Q2 2025 OPKO Health Inc Earnings Call
Operator 2: Good day, and welcome to the OPKO Health Q2 2025 Financial Results Conference Call. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.
Good day and welcome to the optical health second quarter 2025 financial results Conference call.
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I would now like to turn the conference over to Yvonne brakes. Please go ahead.
Yvonne Briggs: Thank you, operator, and good afternoon. This is Yvonne Briggs with Alliance Advisors IR. Thank you all for joining today's call to discuss OPKO Health's financial results for Q2 2025. I'd like to remind you that any statements made during this call by management, other than statements of historical fact, will be considered forward-looking, and as such, are subject to risks and uncertainties that can materially affect the company's results. These forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended 31 December 2024, and subsequently filed SEC reports. Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, 31 July 2025.
Thank you operator and good afternoon. This is Yvonne Briggs with Alliance advisors I R.
Thank you all for joining today's call to discuss <unk> financial results for the second quarter of 2025 I'd.
I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward looking and as such are subject to risks and uncertainties that could materially affect the company's results.
These forward looking statements include without limitation the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 'twenty 'twenty four and subsequently filed SEC reports.
Furthermore, This conference call contains time sensitive information that is accurate only as of the date of the live broadcast July 31st 2025.
Yvonne Briggs: Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Before we begin, let me review the format for today's call. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference Health as well as OPKO's pharmaceutical business. After that, Adam Logal, OPKO's Chief Financial Officer, will review the company's Q2 financial results and discuss OPKO's financial outlook. Then we'll open the call to questions. Now I'd like to turn the call over to Dr. Frost.
Except as required by law.
<unk> undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this call.
Before we begin let me review the format for today's call.
Dr. Phillip Frost, Chairman and Chief Executive Officer will open the call Dr. Elias Zerhouni, Vice Chairman and President will then provide an overview of bio reference health as well as the Opco pharmaceutical business.
After that Adam mogul Op, Cos, Chief financial officer, or via the company's second quarter financial results and discuss the Opco is financial outlook and then we'll open the call to questions.
Now I'd like to turn the call over to Dr. Frost.
Phillip Frost: Good afternoon, thank you for joining us. Today, we will report on the continued progress of OPKO Health's strategic initiatives and business performance. We have streamlined BioReference Health's operations as we prepare to close the sale of its oncology and related clinical testing business to Labcorp. This transaction monetizes certain assets while sharpening BioReference's focus on its core testing business and improving its financial profile. This is our second transaction with Labcorp to unlock value and accelerate BioReference's path to profitability. On the pharmaceutical side, we continue to advance our innovative therapeutic pipeline. ModeX has two programs in phase I clinical trials, with three more expected to enter the clinic late this year and early 2026. A significant catalyst for our pipeline is the phase I data from our EBV vaccine partnered with Merck that will guide decisions regarding phase II testing.
Good afternoon.
And thank you for joining us.
Today, We will report on the continued progress of Opco health strategic administered dose and business performance.
We have streamlined bio reference helps operations as we prepare to close the sale of its oncology and related clinical testing business to labcorp.
This transaction monetize certain assets, while sharpening bio references focused on its core testing business.
Improving its financial profile.
This is our second transaction with labcorp to unlock value and accelerate bar references path to profitability.
On the pharmaceutical side, we continue to advance our an integrator therapeutic pipeline.
Access to programs in phase one clinical trials with three more expected to enter the clinic late this year and early 2026.
It's significant.
For our pipeline as the phase one data from our EBV vaccine partnered with Merck that will guide decisions regarding phase two testing.
Phillip Frost: We are pleased with the progress of our collaboration with Entera Bio to develop an oral tablet formulation of OPK-88006, our GLP-1 glucagon agonist for the treatment of obesity and MASH. Oral administration of this drug candidate has demonstrated encouraging results in animal models with in vivo data presented at the ENDO annual meeting in mid-July. OPKO is independently developing OPK-88006 for subcutaneous administration, with in vivo data having been presented at the American Diabetes Association 85th Scientific Sessions in June. We're also collaborating with Entera Bio on a second program to develop an oral form of our GLP-2 candidate for short bowel syndrome. Our Latin American business and our Irish contract pharmaceutical development and manufacturing unit continue to perform well with increasing revenue and expanding margins even while facing foreign currency headwinds.
We're pleased with the progress of our collaborations with Terra bottle.
To develop an oral tablet formulation of O P. K 88006.
<unk>, one glucagon agonist for the treatment of obesity and mush.
Oral administration of this drug candidate has demonstrated encouraging results in animal models with N vivo data presented at the Endo annual meeting in mid July.
Optical is independently developing O P. K eight eight or six for subcutaneous administration with in vivo data having been presented at the American Diabetes Association edifice scientific sessions in June.
We're also collaborating with Taro body on a second program to develop an oral form of our grip two kinds of date for short bowel syndrome.
Our Latin American business, and our Irish contract pharmaceutical development and manufacturing unit.
Continued to perform well with increasing revenue and expanded margins, even while facing foreign currency headwinds.
Phillip Frost: We've taken several strategic steps to improve our balance sheet and have sufficient capital to allocate to our R&D efforts, which are partially funded by strategic partners and non-dilutive sources. In addition, we have a $200 million common stock repurchase program in place with $141.5 million remaining capacity as of 30 June. As you've noted, we're committed to maximizing shareholder value through the strategic deployment of capital, additional partnerships, business development initiatives, and asset sales. We're confident that this strategy will continue to add value in H2 2025 and beyond. With that overview, I'll turn the call over to Elias.
We've taken several strategic steps to improve our balance sheet.
And have sufficient capital to allocate to our R&D efforts, which were partially funded by strategic partners and non dilutive sources.
In addition, we have a $200 million common stock repurchase program in place with $141.5 million remaining capacity as of June 30th.
Oh.
As you've noted we've we're committed to maximizing shareholder value through the strategic deployment of capital.
Additional partnerships business development initiatives and asset sales, we're confident that this strategy will continue to add value in the second half of 2025.
And beyond.
With that overview I will turn the call over to <unk>.
Elias Zerhouni: Well, thank you, Phil, and good afternoon, everyone. Let's start with an update on BioReference Health, our diagnostic segment. We continue to restructure and right-size this business toward the goal of reaching and sustaining profitability. You will recall that in March, we announced an agreement with Labcorp to sell our oncology assets for $225 million, with $192.5 million payable at closing and an earn-out of up to $32.5 million based on performance. The earn-out will be measured 6 months post-close and is based on the number of specified client accounts that are retained. We expect this transaction to close near the end of Q3 of this year.
Well, thank you Phil and good afternoon, everyone, let's start with an update on by Russia, which helps our diagnostics segment, we continued to restructure and right size this business toward the goal of reaching and sustaining profitability.
You will recall that in March we announced an agreement with <unk> Corp to sell our oncology assets for $225 million with $192 5 million payable at closing and then earn out of up to $32 5 million based on performance and the earn out will be measured six months post close.
And it's based on the number of specified client accounts.
We expect this transaction to close near the end of the third quarter of this year.
