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☒
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ANNUAL 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.
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Miami,
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FL
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33137
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(Address of Principal Executive Offices) (Zip Code)
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(305)
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575-4100
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(Registrant’s Telephone Number, Including Area Code)
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Securities registered pursuant to section 12(b) of the Act:
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Title of Each Class
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Trading Symbol
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Name of Each Exchange on Which Registered
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Common Stock, $.01 par value per share
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OPK
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NASDAQ Global Select Market
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Large accelerated filer
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ý
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Accelerated filer
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o
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Non-accelerated filer
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o
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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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Part I.
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Part II.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Part III.
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Item 10.
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Directors, Executive Officers and Corporate Governance
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Item 11.
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Executive Compensation
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Item 13.
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Certain Relationships and Related Transactions and Director Independence
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Item 14.
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Principal Accounting Fees and Services
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Part IV.
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Item 15.
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Signatures
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Certifications
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EX-21
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EX-23.1
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EX-31.1
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EX-31.2
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EX-32.1
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EX-32.2
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EX-101. INS XBRL Instance Document
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EX-101.SCH XBRL Taxonomy Extension Schema Document
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EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
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EX-101.DEF XBRL Taxonomy Extension Definition Linkbase Document
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EX-101.LAB XBRL Taxonomy Extension Label Linkbase Document
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EX-101.PRE 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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our need for, and ability to obtain, additional financing when needed on favorable terms, or at all;
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adverse results in material litigation matters or governmental inquiries, including, without limitation, pending class action and derivative lawsuits which followed the now settled lawsuit against the Company and its Chairman and Chief Executive Officer by the SEC;
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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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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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the success of our relationship with Pfizer;
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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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that we may not generate profits or cash flow from our laboratory operations or substantial revenue from Rayaldee and our other 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 acquired businesses;
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•
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availability of insurance coverage with respect to material litigation matters;
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•
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changes in regulation and policies in the United States (“U.S.”) 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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increased competition, including price competition;
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changing relationships with payors, including the various state and multi-state Blues programs, suppliers and strategic partners;
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efforts by third-party payors to reduce utilization and reimbursement for clinical testing services;
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our ability to maintain reimbursement coverage for our products and services, including the 4Kscore test;
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failure to timely or accurately bill and collect for our services;
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the information technology systems that we rely on may be subject to unauthorized tampering, cyberattack or other data security or privacy incidents that could impact our billing processes or disrupt our operations;
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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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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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failure to maintain the security of patient-related information;
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our ability to obtain and maintain intellectual property protection for our products;
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our ability to defend our intellectual property rights with respect to our products;
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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;
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the risk that the carrying value of certain assets may exceed the fair value of the assets causing us to impair goodwill or other intangible assets;
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failure to obtain and maintain regulatory approval outside the U.S.; and
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legal, economic, political, regulatory, currency exchange, and other risks associated with international operations.
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ITEM 1.
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BUSINESS
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•
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continue to enhance our commercialization capability in the U.S. and internationally;
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develop and commercialize Rayaldee for new indications, including the treatment of SHPT in patients with vitamin D insufficiency and stage 5 CKD requiring regular hemodialysis;
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obtain requisite regulatory approval and compile clinical data for our most advanced product candidates; and
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expand into other medical markets that provide significant opportunities and that we believe are complementary to and synergistic with our business.
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Products and technologies. We may continue to pursue product and technology acquisitions and licenses that will complement our existing businesses and provide new product and market opportunities, enhance our profitability, leverage our existing assets, and contribute to our own organic growth.
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Commercial businesses. We may continue to pursue acquisitions of commercial businesses that will both drive our growth and provide geographically diverse sales and distribution opportunities.
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Early stage investments. We have made and may continue to make investments in early stage companies that we perceive to have valuable proprietary technology and significant potential to create value for OPKO as a shareholder.
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BioReference Laboratories. BioReference constitutes our core clinical testing laboratory offering automated, high volume routine testing services, STAT testing, informatics, HIV, Hep C and other molecular tests.
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GenPath (Oncology). National oncology presence with expertise in cancer pathology and diagnostics, as well as molecular diagnostics. Core tests include FLOW, IHC, MicroArray, FISH, ISH, Morphology, and full service oncology.
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•
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GenPath (Women’s Health). Innovative technology platform for sexually transmitted infections has enabled expansion nationally with specimens coming from 41 states, including Image Directed Paps analysis, HPV Plus, and STI Testing.
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GeneDx. Industry leading national laboratory for testing rare and ultra-rare genetic diseases with international reach, performing testing on specimens from more than 50 countries.
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•
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our ability to meet all necessary regulatory requirements to advance our product candidates through clinical trials and the regulatory approval process in the U.S. and abroad;
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•
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the perception by physicians and other members of the health care community of the safety, efficacy, and benefits of our products compared to those of competing products or therapies;
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•
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our ability to manufacture products we may develop on a commercial scale;
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the effectiveness of our sales and marketing efforts;
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the willingness of physicians to adopt a new diagnostic or treatment regimen represented by our technology;
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•
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our ability to secure reimbursement for our product candidates;
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•
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the price of the products we may develop and commercialize relative to competing products;
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•
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our ability to accurately forecast and meet demand for our product candidates if regulatory approvals are achieved;
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•
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our ability to develop a commercial scale infrastructure either on our own or with a collaborator, which would include expansion of existing facilities, including our manufacturing facilities, development of a sales and distribution network, and other operational and financial systems necessary to support our increased scale;
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our ability to maintain a proprietary position in our technologies; and
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our ability to rapidly expand the existing information technology infrastructure and configure existing operational, manufacturing, and financial systems (on our own or with third party collaborators) necessary to support our increased scale, which would include existing or additional facilities and or partners.
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the circumstances under which uses and disclosures of PHI are permitted or required without a specific authorization by the patient, including but not limited to treatment purposes, to obtain payments for services and health care operations activities;
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a patient’s rights to access, amend and receive an accounting of certain disclosures of PHI;
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the content of notices of privacy practices for PHI; and
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administrative, technical and physical safeguards required of entities that use or receive PHI electronically.
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•
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Makes clear that situations involving impermissible access, acquisition, use or disclosure of protected health information are now presumed to be a breach unless the covered entity or business associate is able to demonstrate that there is a low probability that the information has been compromised;
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Defines the term “business associate” to include subcontractors and agents that receive, create, maintain or transmit protected health information on behalf of the business associate;
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Establishes new parameters for covered entities and business associates on uses and disclosures of PHI for fundraising and marketing; and
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Establishes clear restrictions on the sale of PHI without patient authorization.
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•
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be found to be ineffective, unreliable, or otherwise inadequate or otherwise fail to receive regulatory approval;
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be difficult or impossible to manufacture on a commercial scale;
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be uneconomical to market or otherwise not be effectively marketed;
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fail to be successfully commercialized if adequate reimbursement from government health administration authorities, private health insurers, and other organizations for the costs of these products is unavailable;
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be impossible to commercialize because they infringe on the proprietary rights of others or compete with products marketed by others that are superior; or
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fail to be commercialized prior to the successful marketing of similar products by competitors.
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safety, efficacy, convenience and cost-effectiveness of our product compared to products of our competitors;
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scope of approved uses and marketing approvals;
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availability of patent or regulatory exclusivity;
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timing of market approvals and market entries;
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ongoing regulatory obligations following approval;
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any restrictions or “black box” warnings required on the product labeling:
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availability of alternative products from our competitors;
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acceptance of the price of our product;
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effectiveness of our sales force and promotional efforts;
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the level of reimbursement of our product;
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acceptance of our product on government and private formularies;
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ability to market our product effectively at the retail level or in the appropriate setting of care; and
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the reputation of our product.
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▪
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our ability to establish and maintain adequate infrastructure to support the commercial launch and sale of our diagnostic tests, including establishing adequate laboratory space, information technology infrastructure, sample collection and tracking systems, electronic ordering and reporting systems and other infrastructure and hiring adequate laboratory and other personnel;
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the success of the validation studies for our diagnostic tests under development and our ability to publish study results in peer-reviewed journals;
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the availability of alternative and competing tests or products and technological innovations or other advances in medicine that cause our technologies to be less competitive;
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▪
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the accuracy rates of such tests, including rates of false-negatives and/or false-positives;
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▪
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concerns regarding the safety or effectiveness or clinical utility of our diagnostic tests;
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changes in the regulatory environment affecting health care and health care providers, including changes in laws regulating laboratory testing and/or device manufacturers;
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the extent and success of our sales and marketing efforts and ability to drive adoption of our diagnostic tests;
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coverage and reimbursement levels by government payors and private insurers;
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pricing pressures and changes in third-party payor reimbursement policies; and
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intellectual property rights held by others or others infringing our intellectual property rights.
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a limited number of, and competition for, suitable patients with the particular types of disease required for enrollment in our clinical trials or that otherwise meet the protocol’s inclusion criteria and do not meet any of the exclusion criteria;
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a limited number of, and competition for, suitable serum or other samples from patients with particular types of disease required for our validation studies;
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a limited number of, and competition for, suitable sites to conduct our clinical trials;
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delay or failure to obtain FDA or other non-U.S. regulatory authorities’ approval or agreement to commence a clinical trial;
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delay or failure to obtain sufficient supplies of the product candidate for our clinical trials;
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requirements to provide the drugs, diagnostic tests, or medical devices required in our clinical trial protocols or clinical trials at no cost or cost, which may require significant expenditures that we are unable or unwilling to make;
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delay or failure to reach agreement on acceptable clinical trial agreement terms or clinical trial protocols with prospective sites or investigators;
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delay or failure to obtain institutional review board (“IRB”) approval to conduct or renew a clinical trial at a prospective site; and
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insufficient liquidity to fund our preclinical and clinical studies.
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slower than expected rates of patient recruitment and enrollment;
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failure of patients to complete the clinical trial;
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unforeseen safety issues;
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lack of efficacy evidenced during clinical trials;
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termination of our clinical trials by one or more clinical trial sites;
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inability or unwillingness of patients or medical investigators to follow our clinical trial protocols;
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inability to monitor patients adequately during or after treatment; and
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insufficient liquidity to fund ongoing studies.
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•
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regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication, or field alerts to physicians and pharmacies;
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regulatory authorities may withdraw their approval of the product and require us to take our approved product off the market;
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we may be required to change the way the product is administered, conduct additional clinical trials, or change the labeling of the product;
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we may have limitations on how we promote our products;
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sales of products may decrease significantly;
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we may be subject to litigation or product liability claims; and
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our reputation may suffer.
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timing of market introduction of competitive products;
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safety and efficacy of our product compared to other products;
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prevalence and severity of any side effects;
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potential advantages or disadvantages over alternative treatments;
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strength of marketing and distribution support;
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price of our products, both in absolute terms and relative to alternative treatments;
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availability of coverage and reimbursement from government and other third-party payors;
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potential product liability claims;
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limitations or warnings contained in a product’s regulatory authority-approved labeling; and
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changes in the standard of care for the targeted indications for any of our products or product candidates, which could reduce the marketing impact of any claims that we could make following applicable regulatory authority approval.
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restrictions on the products, manufacturers, or manufacturing process;
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adverse inspectional observations (Form 483), warning letters, or non-warning letters incorporating inspectional observations;
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civil and criminal penalties;
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injunctions;
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suspension or withdrawal of regulatory approvals or clearances;
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product seizures, detentions, or import bans;
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voluntary or mandatory product recalls and publicity requirements;
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total or partial suspension of production;
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imposition of restrictions on operations, including costly new manufacturing requirements; and
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refusal to approve or clear pending NDAs or supplements to approved NDAs, applications or pre-market notifications.
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a drug candidate may not be deemed safe or effective;
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a medical device candidate may not be deemed to be substantially equivalent to a lawfully marketed non-PMA device, in the case of a premarket notification;
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the FDA may not find the data from pre-clinical studies and clinical trials sufficient;
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the FDA may not approve our or our third-party manufacturer’s processes or facilities; or
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the FDA may change its approval or clearance policies or adopt new regulations.
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federal and state laws applicable to billing and claims payment;
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federal and state laboratory anti-mark-up laws;
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federal and state anti-kickback laws;
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physician self-referral law;
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federal and state false claims laws;
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federal self-referral and financial inducement prohibition laws, commonly known as the Stark Law, and the state equivalents;
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federal and state laws governing laboratory licensing and testing, including CLIA;
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federal and state laws governing the development, use and distribution of LDTs;
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HIPAA, along with the revisions to HIPAA as a result of the amendments from the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH Act”), and analogous state laws and non-US laws, including the General Data Protection Regulation;
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federal, state and foreign regulation of privacy, security, electronic transactions and identity theft;
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federal, state and local laws governing the handling, transportation and disposal of medical and hazardous waste;
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Occupational Safety and Health Administration rules and regulations;
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changes to laws, regulations and rules as a result of the implementation and/or repeal of part or all of 2010 Health Care Reform Legislation; and
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changes to other federal, state and local laws, regulations and rules, including tax laws.
