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OPKO Health’s Q3 2018 Revenue Expectations

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Revenue guidance for Q3 2018

In the third quarter, OPKO Health (OPK) expects service revenue of $200 million–$220 million, assuming stable reimbursement rates and a small rise in volumes. Meanwhile, the company expects product revenue of $28 million–$32 million, and Rayaldee revenue of $5.7 million–$6.5 million.

The company expects revenue of $80 million–$83 million from the transfer of intellectual property, mainly attributable to certain non-recurring milestone Rayaldee payments. In fiscal 2018, analysts expect OPKO Health’s revenue to fall ~1.7% to $1.1 billion, while peers Novartis (NVS), Merck (MRK), and Regeneron (REGN) are expected to report revenue of approximately $52.4 billion, $42.4 billion, and $6.4 billion, respectively.

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BioReference Laboratories’ growth trends

OPKO Health’s diagnostic business, BioReference Laboratories, served more than 12 million patients in 2017. OPKO Health is focused on leveraging BioReference Laboratories’ commercial infrastructure for increasing the adoption of its 4Kscore test and Claros 1 point-of-care diagnostic system.

BioReference Laboratories accounted for most of OPKO’s Q2 2018 service revenue, which was close to $216.1 million. Meanwhile, a subsidiary of BioReference Laboratories and a leading player in the genomics business, GeneDx, saw its exome-based test volumes rise 38% YoY (year-over-year), and its overall volumes rise 13% YoY. GeneDx, which launched 20 new tests and updated 51 tests in Q2 2018, aims to launch 36 new tests and update 57 tests in H2 2018.

On June 12, OPKO Health announced that GeneDx had completed exome sequencing for more than 100,000 patients, adding significantly to OPKO Health’s rare disease gene variant database. Since 2015, the company has contributed to the phenotypical analysis of 62 novel genes and their associated diseases. In the next article, we’ll discuss OPKO Health’s earnings prospects in greater detail.

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