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ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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75-2402409
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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4400 Biscayne Blvd.
Miami, FL 33137 (Address of Principal Executive Offices) (Zip Code) |
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(305) 575-4100
(Registrant’s Telephone Number, Including Area Code) |
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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•
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we have a history of losses and may not generate sustained positive cash flow sufficient to fund our operations and research and development programs;
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•
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the risks inherent in developing, obtaining regulatory approvals for and commercializing new, commercially viable and competitive products and treatments;
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•
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our research and development activities may not result in commercially viable products;
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•
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that earlier clinical results of effectiveness and safety may not be reproducible or indicative of future results;
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•
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that we may fail to obtain regulatory approval for hGH-CTP or successfully commercialize
Rayaldee
and hGH-CTP;
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•
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that we may not generate profits or cash flow from our laboratory operations or substantial revenue from our pharmaceutical and diagnostic products;
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•
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that currently available over-the-counter and prescription products, as well as products under development by others, may prove to be as or more effective than our products for the indications being studied;
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•
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our ability to build a successful pharmaceutical sales and marketing infrastructure;
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•
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our ability and our distribution and marketing partners’ ability to comply with regulatory requirements regarding the sales, marketing and manufacturing of our products and product candidates and the operation of our laboratories;
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•
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the performance of our third-party distribution partners, licensees and manufacturers over which we have limited control;
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•
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our success is dependent on the involvement and continued efforts of our Chairman and Chief Executive Officer;
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•
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integration challenges for Transition Therapeutics, BioReference, EirGen and other acquired businesses;
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•
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changes in regulation and policies in the United States and other countries, including increasing downward pressure on healthcare reimbursement;
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•
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our ability to manage our growth and our expanded operations;
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•
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increased competition, including price competition;
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•
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changing relationships with payers, including the various state and multi-state Blues programs, suppliers and strategic partners;
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•
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efforts by third-party payors to reduce utilization and reimbursement for clinical testing services;
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•
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failure to timely or accurately bill and collect for our services;
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•
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failure in our information technology systems, including cybersecurity attacks or other data security or privacy incidents;
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•
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failure to obtain and retain new clients and business partners, or a reduction in tests ordered or specimens submitted by existing clients;
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•
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failure to establish, and perform to, appropriate quality standards to assure that the highest level of quality is observed in the performance of our testing services;
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•
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failure to maintain the security of patient-related information;
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•
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our ability to obtain and maintain intellectual property protection for our products;
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•
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our ability to defend our intellectual property rights with respect to our products;
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•
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our ability to operate our business without infringing the intellectual property rights of others;
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•
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our ability to attract and retain key scientific and management personnel;
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•
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our need for, and ability to obtain, additional financing;
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•
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adverse results in material litigation matters or governmental inquiries;
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•
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failure to obtain and maintain regulatory approval outside the U.S.;
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•
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legal, economic, political, regulatory, currency exchange, and other risks associated with international operations; and
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•
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our ability to finance and successfully complete construction of a research, development and manufacturing center in Waterford, Ireland.
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June 30, 2018
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December 31, 2017
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||||
ASSETS
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|
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||||
Current assets:
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||||
Cash and cash equivalents
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$
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80,381
|
|
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$
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91,499
|
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Accounts receivable, net
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152,777
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|
|
165,516
|
|
||
Inventory, net
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46,753
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|
49,333
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|
||
Other current assets and prepaid expenses
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41,651
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|
|
42,513
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||
Total current assets
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321,562
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348,861
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||
Property, plant and equipment, net
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150,156
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|
|
146,557
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||
Intangible assets, net
|
648,541
|
|
|
683,835
|
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||
In-process research and development
|
645,714
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|
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647,347
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Goodwill
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714,234
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717,099
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Investments
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45,497
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40,642
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Other assets
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5,246
|
|
|
5,615
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||
Total assets
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$
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2,530,950
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$
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2,589,956
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LIABILITIES AND EQUITY
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|
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||||
Current liabilities:
|
|
|
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||||
Accounts payable
|
$
|
69,061
|
|
|
$
|
74,307
|
|
Accrued expenses
|
200,992
|
|
|
230,301
|
|
||
Current portion of 2033 Senior Notes
|
30,343
|
|
|
—
|
|
||
Current portion of lines of credit and notes payable
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6,465
|
|
|
11,926
|
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||
Total current liabilities
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306,861
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|
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316,534
|
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||
2023 Convertible Notes and 2033 Senior Notes
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55,894
|
|
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29,160
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Deferred tax liabilities, net
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148,255
