OPKO Health posts $53.5M Q3 net loss as revenue rises
Labcorp agreed to pay $722.0 million at closing, with up to $150.0 million in additional 4Kscore-linked cash consideration.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
OPKO Health, Inc. (OPK) reported third-quarter total revenue of $65.414 million, versus $56.425 million a year earlier; nine-month revenue was $206.456 million, versus $159.239 million. Its third-quarter loss from continuing operations was $35.556 million, compared with $32.920 million, and total net loss was $53.534 million, versus net income of $21.631 million.
On September 30, 2026, the board approved a plan to sell substantially all remaining BioReference diagnostic operations. On October 14, 2026, OPKO, BioReference and Labcorp agreed to the asset sale. Labcorp agreed to pay $722.0 million in cash at closing, subject to revenue-based adjustments; OPKO may receive up to $150.0 million over up to ten years based on 4Kscore sales. Closing is subject to customary conditions, including HSR clearance.
Operating activities used $99.125 million of cash in the first nine months. An August amendment added $125.0 million of 2044 Royalty Financing Notes, increasing their aggregate stated principal to $375.0 million.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointNine-month revenue was $206.456 million, versus $159.239 million in 2025.
Negative
- Moderate pointThird-quarter continuing-operations loss was $35.556 million, versus $32.920 million.
Filing Explained
The BioReference sale remains unclosed, and substantially all operating liabilities remain OPKO obligations after closing.
The 10-Q says the BioReference disposal group was classified as held for sale at
After closing, OPKO expects to provide transition services for about twelve months and retain indemnification, employee-related, legal, regulatory, lease and other commitments.
The royalty notes bear interest at three-month SOFR, subject to a
Key Figures
Key Terms
discontinued operations financial
held for sale financial
HSR Clearance regulatory
Transition Services Agreement financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much is Labcorp paying for OPK's BioReference business?
How did OPK's third-quarter 2026 revenue and continuing-operations loss compare?
What conditions apply to OPK's Labcorp sale agreement?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to .
Commission file number
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of |
(I.R.S. Employer |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer |
☐ |
☒ |
|
Non-accelerated filer |
☐ |
Smaller reporting company |
|
|
|
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): ☐ Yes
As of October 20, 2026, the registrant had
Table of Contents
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
Page |
|
Item 1. |
Financial Statements |
4 |
Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 (unaudited) |
5 |
|
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2026 and 2025 (unaudited) |
6 |
|
Condensed Consolidated Statements of Comprehensive income (loss) for the three and nine months ended September 30, 2026 and 2025(unaudited) |
7 |
|
Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2026 and 2025(unaudited) |
8 |
|
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2026 and 2025(unaudited) |
9 |
|
Notes to Condensed Consolidated Financial Statements (unaudited) |
10 |
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
45 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
59 |
Item 4. |
Controls and Procedures |
60 |
PART II. OTHER INFORMATION |
60 |
|
Item 1. |
Legal Proceedings |
60 |
Item 1A. |
Risk Factors |
60 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
60 |
Item 3. |
Defaults Upon Senior Securities |
60 |
Item 4. |
Mine Safety Disclosures |
61 |
Item 5. |
Other Information |
61 |
Item 6. |
Exhibits |
61 |
Signatures |
62 |
|
2
Table of Contents
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies or prospects, operating results, cash flows and/or financial condition. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements, including, but not limited to, economic, political, regulatory and market conditions and fluctuations, including policy changes, inflation, tariffs, interest rate and foreign currency risk inherent in U.S. and international operations. These factors also include those described below and in “Item 1A-Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, and described from time to time in our other filings with the Securities and Exchange Commission (the “SEC”). We do not undertake any obligation to update forward-looking statements, except to the extent required by applicable law. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.
Risks and uncertainties, the occurrence of which could adversely affect our business, include the following:
3
Table of Contents
PART I. FINANCIAL INFORMATION
Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to the “Company”, “OPKO”, “we”, “our”, “ours”, and “us” refer to OPKO Health, Inc., a Delaware corporation, including our consolidated subsidiaries.