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difficulty integrating acquired technologies, products, services, operations, and personnel with the existing businesses;
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diversion of management’s attention in connection with both negotiating the acquisitions and integrating the businesses;
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strain on managerial and operational resources as management tries to oversee larger operations and investments;
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difficulty implementing and maintaining effective internal control over financial reporting at businesses that we acquire or invest in, particularly if they are not located near our existing operations;
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exposure to unforeseen liabilities of acquired companies or companies in which we invest;
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potential costly and time-consuming litigation, including stockholder lawsuits;
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potential issuance of securities to equity holders of the company being acquired with rights that are superior to the rights of holders of our Common Stock, or which may have a dilutive effect on our stockholders;
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the need to incur additional debt or use cash;
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the requirement to record potentially significant additional future operating costs for the amortization of
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non-cash charges or impairments due to a decline in the value of our investments.
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combining the companies’ operations and corporate functions, as well as obtaining anticipated synergies;
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combining our business with BioReference’s business and meeting the capital requirements of the combined company, in a manner that permits us to achieve the cost savings or revenue synergies anticipated to result from the merger, the failure of which would result in the anticipated benefits of the merger not being realized in the time frame currently anticipated or at all;
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•
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integrating the companies’ technologies;
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integrating and unifying the offerings and services available to customers;
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identifying and eliminating redundant and underperforming functions and assets;
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harmonizing and/or addressing differences in the companies’ operating practices, employee development and compensation programs, internal controls and other policies, procedures and processes;
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maintaining existing agreements with customers, distributors, providers and vendors and avoiding delays in entering into new agreements with prospective customers, distributors, providers and vendors;
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addressing possible differences in business backgrounds, corporate cultures and management philosophies;
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consolidating the companies’ administrative and information technology infrastructure;
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coordinating distribution and marketing efforts;
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managing the movement of certain positions to different locations;
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coordinating geographically dispersed organizations; and
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•
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effecting actions that may be required in connection with obtaining regulatory approvals.
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•
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the announcement of new products or product enhancements by us or our competitors;
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•
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results of our clinical trials and other development efforts;
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•
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developments concerning intellectual property rights and regulatory approvals;
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•
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variations in our and our competitors’ results of operations;
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•
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changes in earnings estimates or recommendations by securities analysts, if our Common Stock is covered by analysts;
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•
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developments in the biotechnology, pharmaceutical, diagnostic and medical device industry;
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•
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the announcement and/or commencement and/or settlement of lawsuits or similar claims against us or any of our officers, directors and affiliates;
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•
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the results of product liability or intellectual property lawsuits;
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future issuances of our Common Stock or other securities, including debt;
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•
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purchases and sales of our Common Stock by our officers, directors or affiliates;
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•
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the addition or departure of key personnel;
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•
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announcements by us or our competitors of acquisitions, investments or strategic alliances; and
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•
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general market conditions and other factors, including factors unrelated to our operating performance.
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Location
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Segment and Purpose
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Type of Occupancy
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Miami, FL
|
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Diagnostics & Pharmaceutical: Corporate Headquarters
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Leased
|
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Elmwood Park, NJ
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Diagnostics: Main Laboratory
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Leased
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Gaithersburg, MD
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Diagnostics: Genetics Laboratory
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Leased
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Kiryat Gat, Israel
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Pharmaceutical: Research and Development, CTP
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Leased
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Woburn, MA
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Diagnostics
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Leased
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Nesher, Israel
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Pharmaceuticals: API Manufacturing
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Leased
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Guadalajara, Mexico
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Pharmaceuticals: Pharmaceutical Manufacturing
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Owned
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Banyoles, Spain
|
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Pharmaceuticals: Pharmaceutical Manufacturing
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Owned
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Palol de Revardit, Spain
|
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Warehouse
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Leased
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Barcelona, Spain
|
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Pharmaceuticals: Research and Development
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Leased
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Waterford, Ireland
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Pharmaceuticals: Pharmaceutical Manufacturing
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Leased
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Santiago, Chile
|
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Pharmaceuticals: Office; Warehouse
|
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Leased
|
ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
|
12/31/2019
|
||||||||||||
OPKO Health, Inc.
|
$
|
100.00
|
|
|
$
|
100.60
|
|
|
$
|
93.09
|
|
|
$
|
49.05
|
|
|
$
|
30.13
|
|
|
$
|
14.71
|
|
S&P 500
|
100.00
|
|
|
101.38
|
|
|
113.51
|
|
|
138.29
|
|
|
132.23
|
|
|
173.86
|
|
||||||
NASDAQ Biotechnology
|
100.00
|
|
|
111.77
|
|
|
87.91
|
|
|
106.92
|
|
|
97.45
|
|
|
121.92
|
|
|
|
For the years ended December 31,
|
||||||||||||||||||
(In thousands, except share and per share information)
|
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Statement of operations data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
901,935
|
|
|
$
|
990,266
|
|
|
$
|
966,006
|
|
|
$
|
1,117,494
|
|
|
$
|
447,517
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of revenue
|
|
572,484
|
|
|
604,636
|
|
|
620,130
|
|
|
611,482
|
|
|
235,239
|
|
|||||
Operating expenses
|
|
511,104
|
|
|
535,049
|
|
|
609,124
|
|
|
602,563
|
|
|
332,858
|
|
|||||
Asset impairment charges
|
|
92,399
|
|
|
21,778
|
|
|
13,194
|
|
|
—
|
|
|
—
|
|
|||||
Total costs and expenses
|
|
1,175,987
|
|
|
1,161,463
|
|
|
1,242,448
|
|
|
1,214,045
|
|
|
568,097
|
|
|||||
Operating loss
|
|
(274,052
|
)
|
|
(171,197
|
)
|
|
(276,442
|
)
|
|
(96,551
|
)
|
|
(120,580
|
)
|
|||||
Other income and (expense), net
|
|
(30,913
|
)
|
|
(6,072
|
)
|
|
4,518
|
|
|
(271
|
)
|
|
(39,517
|
)
|
|||||
Income tax benefit (provision)
|
|
(7,060
|
)
|
|
38,726
|
|
|
(18,855
|
)
|
|
56,115
|
|
|
113,675
|
|
|||||
Net loss
|
|
(314,925
|
)
|
|
(153,040
|
)
|
|
(305,250
|
)
|
|
(48,359
|
)
|
|
(53,527
|
)
|
|||||
Net loss attributable to common shareholders
|
|
$
|
(314,925
|
)
|
|
$
|
(153,040
|
)
|
|
$
|
(305,250
|
)
|
|
$
|
(48,359
|
)
|
|
$
|
(52,127
|
)
|
Loss per share:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
loss per share, basic
|
|
$
|
(0.53
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.55
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.11
|
)
|
loss per share, diluted
|
|
$
|
(0.53
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.55
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.11
|
)
|
Weighted average number of common shares outstanding basic:
|
|
595,454,394
|
|
|
563,143,663
|
|
|
559,160,565
|
|
|
550,846,553
|
|
|
488,066
|
|
|||||
Weighted average number of common shares outstanding diluted:
|
|
595,454,394
|
|
|
563,143,663
|
|
|
559,160,565
|
|
|
555,605,448
|
|
|
488,066
|
|
|||||
Balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
2,309,272
|
|
|
$
|
2,451,072
|
|
|
$
|
2,589,956
|
|
|
$
|
2,766,619
|
|
|
$
|
2,799,188
|
|
Long-term liabilities
|
|
$
|
445,394
|
|
|
$
|
371,460
|
|
|
$
|
434,304
|
|
|
$
|
480,166
|
|
|
$
|
614,423
|
|
Total shareholders’ equity
|
|
$
|
1,614,759
|
|
|
$
|
1,791,291
|
|
|
$
|
1,843,623
|
|
|
$
|
2,046,433
|
|
|
$
|
1,957,695
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
Revenues
|
For the years ended December 31,
|
|
|
||||||||
(In thousands)
|
2019
|
|
2018
|
|
Change
|
||||||
Revenue from services
|
$
|
716,434
|
|
|
$
|
813,248
|
|
|
$
|
(96,814
|
)
|
Revenue from products
|
112,184
|
|
|
107,112
|
|
|
5,072
|
|
|||
Revenue from transfer of intellectual property and other
|
73,317
|
|
|
69,906
|
|
|
3,411
|
|
|||
Total revenues
|
$
|
901,935
|
|
|
$
|
990,266
|
|
|
$
|
(88,331
|
)
|
|
For the years ended December 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Healthcare insurers
|
$
|
419,101
|
|
|
$
|
492,995
|
|
Government payors
|
116,662
|
|
|
150,851
|
|
||
Client payors
|
159,972
|
|
|
148,070
|
|
||
Patients
|
20,699
|
|
|
21,332
|
|
||
Total
|
$
|
716,434
|
|
|
$
|
813,248
|
|
Cost of Revenue
|
For the years ended December 31,
|
|
|
||||||||
(In thousands)
|
2019
|
|
2018
|
|
Change
|
||||||
Cost of service revenue
|
$
|
511,206
|
|
|
$
|
546,654
|
|
|
$
|
(35,448
|
)
|
Cost of product revenue
|
61,278
|
|
|
57,982
|
|
|
3,296
|
|
|||
Total cost of revenue
|
$
|
572,484
|
|
|
$
|
604,636
|
|
|
$
|
(32,152
|
)
|
|
For the years ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
External expenses:
|
|
|
|
||||
Manufacturing expense for biological products
|
$
|
38,592
|
|
|
$
|
28,245
|
|
PMA studies
|
20,545
|
|
|
27,693
|
|
||
Earlier-stage programs
|
5,745
|
|
|
17,134
|
|
||
Research and development employee-related expenses
|
24,382
|
|
|
27,547
|
|
||
Other internal research and development expenses
|
28,983
|
|
|
25,785
|
|
||
Third-party grants and funding from collaboration agreements
|
(377
|
)
|
|
(818
|
)
|
||
Total research and development expenses
|
$
|
117,870
|
|
|
$
|
125,586
|
|
Revenues
|
For the years ended December 31,
|
|
|
||||||||
(In thousands)
|
2018
|
|
2017
|
|
Change
|
||||||
Revenue from services
|
$
|
813,248
|
|
|
$
|
782,710
|
|
|
$
|
30,538
|
|
Revenue from products
|
107,112
|
|
|
107,759
|
|
|
(647
|
)
|
|||
Revenue from transfer of intellectual property and other
|
69,906
|
|
|
75,537
|
|
|
(5,631
|
)
|
|||
Total revenues
|
$
|
990,266
|
|
|
$
|
966,006
|
|
|
$
|
24,260
|
|
|
For the years ended December 31,
|
||||||
(In thousands)
|
2018
|
|
2017
|
||||
Healthcare insurers
|
$
|
492,995
|
|
|
$
|
495,209
|
|
Government payors
|
150,851
|
|
|
140,195
|
|
||
Client payors
|
148,070
|
|
|
126,264
|
|
||
Patients
|
21,332
|
|
|
21,042
|
|
||
Total
|
$
|
813,248
|
|
|
$
|
782,710
|
|
Cost of Revenue
|
For the years ended December 31,
|
|
|
||||||||
(In thousands)
|
2018
|
|
2017
|
|
Change
|
||||||
Cost of service revenue
|
$
|
546,654
|
|
|
$
|
558,953
|
|
|
$
|
(12,299
|
)
|
Cost of product revenue
|
57,982
|
|
|
61,177
|
|
|
(3,195
|
)
|
|||
Total cost of revenue
|
$
|
604,636
|
|
|
$
|
620,130
|
|
|
$
|
(15,494
|
)
|
|
For the years ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
External expenses:
|
|
|
|
||||
Manufacturing expense for biological products
|
$
|
28,245
|
|
|
$
|
23,859
|
|
PMA studies
|
27,693
|
|
|
40,613
|
|
||
Earlier-stage programs
|
17,134
|
|
|
8,452
|
|
||
Research and development employee-related expenses
|
27,547
|
|
|
29,893
|
|
||
Other internal research and development expenses
|
25,785
|
|
|
23,618
|
|
||
Third-party grants and funding from collaboration agreements
|
(818
|
)
|
|
—
|
|
||
Total research and development expenses
|
$
|
125,586
|
|
|
$
|
126,435
|
|
Contractual obligations
(In thousands)
|
|
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
Thereafter
|
|
Total
|
||||||||||||||
Open purchase orders
|
|
$
|
89,048
|
|
|
$
|
161
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89,222
|
|
Operating leases
|
|
12,125
|
|
|
6,017
|
|
|
5,003
|
|
|
4,437
|
|
|
3,273
|
|
|
10,119
|
|
|
40,974
|
|
|||||||
Capital leases
|
|
2,748
|
|
|
2,123
|
|
|
1,129
|
|
|
556
|
|
|
233
|
|
|
—
|
|
|
6,789
|
|
|||||||
2033 Senior Notes
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,050
|
|
|
203,140
|
|
|
206,190
|
|
|||||||
Deferred payments
|
|
7,725
|
|
|
7,500
|
|
|
7,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,325
|
|
|||||||
Mortgages and other debts payable
|
|
1,860
|
|
|
710
|
|
|
503
|
|
|
308
|
|
|
245
|
|
|
—
|
|
|
3,626
|
|
|||||||
Lines of credit
|
|
7,327
|
|
|
44,749
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
52,076
|
|
|||||||
Interest commitments
|
|
435
|
|
|
35
|
|
|
21
|
|
|
13,803
|
|
|
4
|
|
|
45,838
|
|
|
60,136
|
|
|||||||
Total
|
|
$
|
121,268
|
|
|
$
|
61,295
|
|
|
$
|
13,769
|
|
|
$
|
19,104
|
|
|
$
|
6,805
|
|
|
$
|
259,097
|
|
|
$
|
481,338
|
|
•
|
Estimated useful life – The asset life expected to contribute meaningful cash flows is determined after considering expected regulatory approval dates (if unapproved), exclusivity periods and other legal, regulatory or contractual provisions.