Elias Zerhouni: With the pending sale of BioReference Oncology and related clinical testing assets to Labcorp, we expect the remaining business to show improving margins through the balance of the year and beyond. Post-transaction, BioReference will maintain its core clinical testing operations in New York and New Jersey and will continue to offer urology diagnostic services, highlighting our proprietary 4Kscore test for prostate cancer risk assessment, as well as its clinical services business with correctional facilities on a nationwide basis. The revenue of these operations represented approximately $300 million in 2024. Reflecting our efforts to drive operational efficiencies, BioReference's financial results continue to improve. As I mentioned on our last call, the latest reduction in force and footprint consolidation provided annualized cost savings of approximately $19 million. Our headcount stands now at approximately 1,900 for Q2.
With the pending sale of buying referenced some calls <unk> and related clinical testing assets Lab Corp. We expect to reverse the remaining business to show improving margins through the balance of the year and beyond.
Both transaction by referenced will maintain its core clinical testing operations in New York and New Jersey.
And we will continue to offer urology diagnostic services, highlighting our proprietary for case core test for prostate cancer risk assessment as.
As well as clinical services business was correctional facilities on a nationwide basis.
The revenue of these operations represented approximately $300 million in 2024.
Reflecting our efforts to drive operational efficiencies by references financial results continued to improve.
As I mentioned in our last call the latest reduction in force and footprint consolidation.
<unk> on your realized cost savings of approximately $19 million, our head counts that stands now at approximately 19 100 for the second quarter.
Elias Zerhouni: After the close of the oncology transaction, we expect our headcount to decrease to between 1,450 and 1,500 by Q4. Now, to further grow the business, we have focused our efforts on optimizing our test menu and establishing strategic relationships in market to increase testing volumes. By focusing in the local New York and New Jersey physician market, we have really strengthened our position with those who serve this patient base. This includes ACOs, IPAs, FQHCs, regional health systems, and specialty healthcare companies. In addition, the combination of our menu size and operational agility as a more focused company is instrumental in capitalizing on new revenue streams, such as direct-to-consumer, employer-based testing, and early-phase clinical trials. We are also pleased to announce that on 25 July, the FDA granted approval of a supplemental application for the 4Kscore test.
After the close of the oncology transaction, we expect our head count to decrease to between 14, 50, and 1500 by the fourth quarter.
To further grow the business, we have focused our efforts on optimizing our test menu and establishing strategy strategic relationships in market to increased testing volumes by focusing on the more local New York and New Jersey physician market, we have really strengthened our position with those who serve.
This patient base and this includes Acos Ipas F. Q H six regional health systems, and specialty health care companies and in addition, the combination of our menu size and operational agility is a more focused company.
Mental and capitalizing on new revenue streams, such as direct to consumer.
Broad based testing in early phase clinical trials.
We are also pleased to announce that on July 21st the FDA granted approval after supplemental application for the four case core test and this approval.
Elias Zerhouni: This approval specifically enables the performance of the 4Kscore test even when digital rectal examination information is not available. The 4Kscore test is indicated for the assessment of the likelihood of aggressive prostate cancer in men 45 years or older and reported to have age-specific elevated or abnormal screening PSA results. In the US, over 90% of PSA screening tests are performed by primary care providers who will now be potential users of the 4Kscore test. Excluding the pending and closed listed cells, BioReference's testing volume grew by 1.4% in Q2 2025 compared with a year-ago period. As for our urology segment, the 4Kscore test continued to perform well with year-over-year increase in test volume of approximately 12%. The aforementioned FDA approval of our supplemental application for the 4Kscore test should provide further opportunities for growth, we believe.
Specifically enables the performance of the full case CT test even when there's no rectal examination information is not available.
The forecast score test is indicated for the assessment of the likelihood of aggressive prostate cancer in men and men 45 years or older and reported to have age specific elevated abnormal screening PSC results in the U S over 90% of P. S.
Screening tests are performed by primary care providers, who now be potential users of the full case Cortes.
Excluding the pending and closed most itself bio references testing volume grew by one 4% in the second quarter of 2025.
There was a year ago period as far our urology segment of Falcon score has continued to perform well with year over year inquiries in test volume of approximately 12%.
No the afford four mentioned FDA approval so far.
Our simple mental applications for the fall Kay score test should provide further opportunities for growth we believe.
Elias Zerhouni: Let's turn to a discussion of our therapeutic segment, starting with ModeX. The phase I Epstein-Barr virus vaccine trial by our Merck collaborators is progressing as planned. This trial will evaluate up to 200 healthy adults for safety and tolerability and is comprised of 2 parts with a different adjuvant for each. We're currently waiting for the analysis of the phase I results that will guide Merck's decisions on progression to phase II trials. Several products are advancing in our immuno-oncology and immunology portfolio. The most advanced is our first-in-class MDX2001 c-Met-Trop2 CD3 CD28 tetraspecific T-cell engager antibody that has progressed to its 5th dose level in a phase I clinical trial.
Now, let's turn to a discussion of our therapeutic segment star.
Starting with the phase one Epstein Barr virus vaccine trial by our marker collaborators is progressing as planned.
Trial will evaluate up to 200 healthy adults for safety and Tolerability and is comprised of two parts with a different adjuvant for each or.
We're currently waiting for the analysis of the Phase one results that will guide March decisions on progression to phase two trials.
<unk> products are advancing in our immuno oncology and immunology portfolio. The most advanced is a first in class.
Mdx 2001 C met trop two G. III C. D 28, Tetra specific T cell engaging antibody that has progressed. So it's finished dose level in the phase one clinical trial.
Elias Zerhouni: We expect to enroll the highest dose level by the end of the year, after which we will focus on assessing signals of efficacy in select tumors known to express high levels of Trop2 or c-Met at biologically active doses. Thereafter, we will focus on the tumors that appear most responsive. Now, two additional programs are expected to enter the clinic late this year or early next year, including our MDX2003 tetraspecific T-cell engager antibody for lymphoma and leukemia, and the MDX2004, an immune rejuvenator for multiple oncology and immunology indications. Our immunology portfolio is focused on the use of multispecific antibodies for immune-impaired patients, including those with cancer, chronic diseases, and the elderly. Our most advanced product aims to address the unmet need in such patients at high risk for COVID complications. We anticipate that phase I studies will begin early next year.
We expect to enroll the highest dose level by the end of the year after which we will focus on assessing signals of efficacy in select tumors known to express high levels of trop, two or C met a biologically active doses and thereafter, we will focus on the tumors that appear most.
<unk> responsive.
Two additional programs are expected to enter the clinic late this year or early next year, excluding our mdx 2003, Tetra specific T cell engaging antibody from lymphoma, and leukemia, and the Mdx 2004, the immune rejuvenated for multiple oncology and immunology.
Indications.
Our immunology portfolio is focused on the use of multi specific antibodies for immune <unk> impaired patients, including those with cancer chronic diseases in the arrow elderly.
Our most advanced product aims to address the unmet need in such patients at high risk for Covid complications and we anticipate the phase one studies will begin early next year and this work as you remember is funded by BARDA.