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|
148,729
|
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Other long-term liabilities, principally contract liabilities, contingent consideration and line of credit
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209,444
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|
|
239,955
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Total long-term liabilities
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413,593
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417,844
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Total liabilities
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720,454
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734,378
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Equity:
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|
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||||
Common Stock - $0.01 par value, 750,000,000 shares authorized; 560,169,422 and 560,023,745
shares issued at June 30, 2018 and December 31, 2017, respectively |
5,602
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5,600
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|
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Treasury Stock - 549,907 and 549,907 shares at June 30, 2018 and December 31, 2017, respectively
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(1,791
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)
|
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(1,791
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)
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||
Additional paid-in capital
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2,901,086
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2,889,256
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Accumulated other comprehensive loss
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(13,004
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)
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(528
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)
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Accumulated deficit
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(1,081,397
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)
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(1,036,959
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)
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Total shareholders’ equity
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1,810,496
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1,855,578
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Total liabilities and equity
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$
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2,530,950
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|
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$
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2,589,956
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For the three months ended June 30,
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For the six months ended June 30,
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||||||||||||
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2018
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2017
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2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
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||||||||
Revenue from services
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$
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216,055
|
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$
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233,912
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|
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$
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427,369
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$
|
462,456
|
|
Revenue from products
|
28,523
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|
|
28,966
|
|
|
56,374
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|
|
51,197
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|
||||
Revenue from transfer of intellectual property and other
|
19,107
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|
|
29,723
|
|
|
34,855
|
|
|
45,328
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|
||||
Total revenues
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263,685
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|
|
292,601
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|
|
518,598
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|
|
558,981
|
|
||||
Costs and expenses:
|
|
|
|
|
|
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||||||||
Cost of service revenue
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134,408
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|
|
143,901
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273,849
|
|
|
283,867
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||||
Cost of product revenue
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15,652
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|
13,505
|
|
|
30,300
|
|
|
28,334
|
|
||||
Selling, general and administrative
|
87,653
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|
|
105,579
|
|
|
179,172
|
|
|
215,523
|
|
||||
Research and development
|
29,211
|
|
|
33,128
|
|
|
62,097
|
|
|
59,685
|
|
||||
Contingent consideration
|
(15,358
|
)
|
|
4,366
|
|
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(13,599
|
)
|
|
6,738
|
|
||||
Amortization of intangible assets
|
17,227
|
|
|
17,953
|
|
|
34,498
|
|
|
35,881
|
|
||||
Total costs and expenses
|
268,793
|
|
|
318,432
|
|
|
566,317
|
|
|
630,028
|
|
||||
Operating loss
|
(5,108
|
)
|
|
(25,831
|
)
|
|
(47,719
|
)
|
|
(71,047
|
)
|
||||
Other income and (expense), net:
|
|
|
|
|
|
|
|
||||||||
Interest income
|
27
|
|
|
136
|
|
|
67
|
|
|
385
|
|
||||
Interest expense
|
(2,722
|
)
|
|
(1,502
|
)
|
|
(4,989
|
)
|
|
(2,931
|
)
|
||||
Fair value changes of derivative instruments, net
|
2,248
|
|
|
5,482
|
|
|
3,644
|
|
|
9,519
|
|
||||
Other income (expense), net
|
8,584
|
|
|
(533
|
)
|
|
10,477
|
|
|
2,509
|
|
||||
Other income and (expense), net
|
8,137
|
|
|
3,583
|
|
|
9,199
|
|
|
9,482
|
|
||||
Income (loss) before income taxes and investment losses
|
3,029
|
|
|
(22,248
|
)
|
|
(38,520
|
)
|
|
(61,565
|
)
|
||||
Income tax benefit (provision)
|
(2,017
|
)
|
|
10,960
|
|
|
(1,126
|
)
|
|
17,904
|
|
||||
Net income (loss) before investment losses
|
1,012
|
|
|
(11,288
|
)
|
|
(39,646
|
)
|
|
(43,661
|
)
|
||||
Loss from investments in investees
|
(7,213
|
)
|
|
(5,628
|
)
|
|
(9,669
|
)
|
|
(7,758
|
)
|
||||
Net loss
|
$
|
(6,201
|
)
|
|
$
|
(16,916
|
)
|
|
$
|
(49,315
|
)
|
|
$
|
(51,419
|
)
|
Loss per share:
|
|
|
|
|
|
|
|
||||||||
Loss per share, basic
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
Loss per share, diluted
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.11
|
)
|
Weighted average common shares outstanding, basic
|
559,541,253
|
|
|
559,347,540
|
|
|
559,507,732
|
|
|
558,892,375
|
|
||||
Weighted average common shares outstanding, diluted
|
559,541,253
|
|
|
564,163,808
|
|
|
559,507,732
|
|
|
563,617,274
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net loss
|
$
|
(6,201
|
)
|
|
$
|
(16,916
|
)
|
|
$
|
(49,315
|
)
|
|
$
|
(51,419
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency translation and other comprehensive income (loss)
|
(12,465
|
)
|
|
10,495
|
|
|
(7,600
|
)
|
|
13,088
|
|
||||
Investments:
|
|
|
|
|
|
|
|
||||||||
Change in unrealized loss, net of tax
|
—
|
|
|
(206
|
)
|
|
—
|
|
|
(743
|
)
|
||||
Reclassification adjustment due to adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
(4,876
|
)
|
|
—
|
|
||||
Reclassification adjustments for losses included in net loss, net of tax
|
—
|
|
|
594
|
|
|
—
|
|
|
594
|
|
||||
Comprehensive loss
|
$
|
(18,666
|
)
|
|
$
|
(6,033
|
)
|
|
$
|
(61,791
|
)
|
|
$
|
(38,480
|
)
|
|
For the six months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(49,315
|
)
|
|
$
|
(51,419
|
)
|
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
|
|
|
||||
Depreciation and amortization
|
49,518
|
|
|
51,281
|
|
||
Non-cash interest
|
2,198
|
|
|
1,294
|
|
||
Amortization of deferred financing costs
|
99
|
|
|
112
|
|
||
Losses from investments in investees
|
9,669
|
|
|
7,758
|
|
||
Equity-based compensation – employees and non-employees
|
11,514
|
|
|
15,844
|
|
||
Gain on disposal of fixed assets
|
(495
|
)
|
|
(2,473
|
)
|
||
Change in fair value of equity securities and derivative instruments
|
(14,819
|
)
|
|
(9,519
|
)
|
||
Change in fair value of contingent consideration
|
(13,599
|
)
|
|
6,738
|
|
||
Deferred income tax benefit
|
(2,026
|
)
|
|
(23,039
|
)
|
||
Changes in assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||
Accounts receivable, net
|
12,440
|
|
|
(30,865
|
)
|
||
Inventory, net
|
894
|
|
|
(443
|
)
|
||
Other current assets and prepaid expenses
|
(3,730
|
)
|
|
3,692
|
|
||
Other assets
|
(146
|
)
|
|
(254
|
)
|
||
Accounts payable
|
(8,092
|
)
|
|
9,439
|
|
||
Foreign currency measurement
|
(77
|
)
|
|
230
|
|
||
Contract liabilities
|
(30,812
|
)
|
|
(31,122
|
)
|
||
Accrued expenses and other liabilities
|
(15,820
|
)
|
|
(3,837
|
)
|
||
Net cash used in operating activities
|
(52,599
|
)
|
|
(56,583
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Investments in investees
|
(1,000
|
)
|
|
(3,000
|
)
|
||
Proceeds from sale of equity securities
|
1,286
|
|
|
—
|
|
||
Purchase of marketable securities
|
—
|
|
|
(5
|
)
|
||
Proceeds from the sale of property, plant and equipment
|
840
|
|
|
3,398
|
|
||
Capital expenditures
|
(12,792
|
)
|
|
(16,805
|
)
|
||
Net cash used in investing activities
|
(11,666
|
)
|
|
(16,412
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Issuance of 2033 Senior Notes, including to related parties
|
55,000
|
|
|
—
|
|
||
Proceeds from the exercise of Common Stock options and warrants
|
318
|
|
|
1,916
|
|
||
Borrowings on lines of credit
|
18,817
|
|
|
45,524
|
|
||
Repayments of lines of credit
|
(20,924
|
)
|
|
(13,525
|
)
|
||
Net cash provided by financing activities
|
53,211
|
|
|
33,915
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(64
|
)
|
|
877
|
|
||
Net decrease in cash and cash equivalents
|
(11,118
|
)
|
|
(38,203
|
)
|
||
Cash and cash equivalents at beginning of period
|
91,499
|
|
|
168,733
|
|
||
Cash and cash equivalents at end of period
|
$
|
80,381
|
|
|
$
|
130,530
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
||||
Interest paid
|
$
|
785
|
|
|
$
|
748
|
|
Income taxes paid, net of refunds
|
$
|
5,251
|
|
|
$
|
4,321
|
|
Non-cash financing:
|
|
|
|
||||
Shares issued upon the conversion of:
|
|
|
|
||||
Common Stock options and warrants, surrendered in net exercise
|
$
|
806
|
|
|
$
|
1,546
|
|
Issuance of capital stock for contingent consideration settlement:
|
|
|
|
||||
OPKO Health Europe
|
$
|
—
|
|
|
$
|
303
|
|
|
|
|
|
||||
|
|
|
|
•
|
For all reporting periods presented before January 1, 2018, we have not restated revenue from contracts that begin and are completed within the same annual reporting period.