|
•
|
Projections – Future revenues are estimated after considering many factors such as historical results, market opportunity, pricing, sales trajectories to peak sales levels, competitive environment and product evolution. Future costs and expenses are estimated after considering historical factors such as the timing and level of development costs to obtain regulatory approvals, maintain or further enhance the product. For IPR&D projects, 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 the location of the research and manufacturing infrastructure.
|
•
|
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 Company specific technical, legal, regulatory, or economic barriers to entry.
|
|
Page
|
|
|
Valuation of Goodwill for BioReference
|
Description of the Matter
|
|
At December 31, 2019, the Company’s goodwill was $671.9 million, and goodwill assigned to the BioReference reporting unit was $434.8 million. As discussed in Note 2 to the consolidated financial statements, goodwill is tested at least annually for impairment. To determine the estimated fair value of the BioReference reporting unit, management considers both market and income valuation approaches.
Auditing management’s annual impairment test of goodwill included in the BioReference reporting unit was complex and highly judgmental due to the significant assumptions used in the determination of guideline companies, market transactions and market multiples, as well as the discount rate, revenue growth rates and operating margins used to estimate future cash flows, which are affected by expectations about future market or economic conditions.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s annual goodwill impairment review process, including controls over management’s review of the significant assumptions in the BioReference analysis described above.
To test the estimated fair value of the BioReference reporting unit, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by management to current industry and economic trends, changes to the Company’s business model and other relevant factors. We involved valuation specialists to assist with assessing the methodologies and evaluating certain significant assumptions, such as the determination of guideline companies, market transactions, market multiples and the discount rate. We assessed the historical accuracy of management’s projected financial information and performed sensitivity analyses on significant assumptions to evaluate the changes in the fair value that would result from changes in the assumptions. In addition, we reviewed the reconciliation of the fair value of the Company’s reporting units to the market capitalization of the Company.
|
|
|
Valuation of Goodwill and Intangible Assets for Biologics, CURNA, Transition Therapeutics and Diagnostics
|
Description of the Matter
|
|
At December 31, 2019, the Company’s goodwill was $671.9 million, indefinite lived in-process research and development assets (IPR&D) was $590.2 million, and the net carrying amount of other intangibles was $529.0 million. Included in the Biologics reporting unit was $139.8 million and $590.2 million of goodwill and IPR&D, respectively. As discussed in Note 2 to the consolidated financial statements, goodwill and indefinite lived IPR&D are tested at least annually for impairment, and finite lived intangible assets are tested for impairment when events or changes in circumstances indicate it is more likely than not that the carrying amount of such assets may not be recoverable. To determine the estimated fair value of their reporting units and the intangible assets included within them, management considers both market and income valuation approaches. As further discussed in Notes 2 and 5, in 2019 the Company recorded impairment of goodwill, indefinite lived IPR&D and other intangible assets of $26.2 million, $44.8 million and $20.7 million, respectively, related to the CURNA, Transition Therapeutics and Diagnostics reporting units.
Auditing management’s annual impairment tests for the goodwill and intangible assets in these reporting units was complex and highly judgmental due to the significant assumptions used in the determination of guideline companies, market transactions and market multiples, as well as the expected timing and amount of market revenue share and the discount rate used to estimate future cash flows, which are affected by expectations about future development of IPR&D, market or economic conditions.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s annual goodwill and intangible asset impairment review process, including controls over management's review of the significant assumptions in the Biologics, CURNA, Transition Therapeutics and Diagnostics analyses described above.
To test the estimated fair value of the reporting units and the intangible assets included within them, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analyses. We compared the significant assumptions used by management to current market and economic trends and other relevant factors. We involved valuation specialists to assist with assessing the methodologies and evaluating certain significant assumptions, such as the determination of guideline companies, market transactions, market multiples and the discount rates. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses on significant assumptions to evaluate the changes in the fair value that would result from changes in the assumptions. In addition, we reviewed the reconciliation of the fair value of the Company’s reporting units to the market capitalization of the Company.
|
|
|
Variable Consideration in Determining Revenue from Services
|
Description of the Matter
|
|
For the year ended December 31, 2019, the Company recorded revenue from services of $716.4 million. As discussed in Note 14 to the consolidated financial statements, revenue from services includes amounts due under third-party and government payer programs, net of estimates of contractual discounts and other elements of variable consideration. The Company estimates variable consideration by evaluating, among other factors, recent collections experience as well as changes in reimbursement regulations, claims processing and coverage determinations.
Auditing revenue from services is complex and highly judgmental due to the estimation required to measure the variable consideration. In particular, management applies judgment in evaluating whether changes in reimbursement regulations, claims processing and coverage determinations affect the estimate of the revenue management expects to be entitled to collect. This resulted in significant auditor judgment in the performance of our procedures.
|
How We Addressed the Matter in Our Audit
|
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s variable consideration estimation process, including controls over management’s review of collections experience and the evaluation of factors that would affect the amount of variable consideration described above.
To test the estimate of variable consideration, we performed audit procedures that included, among others, assessing the methodology used and testing the underlying data used by the Company in its analysis. We compared the collection rates used by management to historical collection trends and evaluated whether changes in the regulatory environment or the Company’s business model, customer base, mix of services and other factors would affect the estimate of variable consideration. We assessed the historical accuracy of management’s estimate and performed sensitivity analyses to evaluate the changes in variable consideration that would result from changes in the expected collection rates used and the corresponding effect on revenue from services.
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
85,452
|
|
|
$
|
96,473
|
|
Accounts receivable, net
|
134,617
|
|
|
143,907
|
|
||
Inventory, net
|
53,434
|
|
|
42,299
|
|
||
Other current assets and prepaid expenses
|
50,542
|
|
|
35,052
|
|
||
Total current assets
|
324,045
|
|
|
317,731
|
|
||
Property, plant and equipment, net
|
127,111
|
|
|
144,674
|
|
||
Intangible assets, net
|
528,962
|
|
|
614,452
|
|
||
In-process research and development
|
590,200
|
|
|
635,572
|
|
||
Goodwill
|
671,940
|
|
|
700,193
|
|
||
Investments
|
20,746
|
|
|
31,228
|
|
||
Operating lease right-of-use assets
|
39,380
|
|
|
—
|
|
||
Other assets
|
6,888
|
|
|
7,222
|
|
||
Total assets
|
$
|
2,309,272
|
|
|
$
|
2,451,072
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
62,537
|
|
|
$
|
47,395
|
|
Accrued expenses
|
164,925
|
|
|
203,513
|
|
||
Current maturities of operating leases
|
12,038
|
|
|
—
|
|
||
Current portion of convertible notes
|
—
|
|
|
31,562
|
|
||
Current portion of lines of credit and notes payable
|
9,619
|
|
|
5,851
|
|
||
Total current liabilities
|
249,119
|
|
|
288,321
|
|
||
Operating lease liabilities
|
27,665
|
|
|
—
|
|
||
Convertible notes
|
211,208
|
|
|
57,299
|
|
||
Deferred tax liabilities
|
118,717
|
|
|
115,193
|
|
||
Other long-term liabilities, principally contract liabilities, contingent consideration and lines of credit
|
87,804
|
|
|
198,968
|
|
||
Total long-term liabilities
|
445,394
|
|
|
371,460
|
|
||
Total liabilities
|
694,513
|
|
|
659,781
|
|
||
Equity:
|
|
|
|
||||
Common Stock - $0.01 par value, 1,000,000,000 and 750,000,000 shares authorized at December 31, 2019 and 2018, respectively; 670,378,701 and 586,881,720 shares issued at December 31, 2019 and 2018, respectively
|
6,704
|
|
|
5,869
|
|
||
Treasury Stock, - 549,907 shares at December 31, 2019 and 2018, respectively
|
(1,791
|
)
|
|
(1,791
|
)
|
||
Additional paid-in capital
|
3,142,993
|
|
|
3,004,422
|
|
||
Accumulated other comprehensive income (loss)
|
(22,070
|
)
|
|
(20,131
|
)
|
||