Elias Zerhouni: This work, as you remember, is funded by BARDA, which is also supporting the advancement of multi-specific antibodies to prevent influenza currently at the pre-IND stage. We continue to work collaboratively with BARDA, which contributed non-diluted funding of $59 million last year and an additional $51 million so far this year to advance these programs. Now, as mentioned by Dr. Frost, moving to OPK-88006, our novel long-acting GLP-1 receptor glucagon receptor dual agonist. We presented a poster on preclinical data at the American Diabetes Association 85th Scientific Session in June, and the therapeutic benefits of OPK-88006 on quantitative biological hallmarks of MASH in mouse models were superior to semaglutide and tirzepatide, suggesting that OPK-88006 could be a promising GLP-1 glucagon receptor dual agonist for the treatment of obesity and MASH. We are encouraged by these results in OPK-88006 therapeutic potential.
It is also supporting the advancement of multi specific antibodies to prevent influenza currently at the pre R&D stage and we continue to work collaboratively with BARDA with which contributed non diluted funding of $59 million last year and an additional $51 million so far.
This year to advance these programs.
Now as mentioned.
Alright, yeah, Dr. Frost moving to Opco 80, 8006, our novel long acting G. L. P. One receptor glucagon receptor dual agonist, we presented a poster on preclinical data at the American Diabetes Association edifice science.
Terrific session in June and the therapeutic benefits of Opco 88, or six on quantitative biological hallmarks of mash in mouse models were superior to semi guotai servo digitize, suggesting that Opco 80, 8006 could be a promising.
GMT, one glucagon receptor dual agonist for the treatment of obesity and Nash.
We are encouraged by these results and Opco 80, 8006 therapeutic potential.
Elias Zerhouni: As Phil mentioned, our collaboration with Entera Bio continues to advance as we're in the pre-IND stage with an oral version of OPK-88006. The oral program combines our proprietary long-acting oxyntomodulin analog and Entera's proprietary N-Tab technology. At the recent ENDO meeting in San Francisco, we presented new pharmacologic and pharmacokinetic in vivo data for oral OPK-88006, showing excellent bioavailability. In addition, we're working with Entera Bio on another program for short bowel syndrome, which represents a significant unmet need. Short bowel syndrome patients have a reduced ability to absorb nutrients and fluids and are at risk of malnutrition, unintended weight loss, and additional symptoms due to the loss of essential vitamins and minerals. The European Society for Clinical Nutrition and Metabolism Congress, or ESPEN, accepted our abstract regarding the PK/PD of our oral GLP-2 tablets for the treatment of short bowel syndrome.
As Phil mentioned, our collaboration with Antero Bio continues to advance that's where the <unk> stage with an oral version of O. PK a 006, the oil program combines our proprietary long acting oaks into module in analog and in turn.
There's proprietary N type technology.
At the recent Endo meeting in San Francisco, we presented new pharmacology and pharmacokinetics in vivo data for all O P. K 80, 8006, showing excellent bioavailability.
In addition, we're working with Antero by you on another program for short bowel syndrome, which represents a significant unmet need.
Bowel syndrome patients have a reduced ability to absorb nutrients in fluids and are at risk of malnutrition.
Tended weight loss and additional symptoms due to the loss of essential vitamins and minerals the European Society for clinical nutrition metabolism Congress or S. Been accepted our stripe regarding the PK PD of our oral G. O P. Two tablets for the treatment of short bowel syndrome and <unk>.
Elias Zerhouni: This presentation will take place in September in Prague. Finally, our Latin America pharmaceutical division and RAYALDEE continue to perform to plan with sustained revenues and margins, and Adam will provide you also an update on NGENLA. In summary, we're pleased with our progress in advancing our first-in-class therapeutic multi-specific antibodies for oncology and immunology indications, as well as our multi-vaccine candidate that are progressing in clinical development at Merck and our metabolic disease program with our OPKO-8006 GLP-1 glucagon co-agonist in both oral and injectable forms for obesity and MASH, as well as an oral GLP-2 agonist for short bowel syndrome. We're confident that the structuring efforts we're undertaking will position BioReference to be more efficient and profitable following the completion of the second asset sale. Now, let me turn the call over to Adam to discuss our financial results. Adam?
The presentation will take place in place in September in Prague.
Finally, our Latin American pharmaceutical division to NYLD continue to perform to plan, which sustained revenues and margins and I don't know who will provide you with an update on in general.
So in summary.
Pleased with our progress in advancing our first in class therapeutic multi specific antibodies for oncology and immunology indications as well as our multi vaccine candidate they're progressing in clinical development at Mark and our metabolic disease program with our Opco 88.
Yeah.
006 G. L. P. One local burn quad goodness in both oral and injectable forms for obesity in mass as well as an oral G. L. P. Two agonist for short bowel syndrome, we're confident that the structuring efforts. We are undertaking are undertaking will position by reference to be.
More efficient and profitable following the completion of the second asset sale now.
Now, let me turn the call over to Adam to discuss our financial results Saddam Adam.
Adam Logal: Thank you, Elias. Let's begin with our diagnostics business. Revenue for Q2 2025 was $101.1 million, including $24.9 million from the oncology assets being sold. This compares with $129.4 million in Q2 2024, with the decline primarily due to the Labcorp transaction that closed in September 2024. Revenue in our non-oncology business continues to see steady growth, highlighted by an increase in 4Kscore volumes of nearly 12%, which Elias mentioned, and has been accelerating throughout the year. Total costs and expenses were $119.3 million, down from $156 million last year. This includes $29.4 million related to the oncology assets and approximately $2 million in expected one-time costs for severance during the 2025 quarter. As a result, our diagnostic operating loss improved to $18.2 million, compared to $26.6 million in Q2 2024.
Thank you Elliot, let's begin with our diagnostics business revenue for the second quarter of 2025 was 101 point $101 $1 million, including $24 $9 million from the oncology assets being sold this compares with $129 4 million.
In Q2 2024 with the decline primarily due to the Labcorp transaction that closed in September of 2024.
Revenue in our non oncology business continues to see steady growth highlighted by an increase in for case score volumes of nearly 12%, which Elliot mentioned and has been accelerating throughout the year.
Total costs and expenses were $119 $3 million down from $156 million last year.
This includes $29.4 million related to the oncology assets and approximately $2 million in expected one time costs for severance during the 2025 quarter.
As a result, our diagnostic operating loss improved to $18 $2 million compared to $26 6 million in Q2 2024.
Adam Logal: Depreciation and amortization expense came in at $4.9 million, down from $6.3 million in 2024. Importantly, as Elias mentioned, the actions we've taken throughout the H1 of this year and those planned as we close the oncology transaction, are expected to deliver over $25 million in annualized cost savings, and we remain on track to achieve cash flow breakeven and positive cash from operations in 2025. Turning to our pharmaceutical business, revenue was $55.7 million, up $2.9 million from 2024's $52.8 million. Product revenue was $40.7 million, up slightly from 2024's $40.5 million, reflecting an increase in our Spanish and Mexican businesses, partially offset by foreign exchange headwinds in Chile. RAYALDEE contributed $7.2 million in both the 2025 and 2024 periods, with improved margins during 2025 due to the lower government rebates.
Depreciation and amortization expense came in at $4 $9 million down from $6 3 million in 2024.
