a receiver or trustee of such Party’s property that is not discharged within ninety (90) days, or any corporate action taken by the board of directors (or similar governing body) of the other Party in furtherance of any of the foregoing actions.
|
(i)
|
(A) All licenses granted to VF under this Agreement shall terminate; (B) all rights in and to the Products in the Territory shall revert to OPKO; (C) VF shall transfer to OPKO [***] cost (unless termination by VF was pursuant to Section [***], in which case [***] shall bear such cost) all relevant and necessary materials, results, analyses, reports, Product data, the URL for Product-specific websites, technology, know-how, regulatory filings, and other information in whatever form developed or generated as of the effective date of such termination by or on behalf of VF or its Affiliates with respect to Products; and (D) VF shall submit to any and all Regulatory Authorities in jurisdictions in which any regulatory filings have been made with respect to the Products, within [***] days after the effective date of such termination, a letter (with a copy to OPKO) notifying such Regulatory Authorities of the transfer of any regulatory filings for a Product in such jurisdictions from VF to OPKO; provided that [***]. VF, its Affiliates or their respective permitted Sublicensees shall be permitted to sell, subject to the payment of applicable royalties due under Article 5 and Section 3.2, any Products in inventory (including completion for sale of any work in progress) over the [***] month period following termination.
|
(ii)
|
Any sublicense granted to a Sublicensee that is not in breach under the applicable sublicense will continue in effect so long as the Sublicensee makes the payments required under Article 5.
|
(i)
|
All licenses granted to VF by OPKO shall terminate; provided, however, that, unless, at [***] price VF, its Affiliates or their respective permitted Sublicensees shall be permitted to sell, subject to the payment of applicable royalties due under Article 5 and Section 3.2, any Products in inventory (including completion for sale of any work in progress) over the [***] month period following termination.
|
(ii)
|
All rights in and to the Products in the Territory shall revert to OPKO;
|
(iii)
|
VF shall transfer to OPKO [***] all relevant and necessary materials, results, analyses, reports, Product data, technology, know-how, regulatory filings, and other information in whatever form developed, controlled, or generated as of the effective date of such termination by or on behalf of VF or its Affiliates with respect to Products, including Product Inventions. VF shall submit to any and all Regulatory Authorities in jurisdictions in which any regulatory filings have been made with respect to the Products, within [***] days after
|
(iv)
|
Any sublicense granted to a Sublicensee that is not in breach under the applicable sublicense will continue in effect so long as the Sublicensee makes the payments required under Article 5.
|
(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: August 8, 2016
|
/s/ Phillip Frost, M.D.
|
|
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:
|
(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: August 8, 2016
|
/s/ Adam Logal
|
|
Adam Logal
|
|
Senior Vice President, Chief Financial Officer,
Chief Accounting Officer and Treasurer
|
Date: August 8, 2016
|
/s/ Phillip Frost, M.D.
|
|
Phillip Frost, M.D.
|
|
Chief Executive Officer
|
Date: August 8, 2016
|
/s/ Adam Logal
|
|
Adam Logal
|
|
Senior Vice President, Chief Financial Officer
Chief Accounting Officer and Treasurer
|