Item 1. Financial Statements
The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
4
Table of Contents
OPKO Health, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
(In thousands, except share and per share data)
|
|
September 30, 2026 |
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December 31, 2025 |
|
||
ASSETS |
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Current assets: |
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Cash, cash equivalents and current restricted cash |
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$ |
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$ |
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||
Accounts receivable, net |
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Inventory, net |
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Other current assets and prepaid expenses |
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Current assets held for sale |
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Total current assets |
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Property, plant and equipment, net |
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Intangible assets, net |
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In-process research and development |
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Goodwill |
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Investments |
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Operating lease right-of-use assets |
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Other assets |
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||
Noncurrent assets held for sale |
|
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||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES AND EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
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|
||
Accounts payable |
|
$ |
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$ |
|
||
Accrued expenses |
|
|
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|
||
Current maturities of operating leases |
|
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||
Current portion of lines of credit and notes payable |
|
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||
Current liabilities held for sale |
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||
Total current liabilities |
|
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Operating lease liabilities |
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||
Long term portion of convertible notes |
|
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||
Senior secured royalty financing |
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Deferred tax liabilities |
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||
Other long-term liabilities |
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||
Noncurrent liabilities held for sale |
|
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||
Total long-term liabilities |
|
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|
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|
||
Total liabilities |
|
|
|
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|
|
||
Equity: |
|
|
|
|
|
|
||
Common Stock - $ |
|
|
|
|
|
|
||
Treasury Stock - |
|
|
|
|
|
( |
) |
|
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total shareholders’ equity |
|
|
|
|
|
|
||
Total liabilities and equity |
|
$ |
|
|
$ |
|
||
The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
5
Table of Contents
OPKO Health, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
|
|
For the three months ended |
|
|
For the nine months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Licensing, collaboration and other revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
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|
|
||||
Cost of revenue |
|
|
|
|
|
|
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|
|
|
|
|
||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Fair value changes of derivative instruments, net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Other expense, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss before income taxes and investment losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax benefit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss before investment losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss from investments in investees |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net income (loss) from continuing operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income (loss) from discontinued operations, net of tax |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Basic income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Income (loss) from discontinued operations |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Net income (loss) attributable to common shareholders |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Diluted income (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from continuing operations |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Income (loss) from discontinued operations |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Net income (loss) attributable to common shareholders |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted average common shares outstanding, basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted average common shares outstanding, diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
6
Table of Contents
OPKO Health, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands)
|
|
For the three months ended |
|
|
For the nine months ended |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive income (loss), net of tax: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in foreign currency translation and other comprehensive income (loss) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
Comprehensive income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
7
Table of Contents
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(In thousands, except share data)
For the three and nine months ended September 30, 2026 and 2025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Treasury |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Dollars |
|
|
Shares |
|
|
Dollars |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Total |
|
||||||||
Balance at June 30, 2026 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Share repurchase |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Exercise of common stock options and vested restricted stock units |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Retirement of treasury shares |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Treasury |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Dollars |
|
|
Shares |
|
|
Dollars |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Total |
|
||||||||
Balance at December 31, 2025 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Share repurchase |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Exercise of common stock options and vested restricted stock units |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Retirement of treasury shares |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Treasury |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Dollars |
|
|
Shares |
|
|
Dollars |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Total |
|
||||||||
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Share repurchase |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Other comprehensive loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance at September 30, 2025 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