Importantly, as Elliot mentioned the actions we've taken throughout the first half of this year and those planned as we close the oncology transaction are expected to deliver over $25 million in annualized cost savings and we remain on track to achieve cash flow breakeven and positive cash from operations.
In 2025.
Turning to our pharmaceutical business revenue was $55 $7 million up $2 $9 million from 2024, $52 8 million.
<unk> revenue was $40 $7 million up slightly from 2024 $45 million, reflecting an increase in our Spanish and Mexican businesses.
We offset by foreign exchange headwinds and Chile.
Ray already contributed $7 $2 million in both the 2025 and 2024 periods with improved margins during 2025 due to the lower government rebates.
Adam Logal: IP transfer revenue rose to $15 million, up from $12.3 million, which includes our Pfizer profit share of $6.1 million, compared to $6.3 million for 2024. While H1 2025 gross profit share has been slower than we anticipated, we are optimistic about the efforts Pfizer has made and expect to make throughout the remainder of 2025 on the global commercialization efforts of the program. Globally, the adoption of the long-acting form of hGH has been slower than we and the broader market has anticipated. However, we continue to see trends of accelerated transition to the once-weekly formulation. Based on the available market data, NGENLA holds about one-third of the global long-acting market. As the market continues to move to the once-weekly dosing, we believe Pfizer will continue to grow its portion of the total market.
IP transfer revenue rose to $15 million up from $12 3 million, which includes our Pfizer profit share of $6 $1 million compared to $6 3 million for 2024.
First half of 2025 gross profit share has been slower than we anticipated we are optimistic about the efforts Pfizer has made.
Back to make throughout the remainder of 2025.
On the global commercialization efforts of the program.
Globally, the adoption of the long acting form of Hgh has been lower than than we and the broader market as anticipated. However, we continue to see trends have accelerated the transition to the once weekly formulation.
Just on the available market data in general hold about one third of the global long acting market and as the market continues to move to the once weekly or once weekly dosing. We believe Pfizer will continue to grow at a portion of the total market.
Adam Logal: In addition, BARDA funding increased to $6.5 million from $5 million, reflecting the expanded program activity for our infectious disease antibody programs. Costs and expenses were $84.4 million, up from $77.6 million, driven by increased R&D investments. R&D totaled $29.8 million, up from $23.7 million, primarily due to the ModX development programs, including our BARDA-supported programs. As Elias mentioned, we are making progress within our clinical development program and with spending on our ongoing Phase I trial, as well as expenses to support an additional five IND filings within the next 12 months for our GLP-1 glucagon, oncology, immunology, and infectious disease programs. As a result, our pharmaceutical operating loss was $28.7 million, compared to $24.8 million last year. Depreciation and amortization expense was $18.1 million, slightly more than 2024's $17.9 million.
In addition, BARDA BARDA funding increased to $6 $5 million from $5 million, reflecting the expanded program activity for our infectious disease antibody program.
Costs and expenses were $84 $4 million up from $77 $6 million driven by increased R&D investment.
R&D totaled $29 $8 million up from $23 7 million.
Primarily due to the moat X development programs, including our BARDA supported programs as Elias mentioned, we are making progress within our clinical development program and with and with spending on our ongoing phase one trial as well as expenses to support an additional five I N E filings within the next 12 months.
For our G. L P. One glucagon oncology monology and infectious disease programs.
As a result, our pharmaceutical operating loss was $28 $7 million compared to $24 $8 million last year dip.
Depreciation and amortization expense was $18 $1 million slightly more than 2024 is $17 9 million.
Adam Logal: For our consolidated results, consolidated operating loss improved slightly during 2025 to $60 million, compared to $61.7 million as a result of the improved results at BioReference Health, partially offset by the increased investments in our pharmaceutical research and development programs. As you'll recall, we completed our convertible note exchange on 1 April 2025. As a result, we recorded approximately $92 million of expense during Q2 2025. While our 2024 net loss benefited from an increase in the value of one of our investments, which resulted in a gain of $60 million during 2024. As a result, our net loss for Q2 2025 was $148.4 million, or $0.19 per share, compared to $10.3 million or $0.01 per share in Q2 2024. As we think about our balance sheet and capital allocation, we ended the quarter with approximately $285 million in cash equivalents, and restricted cash.
For our consolidated results consolidated consolidated operating loss improved slightly during 2000 $25 million to $60 million compared to $61 $7 million.
As a result of the improved result at bio reference partially offset by the increased investments in our pharmaceutical research and development programs.
As Youll recall, we completed our convertible note exchange on April one 2025.
As a result, we recorded approximately $92 million of expense during the second quarter of 2025.
Our 2024 net loss benefited from an increase in the value of one of our investments, which resulted in a gain of $60 million during 2024.
As a result, our net loss for Q2 25.
Was $148 $4 million or <unk> 19 per share compared to $10 $3 million or one penny per share in Q2 2024.
As we think about our balance sheet and capital allocation, we ended the quarter with approximately $285 million in cash cash equivalents and restricted cash we remain focused on after my optimizing our capital structure, while maintaining our investments into our innovative R&D programs.
Adam Logal: We remain focused on optimizing our capital structure while maintaining our investments into our innovative R&D programs. As I mentioned, we completed the convertible note exchange earlier this quarter using approximately $65 million in cash and issuing 121 million shares, eliminating over $159 million in principal debt, which meaningfully improved our overall debt position. Under our expanded share repurchase authorization, as Phil mentioned, we repurchased approximately 13.6 million shares during Q2 2025 and have approximately $142 million remaining authorized, which represents more than 13% of our current share count at recent trading ranges. Cash used in operations during Q2 increased from our normal levels due to certain working capital adjustments, including a negotiated lease exit for one of our BioReference facilities, as well as income taxes paid on our transactions that closed in 2024. We also invested approximately $8 million into Entera Bio related to our oral GLP-1 program.
As I mentioned, we completed the convertible note exchange earlier this quarter using approximately $65 million in cash and issuing 121 million shares eliminating over $159 million in principal debt.
Which meaningfully improved our overall debt position.
Under our expanded share repurchase authorization as Phil mentioned, we were we repurchased approximately 13 6 million shares during Q2 25.
<unk> $142 million remaining authorized which represents more than 13% of our current share count at recent trading ranges.
Cash used in operations during Q2 increased from our normal levels due to certain working capital adjustments, including and negotiate a lease exit for one of our bio reference facilities as well as income taxes paid on our transactions that closed in 2024.
We also invested approximately $8 million into Intera bio related to our oral G. L. P. One program.
Adam Logal: Looking forward, we expect to close our second Labcorp transaction later this year, which will bring in $192.5 million at closing, with potential proceeds of up to $225 million. As we move to our outlook, we continue to execute our multi-phase plan to drive profitability in our diagnostics business by reducing the fixed infrastructure costs and improving our operational efficiency. Following the oncology transaction, the remaining BioReference business is expected to reach cash flow positive and profitability during 2025. This will exclude non-recurring and non-cash items, and we have not adjusted our outlook for the closing of the oncology transaction, but will do so once the closing date is certain. For the full year 2025 outlook, we expect total revenue to be between $640 and 660 million.