Accumulated deficit
|
(1,511,077
|
)
|
|
(1,197,078
|
)
|
||
Total shareholders’ equity
|
1,614,759
|
|
|
1,791,291
|
|
||
Total liabilities and equity
|
$
|
2,309,272
|
|
|
$
|
2,451,072
|
|
|
For the years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Revenue from services
|
$
|
716,434
|
|
|
$
|
813,248
|
|
|
$
|
782,710
|
|
Revenue from products
|
112,184
|
|
|
107,112
|
|
|
107,759
|
|
|||
Revenue from transfer of intellectual property and other
|
73,317
|
|
|
69,906
|
|
|
75,537
|
|
|||
Total revenues
|
901,935
|
|
|
990,266
|
|
|
966,006
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of service revenue
|
511,206
|
|
|
546,654
|
|
|
558,953
|
|
|||
Cost of product revenue
|
61,278
|
|
|
57,982
|
|
|
61,177
|
|
|||
Selling, general and administrative
|
343,305
|
|
|
358,346
|
|
|
414,628
|
|
|||
Research and development
|
117,870
|
|
|
125,586
|
|
|
126,435
|
|
|||
Contingent consideration
|
(14,854
|
)
|
|
(16,816
|
)
|
|
(3,423
|
)
|
|||
Amortization of intangible assets
|
64,783
|
|
|
67,933
|
|
|
71,484
|
|
|||
Asset impairment charges
|
92,399
|
|
|
21,778
|
|
|
13,194
|
|
|||
Total costs and expenses
|
1,175,987
|
|
|
1,161,463
|
|
|
1,242,448
|
|
|||
Operating loss
|
(274,052
|
)
|
|
(171,197
|
)
|
|
(276,442
|
)
|
|||
Other income and (expense), net:
|
|
|
|
|
|
||||||
Interest income
|
1,710
|
|
|
1,240
|
|
|
610
|
|
|||
Interest expense
|
(21,516
|
)
|
|
(11,890
|
)
|
|
(6,601
|
)
|
|||
Fair value changes of derivative instruments, net
|
174
|
|
|
3,043
|
|
|
52
|
|
|||
Other income (expense), net
|
(11,281
|
)
|
|
1,535
|
|
|
10,457
|
|
|||
Other income and (expense), net
|
(30,913
|
)
|
|
(6,072
|
)
|
|
4,518
|
|
|||
Loss before income taxes and investment losses
|
(304,965
|
)
|
|
(177,269
|
)
|
|
(271,924
|
)
|
|||
Income tax benefit (provision)
|
(7,060
|
)
|
|
38,726
|
|
|
(18,855
|
)
|
|||
Net loss before investment losses
|
(312,025
|
)
|
|
(138,543
|
)
|
|
(290,779
|
)
|
|||
Loss from investments in investees
|
(2,900
|
)
|
|
(14,497
|
)
|
|
(14,471
|
)
|
|||
Net loss
|
$
|
(314,925
|
)
|
|
$
|
(153,040
|
)
|
|
$
|
(305,250
|
)
|
Loss per share basic and diluted:
|
|
|
|
|
|
||||||
Loss per share
|
$
|
(0.53
|
)
|
|
$
|
(0.27
|
)
|
|
$
|
(0.55
|
)
|
Weighted average number of common shares
outstanding, basic and diluted
|
595,454,394
|
|
|
563,143,663
|
|
|
559,160,565
|
|
|
For the years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(314,925
|
)
|
|
$
|
(153,040
|
)
|
|
$
|
(305,250
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in foreign currency translation and other comprehensive income (loss)
|
(1,939
|
)
|
|
(14,727
|
)
|
|
22,724
|
|
|||
Investments:
|
|
|
|
|
|
||||||
Change in unrealized gain (loss), net of tax
|
—
|
|
|
—
|
|
|
3,790
|
|
|||
Reclassification adjustments due to adoption of ASU 2016-01
|
—
|
|
|
(4,876
|
)
|
|
—
|
|
|||
Reclassification adjustments for losses included in net loss, net of tax
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||
Comprehensive loss
|
$
|
(316,864
|
)
|
|
$
|
(172,643
|
)
|
|
$
|
(278,769
|
)
|
|
Common Stock
|
|
Treasury
|
|
Additional
Paid-In
Capital
|
|
Accumulated Other
Comprehensive
Loss
|
|
Accumulated
Deficit
|
|
Total
|
||||||||||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
|
||||||||||||||||||||
Balance at December 31, 2016
|
558,576,051
|
|
|
$
|
5,586
|
|
|
(586,760
|
)
|
|
$
|
(1,911
|
)
|
|
$
|
2,845,096
|
|
|
$
|
(27,009
|
)
|
|
$
|
(775,329
|
)
|
|
$
|
2,046,433
|
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28,307
|
|
|
—
|
|
|
—
|
|
|
28,307
|
|
||||||
Exercise of Common Stock options and warrants
|
1,447,694
|
|
|
14
|
|
|
—
|
|
|
—
|
|
|
2,118
|
|
|
—
|
|
|
—
|
|
|
2,132
|
|
||||||
Reclassification of embedded
derivatives to equity
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,551
|
|
|
—
|
|
|
—
|
|
|
13,551
|
|
||||||
Issuance of Treasury Stock in
connection with OPKO Health Europe’s Contingent Consideration |
—
|
|
|
—
|
|
|
36,853
|
|
|
120
|
|
|
184
|
|
|
—
|
|
|
—
|
|
|
304
|
|
||||||
Adoption of ASU 2016-09
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31,665
|
|
|
31,665
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(305,250
|
)
|
|
(305,250
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
26,481
|
|
|
—
|
|
|
26,481
|
|
||||||
Balance at December 31, 2017
|
560,023,745
|
|
|
$
|
5,600
|
|
|
(549,907
|
)
|
|
$
|
(1,791
|
)
|
|
$
|
2,889,256
|
|
|
$
|
(528
|
)
|
|
$
|
(1,048,914
|
)
|
|
$
|
1,843,623
|
|
|
Common Stock
|
|
Treasury
|
|
Additional
Paid-In Capital |
|
Accumulated Other
Comprehensive Loss |
|
Accumulated
Deficit |
|
Total
|
||||||||||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
|
||||||||||||||||||||
Balance at December 31, 2017
|
560,023,745
|
|
|
$
|
5,600
|
|
|
(549,907
|
)
|
|
$
|
(1,791
|
)
|
|
$
|
2,889,256
|
|
|
$
|
(528
|
)
|
|
$
|
(1,048,914
|
)
|
|
$
|
1,843,623
|
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,761
|
|
|
—
|
|
|
—
|
|
|
21,761
|
|
||||||
Exercise of Common Stock options and warrants
|
353,677
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
1,170
|
|
|
—
|
|
|
—
|
|
|
1,174
|
|
||||||
Adoption of ASU 2016-01
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4,876
|
)
|
|
4,876
|
|
|
—
|
|
||||||
Private placement
|
26,504,298
|
|
|
265
|
|
|
—
|
|
|
—
|
|
|
92,235
|
|
|
—
|
|
|
—
|
|
|
92,500
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(153,040
|
)
|
|
(153,040
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(14,727
|
)
|
|
—
|
|
|
(14,727
|
)
|
||||||
Balance at December 31, 2018
|
586,881,720
|
|
|
$
|
5,869
|
|
|
(549,907
|
)
|
|
$
|
(1,791
|
)
|
|
$
|
3,004,422
|
|
|
$
|
(20,131
|
)
|
|
$
|
(1,197,078
|
)
|
|
$
|
1,791,291
|
|
|
Common Stock
|
|
Treasury
|
|
Additional
Paid-In Capital |
|
Accumulated Other
Comprehensive Loss |
|
Accumulated
Deficit |
|
Total
|
||||||||||||||||||
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
|
||||||||||||||||||||
Balance at December 31, 2018
|
586,881,720
|
|
|
$
|
5,869
|
|
|
(549,907
|
)
|
|
$
|
(1,791
|
)
|
|
$
|
3,004,422
|
|
|
$
|
(20,131
|
)
|
|
$
|
(1,197,078
|
)
|
|
$
|
1,791,291
|
|
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13,421
|
|
|
—
|
|
|
—
|
|
|
13,421
|
|
||||||
Exercise of Common Stock options and warrants
|
19,232
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
(3
|
)
|
||||||
Adoption of ASU 2018-07
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(926
|
)
|
|
—
|
|
|
926
|
|
|
—
|
|
||||||
2025 convertible notes including share lending agreement
|
29,250,000
|
|
|
293
|
|
|
—
|
|
|
—
|
|
|
50,559
|
|
|
—
|
|
|
—
|
|
|
50,852
|
|
||||||
Sale of common stock
|
54,227,749
|
|
|
542
|
|
|
—
|
|
|
—
|
|
|
75,520
|
|
|
—
|
|
|
—
|
|
|
76,062
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(314,925
|
)
|
|
(314,925
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,939
|
)
|
|
—
|
|
|
(1,939
|
)
|
||||||
Balance at December 31, 2019
|
670,378,701
|
|
|
$
|
6,704
|
|
|
(549,907
|
)
|
|
$
|
(1,791
|
)
|
|
$
|
3,142,993
|
|
|
$
|
(22,070
|
)
|
|
$
|
(1,511,077
|
)
|
|
$
|
1,614,759
|
|
|
For the years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(314,925
|
)
|
|
$
|
(153,040
|
)
|
|
$
|
(305,250
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
93,807
|
|
|
97,344
|
|
|
102,093
|
|
|||
Non-cash interest
|
8,731
|
|
|
4,903
|
|
|
2,575
|
|
|||
Amortization of deferred financing costs
|
995
|
|
|
187
|
|
|
224
|
|
|||
Losses from investments in investees
|
2,900
|
|
|
14,497
|
|
|
14,471
|
|
|||
Equity-based compensation – employees and non-employees
|
13,421
|
|
|
21,761
|
|
|
28,307
|
|
|||
Asset impairment charges
|
92,399
|
|
|
21,778
|
|
|
13,194
|
|
|||
Realized loss (gain) on disposal of fixed assets and sales of equity securities and other
|
739
|
|
|
46
|
|
|
(8,663
|
)
|
|||
Change in fair value of equity securities and derivative instruments and other
|
8,748
|
|
|
(6,524
|
)
|
|
(52
|
)
|
|||
Change in fair value of contingent consideration
|
(14,854
|
)
|
|
(16,816
|
)
|
|
(3,423
|
)
|
|||
Deferred income tax provision (benefit)
|
4,324
|
|
|
(35,133
|
)
|
|
16,092
|
|
|||
Changes in assets and liabilities, net of the effects of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
7,376
|
|
|
20,397
|
|
|
58,011
|
|
|||
Inventory, net
|
(12,133
|
)
|
|
4,590
|
|
|
(3,539
|
)
|
|||
Other current assets and prepaid expenses
|
(11,486
|
)
|
|
2,276
|
|
|
4,771
|
|
|||
Other assets
|
409
|
|
|
(69
|
)
|
|
(2,372
|
)
|
|||
Accounts payable
|
15,636
|
|
|
(26,083
|
)
|
|
20,171
|
|
|||
Foreign currency measurement
|
(71
|
)
|
|
294
|
|
|
(255
|
)
|
|||
Contract liabilities
|
(69,302
|
)
|
|
(61,264
|
)
|
|
(58,876
|
)
|
|||
Accrued expenses and other liabilities
|
764
|
|
|
1,715
|
|
|
30,441
|
|
|||
Net cash (used in) provided by operating activities
|
(172,522
|
)
|
|
(109,141
|
)
|
|
(92,080
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Investments in investees
|
(1,200
|
)
|
|
(1,000
|
)
|
|
(9,625
|
)
|
|||
Proceeds from sale of equity securities
|
—
|
|
|
1,516
|
|
|
2,211
|
|
|||
Proceeds from the sale of property, plant and equipment
|
671
|
|
|
1,223
|
|
|
7,271
|
|
|||
Capital expenditures
|
(12,741
|
)
|
|
(27,858
|
)
|
|
(46,524
|
)
|
|||
Net cash used in investing activities
|
(13,270
|
)
|
|
(26,119
|
)
|
|
(46,667
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Issuance of common stock
|
76,062
|
|
|
92,500
|
|
|
—
|
|
|||
Issuance of 2023 Convertible Notes, including to related parties
|
200,293
|
|
|
55,000
|
|
|
—
|
|
|||
Debt issuance costs
|
(7,762
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from the exercise of Common Stock options and warrants
|
(3
|
)
|
|
1,173
|
|
|
2,132
|
|
|||
Borrowings on lines of credit
|
294,780
|
|
|
26,917
|
|
|
92,421
|
|
|||
Repayments of lines of credit
|
(359,322
|
)
|
|
(34,681
|
)
|
|
(33,510
|
)
|
|||
Redemption of 2033 Senior Notes