Other |
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Treasury |
|
|
Paid-In |
|
|
Comprehensive |
|
|
Accumulated |
|
|
|
|
||||||||||||||
|
|
Shares |
|
|
Dollars |
|
|
Shares |
|
|
Dollars |
|
|
Capital |
|
|
Loss |
|
|
Deficit |
|
|
Total |
|
||||||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Equity-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Exercise of common stock options and vested restricted stock units |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
||
Repurchase of 2029 Convertible Notes |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Share repurchase |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Other comprehensive income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Balance at September 30, 2025 |
|
|
|
|
$ |
|
|
|
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
8
Table of Contents
OPKO Health, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
|
|
For the nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Non-cash interest |
|
|
|
|
|
|
||
Amortization of deferred financing costs |
|
|
|
|
|
|
||
Losses from investments in investees |
|
|
|
|
|
|
||
Equity-based compensation – employees and non-employees |
|
|
|
|
|
|
||
Revenue from the receipt of equity |
|
|
( |
) |
|
|
|
|
Impairment of intangible assets |
|
|
|
|
|
|
||
Realized gain on disposal of fixed assets and sales of equity securities |
|
|
|
|
|
( |
) |
|
Change in fair value of equity securities and derivative instruments |
|
|
( |
) |
|
|
|
|
Inducement expense and loss on debt conversion |
|
|
|
|
|
|
||
Deferred income tax benefit |
|
|
( |
) |
|
|
( |
) |
Gain on sale of assets |
|
|
( |
) |
|
|
( |
) |
Changes in assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Inventory, net |
|
|
|
|
|
( |
) |
|
Other current assets and prepaid expenses |
|
|
|
|
|
( |
) |
|
Other assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
|
||
Foreign currency measurement |
|
|
|
|
|
( |
) |
|
Accrued expenses and other liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Investments in investees |
|
|
( |
) |
|
|
( |
) |
Proceeds from sale of equity securities |
|
|
|
|
|
|
||
Intangible assets addition payments |
|
|
( |
) |
|
|
|
|
Proceeds from the sale of property, plant and equipment |
|
|
|
|
|
|
||
Capital expenditures |
|
|
( |
) |
|
|
( |
) |
Proceeds from prior asset disposition |
|
|
|
|
|
|
||
Net cash provided by investing activities |
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Issuance of Senior Secured Royalty Financing |
|
|
|
|
|
|
||
Debt discount |
|
|
( |
) |
|
|
|
|
Share repurchase |
|
|
( |
) |
|
|
( |
) |
Proceeds from the exercise of common stock options |
|
|
( |
) |
|
|
( |
) |
Repurchase of 2029 Convertible Notes |
|
|
|
|
|
( |
) |
|
Borrowings on lines of credit |
|
|
|
|
|
|
||
Repayments of lines of credit |
|
|
( |
) |
|
|
( |
) |
Settlement of convertible notes |
|
|
|
|
|
( |
) |
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
( |
) |
|
|
|
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
SUPPLEMENTAL INFORMATION: |
|
|
|
|
|
|
||
Interest paid |
|
$ |
|
|
$ |
|
||
Income taxes paid (refunded), net |
|
$ |
( |
) |
|
$ |
|
|
Non-cash financing: |
|
|
|
|
|
|
||
Shares issued upon the conversion of: |
|
|
|
|
|
|
||
Common stock options, warrants, and restricted stock units surrendered in net exercise |
|
$ |
|
|
$ |
|
||
The accompanying unaudited Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
9
Table of Contents
OPKO Health, Inc. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 1 BUSINESS AND ORGANIZATION
OPKO Health, Inc., a Delaware corporation (“OPKO,” the “Company,” “we,” “us,” or “our”), is a biopharmaceutical company focused on two complementary business platforms: Global Products and Innovative Biotech. Through our Global Products platform, we develop, manufacture and commercialize pharmaceutical products and services through established operations in the United States, Ireland, Spain, Chile and Mexico. Through our Innovative Biotech platform, we advance proprietary therapeutic programs, intellectual property assets and strategic collaborations intended to address significant unmet medical needs. We seek to create long-term shareholder value through a balanced business model that combines revenue-generating pharmaceutical operations with a portfolio of innovative biotechnology opportunities. Consistent with this strategy, management evaluates and manages the business through these two platforms.
Our Global Products platform includes the development, manufacture and commercialization of pharmaceutical products and services, as well as certain commercial arrangements generally associated with the commercialization of pharmaceutical products. Our portfolio includes Rayaldee®, a U.S. Food and Drug Administration (“FDA”) approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency. Rayaldee has received marketing authorizations in multiple international markets, and we continue to pursue additional commercialization opportunities through strategic partnerships. Our Global Products platform also includes established pharmaceutical operations that provide manufacturing, development and commercialization capabilities across multiple international markets.
We operate established pharmaceutical businesses internationally, with principal operations in Ireland, Spain, Chile and Mexico. These businesses generate revenue and cash flow while providing development, manufacturing, regulatory and commercial capabilities that support our broader operations. Our Irish subsidiary, EirGen Pharma Ltd. (“EirGen”), specializes in the development and commercial supply of high-potency oral solid-dose pharmaceutical products and exports products to more than 60 countries worldwide. Research and development activities are primarily conducted in facilities located in Weston, Massachusetts; Waterford, Ireland; Kiryat Gat, Israel; and Barcelona, Spain.
Our Innovative Biotech platform includes proprietary development programs, intellectual property assets, strategic collaborations, royalty interests and next-generation therapeutic technologies. We have partnered with Pfizer Inc. (“Pfizer”) for the development and commercialization of NGENLA® (somatrogon-ghla), a once-weekly human growth hormone therapy that has received regulatory approvals in more than 50 countries worldwide. Through our subsidiary, ModeX Therapeutics, Inc. (“ModeX”), we are advancing a portfolio of multispecific antibody and immunotherapy candidates focused on oncology and infectious diseases. Our Innovative Biotech platform also includes biologics research, development-stage therapeutic programs and other opportunities intended to create future value through innovation, strategic partnerships and potential commercialization.
NOTE 2 DISCONTINUED OPERATIONS
Background and classification
During 2024 and 2025, the Company completed transactions involving the sale of portions of the BioReference Health, LLC (“BioReference”) diagnostics business. On September 30, 2026, the Company’s Board of Directors approved a plan to sell substantially all of the remaining BioReference diagnostic operations to Laboratory Corporation of America Holdings (“Labcorp”). The planned disposition includes certain assets of BioReference's clinical and anatomic pathology laboratory testing business, including assets associated with clinical and women's health testing services, urology, corrections and BioReference's proprietary 4Kscore® prostate cancer test, together with certain operating lease liabilities and leased assets included in the transaction. The transaction excludes specified assets and liabilities that will remain with us following completion of the sale.