Looking forward, we expect to close our second Lab Corp transaction later, this year, which will bring in $192 $5 million at closing with potential proceeds of up to $225 million.
As we move to our outlook, we continue to execute our multi phased plan to drive profitability in our diagnostics business by reducing the fixed infrastructure costs and improving our operational efficiency. Following the oncology transaction. The remaining bio reference business is expected to reach <unk>.
Cash flow positive and profitability during 2025, this will exclude nonrecurring and noncash items.
And we have not adjusted our outlook.
For the closing of the oncology transaction, but we'll do so once the closing date is certain.
For the full year 2025 outlook, we expect total revenue to be between 640 and 600.
$60 million.
Adam Logal: Revenue from services of $405 to $425 million, including $95 to $105 million from our oncology assets, revenue from products of $160 to $170 million, and other revenue of $65 to $75 million, including our Pfizer profit share of $28 to $35 million. Support from BARDA of $30 to $35 million. Total costs and expenses are expected to be between $835 and $865 million, excluding $15 to $20 million of one-time restructuring costs for our diagnostics business. This includes $125 to $135 million in expenses related to our oncology assets. It includes $120 to $130 million of research and development spending, which will be partially offset by $30 to $35 million in BARDA funding.
Revenue from services of $405 million to $425 million, including $95 million to $105 million from our oncology asset.
Revenue from products of $160 million to $170 million.
Other revenue of $65 million to $75 million, including including our Pfizer profit share of $28 million to $35 million.
Support from BARDA of $30 million to $35 million.
Total costs and expenses are expected to be between $835 $865 million and exclude.
Excluding $15 million to $20 million of one time restructuring costs for our diagnostics business.
This includes a $125 million to $135 million.
And expenses related to our oncology asset.
It includes $120 million to $130 million of research and development spending which will be partially offset by 30% to $35 million in BARDA funding.
Adam Logal: We expect depreciation and amortization expense to be approximately $90 million. We also anticipate a $100 million gain on the oncology transaction, which will reduce operating expenses and increase operating income in the quarter which we close. With that, I'd like to open up the call for questions. Operator?
We expect depreciation and amortization expense to be approximately $90 million.
And we also anticipate a $100 million gain on the oncology transaction, which will reduce operating expenses and increase operating income in the quarter, which we close.
With that I'd like to open up the call for questions operator.
Operator.
Operator 2: Certainly. We will now begin the question and answer session. Our first question comes from Maury Raycroft with Jefferies. Please go ahead.
Certainly.
We will now begin the question and answer session.
To ask a question you May press Star then one on your telephone keypad.
If you were using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from Maury Raycroft with Jefferies. Please go ahead.
James: Hi, this is James on for Maury. Congrats on the update. Thanks for taking our questions. Given that new prescriptions and total prescriptions for NGENLA were up in Q2, do you expect that the $6.1 million in NGENLA/GENOTROPIN in profit share in Q2 is due to lower gross to net from co-pay assistance in Q1 carrying over to Q2? Have you received any insights from Pfizer on Q2 sales, or do you plan to follow up with them for clarification? I have a follow-up.
Hi, This is James on for Maury Congrats on the update thanks for taking our questions given that new prescriptions and total prescriptions for in general were up into Q do you expect that the $6 $1 million in gentleman Slash Junior Philip and profit share in <unk> was due to.
Lower gross to net.
From co pay assistance in <unk> carrying over into <unk>.
And have you received any insights from Pfizer on <unk> sales or do you plan to follow up with them for clarification and I have a follow up.
Adam Logal: Hey, James. Thanks for the questions. We definitely saw an improvement in the US market, as it relates to the prescription trends that you identified. We continue to see some of the international markets that are in the early days of launches continuing to work through some of the higher-cost inventory that's set out there. We expect the remainder of the year to pick back up to the traditional levels. We saw strength broadly across all of the geographic markets for NGENLA. We're pretty optimistic of where that's headed.
Hey, James Thanks for the questions and we definitely saw an improvement in the U S market and as it relates to their prescription trends that you identified we continue to see some of the international markets that are in the early days of launches continuing to work through some of the higher cost.
<unk> that set out there so we expect them.
The remainder of the year to to pick back up to the traditional levels.
But we saw strength broadly across all of the geographic markets Foreign Gen life. So we're pretty optimistic of where that's headed.
Yes.
James: Got it. Thanks. Then, follow-up is, how is the EBITDA margin for the diagnostics business tracking in Q2 versus Q1? How are you setting expectations for EBITDA profitability in Q3, Q4? Going along with that, this approval with the supplemental application for the 4Kscore test, can you talk about implications for growth in 4Kscore test sales in the coming quarters?
Got it thanks, and then follow up is how does the EBIT margin margins of diagnostics business tracking.
In <unk> versus <unk>, and how are you setting expectations for EBITDA profitability, increasing <unk> and kind of going along with that.
This approval with a supplemental application for the for Q4 case forecast can you talk about indications for growth and for Kate score test kit sales in the coming quarters.
Adam Logal: Let me pull the EBITDA question apart. When we think about the diagnostics segment, we're continuing to see quarter-over-quarter improvements, and a lot of the steps we've taken to drive costs down are bearing fruit. If you were to look at the $18.2 million operating loss that resulted in Q2, consider the $2 million of non-recurring expenses in there, you start to see that $4.5 million comes from the oncology business that is set to close later this year, and depreciation and amortization expense of $4.9 million. It gets you to about a $6 million or a couple of million dollar a month loss in that segment. A lot of the costs, as Elias mentioned, are expected to come out when we close the oncology transaction in a couple of months' time and get our head count even further down.
Yeah. So let me let me pull the EBIT question apart. So so when we think about the diagnostics segment, where we're continuing to see quarter over quarter improvements in a lot of the.
The steps we've taken to drive costs down are bearing fruit. If you were to look at the.
$18 $2 million operating loss that resulted in Q2 consider that $2 million of nonrecurring expenses in there.
You start to see that $4 5 million comes from the oncology business that are set to close later this year.
And depreciation and amortization expense of $4 9 million. It gets you to about a $6 million or a couple of million dollar a month.
Los in that in that segment a lot of the cost as early as mentioned are expected to come come out when we close the oncology transaction.
And a couple of months time and get our head count even further down.
Adam Logal: We've been pretty judicious about making sure we maintain that business with the infrastructure, BioReference, that's required to get through the closing. Once the closing occurs, we'll be able to bring the overall cost structure down as we plan. We feel we're on track to deliver those cost savings and to get to that cash flow positive basis this year, both from an EBITDA and a cash position. As it relates to 4Kscore, we've seen really good upward growth on the test this year so far. We mentioned it's about 12% up. I think July, that really has started to accelerate, that is before we had the FDA label change really opens up the market for us to think about primary care docs being able to order the test. We think the upside is meaningful.
Then pretty judicious about making sure we maintain that business with.
With the infrastructure it by referenced that's required to get through the closing, but once the closing occurs we'll be able to bring the overall cost structure down.
We plan, we feel we're on track to deliver those cost savings and to get to that cash flow positive basis. This year.
If both both from an EBITDA and our cash position.
As it relates to four K scores, so we've seen really good.
<unk> growth on the test this year so far.