|
•
|
For all reporting periods presented before January 1, 2018, we have not disclosed the amount of the transaction price allocated to the remaining performance obligations or an explanation of when we expect to recognize that amount as revenue.
|
•
|
We have applied the practical expedient provided for by Topic 606 by not adjusting the transaction price for significant financing components for periods less than one year.
|
|
For the three months ended June 30, 2017
(in thousands)
|
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Revenue from services
|
$
|
233,912
|
|
|
$
|
256,671
|
|
|
$
|
(22,759
|
)
|
Revenue from transfer of intellectual property and other
|
29,723
|
|
|
28,576
|
|
|
1,147
|
|
|||
Selling, general and administrative
|
105,579
|
|
|
128,338
|
|
|
(22,759
|
)
|
|||
Research and development
|
33,128
|
|
|
32,593
|
|
|
535
|
|
|
For the six months ended June 30, 2017
(in thousands)
|
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Revenue from services
|
$
|
462,456
|
|
|
$
|
511,956
|
|
|
$
|
(49,500
|
)
|
Revenue from transfer of intellectual property and other
|
45,328
|
|
|
47,154
|
|
|
(1,826
|
)
|
|||
Selling, general and administrative
|
215,523
|
|
|
265,023
|
|
|
(49,500
|
)
|
|||
Research and development
|
59,685
|
|
|
58,615
|
|
|
1,070
|
|
|
December 31, 2017
(in thousands)
|
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Other current assets and prepaid expenses
|
$
|
42,513
|
|
|
$
|
37,113
|
|
|
$
|
5,400
|
|
Accrued expenses
|
230,301
|
|
|
215,102
|
|
|
15,199
|
|
|||
Other long-term liabilities, principally contract liabilities, contingent consideration and line of credit
|
239,955
|
|
|
219,954
|
|
|
20,001
|
|
|||
Accumulated deficit
|
(1,036,959
|
)
|
|
(1,007,159
|
)
|
|
(29,800
|
)
|
|
For the six months ended June 30, 2017
(in thousands) |
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Net loss
|
$
|
(51,419
|
)
|
|
$
|
(48,523
|
)
|
|
$
|
(2,896
|
)
|
Contract liabilities
|
(31,122
|
)
|
|
(34,018
|
)
|
|
2,896
|
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
(In thousands, except per share data)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net loss, basic
|
$
|
(6,201
|
)
|
|
$
|
(16,916
|
)
|
|
$
|
(49,315
|
)
|
|
$
|
(51,419
|
)
|
Add: Interest on 2033 Senior Notes
|
—
|
|
|
652
|
|
|
—
|
|
|
1,291
|
|
||||
Change in FV of embedded derivative income
|
—
|
|
|
(5,069
|
)
|
|
—
|
|
|
(10,014
|
)
|
||||
Net loss, diluted
|
$
|
(6,201
|
)
|
|
$
|
(21,333
|
)
|
|
$
|
(49,315
|
)
|
|
$
|
(60,142
|
)
|
|
|
|
|
|
|
|
|
||||||||
Denominator
|
|
|
|
|
|
|
|
||||||||
(Shares in thousands)
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding, basic
|
559,541
|
|
|
559,348
|
|
|
559,508
|
|
|
558,892
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Stock options
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
2033 Senior Notes
|
—
|
|
|
4,816
|
|
|
—
|
|
|
4,725
|
|
||||
Dilutive potential shares
|
—
|
|
|
4,816
|
|
|
—
|
|
|
4,725
|
|
||||
Weighted average common shares outstanding, diluted
|
559,541
|
|
|
564,164
|
|
|
559,508
|
|
|
563,617
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss per share, basic
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.09
|
)
|
Loss per share, diluted
|
$
|
(0.01
|
)
|
|
$
|
(0.04
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.11
|
)
|
(In thousands)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Accounts receivable, net:
|
|
|
|
||||
Accounts receivable
|
$
|
154,269
|
|
|
$
|
166,962
|
|
Less: allowance for doubtful accounts
|
(1,492
|
)
|
|
(1,446
|
)
|
||
|
$
|
152,777
|
|
|
$
|
165,516
|
|
Inventories, net:
|
|
|
|