We determined that the disposal group met the criteria to be classified as held for sale as of September 30, 2026. The planned disposition represents a strategic shift that has, or will have, a material effect on our operations and financial results because it will eliminate substantially all of our remaining diagnostic operations and allow us to focus our capital and resources on our Global Products and Innovative Biotech platforms. Accordingly, the results of the discontinued diagnostic operations are reported as discontinued operations for all periods presented, and the related prior-period amounts have been recast to conform to the current-period presentation. The discontinued operations were previously included within our Diagnostics reportable segment.
10
Table of Contents
Expected manner and timing of disposal
On October 14, 2026, we, BioReference and Labcorp entered into an Asset Purchase Agreement (the "Labcorp Purchase Agreement") pursuant to which Labcorp agreed to acquire certain assets of BioReference's clinical and anatomic pathology laboratory testing business and assume specified liabilities associated with the acquired operations. Under the Asset Purchase Agreement, Labcorp agreed to pay aggregate cash consideration of $
The transaction is subject to customary closing conditions, including the accuracy of the parties' representations and warranties (subject to certain exceptions), performance of the parties' respective covenants under the Labcorp Purchase Agreement, and expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR Clearance"). The transaction is not subject to a financing condition. The Labcorp Purchase Agreement contains customary termination rihgts, including that the parties may terminate the agreement if the transaction has not closed by April 14, 2027, subject to extension by mutual agreement, or if any governmental authority issues any order, injunction, or judgment that restrains, enjoins or otherwise prohibits or makes the transaction illegal. Additionally, the Labcorp Purchase Agreement provides that, upon its termination under specified circumstances related to the failure to obtain HSR Clearance or other required governmental approvals, Labcorp would be required to pay to us a termination fee of approximately $
Certain purchased assets necessary for the performance of transition services following the closing date will transfer to Labcorp on specified conveyance dates during or at the conclusion of the transition-services period under a transition services agreement to be entered into with Labcorp upon closing of the sale of the business (the “Transition Services Agreement”). Accordingly, certain assets may remain legally owned by BioReference for a limited period following closing even though those assets are included within the purchased assets contemplated by the transaction.
We currently expect to complete the disposition of the clinical testing business within one year of the initial held-for-sale classification. The assets and liabilities of the disposal group were measured in accordance with applicable accounting guidance, including measurement of long-lived assets at the lower of carrying value or fair value less cost to sell. No impairment loss was recognized upon classification as held for sale. Depreciation and amortization of long-lived assets included in the disposal group ceased upon classification as held for sale.
The disposal group primarily consists of assets being transferred under the Labcorp Purchase Agreement. Substantially all operating liabilities associated with the BioReference business are excluded from the transaction and will remain obligations of the Company. Accordingly, the liabilities classified as held for sale consist of operating lease liabilities associated with operating lease right-of-use assets included in the disposal group.
Assets and liabilities of discontinued operations
The following table presents the major classes of assets and liabilities comprising the disposal group as of September 30, 2026 and the corresponding balances as of December 31, 2025, which have been reclassified to conform to the current-period presentation.
(in thousands) |
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Assets: |
|
|
|
|
|
|
||
Inventory |
|
$ |
|
|
$ |
|
||
Property, plant and equipment |
|
|
|
|
|
|
||
Intangible assets, net |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets held for sale |
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
||
Current maturities of operating leases |
|
$ |
|
|
$ |
|
||
Operating lease liabilities |
|
|
|
|
|
|
||
Total liabilities held for sale |
|
$ |
|
|
$ |
|
||
11
Table of Contents
Certain assets and liabilities associated with the BioReference business are excluded from the Labcorp Purchase Agreement and therefore are not included in the disposal group classified as held for sale. Accordingly, such liabilities continue to be presented within their respective captions in our condensed consolidated balance sheets. The liabilities included in the disposal group classified as held for sale consist of lease obligations associated with leased assets included in the transaction. Certain other assets are expected to transfer to Labcorp following closing pursuant to the Transition Services Agreement and, accordingly, remain included within the disposal group despite being legally retained by BioReference for a limited period following closing.
The following table summarizes significant identifiable BioReference assets and lease-related obligations excluded from the disposal group as of September 30, 2026 and December 31, 2025. Certain other excluded assets and liabilities, including cash and cash equivalents, accounts receivable, trade payables and other working capital balances, continue to be reported within their respective captions in the condensed consolidated balance sheets and are not presented separately below.