We mentioned, it's about 12% up I think July that really has started to accelerate it and that is before we had the FDA label change and really opens up the market for us to think about primary care docs being able to order. The test. So we think the upside is meaningful.
Adam Logal: As I mentioned, being at 12% and meaningfully higher in July, we think, again, that the opportunity is pretty important. That test has a strong margin profile with a relatively small sales force calling on docs today.
And as I mentioned being at 12% and meaningfully higher in July we think again the opportunity is pretty important.
And that test is a strong margin profile with a relatively small sales force calling on docs today.
James: Got it. Thanks so much for answering my questions. I'll hop back in the queue.
Got it thanks, so much for answering my questions I'll hop back in queue. Thanks.
Adam Logal: Thanks, James.
Thanks James.
Operator 2: Our next question comes from Edward Tenthoff with Piper Sandler. Please go ahead.
Our next question comes from Edward <unk> with Piper Sandler. Please go ahead.
Edward Tenthoff: Great. Thank you very much. My questions have to do with the obesity efforts, and specifically with an increasingly crowded landscape. How do you envision oxyntomodulin differentiating, either as an injectable or with an oral formulation that's partnered with Entera? Thanks.
Great. Thank you very much.
So my question is how to deal with.
The city effort.
Specifically with a an increasingly crowded.
Landscape.
How do you envision.
Modular.
Differentiating either as an injectable or with the oral formulation that's partnered with Terra things.
Elias Zerhouni: Yeah. Thanks for the question. Fundamentally, we think there is a differentiation because what we found out actually, and we studied the molecule that we created, that not only is it effective in obesity, but glucagon increases the metabolism, but more importantly, glucagon has an effect downstream of glucagon on FGF21, which rises with our molecule. FGF21 is known actually to be anti-fibrosis or correct fibrosis, as we know from other molecules that have been developed around FGF21. We believe based on the results we have and then the preclinical data that show really a very good profile for the drug, number one, we believe that it will have merits for MASH patients combined with obesity and diabetes. We will have to look at that. The second advantage, obviously, is that with Entera, we can create an oral form excuse me, of the molecule.
Yeah. Thanks for the question I mean fundamentally.
We think there is a differentiation because.
What we found out actually and we studied the molecule that we created.
That not only easy and effective in obesity, but glucagon increases the metabolism, but more importantly, glucagon has in effect.
Onstream a nuclear bomb.
F 'twenty, one which rises with our molecule MTF, Tony one is known actually to be anti fibrosis or correct fibrosis as we know from other Molly.
Molecules that have been.
Developed around this Jeff Tony you want so we believe based on the results we have and then the preclinical data that silver Healy.
A very good profile for the drug number one we believe that it will have merits for.
Mash patients combined with obesity and diabetes. So we will have to look at that the second advantage obviously.
With.
And so we can create.
And all four of them.
Excuse me of the molecule.
Elias Zerhouni: Frankly, that is something that in the information that we have from physicians is welcome because they like to stabilize the patient and convert them into oral forms to maintain the weight loss and maintain the effect over time without having to continue with the injectables. Those are the two aspects. It has a biological aspect that we believe will be very valuable in MASH, and then it has a, not just a convenience, but really a stabilization aspect of the regimen that you have to keep patients on to maintain the obesity reduction and the metabolic improvements that you hope to achieve.
Frankly that is something that in the end.
And in the information that we have from physicians is welcome because.
No they they like to stabilize the patient and convert them into oral forms to maintain their weight loss and maintain the effects over time without having to.
To continue with the Injectables. So those are the two aspects. It has a biological aspect that we believe will be very valuable with mash and then it has a.
Not just the convenience of really a stabilization aspects of the regimen that you have to keep patients on.
You maintained the Ob.
We see induction and the.
Okay.
Improvements that you hope to achieve.
Edward Tenthoff: That's very helpful. Then when it comes to actually proving that out in the phase I study, are there endpoints you're envisioning or different patient populations? Or how do you think you can actually tease that out in the clinical trials?
That's very helpful and then when it comes to actually.
Proving that out and.
The phase one study or their endpoints, you're envisioning or different patient populations or how do you think he can actually tease that out in the clinical trials right. So that's a great question. So our plan is to really go into patients who have.
Elias Zerhouni: All right. That's a great question. Our plan is to really go into patients who have biomarker evidence of MASH and are obese, okay? Really go into that phase I data on that population of patients that will eventually be of interest if we get both safety and some signal of efficacy with biomarkers. We're not going to do a biopsy study. We don't want to do that until we have good evidence that both the dose and the effect are really differentiating. Okay? That's the idea. We're basically focused on patients who have, for example, liver stiffness, liver fat, and evidence that they are not only obese, but they have a fatty liver that could lead to fibrosis eventually and liver failure. Those are the patients we're going to focus on in phase I with a cost that is quite reasonable.
Biomarker evidence.
Yeah.
Match and are obese, okay, and really go into that phase one data on that population of patients that will eventually be of interest.
If we get a bill.
Safety and some science signal of efficacy with Biomarkers, we're not going to do a biopsy study, we don't want to do that until we have good evidence.
Both the dose and the effect really.
Differentiating okay. So that.
That's the idea and we're basically focused on patients who have for example, liver stiffness liver fat and evidence that they are not only obese, but to have a fatty liver.
Good lead to fibrosis, eventually and liver failure.
Those are the patients we're going to focus on the changed once.
With a.
The costs that is quite reasonable, but then obviously you know this.
Elias Zerhouni: Obviously, these developments are quite expensive. We're not going to pursue that all on our own, and we have a lot of interest coming our way about potential collaborations once we achieve the data that we need to have to really create the value of the asset forward.
These developments are quite expensive when mom going to pursue that all of our own and we'd have a lot of interest coming our way about potential collaborations once we achieve the data.
The data that we need to have to go.
Really create the value of the asset forward.
Edward Tenthoff: That's really helpful. Thanks for the color, Elias.
That's really helpful. Thanks for the color.
Elias Zerhouni: Thank you.
Okay. Thank you.
Yeah.
Operator 2: Thank you. Our next question comes from Yale Jen with Laidlaw & Company. Please go ahead.
Thank you.
Our next question comes from rate Yale Jen with Laidlaw and company. Please go ahead.
Yale Jen: Good afternoon, and thanks for taking the questions. I just want to follow up what Edward just mentioned earlier. What's your estimate of the size in terms of patients both have obesity as well as MASH? Would that be the specific sort of indication you're going to explore in the phase I study when you presumably start later this year or early next year?
Good afternoon, and thanks for taking the questions I just wanted to follow up.
Ed just mentioned earlier.
What do you what's your estimate of the size in terms of patient both have obesity, that's what Nash.
And.
And would that be the specific sort of indication you're going to explore.
In the phase one study when you presumably.
Presumably started later.
Peter.
This year or early next year.
Elias Zerhouni: Yeah, great question. The answer is yes, we're focused on that population. We're going to try to focus on the patients that have biomarkers that indicate that they're in what we call S2, S3, S4 MASH, degrees of MASH, stages of MASH. Those are the patients we're going to focus on. We're going to look for, as any phase I, for safety signals and dosing ranges, we're not really looking for definitive efficacy, but we will look for biomarker trends that will help us. Now, in terms of total number of patients, it's hard to me to tell you the exact number, but we're thinking between 100 and 170 patients to do the full-
The answer is a great question. The answer is yes, we would focus on that population.