||||
Consumable supplies
|
$
|
24,986
|
|
|
$
|
21,546
|
|
Finished products
|
16,783
|
|
|
21,012
|
|
||
Work in-process
|
3,910
|
|
|
5,873
|
|
||
Raw materials
|
5,800
|
|
|
7,467
|
|
||
Less: inventory reserve
|
(4,726
|
)
|
|
(6,565
|
)
|
||
|
$
|
46,753
|
|
|
$
|
49,333
|
|
Other current assets and prepaid expenses:
|
|
|
|
||||
Taxes recoverable
|
21,319
|
|
|
18,138
|
|
||
Other receivables
|
2,031
|
|
|
8,798
|
|
||
Prepaid supplies
|
10,278
|
|
|
8,207
|
|
||
Prepaid insurance
|
3,259
|
|
|
3,532
|
|
||
Other
|
4,764
|
|
|
3,838
|
|
||
|
$
|
41,651
|
|
|
$
|
42,513
|
|
Intangible assets, net:
|
|
|
|
||||
Customer relationships
|
$
|
447,225
|
|
|
$
|
448,345
|
|
Technologies
|
340,815
|
|
|
340,921
|
|
||
Trade names
|
50,494
|
|
|
50,553
|
|
||
Licenses
|
10,246
|
|
|
10,305
|
|
||
Covenants not to compete
|
16,367
|
|
|
16,372
|
|
||
Product registrations
|
9,694
|
|
|
10,475
|
|
||
Other
|
5,696
|
|
|
5,799
|
|
||
Less: accumulated amortization
|
(231,996
|
)
|
|
(198,935
|
)
|
||
|
$
|
648,541
|
|
|
$
|
683,835
|
|
Accrued expenses:
|
|
|
|
||||
Contract liabilities
|
$
|
61,846
|
|
|
$
|
61,388
|
|
Employee benefits
|
46,621
|
|
|
50,377
|
|
||
Clinical trials
|
11,598
|
|
|
12,191
|
|
||
Taxes payable
|
3,604
|
|
|
4,609
|
|
||
Contingent consideration
|
2,042
|
|
|
11,750
|
|
||
Capital leases short-term
|
3,166
|
|
|
3,399
|
|
||
Milestone payment
|
4,967
|
|
|
4,868
|
|
||
Professional fees
|
1,727
|
|
|
2,355
|
|
||
Other
|
65,421
|
|
|
79,364
|
|
||
|
$
|
200,992
|
|
|
$
|
230,301
|
|
|
|
|
|
(In thousands)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Other long-term liabilities:
|
|
|
|
||||
Contract liabilities
|
$
|
47,720
|
|
|
$
|
78,990
|
|
Line of credit
|
105,539
|
|
|
104,152
|
|
||
Contingent consideration
|
25,712
|
|
|
29,603
|
|
||
Mortgages and other debts payable
|
1,704
|
|
|
1,567
|
|
||
Capital leases long-term
|
6,638
|
|
|
7,786
|
|
||
Other
|
22,131
|
|
|
17,857
|
|
||
|
$
|
209,444
|
|
|
$
|
239,955
|
|
|
2018
|
||||||||||
(In thousands)
|
Balance at January 1
|
|
Foreign exchange and other
|
|
Balance at June 30
th
|
||||||
Pharmaceuticals
|
|
|
|
|
|
||||||
CURNA
|
$
|
4,827
|
|
|
$
|
—
|
|
|
$
|
4,827
|
|
EirGen
|
89,226
|
|
|
(2,201
|
)
|
|
87,025
|
|
|||
FineTech
|
11,698
|
|
|
—
|
|
|
11,698
|
|
|||
OPKO Chile
|
5,203
|
|
|
(307
|
)
|
|
4,896
|
|
|||
OPKO Biologics
|
139,784
|
|
|
—
|
|
|
139,784
|
|
|||
OPKO Health Europe
|
7,898
|
|
|
(197
|
)
|
|
7,701
|
|
|||
OPKO Renal
|
2,069
|
|
|
—
|
|
|
2,069
|
|
|||
Transition Therapeutics
|
3,608
|
|
|
(160
|
)
|
|
3,448
|
|
|||
|
|
|
|
|
|
||||||
Diagnostics
|
|
|
|
|
|
||||||
BioReference
|
401,821
|
|
|
—
|
|
|
401,821
|
|
|||
OPKO Diagnostics
|
17,977
|
|
|
—
|
|
|
17,977
|
|
|||
OPKO Lab
|
32,988
|
|
|
—
|
|
|
32,988
|
|
|||
|
$
|
717,099
|
|
|
$
|
(2,865
|
)
|
|
$
|
714,234
|
|
(in thousands)
|
|
|
|
|
||||
Investment type
|
|
Investment Carrying Value
|
|
Underlying Equity in Net Assets
|
||||
Equity method investments
|
|
$
|
19,703
|
|
|
$
|
15,547
|
|
Variable interest entity, equity method
|
|
706
|
|
|
—
|
|
||
Equity securities
|
|
22,350
|
|
|
|
|||
Equity securities with no readily determinable fair value
|
|
939
|
|
|
|
|||
Warrants and options
|
|
1,799
|
|
|
|
|||
Total carrying value of investments
|
|
$
|
45,497
|
|
|
|
(In thousands)
|
2033 Senior Notes
|
|
Discount
|
|
Debt Issuance Cost
|
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
31,850
|
|
|
$
|
(2,565
|
)
|
|
$
|
(125
|
)
|
|
$
|
29,160
|
|
Amortization of debt discount and debt issuance costs
|
—
|
|
|
1,109
|
|
|
74
|
|
|
1,183
|
|
||||
Balance at June 30, 2018
|
$
|
31,850
|
|
|
$