(in thousands) |
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Assets: |
|
|
|
|
|
|
||
Property, plant and equipment |
|
$ |
|
|
$ |
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Deposits and other assets |
|
|
|
|
|
|
||
Total significant retained assets |
|
$ |
|
|
$ |
|
||
Liabilities |
|
|
|
|
|
|
||
Current maturities of operating leases |
|
|
|
|
|
|
||
Long-term operating lease liabilities |
|
|
|
|
|
|
||
Total significant retained liabilities |
|
$ |
|
|
$ |
|
||
The excluded property, plant and equipment primarily consists of machinery and equipment, furniture and fixtures, leasehold improvements and assets not yet placed into service. The excluded operating lease right-of-use assets and related lease liabilities primarily relate to facilities and equipment not included in the transaction. In addition, substantially all operating liabilities of BioReference are excluded from the transaction and will remain obligations of the Company following completion of the sale. These retained assets and liabilities do not form part of the disposal group classified as held for sale and therefore continue to be presented within their respective captions in our condensed consolidated balance sheets.
Results of discontinued operations
The major classes of line items constituting income (loss) from discontinued operations were as follows:
|
|
For the three months ended |
|
|
For the nine months ended |
|
||||||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gain on sale of assets |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Total costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating income (loss) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) from discontinued operations before income taxes |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Income tax benefit (provision) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Net income (loss) from discontinued operations |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The amounts presented above reflect the historical operating results of the BioReference business classified as discontinued operations. Revenue and operating results for the periods presented were affected by previously completed dispositions and the ongoing transition of the diagnostic operations included in the disposal group. The gain on sale of assets for the three and nine months ended September 30, 2025 relates primarily to the September 2025 sale of BioReference’s oncology
12
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diagnostics business and related clinical testing services assets to Labcorp. Income taxes attributable to discontinued operations are presented separately from continuing operations.
Cash flows attributable to discontinued operations have not been separately presented in our condensed consolidated statements of cash flows. Accordingly,
|
|
For the nine months ended September 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Net cash used in operating activities of discontinued operations |
|
$ |
( |
) |
|
$ |
( |
) |
Net cash provided by investing activities of discontinued operations |
|
|
|
|
|
|
||
Net cash provided by (used in) financing activities of discontinued operations |
|
|
( |
) |
|
|
( |
) |
Continuing involvement
Following the closing of the transaction, we have agreed to provide transition services to Labcorp pursuant to the Transition Services Agreement. During the transition-services period, BioReference has agreed to continue providing specified laboratory testing, billing, collection, administrative, information technology, facilities and related support services necessary to facilitate the orderly transfer of operations to Labcorp. The transition services are expected to include performance of certain laboratory testing services, including the 4Kscore® test, and support the phased transfer to Labcorp of BioReference's customers, patient service centers, employees, leases, permits, laboratory equipment and other operational activities.
During the transition-services period, BioReference is expected to remain the licensed operator of certain laboratory operations and retain responsibility for day-to-day laboratory activities necessary to provide the transition services. Certain purchased assets necessary to perform those services are expected to remain legally held by BioReference until their applicable conveyance dates under the Labcorp Purchase Agreement and Transition Services Agreement.
The initial transition-services period is expected to extend for approximately twelve months following closing, subject to limited extension rights. Amounts earned or incurred under the Transition Services Agreement following closing will be reflected within continuing operations. We also expect to retain certain indemnification obligations, employee-related obligations, legal and regulatory obligations, lease obligations and other commitments associated with BioReference operations and the transaction. These retained obligations are excluded from the disposal group classified as held for sale and will continue to be reflected in our consolidated balance sheets following closing.
Prior diagnostic dispositions
On September 15, 2025, we completed the sale of certain assets of BioReference to Labcorp (the “Oncology Transaction”), pursuant to an agreement entered into on March 10, 2025. Labcorp acquired BioReference's oncology diagnostics business and related clinical testing services assets. Upon closing, Labcorp paid an aggregate of $
NOTE 3 FOREIGN EXCHANGE RATES
Foreign Currency Exchange Rates
Approximately
We are subject to foreign currency transaction risk due to fluctuations in exchange rates between the time a transaction is initiated and settled. To mitigate this risk, we use foreign currency forward contracts. These contracts fix an exchange rate, allowing us to offset potential losses (or gains) caused by exchange rate changes at the settlement date. As of September 30,
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2026, we held $
NOTE 4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments or adjustments otherwise disclosed herein) considered necessary to present fairly the Company’s results of operations, financial position and cash flows have been made. The results of operations and cash flows for the nine months ended September 30, 2026 are not necessarily indicative of the results of operations and cash flows that may be reported for the remainder of 2026 or any other future periods. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Principles of consolidation. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of OPKO Health, Inc. and our wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. Certain prior-period amounts have been reclassified to conform to the current-period presentation of discontinued operations with respect to the clinical testing business.
Use of estimates. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ significantly from these estimates.
Cash, cash equivalents and restricted cash. Cash, cash equivalents and restricted cash include short-term, interest-bearing instruments with original maturities of 90 days or less at the date of purchase. We also consider all highly liquid investments with original maturities at the date of purchase of 90 days or less as cash equivalents. These investments include money markets, bank deposits, certificates of deposit and U.S. treasury securities.