I was trying to focus on the patient.
Patients that have biomarkers that indicate that they are in what we call it as two or three or four.
Basch.
Degrees of smash stages of match and those are the patients who are going to focus on.
We're going to look for as anybody in phase one for safety signals and dosing ranges and we're not really looking for definitive efficacy, but we will look for a biomarker trends that will help us now in terms of a total number of patients hutch familiar to tell you the number but the exact number but we're thinking.
Between 100 and 170 patients.
To do this for us.
Yale Jen: You mean?
Elias Zerhouni: The full phase I.
For full for full phase one.
Yale Jen: Okay, great. That's very helpful. Maybe just one follow-up question here, which is in terms of the collaboration you have, you have both OPK-88006 and also you have a compound addressing short bowel syndrome.
Okay, Great. That's very helpful and maybe one follow up question here, which is that in terms of the.
D E collaboration you have.
You have both a host of states and also you'll have a comp drag.
Anything short bowel syndrome.
Elias Zerhouni: Yes.
Yale Jen: Just would like to get a little bit more color in terms of what's the difference between these two compounds and specifically for the short bowel syndrome compound.
I'd like to know a little bit.
Get a little bit more color in terms of what's the difference between these two compounds specifically.
Oh about single compounds.
Elias Zerhouni: Oh, yeah.
Yale Jen: would probably not have too much ideas about.
Not too much of ideas about.
Elias Zerhouni: Right. The GLP-1 glucagon receptor co-agonist is completely different than a GLP-2. All right? GLP-2 is a separate molecule and physiologically not at all comparable to the GLP-1. Although they have close names, but they're not. The GLP-2 has a huge function in actually intestinal absorption regulation, and that's why it's really something that a lot of people want to develop for people who have short bowel syndrome, malnutrition attendant with that. It's an unmet need that has not been served very well. People get infusions of parenteral nutrition, infusion of food supplements, and so on, and it's not as good, as effective, and that's why the program was developed to address that unmet need, which is a completely separate population, completely different than the obesity MASH population we are trying to address with the GLP-1 glucagon.
So the JMP, one glucagon receptor co agonist.
It is completely different than a G. L P to GOP too as a separate molecule.
None at all in physiologically, none at all comparable to the G. L. P. One although they have closed the names, but they're not and so the G. L. P. Two has a huge function in actually intestinal absorption of regulation and that's why it's really something that a lot of people want to do that.
For people, who have short bowel syndrome malnutrition in tandem with that.
Unmet need but has not been served very well you know people will get.
Infusions of parenteral nutrition.
Fusion of Ms.
Food <unk>.
A couple of months and so on and it's not as good as effective and that's why the program was developed to address that unmet need which is a completely separate population completely different than the obesity mass population, we're trying to address with a G. L. P. One glucagon.
Elias Zerhouni: Now our collaboration with Entera is obviously adding an option, which is an oral version, which we find to be quite attractive to offer a spectrum of approaches from injectable to oral and vice versa.
And now our collaboration with Integra is obviously, adding an option which is an oral version.
We found to be quite attractive.
To offer a spectrum of approaches from injectable to oral and vice versa.
Yale Jen: Maybe squeeze one more in here, which is when you anticipate this program to enter clinical study. Will that be next year? Thanks.
So maybe I'll squeeze one more in here, which is when you anticipate this program to enter clinical study would that be next year and thanks.
Elias Zerhouni: Yes, I think so. Yeah.
Yes, I think so yeah.
Yale Jen: Thank you.
Elias Zerhouni: When exactly, I don't know. Depends on FDA, depends on regulatory. Yes, definitely next year.
Yeah, exactly I don't know it depends on the FDA and it depends on regulatory and but yes I mean.
And definitely next year.
Yale Jen: Okay, great. Thanks.
Okay, great. Thanks.
Operator 2: Thank you. Our next question comes from Yi Chen with H.C. Wainwright & Co. Please go ahead.
Thank you.
Our next question comes from <unk>, Chen with H C. Wainwright and company. Please go ahead.
Yi Chen: Thank you for taking my question. My question is related to the long-acting GLP-1 receptor, glucagon receptor dual agonist. Today, many patients taking GLP-1 drugs, they discontinue treatment due to GI side effects. The current GLP-1 drug cause lean muscle mass loss as well as fat loss, which is a big problem for elderly patients. Does your dual agonist have the potential to improve either of these two aspects of the current GLP-1 drugs on the market today?
Thank you for taking my question. My question is related to the long acting receptor <unk> receptor.
Today, many patients taking <unk>.
Continued treatment.
Instead of effect and also the currency up one drug.
Cause lean muscle mass loss as well as fat loss, which is a big problem for elderly patients. So does your dual agonist has the potential to improve either of these two aspects of the currency help you on drugs on the market today.
Elias Zerhouni: I hope that on GI side effects, we will be able to titrate properly, and that's an open question. I can't tell you it will or will not. I think when you look at the data of others who have GLP-1 glucagon molecules, you might have the hope that that will be the case. Every molecule is different. Ours is really, on a preclinical basis, has a very good profile. Now, in terms of lean muscle mass, I don't think there will be a major difference. There may be one because glucagon is enhancing metabolism, but I don't think anybody knows the answer exactly. Some trials by Boehringer Ingelheim and others seem to show a little bit better profile, but I really wouldn't stick my neck out here and say we will definitely have better profiles on both of these counts.
Hi.
I hope that on the Gi side effects, we will be able to.
Two titrated properly and that's an open question I can't tell you. It will not I think when you look at the data of others, who have GL. One glucagon molecules you you might have the hope that that will be the case, but you know every molecule is different hours is really on a preclinical basis.
Has a very good profile now in terms of lean muscle mass I don't think it will be a major difference.
Maybe one because glucagon is absolutely you know enhancing metabolism.
I don't think anybody knows the answer exactly some.
Trials by Boehringer, Ingelheim, and others seem to show a little bit better profile, but I really wouldn't wouldn't stick my neck out here and say, we will definitely have a better profiles on both of these accounts.
Elias Zerhouni: I hope that we will, because of the difference in metabolic action.
Hope that we will because of the difference in metabolic action.
Yi Chen: Okay. Thank you.
Okay. Thank you.
Operator 2: Thank you. Our next question comes from Michael Petusky with Barrington Research. Please go ahead.
Thank you.
Our next question comes from Michael Pitofsky with Barrington Research. Please go ahead.
Michael Petusky: Hey, good evening. Adam, I was writing as fast as I could, but not as quick as you were talking. I don't think it's in the release. What was the BARDA revenue in the quarter? Was it $56, did you say?
Hey, good evening.
Yeah, I was writing as fast as I could but not as quick as you were talking what was the what was the Bart I don't think it's in the release what was the BARDA revenue in the quarter was at high six did you say.
Adam Logal: Yeah. BARDA revenue in the quarter, let me make sure I get it right. It was $6. Sorry. It was $6.5, yeah, for the quarter.