|
(1,456
|
)
|
|
$
|
(51
|
)
|
|
$
|
30,343
|
|
(Dollars in thousands)
|
|
|
|
|
|
Balance Outstanding
|
||||||||
Lender
|
|
Interest rate on
borrowings at June 30, 2018
|
|
Credit line
capacity
|
|
June 30,
2018 |
|
December 31,
2017
|
||||||
JPMorgan Chase
|
|
4.01%
|
|
$
|
175,000
|
|
|
$
|
105,539
|
|
|
$
|
104,152
|
|
Itau Bank
|
|
5.50%
|
|
1,810
|
|
|
1,179
|
|
|
446
|
|
|||
Bank of Chile
|
|
6.60%
|
|
3,800
|
|
|
502
|
|
|
1,598
|
|
|||
BICE Bank
|
|
5.50%
|
|
2,500
|
|
|
798
|
|
|
1,819
|
|
|||
BBVA Bank
|
|
5.50%
|
|
3,250
|
|
|
250
|
|
|
1,665
|
|
|||
Security Bank
|
|
5.50%
|
|
98
|
|
|
98
|
|
|
501
|
|
|||
Estado Bank
|
|
5.50%
|
|
3,500
|
|
|
757
|
|
|
2,111
|
|
|||
Santander Bank
|
|
5.50%
|
|
4,500
|
|
|
262
|
|
|
1,988
|
|
|||
Scotiabank
|
|
5.00%
|
|
1,800
|
|
|
9
|
|
|
384
|
|
|||
Banco Bilbao Vizcaya
|
|
2.90%
|
|
292
|
|
|
—
|
|
|
—
|
|
|||
Santander Bank
|
|
2.67%
|
|
350
|
|
|
102
|
|
|
—
|
|
|||
Total
|
|
|
|
$
|
196,900
|
|
|
$
|
109,496
|
|
|
$
|
114,664
|
|
(In thousands)
|
June 30,
2018 |
|
December 31,
2017
|
||||
Current portion of notes payable
|
$
|
2,821
|
|
|
$
|
1,632
|
|
Other long-term liabilities
|
6,469
|
|
|
2,011
|
|
||
Total
|
$
|
9,290
|
|
|
$
|
3,643
|
|
(In thousands)
|
Foreign
currency
|
|
Unrealized
gain (loss) in
Accumulated
OCI
|
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
(5,404
|
)
|
|
$
|
4,876
|
|
|
$
|
(528
|
)
|
Other comprehensive loss before reclassifications
|
(7,600
|
)
|
|
—
|
|
|
(7,600
|
)
|
|||
Reclassification adjustment due to adoption of ASU 2016-01
|
—
|
|
|
(4,876
|
)
|
|
(4,876
|
)
|
|||
Net other comprehensive loss
|
(7,600
|
)
|
|
(4,876
|
)
|
|
(12,476
|
)
|
|||
Balance at June 30, 2018
|
$
|
(13,004
|
)
|
|
$
|
—
|
|
|
$
|
(13,004
|
)
|
|
Fair value measurements as of June 30, 2018
|
||||||||||||||
(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:
|
|
|
|
|
|
|
|
||||||||
Equity securities
|
22,350
|
|
|
—
|
|
|
—
|
|
|
22,350
|
|
||||
Common stock options/warrants
|
—
|
|
|
1,799
|
|
|
—
|
|
|
1,799
|
|
||||
Forward contracts
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
||||
Total assets
|
$
|
22,350
|
|
|
$
|
1,822
|
|
|
$
|
—
|
|
|
$
|
24,172
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration
|
—
|
|
|
—
|
|
|
27,754
|
|
|
27,754
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27,754
|
|
|
$
|
27,754
|
|
|
Fair value measurements as of December 31, 2017
|
||||||||||||||
(In thousands)
|
Quoted
prices in
active
markets for
identical
assets
(Level 1)
|
|
Significant
other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
107
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
107
|
|
Equity securities
|
12,461
|
|
|
—
|
|
|
—
|
|
|
12,461
|
|
||||
Common stock options/warrants
|
—
|
|
|
3,333
|
|
|
—
|
|
|
3,333
|
|
||||
Total assets
|
$
|
12,568
|
|
|
$
|
3,333
|
|
|
$
|
—
|
|
|
$
|
15,901
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Forward contracts
|
—
|
|
|
317
|
|
|
—
|
|
|
317
|
|
||||
Contingent consideration
|
—
|
|
|
—
|
|
|
41,353
|
|
|
41,353
|
|
||||
Total liabilities
|
$
|
—
|
|
|
$
|
317
|
|
|
$
|
41,353
|
|
|
$
|
41,670
|
|
|
June 30, 2018
|
||
(In thousands)
|
Contingent
consideration
|
||
Balance at December 31, 2017
|
$
|
41,353
|
|
Change in fair value:
|
|
||
Included in results of operations
|
(13,599
|
)
|
|
Balance at June 30, 2018
|
$
|
27,754
|
|
(In thousands)
|
Balance Sheet Component
|
|
June 30,
2018 |
|
December 31,
2017 |
||||
Derivative financial instruments:
|
|
|
|
|
|
||||
Common Stock options/warrants
|
Investments, net
|
|
$
|
1,799
|
|
|
$
|
3,333
|
|
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.