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the Condensed Consolidated Balance Sheet to the sum of such amounts in the Condensed Consolidated Statements of Cash Flows:
|
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Restricted cash, current |
|
|
|
|
|
|
||
Restricted cash, long-term |
|
|
|
|
|
|
||
Total cash, cash equivalents, and restricted cash shown in the Condensed Consolidated Statements of Cash Flows |
|
$ |
|
|
$ |
|
||
The Company classifies cash deposits related to letters of credit securing insurance and lease obligations as restricted cash, which is included in other assets, non-current, within the Consolidated Balance Sheet.
Inventories. Inventories are valued at the lower of cost and net realizable value. Cost is determined by the first-in, first-out method. We consider such factors as the amount of inventory on hand, estimated time required to sell such inventories, remaining shelf-life, and current market conditions to determine whether inventories are stated at the lower of cost and net realizable value. Inventories primarily consist of pharmaceutical product inventory, including raw materials, work-in-process and finished goods. Inventory obsolescence expense for the three and nine months ended September 30, 2026 was $
Goodwill and intangible assets. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired accounted for by the acquisition method of accounting. Refer to Note 6. Goodwill, in-process research and development (“IPR&D”) and other intangible assets acquired in business combinations, licensing and other transactions was $
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operations were reclassified to assets held for sale as part of the disposal group described in Note 2 and, accordingly, are excluded from the goodwill and intangible asset balances presented above.
Assets acquired and liabilities assumed in business combinations, licensing and other transactions are generally recognized at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. At acquisition, we generally determine the fair value of intangible assets, including IPR&D, using the “income method.”
After their acquisition, goodwill and indefinite lived intangible assets are tested at least annually as of October 1 for impairment, or when events or changes in circumstances indicate it is more likely than not that the carrying amount of such assets may not be recoverable.
Estimating the fair value of a reporting unit for goodwill impairment is highly sensitive to changes in projections and assumptions and changes in assumptions could potentially lead to impairment. We perform sensitivity analyses around our assumptions in order to assess the reasonableness of the assumptions and the results of our testing. Ultimately, potential changes in these assumptions may impact the estimated fair value of a reporting unit and result in an impairment if the fair value of such reporting unit is less than its carrying value. Goodwill was $
Net intangible assets other than goodwill were $
Upon regulatory approval, IPR&D assets are classified as finite-lived intangible assets. These assets are then amortized on a straight-line basis over their estimated useful lives. If a project is abandoned, the associated IPR&D costs are immediately expensed. We also regularly assess finite-lived intangible assets for impairment. This assessment involves comparing the carrying amount of an asset, which is its cost minus accumulated amortization, to its estimated future undiscounted cash flows. If the carrying amount exceeds the estimated future cash flows, an impairment charge is recognized to reflect the difference between the asset's carrying amount and its fair value.
While we believe our estimates and assumptions used in impairment testing (including for goodwill and IPR&D) are reasonable and reflect those used by market participants, there is a potential risk of material impairment charges. Changes in business or market conditions, including changes in global trade policies and tariffs, could affect the future operating performance of our Ireland reporting unit, which includes EirGen and Rayaldee. Based on the current financial performance of our Ireland reporting unit, we could be subject to impairment charges if future performance deviates from the estimates and assumptions used in our impairment assessments. For reference, the goodwill of our Ireland reporting unit totaled $
We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives, ranging from
Fair value measurements. The carrying amounts of our cash, cash equivalents, restricted cash, accounts receivable, accounts payable and short-term debt approximate their fair value due to the short-term maturities of these instruments. Investments that are considered equity securities as of September 30, 2026 and December 31, 2025 are predominately carried at fair value.
In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts. Accordingly, the estimates of fair value presented herein may not be indicative of the amounts that could be realized in a current market exchange. Refer to Note 10.
Derivative financial instruments. We record derivative financial instruments on our Condensed Consolidated Balance Sheet at their fair value and recognize the changes in the fair value in our Condensed Consolidated Statement of Operations when they occur, the only exception being derivatives that qualify as hedges. For a derivative instrument to qualify as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At September 30, 2026 and December
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31, 2025, our foreign currency forward contracts held to economically hedge inventory purchases did not meet the documentation requirements to be designated as hedges. Accordingly, we recognized all changes in the fair values of our derivatives instruments, net, in our Condensed Consolidated Statement of Operations. Refer to Note 11.
Property, plant and equipment. Property, plant and equipment are recorded at cost or fair value if acquired in a business combination. Depreciation is provided using the straight-line method over the estimated useful lives of the assets and includes amortization expense for assets capitalized under finance leases. The estimated useful lives by asset class are as follows: software -
Impairment of long-lived assets. Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, then an impairment charge is recognized for the amount by which the carrying amount of the asset exceeds the fair value of the asset.