Yeah, So BARDA revenue in the quarter, let me make sure I got it right. It was six.
I'm sorry.
It was six five yeah.
For the quarter.
Michael Petusky: 5 even or 5 6?
Five even or 566.
Adam Logal: $6.5 million.
$6 5 million.
Michael Petusky: Oh, sorry. 6.5. Okay.
Oh, sorry 6.5, okay.
Adam Logal: Yeah.
Michael Petusky: Thank you. The guide for revenue for BARDA for the year?
And the Guy in the guide for revenue for BARDA for the year.
Adam Logal: Sure. It was $30 to 35 million for the year.
Sure.
It was $30 million to $35 million for the year.
Right.
Michael Petusky: Thank you. Then I guess, as you sort of think about the go forward after the oncology deal closes, does your assumption of sort of cash flow breakeven, et cetera, does that require a higher revenue run rate than sort of the, let's call it $300 million annualized that'll be left post the close? Essentially, does that top line have to grow in order to sort of achieve, or can it sort of roughly stay around this level?
Thank you and then I guess as he is he.
Sort of think about it.
The go forward after the.
Oncology deal closes.
Does your assumption of sort of.
Cash flow breakeven et cetera does that require a higher revenue run rate and sort of the let's call. It 300 million annualized that'll be left.
Post the close or or like essentially does that does that top line to grow.
In order to sort of achieve or can it sort of.
Roughly stay around this level.
Adam Logal: Yeah, we've got plans for the revenue to grow, but achieving cash flow breakeven and being positive is not dependent on us achieving our growth plan.
So we've got plans for the revenue to grow, but achieving cash flow breakeven and pause being positive is not dependent on us achieving our growth plan.
Michael Petusky: Okay. All right. I just want to, I guess, obviously, you've got cash on the balance sheet, you'll have more cash on the balance sheet, presumably, in the next 90 days or so. Could you guys just talk about capital allocation priorities in terms of that balance sheet cash? Thanks.
Alright, and then I just wanted to I guess.
You know obviously, you've got cash on the balance sheet, you'll have more cash on the balance sheet, presumably in the next 90 days or so.
Could you guys just talk about capital allocation priorities for.
Yeah, you know in terms of.
That balance sheet cash thanks.
Adam Logal: Yeah. I'll start us off, Mike, and let Elias and others weigh in. As we kind of laid out early this year, we think about cash really for dollar for dollar of what we're spending or investing in the operations and R&D programs, for us to be investing back into the balance sheet. That's been pretty close to where we've been this year for the H1. I think when we did the debt exchange in April, that accelerated the use of cash for our balance sheet strengthening a little bit faster than probably what we planned in January. I'd say this year, we expected to use a little over $100 million in investing in R&D. We remain on track with that.
Yeah, So I'll start us off Mike and let Elliot and others weigh in.
We kind of laid out early this year, we think about cash really for dollar for dollar what we're spending or investing in the operations and R&D programs.
For us to be investing back into the balance sheet and that's been pretty close to where we've been this year.
For the first half I think we when we did the debt.
Exchange in April that that accelerated the use of cash for.
For our balance sheet, strengthening a little bit faster than probably what we planned in January but I'd say this year, we expected to use a little over $100 million and investing in R&D.
We remain on track with that.
Adam Logal: As it relates to how much cash we've put in our stock buyback program as well as the convertible debt exchanges, we're approaching $80 million so far this year and would expect to continue to buy back shares as opportunities exist. As we think forward, it's probably not going to continue at that same accelerated pace on the capital side. We'll also be mindful of how we are able to partner any of our R&D programs to continue to try to find non-dilutive sources of cash to fund those programs and accelerate those like we did with our relationships with BARDA. Hopefully that helps.
Relates to how much cash we've put in our stock buyback program as well as the convertible debt exchanges you know we're in the.
Approaching $80 million, so far this year and would expect to continue to buy back shares as opportunities.
And as we think forward.
Probably not going to continue that theme accelerated pace.
On the capital side.
We will also be mindful of how we are able to partner any of our R&D programs to continue to try to find non dilutive sources of cash to fund those programs and accelerate those like we did.
With our relationships with with BARDA.
Hopefully that helps.
Michael Petusky: It does. Could I just ask maybe just a slight clarifying question? The stock obviously, in my opinion, hasn't reacted much to sort of some of the improvements that you guys are making. It seemed like you're on the path to making, particularly in the lab business. I'm just curious, does that create, I guess, any extra urgency in terms of completing the common share repurchase?
It does can I just ask maybe just for flight clarifying question.
The stock obviously.
As you know in my opinion hasn't reacted much to sort of some of the improvements that you guys are making it seem like you are on the path to making particularly in the lab business and I'm. Just curious does that create I guess any extra urgency in terms of sort of.
Completing the common share share repurchase.
Adam Logal: Yeah. I think the board has authorized us to go up to that $200 million. We have about 142 or $141.5 million left to deploy, and I don't think we will be shy about using it as the balance sheet allows.
Yeah, I mean, I think the board has authorized us to go out to that $200 million. So we have about 140 to $141 $5 million left to deploy in.
Don't think we will be shy about using it.
As as the balance sheet allowance.
Michael Petusky: Awesome. Thanks, guys.
Awesome. Thanks, guys.
Yeah.
Operator 2: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Dr. Frost for any closing remarks.
Thank you.
This concludes our question and answer session I would like to turn the conference back over to Dr. Frost for any closing remarks.
Phillip Frost: Thank you. Thank you all for your good questions and for participating in general. I'll close by observing that many of the things that we have talked about at previous meetings have really come to fruition. We have emphasized in the past the use of our assets in such a way that will be beneficial for the company and the shareholders. The disposition of the two parts of our reference so far are good examples of that. The remaining part is certainly becoming a more valuable asset, which we're very happy about. So far as the expenditures are concerned, which are major for us, they're largely for R&D. We consider those, as Adam mentioned, investments. We consider them to be interesting and good investments in the sense that many of the projects are quite novel. They're on the high-risk side, I would say.
Thank you. Thank you all for your good questions and for participating in general.
Closed right.
Serving the many of the things that we have talked about at previous meetings.
It really come to fruition, we have emphasized in the past.
Use of our assets in such a way that will be beneficial for the company and the shareholders and the disposition of the two parts of our referenced so far are good examples of that and the remaining part.
It's becoming a more valuable asset, which we're very happy about so far is expanding.
Expenditures are concerned which are our major for us they're largely for R&D and.
We consider those as Adam mentioned investments.
We consider them to be interesting and good investment in the sense that many.
Many of the projects are quite novel.
I Wonder Hi, Richard I would say and so we can't guarantee anything.
Phillip Frost: We can't guarantee anything, but we also believe that the potential returns for these projects are significant. It's for that reason that we feel good about what we're doing. I'll leave you with those thoughts. Again, thank you once again. I look forward to being with you again a quarter from now.
We also believe that the potential returns for these projects.
Our significant.
And it's for that reason that we feel good about what we're doing so.
So I'll leave you with those thoughts and again. Thank you once again and look forward to being with you again in a quarter from now.
Okay.
Operator 2: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Okay.
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