|
|
$
|
23
|
|
|
$
|
(317
|
)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Derivative gain (loss):
|
|
|
|
|
|
|
|
||||||||
Common Stock options/warrants
|
$
|
1,916
|
|
|
$
|
444
|
|
|
$
|
3,587
|
|
|
$
|
(512
|
)
|
2033 Senior Notes
|
—
|
|
|
5,069
|
|
|
—
|
|
|
10,014
|
|
||||
Forward contracts
|
332
|
|
|
(31
|
)
|
|
57
|
|
|
17
|
|
||||
Total
|
$
|
2,248
|
|
|
$
|
5,482
|
|
|
$
|
3,644
|
|
|
$
|
9,519
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Healthcare insurers
|
$
|
92,033
|
|
|
$
|
104,366
|
|
|
$
|
192,986
|
|
|
$
|
217,062
|
|
Government payers
|
72,459
|
|
|
80,037
|
|
|
139,595
|
|
|
157,090
|
|
||||
Client payers
|
45,828
|
|
|
42,961
|
|
|
83,357
|
|
|
76,900
|
|
||||
Patients
|
5,735
|
|
|
6,548
|
|
|
11,431
|
|
|
11,404
|
|
||||
Total
|
$
|
216,055
|
|
|
$
|
233,912
|
|
|
$
|
427,369
|
|
|
$
|
462,456
|
|
(In thousands)
|
|
Chargebacks, discounts, rebates and fees
|
|
Governmental
|
|
Returns
|
|
Total
|
||||||||
Balance at December 31, 2017
|
|
$
|
233
|
|
|
$
|
348
|
|
|
$
|
437
|
|
|
$
|
1,018
|
|
Provision related to current period sales
|
|
2,188
|
|
|
2,936
|
|
|
—
|
|
|
5,124
|
|
||||
Credits or payments made
|
|
(1,697
|
)
|
|
(2,557
|
)
|
|
(311
|
)
|
|
(4,565
|
)
|
||||
Balance at June 30, 2018
|
|
$
|
724
|
|
|
$
|
727
|
|
|
$
|
126
|
|
|
$
|
1,577
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total gross
Rayaldee
sales
|
|
|
|
|
|
|
|
$
|
13,582
|
|
||||||
Provision for
Rayaldee
sales allowances and accruals as a percentage of gross
Rayaldee
sales
|
|
|
|
|
|
|
|
38
|
%
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenue from services:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diagnostics
|
216,055
|
|
|
233,912
|
|
|
427,369
|
|
|
462,456
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
216,055
|
|
|
$
|
233,912
|
|
|
$
|
427,369
|
|
|
$
|
462,456
|
|
Revenue from products:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
28,523
|
|
|
$
|
28,966
|
|
|
$
|
56,374
|
|
|
$
|
51,197
|
|
Diagnostics
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
28,523
|
|
|
$
|
28,966
|
|
|
$
|
56,374
|
|
|
$
|
51,197
|
|
Revenue from transfer of intellectual property and other:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
19,107
|
|
|
$
|
29,723
|
|
|
$
|
34,855
|
|
|
$
|
45,328
|
|
Diagnostics
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
19,107
|
|
|
$
|
29,723
|
|
|
$
|
34,855
|
|
|
$
|
45,328
|
|
Operating loss:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
2,165
|
|
|
$
|
(8,009
|
)
|
|
$
|
(20,783
|
)
|
|
$
|
(34,154
|
)
|
Diagnostics
|
1,475
|
|
|
(4,944
|
)
|
|
(6,543
|
)
|
|
(8,044
|
)
|
||||
Corporate
|
(8,748
|
)
|
|
(12,878
|
)
|
|
(20,393
|
)
|
|
(28,849
|
)
|
||||
|
$
|
(5,108
|
)
|
|
$
|
(25,831
|
)
|
|
$
|
(47,719
|
)
|
|
$
|
(71,047
|
)
|
Depreciation and amortization:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
6,752
|
|
|
$
|
6,694
|
|
|
$
|
13,492
|
|
|
$
|
13,469
|
|
Diagnostics
|
17,989
|
|
|
18,827
|
|
|
35,975
|
|
|
37,752
|
|
||||
Corporate
|
21
|
|
|
30
|
|
|
51
|
|
|
60
|
|
||||
|
$
|
24,762
|
|
|
$
|
25,551
|
|
|
$
|
49,518
|
|
|
$
|
51,281
|
|
Loss from investment in investees:
|
|
|
|
|
|
|
|
||||||||
Pharmaceutical
|
$
|
(6,942
|
)
|
|
$
|
(5,309
|
)
|
|
$
|
(9,114
|
)
|
|
$
|
(7,123
|
)
|
Diagnostics
|
(271
|
)
|
|
(319
|
)
|
|
(555
|
)
|
|
(635
|
)
|
||||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
|
$
|
(7,213
|
)
|
|
$
|
(5,628
|
)
|
|
$
|
(9,669
|
)
|
|
$
|
(7,758
|
)
|
Revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
222,535
|
|
|
$
|
244,650
|
|
|
$
|
437,845
|
|
|
$
|
474,084
|
|
Ireland
|
20,778
|
|
|
22,525
|
|
|
38,060
|
|
|
39,734
|
|
||||
Chile
|
11,937
|
|
|
11,899
|
|
|
23,670
|
|
|
22,020
|
|
||||
Spain
|
4,592
|
|
|
5,118
|
|
|
10,125
|
|
|
9,623
|
|
||||
Israel
|
2,526
|
|
|
7,654
|
|
|
6,141
|
|
|
11,872
|
|
||||
Mexico
|
1,302
|
|
|
724
|
|
|
2,723
|
|
|
1,589
|
|
||||
Other
|
15
|
|
|
31
|
|
|
34
|
|
|
59
|
|
||||
|
$
|
263,685
|
|
|
$
|
292,601
|
|
|
$
|
518,598
|
|
|
$
|
558,981
|
|
(In thousands)
|
June 30,
2018 |
|
December 31,
2017 |
||||
Assets:
|
|
|
|
||||
Pharmaceutical
|
$
|
1,258,293
|
|
|
$
|
1,287,964
|
|
Diagnostics
|
1,217,456
|
|
|
1,241,388
|
|
||
Corporate
|
55,201
|
|
|
60,604
|
|
||
|
$
|
2,530,950
|
|
|
$
|
2,589,956
|
|
Goodwill:
|
|
|
|
||||
Pharmaceutical
|
$
|
261,447
|
|
|
$
|
264,313
|
|
Diagnostics
|
452,787
|
|
|
452,786
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
714,234
|
|
|
$
|
717,099
|
|
Revenues
|
For the three months ended June 30,
|
|
|
||||||||
(In thousands)
|
2018
|
|
2017
|
|
Change
|
||||||
Revenue from services
|
$
|
216,055
|
|
|
$
|
233,912
|
|
|
$
|
(17,857
|
)
|
Revenue from products
|
28,523
|
|
|
28,966
|
|
|
(443
|
)
|
|||
Revenue from transfer of intellectual property and other
|
19,107
|
|
|
29,723
|
|
|
(10,616
|
)
|
|||
Total revenues
|
$
|
263,685
|
|
|
$
|
292,601
|
|
|
$
|
(28,916
|
)
|
|
Three months ended June 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Healthcare insurers
|
$
|
92,033
|
|
|
$
|
104,366
|
|
Government payers
|
72,459
|
|
|
80,037
|
|
||
Client payers
|
45,828
|
|
|
42,961
|
|
||
Patients
|
5,735
|
|
|
6,548
|
|
||
Total
|
$
|
216,055
|
|
|
$
|
233,912
|
|
Cost of Revenue
|
For the three months ended June 30,