Income taxes. Income taxes are accounted for under the asset-and-liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and the respective tax bases and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. We periodically evaluate the realizability of our net deferred tax assets. Our tax accruals are analyzed periodically and adjustments are made as events occur to warrant such adjustment. Valuation allowances on certain U.S. deferred tax assets and non-U.S. deferred tax assets are established, because realization of these tax benefits through future taxable income does not meet the more-likely-than-not threshold.
We operate in various countries and tax jurisdictions globally. For interim reporting purposes, we record income taxes based on the expected effective income tax rate, taking into consideration year to date and global forecasted tax results. For the nine months ended September 30, 2026, the tax rate differed from the U.S. federal statutory rate of
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. This comprehensive legislation includes several significant tax provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of key business provisions. The OBBBA has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. Most notably for the Company, the legislation reverses the requirement to capitalize domestic research and experimental (R&E) costs under Section 174 of the Internal Revenue Code, allowing for immediate expense of these costs beginning with the tax year ending December 31, 2025. Management has evaluated the new legislation and determined that the enactment of the OBBBA did not have a material impact on the Company's annual effective tax rate.
Included in Other long-term liabilities is an accrual of $
Revenue recognition. We recognize revenue when a customer obtains control of promised goods or services in accordance with Accounting Standards Codification Topic 606, Revenue from Contracts with Customers (“Topic 606”). The amount of revenue that is recorded reflects the consideration that we expect to receive in exchange for those goods or services. We apply the following five-step model in order to determine this amount: (i) identify the contract(s) with a customer; (ii) identify the
16
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performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation.
We apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, we review the contract to determine which performance obligations we must deliver and which of these performance obligations are distinct. We recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when the performance obligation is satisfied or as it is satisfied. For a complete discussion of accounting for Revenues from products and Licensing, collaboration and other revenue, refer to Note 14.
Concentration of credit risk and allowance for credit losses. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of accounts receivable. Substantially all of our accounts receivable are with companies in the healthcare industry. However, credit risk is limited due to the number of our clients as well as their dispersion across many different geographic regions.
We assess the collectability of accounts receivable balances by considering factors such as historical collection experience, customer credit worthiness, the age of accounts receivable balances, regulatory changes and current economic conditions and trends that may affect a customer’s ability to pay. Actual results could differ from those estimates. The allowance for credit losses was $
Accounts receivable included $
Stock Repurchase Program. On July 18, 2024, the Company announced that its Board of Directors authorized a stock repurchase program for up to $
Under the program, the Company may repurchase shares of Common Stock from time to time through various methods, including open market purchases, block trades, privately negotiated transactions, accelerated share repurchases, and pursuant to pre-set trading plans under Rule 10b5-1(c) of the Exchange Act and otherwise in compliance with applicable laws. The timing and amount of any repurchases are subject to market conditions, capital management, investment opportunities, and other factors. The repurchase program does not obligate the Company to acquire any specific number of shares, has no expiration date, and may be modified, suspended, or discontinued at any time at the Company's discretion.
Equity-based compensation. We measure the cost of services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in the Condensed Consolidated Statement of Operations over the period during which an employee is required to provide service in exchange for the award. For the three and nine months ended September 30, 2026, we recorded $
Research and development expenses. Research and development expenses include external and internal expenses. External expenses include clinical and nonclinical activities performed by contract research organizations, lab services, purchases of drug and manufacturing development costs. Research and development employee-related expenses include salaries, benefits and equity-based compensation expense. Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities. We expense these costs in the period in which they are incurred. We estimate our liabilities for research and development expenses in order to match the recognition of expenses to the period in which the actual services are received. As such, accrued liabilities related to third party research and development activities are recognized based upon our estimate of services received and degree of completion of the services in accordance with the specific third party contract.
Research and development expense includes costs for in-process research and development projects acquired in asset acquisitions which have not reached technological feasibility, and which have no alternative future use. For in-process research
17
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and development projects acquired in business combinations, the in-process research and development project is capitalized and evaluated for impairment until the development process has been completed. Once the development process has been completed the asset will be amortized over its remaining estimated useful life.
Segment reporting. Our Chief Executive Officer serves as our chief operating decision-maker ("CODM"). The CODM reviews operating results and operating plans and makes resource allocation decisions on a company-wide or aggregate basis. We manage our operations through
Shipping and handling costs. We do not charge customers for shipping and handling costs. Shipping and handling costs are classified as Cost of revenues in the Condensed Consolidated Statement of Operations.