|
(28,800
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by (used in) financing activities
|
175,248
|
|
|
140,909
|
|
|
61,043
|
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
(477
|
)
|
|
(675
|
)
|
|
470
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
(11,021
|
)
|
|
4,974
|
|
|
(77,234
|
)
|
|||
Cash and cash equivalents at beginning of period
|
96,473
|
|
|
91,499
|
|
|
168,733
|
|
|||
Cash and cash equivalents at end of period
|
$
|
85,452
|
|
|
$
|
96,473
|
|
|
$
|
91,499
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
11,873
|
|
|
$
|
2,076
|
|
|
$
|
1,313
|
|
Income taxes paid, net of refunds
|
$
|
2,667
|
|
|
$
|
(1,410
|
)
|
|
$
|
5,416
|
|
Operating lease right-of-use assets due to adoption of ASU No. 2016-02
|
$
|
39,380
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease liabilities due to adoption of ASU No. 2016-02
|
$
|
39,703
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash financing:
|
|
|
|
|
|
||||||
Shares issued upon the conversion of:
|
|
|
|
|
|
||||||
Common Stock options and warrants, surrendered in net exercise
|
$
|
20
|
|
|
$
|
806
|
|
|
$
|
1,546
|
|
Issuance of capital stock to acquire or contingent consideration settlement:
|
|
|
|
|
|
||||||
OPKO Health Europe
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
304
|
|
|
For the years ended December 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Accounts receivable, net
|
|
|
|
||||
Accounts receivable
|
$
|
136,551
|
|
|
$
|
145,665
|
|
Less: allowance for doubtful accounts
|
(1,934
|
)
|
|
(1,758
|
)
|
||
|
$
|
134,617
|
|
|
$
|
143,907
|
|
Inventories, net
|
|
|
|
||||
Consumable supplies
|
$
|
23,005
|
|
|
$
|
23,264
|
|
Finished products
|
25,142
|
|
|
15,259
|
|
||
Work in-process
|
3,238
|
|
|
2,473
|
|
||
Raw materials
|
4,586
|
|
|
4,259
|
|
||
Less: inventory reserve
|
(2,537
|
)
|
|
(2,956
|
)
|
||
|
$
|
53,434
|
|
|
$
|
42,299
|
|
Other current assets and prepaid expenses
|
|
|
|
||||
Taxes recoverable
|
$
|
19,808
|
|
|
$
|
15,708
|
|
Other receivables
|
$
|
3,262
|
|
|
$
|
2,368
|
|
Prepaid supplies
|
8,147
|
|
|
9,693
|
|
||
Prepaid insurance
|
3,486
|
|
|
3,436
|
|
||
Other
|
15,839
|
|
|
3,847
|
|
||
|
$
|
50,542
|
|
|
$
|
35,052
|
|
Property, plant and equipment, net:
|
|
|
|
||||
Machinery, medical and other equipment
|
$
|
165,501
|
|
|
$
|
147,757
|
|
Leasehold improvements
|
33,606
|
|
|
34,607
|
|
||
Furniture and fixtures
|
12,631
|
|
|
12,737
|
|
||
Automobiles and aircraft
|
10,029
|
|
|
10,133
|
|
||
Software
|
13,861
|
|
|
13,425
|
|
||
Building
|
18,462
|
|
|
18,554
|
|
||
Land
|
2,422
|
|
|
2,453
|
|
||
Construction in process
|
7,044
|
|
|
16,670
|
|
||
Less: accumulated depreciation
|
(136,445
|
)
|
|
(111,662
|
)
|
||
|
$
|
127,111
|
|
|
$
|
144,674
|
|
Intangible assets, net:
|
|
|
|
||||
Customer relationships
|
$
|
445,408
|
|
|
$
|
446,296
|
|
Technologies
|
296,246
|
|
|
340,729
|
|
||
Trade names
|
49,786
|
|
|
50,404
|
|
||
Covenants not to compete
|
16,318
|
|
|
16,322
|
|
||
Licenses
|
5,766
|
|
|
5,766
|
|
||
Product registrations
|
7,578
|
|
|
7,861
|
|
||
Other
|
6,094
|
|
|
5,613
|
|
||
Less: accumulated amortization
|
(298,234
|
)
|
|
(258,539
|
)
|
||
|
$
|
528,962
|
|
|
$
|
614,452
|
|
|
For the years ended December 31,
|
||||||
(In thousands)
|
2019
|
|
2018
|
||||
Accrued expenses:
|
|
|
|
||||
Contract liabilities
|
$
|
19,196
|
|
|
$
|
63,503
|
|
Employee benefits
|
33,671
|
|
|
45,621
|
|
||
Commitments and Contingencies
|
38,635
|
|
|
15,327
|
|
||
Clinical trials
|
8,122
|
|
|
10,401
|
|
||
Professional fees
|
1,333
|
|
|
2,952
|
|
||
Finance leases short-term
|
2,743
|
|
|
3,280
|
|
||
Milestone payment
|
—
|
|
|
4,871
|
|
||
Contingent consideration
|
2,375
|
|
|
2,375
|
|
||
Other
|
58,850
|
|
|
55,183
|
|
||
|
$
|
164,925
|
|
|
$
|
203,513
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
||||
Line of credit
|
$
|
44,749
|
|
|
$
|
105,198
|
|
Contract liabilities
|
2,571
|
|
|
27,566
|
|
||
Contingent consideration
|
7,308
|
|
|
22,162
|
|
||
Finance leases long-term
|
4,046
|
|
|
5,620
|
|
||
Mortgages and other debts payable
|
3,906
|
|
|
4,654
|
|
||
Other
|
25,224
|
|
|
33,768
|
|
||
|
$
|
87,804
|
|
|
$
|
198,968
|
|
(In thousands)
|
Beginning
balance
|
|
Charged
to
expense
|
|
Written-off
|
|
Ending
balance
|
||||||
2019
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
(1,758
|
)
|
|
(469
|
)
|
|
293
|
|
|
$
|
(1,934
|
)
|
Inventory reserve
|
$
|
(2,956
|
)
|
|
(2,349
|
)
|
|
2,768
|
|
|
$
|
(2,537
|
)
|
Tax valuation allowance
|
$
|
(154,916
|
)
|
|
(38,340
|
)
|
|
—
|
|
|
$
|
(193,256
|
)
|
2018
|
|
|
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
(1,446
|
)
|
|
(665
|
)
|
|
353
|
|
|
$
|
(1,758
|
)
|
Inventory reserve
|
$
|
(6,565
|
)
|
|
(1,915
|
)
|
|
5,524
|
|
|
$
|
(2,956
|
)
|
Tax valuation allowance
|
$
|
(142,062
|
)
|
|
(12,854
|
)
|
|
—
|
|
|
$
|
(154,916
|
)
|
|
2019
|
|
2018
|
||||||||||||||||||||||||||||
(In thousands)
|
Balance at January 1
|
|
Goodwill impairment
|
|
Foreign exchange and other
|
|
Balance at December 31st
|
|
Balance at January 1
|
|
Goodwill impairment
|
|
Foreign exchange and other
|
|
Balance at December 31
|
||||||||||||||||
Pharmaceuticals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
CURNA
|
$
|
4,827
|
|
|
$
|
(4,827
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,827
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,827
|
|
Rayaldee
|
87,314
|
|
|
—
|
|
|
(1,709
|
)
|
|
85,605
|
|
|
91,295
|
|
|
—
|
|
|
(3,981
|
)
|
|
87,314
|
|
||||||||
FineTech
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,698
|
|
|
(11,698
|
)
|
|
—
|
|
|
—
|
|
||||||||
OPKO Biologics
|
139,784
|
|
|
|
|
—
|
|
|
139,784
|
|
|
139,784
|
|
|
—
|
|
|
—
|
|
|
139,784
|
|
|||||||||
OPKO Chile
|
4,614
|
|
|
|
|
(266
|
)
|
|
4,348
|
|
|
5,203
|
|
|
—
|
|
|
(589
|
)
|
|
4,614
|
|
|||||||||
OPKO Health Europe
|
7,546
|
|
|
|
|
(152
|
)
|
|
7,394
|
|
|
7,898
|
|
|
—
|
|
|
(352
|
)
|
|
7,546
|
|
|||||||||
Transition Therapeutics
|
3,322
|
|
|
(3,421
|
)
|
|
99
|
|
|
—
|
|
|
3,608
|
|
|
—
|
|
|
(286
|
)
|
|
3,322
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Diagnostics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
BioReference
|
434,809
|
|
|
—
|
|
|
—
|
|
|
434,809
|
|
|
434,809
|
|
|
—
|
|
|
—
|
|
|
434,809
|
|
||||||||
OPKO Diagnostics
|
17,977
|
|
|
(17,977
|
)
|
|
—
|
|
|
—
|
|
|
17,977
|
|
|
—
|
|
|
—
|
|
|
17,977
|
|
||||||||
|
$
|
700,193
|
|
|
$
|
(26,225
|
)
|
|
$
|
(2,028
|
)
|
|
$
|
671,940
|
|
|
$
|
717,099
|
|
|
$
|
(11,698
|
)
|
|
$
|
(5,208
|
)
|
|
$
|
700,193
|
|
(In thousands)
|
2025 Senior Notes
|
|
Discount
|
|
Debt Issuance Cost
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of 4.50% convertible notes
|
200,000
|
|
|
(52,600
|
)
|
|
(5,720
|
)
|
|
141,680
|
|
||||
Amortization of debt discount and debt issuance costs
|
—
|
|
|
5,826
|
|
|
634
|
|
|
6,460
|
|
||||
Balance at December 31, 2019
|
$
|
200,000
|
|
|
$
|
(46,774
|
)
|
|
$
|
(5,086
|
)
|
|
$
|
148,140
|
|
(Dollars in thousands)
|
|
|
|
|
|
Balance Outstanding
|
||||||||
Lender
|
|
Interest rate on
borrowings at December 31, 2019
|
|
Credit line
capacity
|
|
December 31,
2019 |
|
December 31,
2018
|
||||||
JP Morgan Chase
|
|
3.69%
|
|
$
|
75,000
|
|
|
$
|
44,750
|
|
|
$
|
105,198
|
|
Itau Bank
|
|
5.50%
|
|
1,810
|
|
|
472
|
|
|
232
|
|
|||
Bank of Chile
|
|
6.60%
|
|
3,800
|
|
|
851
|
|
|
432
|
|
|||
BICE Bank
|
|
5.50%
|
|
2,500
|
|
|
1,429
|
|
|
818
|
|
|||
BBVA Bank
|
|
5.50%
|
|
3,250
|
|
|
11
|
|
|
858
|
|
|||
Security Bank
|
|
5.50%
|
|
588
|
|
|
588
|
|
|
—
|
|
|||
Estado Bank
|
|
5.50%
|
|
3,500
|
|
|
1,365
|
|
|
308
|
|
|||
Santander Bank
|
|
5.50%
|
|
4,500
|
|
|
1,943
|
|
|
852
|
|
|||
Scotiabank
|
|
5.00%
|
|
1,800
|
|
|
668
|
|
|
2
|
|
|||
Banco De Sabadell
|
|
1.45%
|
|
336
|
|
|
—
|
|
|
—
|
|
|||
Banco Bilbao Vizcaya
|
|
2.45%
|
|
336
|
|
|
—
|
|
|
—
|
|
|||
Santander Bank
|
|
1.40%
|
|
336
|
|
|
—
|
|
|
10
|
|
|||
Total
|
|
|
|
$
|
97,756
|
|
|
$
|
52,077
|
|
|
$
|
108,710
|
|
(In thousands)
|
December 31,
2019 |
|
December 31,
2018 |
||||
Current portion of notes payable
|
$
|
2,494
|
|
|
$
|
2,560
|
|
Other long-term liabilities
|
4,723
|
|
|
5,693
|
|
||
Total
|
$
|
7,217
|
|
|
$
|
8,253
|
|
(In thousands)
|
Foreign
currency translation |
||
Balance at December 31, 2018
|
$
|
(20,131
|
)
|
Other comprehensive income (loss) before reclassifications
|
(1,939
|
)
|
|
Net other comprehensive income (loss)
|
(1,939
|
)
|
|
Balance at December 31, 2019
|
$
|
(22,070
|
)
|
(In thousands)
|
Foreign
currency translation |
|
Unrealized
gain (loss) in Accumulated OCI |
|
Total
|
||||||
Balance at December 31, 2017
|
$
|
(5,404
|
)
|
|
$
|
4,876
|
|
|
$
|
(528
|
)
|
Other comprehensive income (loss) before reclassifications
|
(14,727
|
)
|
|
—
|
|
|
(14,727
|
)
|
|||
Reclassification adjustment due to adoption of ASU 2016-01
|
—
|
|
|
(4,876
|
)
|
|
(4,876
|
)
|
|||
Net other comprehensive income (loss)
|
(14,727
|
)
|
|
(4,876
|
)
|
|
(19,603
|
)
|
|||
Balance at December 31, 2018
|
$
|
(20,131
|
)
|
|
$
|
—
|
|
|
$
|
(20,131
|
)
|
|
Year Ended
December 31,
2019
|
|
Year Ended
December 31,
2018
|
|
Year Ended
December 31,
2017
|
Expected term (in years)
|
3.0 - 10.0
|
|
3.0 - 10.0
|
|
3.0 - 10.0
|
Risk-free interest rate
|
1.35% - 2.63%
|
|
2.32% - 3.09%
|
|
1.32% - 2.41%
|
Expected volatility
|
54% - 63%
|
|
40% - 54%
|
|
38% - 55%
|
Expected dividend yield
|
0%
|
|
0%
|
|
0%
|
Options
|
Number of
options
|
|
Weighted
average
exercise
price
|
|
Weighted
average
remaining
contractual
term (years)
|
|
Aggregate
intrinsic value
(in thousands)
|
|||||
Outstanding at December 31, 2018
|
33,031,298
|
|
|
$
|
9.31
|
|
|
5.93
|
|
$
|
232
|
|
Granted
|
8,066,000
|
|
|
$
|
2.47
|
|
|
|
|
|
||
Exercised
|
(24,877
|
)
|
|
$
|
0.66
|
|
|
|
|
|
||
Forfeited
|
(1,443,575
|
)
|
|
$
|
7.32
|
|
|
|
|
|
||
Expired