|
|
|
|||||||
(In thousands)
|
2018
|
2017
|
|
Change
|
||||||
Cost of service revenue
|
$
|
134,408
|
|
$
|
143,901
|
|
|
$
|
(9,493
|
)
|
Cost of product revenue
|
15,652
|
|
13,505
|
|
|
2,147
|
|
|||
Total cost of revenue
|
$
|
150,060
|
|
$
|
157,406
|
|
|
$
|
(7,346
|
)
|
Research and Development Expenses
|
For the three months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
External expenses:
|
|
|
|
||||
Phase 3 clinical trials
|
$
|
4,828
|
|
|
$
|
3,464
|
|
Manufacturing expense for biological products
|
6,376
|
|
|
13,881
|
|
||
PMA studies
|
—
|
|
|
356
|
|
||
Earlier-stage programs
|
2,449
|
|
|
1,261
|
|
||
Research and development employee-related expenses
|
9,582
|
|
|
5,985
|
|
||
Other internal research and development expenses
|
5,976
|
|
|
8,181
|
|
||
Total research and development expenses
|
$
|
29,211
|
|
|
$
|
33,128
|
|
Revenues
|
For the six months ended June 30,
|
|
|
||||||||
(In thousands)
|
2018
|
|
2017
|
|
Change
|
||||||
Revenue from services
|
$
|
427,369
|
|
|
$
|
462,456
|
|
|
$
|
(35,087
|
)
|
Revenue from products
|
56,374
|
|
|
51,197
|
|
|
5,177
|
|
|||
Revenue from transfer of intellectual property and other
|
34,855
|
|
|
45,328
|
|
|
(10,473
|
)
|
|||
Total revenues
|
$
|
518,598
|
|
|
$
|
558,981
|
|
|
$
|
(40,383
|
)
|
|
Six months ended June 30,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Healthcare insurers
|
$
|
192,986
|
|
|
$
|
217,062
|
|
Government payers
|
139,595
|
|
|
157,090
|
|
||
Client payers
|
83,357
|
|
|
76,900
|
|
||
Patients
|
11,431
|
|
|
11,404
|
|
||
Total
|
$
|
427,369
|
|
|
$
|
462,456
|
|
Cost of Revenue
|
For the six months ended June 30,
|
|
|
|||||||
(In thousands)
|
2018
|
2017
|
|
Change
|
||||||
Cost of service revenue
|
$
|
273,849
|
|
$
|
283,867
|
|
|
$
|
(10,018
|
)
|
Cost of product revenue
|
30,300
|
|
28,334
|
|
|
1,966
|
|
|||
Total cost of revenue
|
$
|
304,149
|
|
$
|
312,201
|
|
|
$
|
(8,052
|
)
|
Research and Development Expenses
|
For the six months ended June 30,
|
||||||
|
2018
|
|
2017
|
||||
External expenses:
|
|
|
|
||||
Phase 3 clinical trials
|
$
|
8,606
|
|
|
$
|
8,079
|
|
Manufacturing expense for biological products
|
17,670
|
|
|
20,275
|
|
||
PMA studies
|
59
|
|
|
445
|
|
||
Earlier-stage programs
|
5,615
|
|
|
3,255
|
|
||
Research and development employee-related expenses
|
18,233
|
|
|
12,738
|
|
||
Other internal research and development expenses
|
11,914
|
|
|
14,893
|
|
||
Total research and development expenses
|
$
|
62,097
|
|
|
$
|
59,685
|
|
Contractual obligations
(In thousands)
|
|
Remaining six months ending December 31, 2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
|
Total
|
||||||||||||||
Open purchase orders
|
|
$
|
82,466
|
|
|
$
|
1,933
|
|
|
$
|
51
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
84,450
|
|
Operating leases
|
|
9,684
|
|
|
16,262
|
|
|
10,361
|
|
|
6,928
|
|
|
3,304
|
|
|
3,637
|
|
|
50,176
|
|
|||||||
Capital leases
|
|
1,526
|
|
|
2,908
|
|
|
2,478
|
|
|
1,771
|
|
|
675
|
|
|
445
|
|
|
9,803
|
|
|||||||
2033 Senior Notes and 2023 Convertible Notes
|
|
—
|
|
|
31,850
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
55,000
|
|
|
86,850
|
|
|||||||
Deferred payments
|
|
5,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|||||||
Mortgages and other debts payable
|
|
2,198
|
|
|
1,129
|
|
|
498
|
|
|
462
|
|
|
359
|
|
|
4,644
|
|
|
9,290
|
|
|||||||
Lines of credit
|
|
3,855
|
|
|
—
|
|
|
105,539
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
109,394
|
|
|||||||
Severance payments
|
|
3,568
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,568
|
|
|||||||
Interest commitments
|
|
514
|
|
|
215
|
|
|
41
|
|
|
30
|
|
|
16
|
|
|
13,713
|
|
|
14,529
|
|
|||||||
Total
|
|
$
|
108,811
|
|
|
$
|
59,297
|
|
|
$
|
118,968
|
|
|
$
|
9,191
|
|
|
$
|
4,354
|
|
|
$
|
77,439
|
|
|
$
|
378,060
|
|
•
|
Unit of account – Most intangible assets are valued as single global assets rather than multiple assets for each jurisdiction or indication after considering the development stage, expected levels of incremental costs to obtain additional approvals, risks associated with further development, amount and timing of benefits expected to be derived in the future, expected patent lives in various jurisdictions and the intention to promote the asset as a global brand.
|
•
|
Estimated useful life – The asset life expected to contribute meaningful cash flows is determined after considering all pertinent matters associated with the asset, including expected regulatory approval dates (if unapproved), exclusivity periods and other legal, regulatory or contractual provisions as well as the effects of any obsolescence, demand, competition, and other economic factors, including barriers to entry.
|
•
|
Probability of Technical and Regulatory Success (“PTRS”) Rate – PTRS rates are determined based upon industry averages considering the respective program’s development stage and disease indication and adjusted for specific information or data known at the acquisition date. Subsequent clinical results or other internal or external data obtained could alter the PTRS rate and materially impact the estimated fair value of the intangible asset in subsequent periods leading to impairment charges.