|
(2,258,425
|
)
|
|
$
|
7.74
|
|
|
|
|
|
||
Outstanding at December 31, 2019
|
37,370,421
|
|
|
$
|
8.01
|
|
|
6.00
|
|
$
|
—
|
|
Vested and expected to vest at December 31, 2019
|
37,370,421
|
|
|
$
|
8.01
|
|
|
6.00
|
|
$
|
—
|
|
Exercisable at December 31, 2019
|
24,448,521
|
|
|
$
|
10.18
|
|
|
4.49
|
|
$
|
—
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,398
|
|
State
|
(89
|
)
|
|
6,318
|
|
|
(1,737
|
)
|
|||
Foreign
|
(2,647
|
)
|
|
(2,738
|
)
|
|
(3,424
|
)
|
|||
|
(2,736
|
)
|
|
3,580
|
|
|
(2,763
|
)
|
|||
Deferred
|
|
|
|
|
|
||||||
Federal
|
333
|
|
|
2,045
|
|
|
(10,759
|
)
|
|||
State
|
125
|
|
|
5,673
|
|
|
(2,738
|
)
|
|||
Foreign
|
(4,782
|
)
|
|
27,428
|
|
|
(2,595
|
)
|
|||
|
(4,324
|
)
|
|
35,146
|
|
|
(16,092
|
)
|
|||
Total, net
|
$
|
(7,060
|
)
|
|
$
|
38,726
|
|
|
$
|
(18,855
|
)
|
(In thousands)
|
December 31, 2019
|
|
December 31, 2018
|
||||
Deferred income tax assets:
|
|
|
|
||||
Federal net operating loss
|
$
|
121,125
|
|
|
$
|
101,662
|
|
State net operating loss
|
64,648
|
|
|
59,126
|
|
||
Foreign net operating loss
|
32,162
|
|
|
34,407
|
|
||
Research and development expense
|
1,560
|
|
|
2,893
|
|
||
Tax credits
|
22,989
|
|
|
21,669
|
|
||
Stock options
|
30,640
|
|
|
30,430
|
|
||
Accruals
|
17,215
|
|
|
6,294
|
|
||
Equity investments
|
13,495
|
|
|
12,904
|
|
||
Bad debts
|
445
|
|
|
414
|
|
||
Lease liability
|
1,064
|
|
|
1,370
|
|
||
Foreign credits
|
9,909
|
|
|
10,837
|
|
||
Available-for-sale securities
|
2,478
|
|
|
2,447
|
|
||
Operating lease asset
|
10,204
|
|
|
—
|
|
||
Other
|
8,395
|
|
|
11,668
|
|
||
Deferred income tax assets
|
336,329
|
|
|
296,121
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Intangible assets
|
(230,662
|
)
|
|
(250,640
|
)
|
||
Convertible Debt
|
(12,219
|
)
|
|
—
|
|
||
Operating lease liability
|
(10,204
|
)
|
|
—
|
|
||
Fixed assets
|
(3,976
|
)
|
|
(3,486
|
)
|
||
Other
|
(2,130
|
)
|
|
(2,272
|
)
|
||
Deferred income tax liabilities
|
(259,191
|
)
|
|
(256,398
|
)
|
||
Net deferred income tax assets (liabilities)
|
77,138
|
|
|
39,723
|
|
||
Valuation allowance
|
(194,869
|
)
|
|
(154,916
|
)
|
||
Net deferred income tax liabilities*
|
$
|
(117,731
|
)
|
|
$
|
(115,193
|
)
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Unrecognized tax benefits at beginning of period
|
$
|
17,513
|
|
|
$
|
21,347
|
|
|
$
|
27,545
|
|
Gross increases – tax positions in prior period
|
—
|
|
|
—
|
|
|
44
|
|
|||
Gross increases – tax positions in current period
|
884
|
|
|
8,384
|
|
|
—
|
|
|||
Gross decreases – tax positions in prior period
|
(298
|
)
|
|
(7,597
|
)
|
|
(1,724
|
)
|
|||
Lapse of Statute of Limitations
|
(939
|
)
|
|
(4,621
|
)
|
|
(4,518
|
)
|
|||
Unrecognized tax benefits at end of period
|
$
|
17,160
|
|
|
$
|
17,513
|
|
|
$
|
21,347
|
|
|
For the years ended December 31,
|
|||||||
|
2019
|
|
2018
|
|
2017
|
|||
Federal statutory rate
|
21.0
|
%
|
|
21.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
2.8
|
%
|
|
4.3
|
%
|
|
5.1
|
%
|
Foreign income tax
|
(6.6
|
)%
|
|
(6.0
|
)%
|
|
(5.3
|
)%
|
Income Tax Refunds
|
—
|
%
|
|
3.6
|
%
|
|
—
|
%
|
Research and development tax credits
|
0.3
|
%
|
|
1.9
|
%
|
|
0.6
|
%
|
Non-Deductible components of Convertible Debt
|
—
|
%
|
|
(0.2
|
)%
|
|
0.1
|
%
|
Valuation allowance
|
(17.9
|
)%
|
|
(7.1
|
)%
|
|
(28.4
|
)%
|
Rate change effect
|
0.4
|
%
|
|
8.1
|
%
|
|
(10.8
|
)%
|
Non-deductible items
|
(0.7
|
)%
|
|
(2.9
|
)%
|
|
(1.9
|
)%
|
Unrecognized tax benefits
|
—
|
%
|
|
(1.8
|
)%
|
|
(0.7
|
)%
|
Impairments
|
(1.6
|
)%
|
|
—
|
%
|
|
—
|
%
|
Other
|
—
|
%
|
|
(0.7
|
)%
|
|
(0.4
|
)%
|
Total
|
(2.3
|
)%
|
|
20.2
|
%
|
|
(6.7
|
)%
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Pre-tax income (loss):
|
|
|
|
|
|
||||||
U.S.
|
$
|
(236,544
|
)
|
|
$
|
(132,102
|
)
|
|
$
|
(247,938
|
)
|
Foreign
|
(71,321
|
)
|
|
(59,664
|
)
|
|
(38,457
|
)
|
|||
Total
|
$
|
(307,865
|
)
|
|
$
|
(191,766
|
)
|
|
$
|
(286,395
|
)
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Healthcare insurers
|
$
|
419,101
|
|
|
$
|
492,995
|
|
|
$
|
495,209
|
|
Government payors
|
116,662
|
|
|
150,851
|
|
|
140,195
|
|
|||
Client payors
|
159,972
|
|
|
148,070
|
|
|
126,264
|
|
|||
Patients
|
20,699
|
|
|
21,332
|
|
|
21,042
|
|
|||
Total
|
$
|
716,434
|
|
|
$
|
813,248
|
|
|
$
|
782,710
|
|
(In thousands)
|
|
Chargebacks, discounts, rebates and fees
|
|
Governmental
|
|
Returns
|
|
Total
|
||||||||
Balance at December 31, 2018
|
|
$
|
1,316
|
|
|
$
|
2,090
|
|
|
$
|
637
|
|
|
$
|
4,043
|
|
Provision related to current period sales
|
|
13,723
|
|
|
25,106
|
|
|
3,699
|
|
|
42,528
|
|
||||
Credits or payments made
|
|
(11,845
|
)
|
|
(21,355
|
)
|
|
(1,585
|
)
|
|
(34,785
|
)
|
||||
Balance at December 31, 2019
|
|
$
|
3,194
|
|
|
$
|
5,841
|
|
|
$
|
2,751
|
|
|
$
|
11,786
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total gross Rayaldee sales
|
|
|
|
|
|
|
|
$
|
73,965
|
|
||||||
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales
|
|
|
|
|
|
|
|
57
|
%
|
(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
|
|
5,704
|
|
|
10,061
|
|
|
680
|
|
|
16,445
|
|
||||
Credits or payments made
|
|
(4,621
|
)
|
|
(8,319
|
)
|
|
(480
|
)
|
|
(13,420
|
)
|
||||
Balance at December 31, 2018
|
|
$
|
1,316
|
|
|
$
|
2,090
|
|
|
$
|
637
|
|
|
$
|
4,043
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total gross Rayaldee sales
|
|
|
|
|
|
|
|
$
|
36,715
|
|
||||||
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales
|
|
|
|
|
|
|
|
45
|
%
|
(in thousands)
|
|
Classification on the Balance Sheet
|
|
December 31, 2019
|
||
Assets
|
|
|
|
|
||
Operating lease assets
|
|
Operating lease right-of-use assets
|
|
$
|
39,380
|
|
Finance lease assets
|
|
Property, plant and equipment, net
|
|
6,789
|
|
|
|
|
|
|
|
||
Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Operating lease liabilities
|
|
Current maturities of operating leases
|
|
12,038
|
|
|
Accrued expenses
|
|
Current maturities of finance leases
|
|
2,743
|
|
|
Long-term
|
|
|
|
|
||
Operating lease liabilities
|
|
Operating lease liabilities
|
|
27,665
|
|
|
Other long-term liabilities
|
|
Finance lease liabilities
|
|
$
|
4,046
|
|
|
|
|
|
|
||
Weighted average remaining lease term
|
|
|
|
|
||
Operating leases
|
|
|
|
5.6 years
|
|
|
Finance leases
|
|
|
|
2.6 years
|
|
|
Weighted average discount rate
|
|
|
|
|
||
Operating leases
|
|
|
|
6.3
|
%
|
|
Finance leases
|
|
|
|
3.0
|
%
|
(in thousands)
|
|
Operating
|
Finance
|
||||
2020
|
|
$
|
12,750
|
|
$
|
2,871
|
|
2021
|
|
6,526
|
|
2,186
|
|
||
2022
|
|
5,777
|
|
1,155
|
|
||
2023
|
|
5,450
|
|
563
|
|
||
2024
|
|
4,297
|
|
233
|
|
||
Thereafter
|
|
17,186
|
|
—
|
|
||
Total undiscounted future minimum lease payments
|
|
51,986
|
|
7,008
|
|
||
Less: Difference between lease payments and discounted lease liabilities
|
|
12,283
|
|
219
|
|
||
Total lease liabilities
|
|
$
|
39,703
|
|
$
|
6,789
|
|
(in thousands)
|
|
For the year ended December 31, 2019
|
||
Operating cash out flows from operating leases
|
|
$
|
20,712
|
|
Operating cash out flows from finance leases
|
|
374
|
|
|
Financing cash out flows from finance leases
|
|
2,833
|
|
|
Total
|
|
$
|
23,919
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Revenue from services:
|
|
|
|
|
|
||||||
Pharmaceutical
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Diagnostics
|
716,434
|
|
|
813,248
|
|
|
782,710
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
|
|
|||
|
$
|
716,434
|
|
|
$
|
813,248
|
|
|
$
|
782,710
|
|
Revenue from products:
|
|
|
|
|
|
||||||
Pharmaceutical
|
$
|
112,184
|
|
|
$
|
107,112
|
|
|
$
|
107,759
|
|
Diagnostics
|
—
|
|
|
—
|
|
|
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
|
|
|||
|
$
|
112,184
|
|
|
$
|
107,112
|
|
|
$
|
107,759
|
|
Revenue from transfer of intellectual property and other:
|
|
|
|
|
|
||||||
Pharmaceutical
|
$
|
73,317
|
|
|
$
|
69,906
|
|
|
$
|
75,537
|
|
Diagnostics
|
—
|
|
|
—
|
|
|
|
|
|||
Corporate
|
—
|
|
|
—
|
|
|
|
|
|||
|
$
|
73,317
|
|
|
$
|
69,906
|
|
|
$
|
75,537
|
|
Operating loss:
|
|
|
|
|
|
||||||
Pharmaceutical
|
$
|
(109,062
|
)
|
|
$
|
(82,641
|
)
|
|
$
|
(84,287
|
)
|
Diagnostics
|
(123,359
|
)
|
|
(44,942
|
)
|
|
(136,540
|
)
|
|||
Corporate
|
(41,631
|
)
|
|
(43,614
|
)
|
|
(55,615
|
)
|
|||
|
$
|
(274,052
|
)
|
|
$
|
(171,197
|
)
|
|
$
|
(276,442
|
)
|
Depreciation and amortization:
|
|
|
|
|
|
||||||
Pharmaceutical
|
$
|
30,073
|
|
|
$
|
28,007
|
|
|
$
|
27,513
|
|
Diagnostics
|
63,675
|
|
|
69,246
|
|
|
74,442
|
|
|||
Corporate
|
59
|
|
|
91
|
|
|
138
|
|
|||
|
$
|
93,807
|
|
|
$
|
97,344
|
|
|
$
|
102,093
|
|
Loss from investment in investees:
|
|
|
|
|
|
||||||
Pharmaceutical
|
$
|
(2,900
|
)
|
|
$
|
(10,822
|
)
|
|
$
|
(12,646
|
)
|
Diagnostics
|
—
|
|
|
(3,675
|
)
|
|
(1,825
|
)
|
|||
Corporate
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
$
|
(2,900
|
)
|
|
$
|
(14,497
|
)
|
|
$
|
(14,471
|
)
|
Revenues:
|
|
|
|
|
|
||||||
U.S.
|
$
|
751,099
|
|
|
$
|
837,509
|
|
|
$
|
803,853
|
|
Ireland
|
81,170
|
|
|
78,102
|
|
|
80,905
|
|
|||
Chile
|
33,642
|
|
|
41,216
|
|
|
44,286
|
|
|||
Spain
|
18,747
|
|
|
18,195
|
|
|
18,285
|
|
|||
Israel
|
8,769
|
|
|
9,479
|
|
|
13,951
|
|
|||
Mexico
|
8,032
|
|
|
5,598
|
|
|
4,605
|
|
|||
Other
|
476
|
|
|
167
|
|
|
121
|
|
|||
|
$
|
901,935
|
|
|
$
|
990,266
|
|
|
$
|
966,006
|
|
(In thousands)
|
December 31,
2019 |
|
December 31,
2018 |
||||
Assets:
|
|
|
|
||||
Pharmaceutical
|
$
|
1,174,639
|
|
|
$
|
1,236,499
|
|
Diagnostics
|
1,035,112
|
|
|
1,162,160
|
|
||
Corporate
|
99,521
|
|
|
52,413
|
|
||
|
$
|
2,309,272
|
|
|
$
|
2,451,072
|
|
Goodwill:
|
|
|
|
||||
Pharmaceutical
|
$
|
237,131
|
|
|
$
|
247,407
|
|
Diagnostics
|
434,809
|
|
|
452,786
|
|
||
Corporate
|
—
|
|
|
—
|
|
||
|
$
|
671,940
|
|
|
$
|
700,193
|
|
(In thousands)
|
December 31, 2019
|
|
December 31, 2018
|
||||
PP&E:
|
|
|
|
||||
U.S.
|
$
|
62,158
|
|
|
$
|
76,907
|
|
Foreign
|
64,953
|
|
|
67,767
|
|
||
Total
|
$
|
127,111
|
|
|
$
|
144,674
|
|
|
Fair value measurements as of December 31, 2019
|
||||||||||||||
(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
|
$
|
18,870
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,870
|
|
Common stock options/warrants
|
—
|
|
|
120
|
|
|
—
|
|
|
120
|
|
||||
Forward contracts
|
—
|
|
|
133
|
|
|
—
|
|
|
133
|
|
||||
Total assets
|
$
|
18,870
|
|
|
$
|
253
|
|
|
$
|
—
|
|
|
$
|
19,123
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration:
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,683
|
|
|
9,683
|
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,683
|
|
|
$
|
9,683
|
|
|
Fair value measurements as of December 31, 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
|
$
|
26,313
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
26,313
|
|
Common stock options/warrants
|
—
|
|
|
855
|
|
|
—
|
|
|
855
|
|
||||
Forward contracts
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
||||
Total assets
|
$
|
26,313
|
|
|
$
|
876
|
|
|
$
|
—
|
|
|
$
|
27,189
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Contingent consideration:
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,537
|
|
|
$
|
24,537
|
|
Total liabilities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,537
|
|
|
$
|
24,537
|
|
|
December 31, 2019
|
||||||||||||||||||
(In thousands)
|
Carrying
Value
|
|
Total
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||||
2025 Notes
|
$
|
148,140
|
|
|
$
|
158,174
|
|
|
$
|
158,174
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31, 2019
|
||
(In thousands)
|
Contingent
consideration
|
||
Balance at December 31, 2018
|
$
|
24,537
|
|
Total losses (gains) for the period:
|
|
||
Included in results of operations
|
(14,854
|
)
|
|
Balance at December 31, 2019
|
$
|
9,683
|
|
|
December 31, 2018
|
||
(In thousands)
|
Contingent
consideration |
||
Balance at December 31, 2017
|
$
|
41,353
|
|
Total losses (gains) for the period:
|
|
||
Included in results of operations
|
(16,816
|
)
|
|
Balance at December 31, 2018
|
$
|
24,537
|
|
(In thousands)
|
Balance Sheet Component
|
|
December 31, 2019
|
|
December 31,
2018 |
||||
Derivative financial instruments:
|
|
|
|
|
|
||||
Common stock options/warrants
|
Investments, net
|
|
$
|
120
|
|
|
$
|
855
|
|
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.
|
|
$
|
133
|
|
|
$
|
21
|
|
|
For the years ended December 31,
|
||||||||||
(In thousands)
|
2019
|
|
2018
|
|
2017
|
||||||
Derivative gain (loss):
|
|
|
|
|
|
||||||
Common stock options/warrants
|
$
|
(601
|
)
|
|
$
|
2,643
|
|
|
$
|
(2,533
|
)
|
2033 Senior Notes
|
—
|
|
|
—
|
|
|
3,185
|
|
|||
Forward contracts
|
$
|
775
|
|
|
$
|
400
|
|
|
$
|
(600
|
)
|
Total
|
$
|
174
|
|
|
$
|
3,043
|
|
|
$
|
52
|
|
|
For the 2019 Quarters Ended
|
||||||||||||||
(In thousands, except per share data)
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenues
|
$
|
222,451
|
|
|
$
|
226,368
|
|
|
$
|
228,772
|
|
|
$
|
224,344
|
|
Total costs and expenses
|
297,769
|
|
|
273,628
|
|
|
267,783
|
|
|
336,807
|
|
||||
Net income (loss)
|
(80,762
|
)
|
|
(59,806
|
)
|
|
(62,007
|
)
|
|
(112,350
|
)
|
||||
Earnings (loss) per share, basic and diluted
|
$
|
(0.14
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.18
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
For the 2018 Quarters Ended
|
||||||||||||||
(In thousands, except per share data)
|
March 31
|
|
June 30
|
|
September 30
|
|
December 31
|
||||||||
Total revenues
|
$
|
254,914
|
|
|
$
|
263,685
|
|
|
$
|
249,815
|
|
|
$
|
221,852
|
|
Total costs and expenses
|
297,525
|
|
|
268,793
|
|
|
283,279
|
|
|
311,866
|
|
||||
Net income (loss)
|
(43,114
|
)
|
|
(6,201
|
)
|
|
(27,655
|
)
|
|
(76,070
|
)
|
||||
Earnings (loss) per share, basic and diluted
|
$
|
(0.08
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(0.13
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
(a)
|
(1)
|
Financial Statements: See Part II, Item 8 of this report.
|
|
|
Schedule I - Condensed Financial Information of Registrant. Additionally, the financial statement schedule entitled “Schedule II – Valuation and Qualifying Accounts” has been omitted since the information required is included in the consolidated financial statements and notes thereto. Other schedules are omitted because they are not required.
|
|
(2)
|
Exhibits: See below.
|
*
|
Denotes management contract or compensatory plan or arrangement.
|
**
|
Filed herewith.
|
+
|
Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission.
|
(1)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 2, 2007, 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 Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2008 for the Company’s three-month period ended June 30, 2008, and incorporated herein by reference.
|
(4)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2008 for the Company’s three-month period ended September 30, 2008, and incorporated herein by reference.
|
(5)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2009 for the Company’s three-month period ended March 31, 2009, and incorporated herein by reference.
|
(6)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2009 for the Company’s three-month period ended June 30, 2009, and incorporated herein by reference.
|
(7)
|
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.
|
(8)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2009 for the Company’s three-month period ended September 30, 2009, and incorporated herein by reference.
|
(9)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2010 for the Company’s three-month period ended March 31, 2010, and incorporated herein by reference.
|
(10)
|
Filed with the Company’s Amendment to Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 3, 2011.
|
(11)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 17, 2010.
|
(12)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 10, 2011, and incorporated herein by reference.
|
(13)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2011 for the Company’s three-month period ended March 31, 2011, and incorporated herein by reference.
|
(14)
|
Filed with the Company’s Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on July 5, 2011, and incorporated herein by reference.
|
(15)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2011 for the Company’s three-month period ended September 30, 2011, and incorporated herein by reference.
|
(16)
|
Filed with the Company’s Annual Report on Form 10-K/A filed with the Securities and Exchange Commission on July 28, 2011.
|
(17)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2012.
|
(18)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2012 for the Company’s three-month period ended March 31, 2012, and incorporated herein by reference.
|
(19)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 9, 2012 for the Company’s three-month period ended September 30, 2012, and incorporated herein by reference.
|
(20)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on January 29, 2013, and incorporated herein by reference.
|
(21)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 18, 2013.
|
(22)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on May 10, 2013 for the Company’s three-month period ended March 31, 2013, and incorporated herein by reference.
|
(23)
|
Filed with the Company’s Schedule 13D filed with the Securities and Exchange Commission on March 22, 2013, and incorporated herein by reference.
|
(24)
|
Filed as Annex A to the Company’s Preliminary Joint Proxy Statement/Prospectus, Form S-4, with the Securities Exchange Commission on June 27, 2013, as amended, and incorporated herein by reference.
|
(25)
|
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.
|
(26)
|
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.
|
(27)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 5, 2015 for the Company’s three month period ended June 30, 2015, and incorporated herein by reference.
|
(28)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 4, 2015, and incorporated herein by reference.
|
(29)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2015, and incorporated herein by reference.
|
(30)
|
Filed under Part II, Item 8, of the Bio-Reference Laboratories, Inc. Form 10-K filed with the Securities and Exchange Commission on January 13, 2015 (File No. 0-15266), and incorporated herein by reference.
|
(31)
|
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.
|
(32)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 29, 2016, and incorporated herein by reference.
|
(33)
|
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.
|
(34)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 8, 2016 for the Company’s three month period ended June 30, 2016, and incorporated herein by reference.
|
(35)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 23, 2017 and incorporated herein by reference.
|
(36)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 8, 2017 and incorporated herein by reference.
|
(37)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2018 and incorporated herein by reference.
|
(38)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 7, 2018 for the Company’s three month period ended June 30, 2018, and incorporated herein by reference
|
(39)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 7, 2019 and incorporated herein by reference.
|
(40)
|
Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2019 and incorporated herein by reference.
|
(41)
|
Filed with the Company’s Annual Report on Form 10-Q filed with the Securities and Exchange Commission on May 8, 2019 and incorporated herein by reference.
|
(42)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 21, 2019.
|
(43)
|
Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on October 29, 2019.