|
•
|
Projections – Future revenues are estimated after considering many factors such as initial market opportunity, pricing, sales trajectories to peak sales levels, competitive environment and product evolution. Future costs and expenses are estimated after considering historical market trends, market participant synergies and the timing and level of additional development costs to obtain the initial or additional regulatory approvals, maintain or further enhance the product. We generally assume initial positive cash flows to commence shortly after the receipt of expected regulatory approvals which typically may not occur for a number of years. Actual cash flows attributed to the project are likely to be different than those assumed since projections are subjected to multiple factors including trial results and regulatory matters which could materially change the ultimate commercial success of the asset as well as significantly alter the costs to develop the respective asset into commercially viable products.
|
•
|
Tax rates – The expected future income is tax effected using a market participant tax rate. In determining the tax rate, we consider the jurisdiction in which the intellectual property is held and location of research and manufacturing infrastructure. We also consider that any repatriation of earnings would likely have U.S. tax consequences.
|
•
|
Discount rate – Discount rates are selected after considering the risks inherent in the future cash flows; the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry, as well as expected changes in standards of practice for indications addressed by the asset.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
(In thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Healthcare insurers
|
$
|
92,033
|
|
|
$
|
104,366
|
|
|
$
|
192,986
|
|
|
$
|
217,062
|
|
Government payers
|
72,459
|
|
|
80,037
|
|
|
139,595
|
|
|
157,090
|
|
||||
Client payers
|
45,828
|
|
|
42,961
|
|
|
83,357
|
|
|
76,900
|
|
||||
Patients
|
5,735
|
|
|
6,548
|
|
|
11,431
|
|
|
11,404
|
|
||||
Total
|
$
|
216,055
|
|
|
$
|
233,912
|
|
|
$
|
427,369
|
|
|
$
|
462,456
|
|
(In thousands)
|
|
Chargebacks, discounts, rebates and fees
|
|
Governmental
|
|
Returns
|
|
Total
|
||||||||
Balance at December 31, 2017
|
|
$
|
233
|
|
|
$
|
348
|
|
|
$
|
437
|
|
|
$
|
1,018
|
|
Provision related to current period sales
|
|
2,188
|
|
|
2,936
|
|
|
—
|
|
|
5,124
|
|
||||
Credits or payments made
|
|
(1,697
|
)
|
|
(2,557
|
)
|
|
(311
|
)
|
|
(4,565
|
)
|
||||
Balance at June 30, 2018
|
|
$
|
724
|
|
|
$
|
727
|
|
|
$
|
126
|
|
|
$
|
1,577
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total gross
Rayaldee
sales
|
|
|
|
|
|
|
|
$
|
13,582
|
|
||||||
Provision for
Rayaldee
sales allowances and accruals as a percentage of gross
Rayaldee
sales
|
|
|
|
|
|
|
|
38
|
%
|
•
|
For all reporting periods presented before January 1, 2018, we have not restated revenue from contracts that begin and are completed within the same annual reporting period.
|
•
|
For all reporting periods presented before January 1, 2018, we have not disclosed the amount of the transaction price allocated to the remaining performance obligations or an explanation of when we expect to recognize that amount as revenue.
|
•
|
We have applied the practical expedient provided for by Topic 606 by not adjusting the transaction price for significant financing components for periods less than one year.
|
|
For the three months ended June 30, 2017
(in thousands)
|
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Revenue from services
|
$
|
233,912
|
|
|
$
|
256,671
|
|
|
$
|
(22,759
|
)
|
Revenue from transfer of intellectual property and other
|
29,723
|
|
|
28,576
|
|
|
1,147
|
|
|||
Selling, general and administrative
|
105,579
|
|
|
128,338
|
|
|
(22,759
|
)
|
|||
Research and development
|
33,128
|
|
|
32,593
|
|
|
535
|
|
|
For the six months ended June 30, 2017
(in thousands)
|
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Revenue from services
|
$
|
462,456
|
|
|
$
|
511,956
|
|
|
$
|
(49,500
|
)
|
Revenue from transfer of intellectual property and other
|
45,328
|
|
|
47,154
|
|
|
(1,826
|
)
|
|||
Selling, general and administrative
|
215,523
|
|
|
265,023
|
|
|
(49,500
|
)
|
|||
Research and development
|
59,685
|
|
|
58,615
|
|
|
1,070
|
|
|
December 31, 2017
(in thousands)
|
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Other current assets and prepaid expenses
|
$
|
42,513
|
|
|
$
|
37,113
|
|
|
$
|
5,400
|
|
Accrued expenses
|
230,301
|
|
|
215,102
|
|
|
15,199
|
|
|||
Other long-term liabilities, principally contract liabilities, contingent consideration and line of credit
|
239,955
|
|
|
219,954
|
|
|
20,001
|
|
|||
Accumulated deficit
|
(1,036,959
|
)
|
|
(1,007,159
|
)
|
|
(29,800
|
)
|
|
For the six months ended June 30, 2017
(in thousands)
|
||||||||||
|
As adjusted under Topic 606
|
|
As originally reported
|
|
Effect of change
|
||||||
Net loss
|
$
|
(51,419
|
)
|
|
$
|
(48,523
|
)
|
|
$
|
(2,896
|
)
|
Contract liabilities
|
(31,122
|
)
|
|
(34,018
|
)
|
|
2,896
|
|
*
|
Filed herewith.
|
(1)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2013 for the Company’s three month period ended September 30, 2013, and incorporated herein by reference.
|
(2)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2008, and incorporated herein by reference.
|
(3)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 24, 2009, and incorporated herein by reference.
|
(4)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2013, and incorporated herein by reference.
|
Date: August 7, 2018
|
|
OPKO Health, Inc.
|
|
|
|
|
|
/s/ Adam Logal
|
|
|
Adam Logal
|
|
|
Senior Vice President, Chief Financial Officer,
|
|
|
Chief Accounting Officer and Treasurer
|
(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 7, 2018
|
/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 7, 2018
|
/s/ Adam Logal
|
|
Adam Logal
|
|
Senior Vice President, Chief Financial Officer,
Chief Accounting Officer and Treasurer
|
Date: August 7, 2018
|
/s/ Phillip Frost, M.D.
|
|
Phillip Frost, M.D.
|
|
Chief Executive Officer
|
Date: August 7, 2018
|
/s/ Adam Logal
|
|
Adam Logal
|
|
Senior Vice President, Chief Financial Officer
Chief Accounting Officer and Treasurer
|