|
(44)
|
Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 5, 2019
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
58,627
|
|
|
$
|
14,724
|
|
Other current assets and prepaid expenses
|
12,463
|
|
|
2,545
|
|
||
Total current assets
|
71,090
|
|
|
17,269
|
|
||
Property, plant and equipment, net
|
—
|
|
|
59
|
|
||
Investments
|
1,778,885
|
|
|
1,873,009
|
|
||
Operating lease right-of-use assets
|
4,672
|
|
|
—
|
|
||
Other assets
|
66
|
|
|
113
|
|
||
Total assets
|
$
|
1,854,713
|
|
|
$
|
1,890,450
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,791
|
|
|
$
|
1,085
|
|
Accrued expenses
|
18,280
|
|
|
8,213
|
|
||
Current maturities of operating leases
|
1,075
|
|
|
—
|
|
||
Current portion of convertible notes
|
—
|
|
|
31,562
|
|
||
Current portion of notes payable
|
3,524
|
|
|
521
|
|
||
Total current liabilities
|
24,670
|
|
|
41,381
|
|
||
Operating lease liabilities
|
3,597
|
|
|
—
|
|
||
Convertible notes
|
211,208
|
|
|
57,299
|
|
||
Deferred tax liabilities, net
|
479
|
|
|
479
|
|
||
Total long-term liabilities
|
215,284
|
|
|
57,778
|
|
||
Total liabilities
|
239,954
|
|
|
99,159
|
|
||
Equity:
|
|
|
|
||||
Common Stock - $0.01 par value, 1,000,000,000 and 750,000,000 shares authorized at December 31, 2019 and 2018, respectively; 670,378,701 and 586,881,720 shares issued at December 31, 2019 and 2018, respectively
|
6,704
|
|
|
5,869
|
|
||
Treasury Stock, at cost - 549,907 shares at December 31, 2019 and 2018, respectively
|
(1,791
|
)
|
|
(1,791
|
)
|
||
Additional paid-in capital
|
3,142,993
|
|
|
3,004,422
|
|
||
Accumulated other comprehensive income (loss)
|
(22,070
|
)
|
|
(20,131
|
)
|
||
Accumulated deficit
|
(1,511,077
|
)
|
|
(1,197,078
|
)
|
||
Total shareholders’ equity
|
1,614,759
|
|
|
1,791,291
|
|
||
Total liabilities and equity
|
$
|
1,854,713
|
|
|
$
|
1,890,450
|
|
|
For the years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Revenue from products
|
$
|
796
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Revenue from transfer of intellectual property and other
|
1,150
|
|
|
1,069
|
|
|
1,069
|
|
|||
Total revenues
|
1,946
|
|
|
1,069
|
|
|
1,069
|
|
|||
Costs and expenses:
|
|
|
|
|
|
||||||
Costs of revenue
|
1,382
|
|
|
2,358
|
|
|
1,438
|
|
|||
Selling, general and administrative
|
47,949
|
|
|
52,397
|
|
|
57,410
|
|
|||
Research and development
|
2,027
|
|
|
4,184
|
|
|
4,426
|
|
|||
Total costs and expenses
|
51,358
|
|
|
58,939
|
|
|
63,274
|
|
|||
Operating loss
|
(49,412
|
)
|
|
(57,870
|
)
|
|
(62,205
|
)
|
|||
Other income and (expense), net:
|
|
|
|
|
|
||||||
Interest income
|
2,186
|
|
|
631
|
|
|
260
|
|
|||
Interest expense
|
(21,172
|
)
|
|
(8,608
|
)
|
|
(4,426
|
)
|
|||
Fair value changes of derivative instruments, net
|
(601
|
)
|
|
1,991
|
|
|
652
|
|
|||
Other income (expense), net
|
(8,887
|
)
|
|
3,906
|
|
|
5,177
|
|
|||
Other income and (expense), net
|
(28,474
|
)
|
|
(2,080
|
)
|
|
1,663
|
|
|||
Loss before income taxes and investment losses
|
(77,886
|
)
|
|
(59,950
|
)
|
|
(60,542
|
)
|
|||
Income tax benefit (provision)
|
(5
|
)
|
|
(11
|
)
|
|
(247
|
)
|
|||
Net loss before investment losses
|
(77,891
|
)
|
|
(59,961
|
)
|
|
(60,789
|
)
|
|||
Loss from investments in investees
|
(2,900
|
)
|
|
(10,822
|
)
|
|
(12,646
|
)
|
|||
Net income (loss) from subsidiaries, net of taxes
|
(234,134
|
)
|
|
(82,257
|
)
|
|
(231,815
|
)
|
|||
Net loss
|
$
|
(314,925
|
)
|
|
$
|
(153,040
|
)
|
|
$
|
(305,250
|
)
|
|
For the years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net loss
|
$
|
(314,925
|
)
|
|
$
|
(153,040
|
)
|
|
$
|
(305,250
|
)
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Change in foreign currency translation and other comprehensive income (loss)
|
(1,939
|
)
|
|
(14,727
|
)
|
|
22,724
|
|
|||
Investments:
|
|
|
|
|
|
||||||
Change in unrealized gain (loss), net of tax
|
—
|
|
|
—
|
|
|
3,790
|
|
|||
Reclassification adjustments due to adoption of ASU 2016-01
|
—
|
|
|
(4,876
|
)
|
|
—
|
|
|||
Reclassification adjustments for losses included in net loss, net of tax
|
—
|
|
|
—
|
|
|
(33
|
)
|
|||
Comprehensive loss
|
$
|
(316,864
|
)
|
|
$
|
(172,643
|
)
|
|
$
|
(278,769
|
)
|
|
For the years ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(314,925
|
)
|
|
$
|
(153,040
|
)
|
|
$
|
(305,250
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
59
|
|
|
91
|
|
|
138
|
|
|||
Non-cash interest
|
8,545
|
|
|
4,564
|
|
|
2,049
|
|
|||
Amortization of deferred financing costs
|
922
|
|
|
551
|
|
|
574
|
|
|||
Losses from investments in investees
|
2,900
|
|
|
10,822
|
|
|
12,646
|
|
|||
(Income) loss from subsidiaries
|
234,134
|
|
|
82,257
|
|
|
231,815
|
|
|||
Equity-based compensation – employees and non-employees
|
13,421
|
|
|
21,761
|
|
|
28,308
|
|
|||
Realized loss (gain) on equity securities and disposal of fixed assets
|
(796
|
)
|
|
208
|
|
|
(652
|
)
|
|||
Change in fair value of derivative instruments
|
9,523
|
|
|
(6,124
|
)
|
|
(4,953
|
)
|
|||
Changes in other assets and liabilities
|
3,907
|
|
|
6,847
|
|
|
4,258
|
|
|||
Net cash used in operating activities
|
(42,310
|
)
|
|
(32,063
|
)
|
|
(31,067
|
)
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Investments in investees
|
(1,200
|
)
|
|
(1,000
|
)
|
|
(9,625
|
)
|
|||
Subsidiary financing
|
(152,376
|
)
|
|
(123,787
|
)
|
|
41,990
|
|
|||
Proceeds from sale of equity securities
|
—
|
|
|
1,516
|
|
|
2,211
|
|
|||
Net cash provided by (used in) investing activities
|
(153,576
|
)
|
|
(123,271
|
)
|
|
34,576
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Issuance convertible notes, net
|
200,293
|
|
|
55,000
|
|
|
—
|
|
|||
Issuance of common stock
|
76,061
|
|
|
92,500
|
|
|
—
|
|
|||
Debt issuance costs
|
(7,762
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from the exercise of Common Stock options and warrants
|
(3
|
)
|
|
1,173
|
|
|
2,132
|
|
|||
Borrowings on lines of credit
|
28,800
|
|
|
—
|
|
|
—
|
|
|||
Repayments of lines of credit
|
(28,800
|
)
|
|
—
|
|
|
—
|
|
|||
Redemption of 2033 Senior Notes
|
(28,800
|
)
|
|
—
|
|
|
—
|
|
|||
Net cash provided by financing activities
|
239,789
|
|
|
148,673
|
|
|
2,132
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
43,903
|
|
|
(6,661
|
)
|
|
5,641
|
|
|||
Cash and cash equivalents at beginning of period
|
14,724
|
|
|
21,385
|
|
|
15,744
|
|
|||
Cash and cash equivalents at end of period
|
$
|
58,627
|
|
|
$
|
14,724
|
|
|
$
|
21,385
|
|
SUPPLEMENTAL INFORMATION:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
5,224
|
|
|
$
|
956
|
|
|
$
|
956
|
|
Income taxes paid, net of refunds
|
$
|
(1,300
|
)
|
|
$
|
(578
|
)
|
|
$
|
327
|
|
Operating lease right-of-use assets due to adoption of ASU No. 2016-02
|
$
|
4,855
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease liabilities due to adoption of ASU No. 2016-02
|
$
|
4,855
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Non-cash financing:
|
|
|
|
|
|
||||||
Shares issued upon the conversion of:
|
|
|
|
|
|
||||||
Common Stock options and warrants, surrendered in net exercise
|
$
|
20
|
|
|
$
|
806
|
|
|
$
|
1,546
|
|
Issuance of capital stock to acquire or contingent consideration settlement:
|
|
|
|
|
|
||||||
OPKO Health Europe
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
304
|
|
(In thousands)
|
2025 Senior Notes
|
|
Discount
|
|
Debt Issuance Cost
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Issuance of 4.50% convertible notes
|
200,000
|
|
|
(52,600
|
)
|
|
(5,720
|
)
|
|
141,680
|
|
||||
Amortization of debt discount and debt issuance costs
|
—
|
|
|
5,826
|
|
|
634
|
|
|
6,460
|
|
||||
Balance at December 31, 2019
|
$
|
200,000
|
|
|
$
|
(46,774
|
)
|
|
$
|
(5,086
|
)
|
|
$
|
148,140
|
|
Date: March 2, 2020
|
OPKO HEALTH, INC.
|
|
|
|
|
|
By:
|
/s/ Phillip Frost, M.D.
|
|
|
Phillip Frost, M.D.
|
|
|
Chairman of the Board and
|
|
|
Chief Executive Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ Phillip Frost, M.D.
|
|
Chairman of the Board and Chief Executive
|
|
March 2, 2020
|
Phillip Frost, M.D.
|
|
Officer
(Principal Executive Officer) |
|
|
|
|
|
|
|
/s/ Jane H. Hsiao, Ph.D., MBA
|
|
Vice Chairman and Chief Technical Officer
|
|
March 2, 2020
|
Jane H. Hsiao, Ph.D., MBA
|
|
|
|
|
|
|
|
|
|
/s/ Steven D. Rubin
|
|
Director and Executive Vice President –
|
|
March 2, 2020
|
Steven D. Rubin
|
|
Administration
|
|
|
|
|
|
|
|
/s/ Adam Logal
|
|
Senior Vice President, Chief Financial Officer,
|
|
March 2, 2020
|
Adam Logal
|
|
Chief Accounting Officer and Treasurer
(Principal Financial Officer)
|
|
|
|
|
|
|
|
/s/ Robert S. Fishel, M.D.
|
|
Director
|
|
March 2, 2020
|
Robert S. Fishel, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ Anthony Japour, M.D.
|
|
Director
|
|
March 2, 2020
|
Anthony Japour, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ Richard Krasno, Ph.D.
|
|
Director
|
|
March 2, 2020
|
Richard Krasno, Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ Richard A. Lerner, M.D.
|
|
Director
|
|
March 2, 2020
|
Richard A. Lerner, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ John A. Paganelli
|
|
Director
|
|
March 2, 2020
|
John A. Paganelli
|
|
|
|
|
|
|
|
|
|
/s/ Richard C. Pfenniger, Jr.
|
|
Director
|
|
March 2, 2020
|
Richard C. Pfenniger, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ Alice Lin-Tsing Yu, M.D., Ph.D.
|
|
Director
|
|
March 2, 2020
|
Alice Lin-Tsing Yu, M.D., Ph.D.
|
|
|
|
|
Exhibit Number
|
Description
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
•
|
the corporation has elected in its certificate of incorporation not to be governed by Section 203;
|
•
|
the business combination or the transaction which resulted in the stockholder becoming an interested stockholder was approved by the board of directors of the corporation before the date of the business combination or the date such stockholder became an interested stockholder, as applicable;
|
•
|
upon consummation of the transaction that made such stockholder an interested stockholder, the interested stockholder owned at least 85% of the “voting stock” (as defined in Section 203) of the corporation outstanding at the commencement of the transaction excluding voting stock owned by directors who are also officers or held in employee benefit plans in which the employees do not have a confidential right to tender stock held by the plan in a tender or exchange offer; or
|
•
|
the business combination is approved by the board of directors and by the stockholders (acting at a meeting and not by written consent) by the affirmative vote of at least 66-2/3% of the outstanding voting stock which is not “owned” (as defined in Section 203) by the interested stockholder.
|
Lender
|
Revolving Commitment
|
JPMorgan Chase Bank, N.A.
|
$75,000,000
|
Total
|
$75,000,000
|
By:
|
/s/ Steven D. Rubin
Name: Steven D. Rubin Title: Executive Vice President of Administration |
By:
|
/s/ Phillip Frost, M.D.
Phillip Frost, M.D. |
NAME
|
|
JURISDICTION OF INCORPORATION
|
OPKO Instrumentation, LLC
|
|
Delaware
|
OPKO Pharmaceuticals, LLC
|
|
Delaware
|
OPKO Diagnostics, LLC
|
|
Delaware
|
OPKO Chile, S.A.
|
|
Chile
|
Arama Natural Products Distribuidora, Ltda
|
|
Chile
|
Pharmacos Exakta S.A. de C.V.
|
|
Mexico
|
FineTech Pharmaceutical Ltd
|
|
Israel
|
Farmadiet Group Holdings, S.C.
|
|
Spain
|
OPKO Biologics, Ltd
|
|
Israel
|
OPKO Ireland Global Holdings, Ltd
|
|
Ireland
|
OPKO Ireland, Ltd
|
|
Ireland
|
OPKO Canada Corp, ULC
|
|
Canada
|
OPKO Renal, LLC
|
|
Canada
|
Curna, Inc.
|
|
Delaware
|
BioReference Laboratories, Inc.
|
|
New Jersey
|
GeneDX, Inc.
|
|
New Jersey
|
Genome Diagnostics, Ltd
|
|
Canada
|
EirGen Pharma Limited
|
|
Ireland
|
Transition Therapeutics, Inc.
|
|
Canada
|
1.
|
Registration Statement (Form S-3 No. 333-229400) of OPKO Health, Inc. and subsidiaries,
|
2.
|
Registration Statement (Form S-8 No. 333-211209) pertaining to the 2016 Equity Incentive Plan of OPKO Health, Inc. and subsidiaries,
|
3.
|
Registration Statement (Form S-8 No. 333-144040) pertaining to the 2007 Equity Incentive Plan of OPKO Health, Inc. and subsidiaries,
|
4.
|
Registration Statement (Form S-8 No. 333-190899) pertaining to the 2005 Stock Incentive Plan and 2007 Equity Incentive Plan of PROLOR Biotech, Inc. (formerly Modigene Inc.),
|
5.
|
Registration Statement (Form S-8 No. 333-190900) pertaining to the 2007 Equity Incentive Plan of OPKO Health, Inc. and subsidiaries, and
|
6.
|
Registration Statement (Form S-8 No. 333-206489) pertaining to the 2003 Employee Incentive Stock Option Plan of BioReference Laboratories, Inc.
|
(1)
|
I have reviewed this Annual Report on Form 10-K 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.
|
|
/s/Phillip Frost, M.D.
|
Date: March 2, 2020
|
Phillip Frost, M.D.
|
|
Chief Executive Officer
|
(1)
|
I have reviewed this Annual Report on Form 10-K 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: March 2, 2020
|
/s/ Adam Logal
|
|
Adam Logal
|
|
Senior Vice President, Chief Financial Officer,
Chief Accounting Officer and Treasurer
|
Date: March 2, 2020
|
/s/ Phillip Frost, M.D.
|
|
Phillip Frost, M.D.
|
|
Chief Executive Officer
|
Date: March 2, 2020
|
/s/ Adam Logal
|
|
Adam Logal
|
|
Senior Vice President, Chief Financial Officer
Chief Accounting Officer and Treasurer
|