Foreign currency translation. The financial statements of certain of our foreign operations are measured using the local currency as the functional currency. The local currency assets and liabilities are generally translated at the rate of exchange to the U.S. dollar on the balance sheet date. The local currency revenues and expenses are translated at average rates of exchange to the U.S. dollar during the reporting periods. Foreign currency transaction gains (losses) have been reflected as a component of Other income (expense), net within the Condensed Consolidated Statement of Operations and foreign currency translation gains (losses) have been included as a component of the Condensed Consolidated Statement of Comprehensive Income (Loss). For the three months ended September 30, 2026, we recorded foreign currency transaction losses of $
Variable interest entities. The consolidation of a variable interest entity (“VIE”) is required when an enterprise has a controlling financial interest. A controlling financial interest in a VIE will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE. Refer to Note 7.
Investments. We have made strategic investments in development stage and emerging companies. We record these investments as equity securities based on our percentage of ownership and whether we have significant influence over the operations of the investees. Refer to Note 7. For investments classified as equity securities, we record changes in their fair value as Other income (expense) in our Condensed Consolidated Statement of Operations based on their closing price per share at the end of each reporting period, unless the equity security does not have a readily determinable fair value. Refer to Note 7.
Accounting standards yet to be adopted.
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses is effective prospectively to financial statements issued for reporting period after the effective date or retrospectively to any or all prior periods presented in the financial statements, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
Recently adopted accounting standards.
In November 2024, the FASB issued ASU 2024-04, Debt (Subtopic 470-20): Debt with Conversion and Other Options. (“ASU 2024-04”) clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument. ASU 2024-04 is effective for reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted for entities that have adopted ASU 2020-06. We adopted ASU 2024-04 prospectively effective January 1, 2025. The adoption of ASU 2024-04 did not have a material impact on our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.
In 2021, the Organization for Economic Co-operation and Development (“OECD”) established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution (“Pillar Two”) to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate. On December 15, 2022, the EU member states agreed to implement the OECD’s global minimum tax rate of 15%. The OECD issued Pillar Two model rules and continues to release guidance on these
18
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rules. Various participating countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax, some effective beginning in 2024. We considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and there is no material impact to our tax results for the period. We anticipate further legislative activity and administrative guidance, and will continue to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in.
NOTE 5 EARNINGS (LOSS) PER SHARE
Basic income (loss) per share is computed by dividing income (loss) available to common shareholders by the weighted-average number of shares of common stock outstanding during the period. Diluted income (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised, converted or settled. For the three and nine months ended September 30, 2026, the Company reported a loss from continuing operations, which is the control number for purposes of determining whether potential common shares are dilutive. Accordingly, all potential common shares were excluded from the computation of diluted earnings per share because their effect would have been antidilutive, and diluted earnings (loss) per share was the same as basic earnings (loss) per share.
A total of
A total of
During the three months ended September 30, 2026,
During the nine months ended September 30, 2026,
During the three months ended September 30, 2025,
During the nine months ended September 30, 2025,
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NOTE 6 COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS
|
|
September 30, |
|
|
December 31, |
|
||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
Accounts receivable, net: |
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|
|
|
|
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Less: allowance for credit losses |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
Inventories, net: |
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|
||
Finished products |
|
$ |
|
|
$ |
|
||
Work in-process |
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|
||
Raw materials |
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|
|
|
||
Less: inventory reserve |
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|
( |
) |
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|
( |
) |
|
|
$ |
|
|
$ |
|
||
Other current assets and prepaid expenses: |
|
|
|
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||
Taxes recoverable |
|
$ |
|
|
$ |
|
||
Prepaid expenses |
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|
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|
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|
||
Prepaid insurance |
|
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|
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|
||
Other receivables |
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|
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|
||
Escrow receivable |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Intangible assets, net: |
|
|
|
|
|
|
||
Technologies |
|
$ |
|
|
$ |
|
||
Customer relationships |
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|
||
Trade names |
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||
Covenants not to compete |
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Licenses |
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|
||
Product registrations |
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|
||
Other |
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|
|
|
|
||
Less: accumulated amortization |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
|
|
$ |
|
||
Accrued expenses: |
|
|
|
|
|
|
||
Employee benefits and severance |
|
$ |
|
|
$ |
|
||
Clinical trials |
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Commitments and contingencies |
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Accrued interest |
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Gross to net provision |
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Inventory received but not invoiced |
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Finance leases short-term |
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Professional fees |
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Taxes payable |
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Royalties |
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Commissions |
|
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Other |
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|
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||
|
|
$ |
|
|
$ |
|
||
Other long-term liabilities: |
|
|
|
|
|
|
||
Finance leases long-term |
|
$ |
|
|
$ |
|
||
Mortgages and other debts payable |
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||
Employee severance |
|
|
|
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Other |
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|
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||
|
|
$ |
|
|
$ |
|
||
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Our intangible assets and goodwill relate principally to our completed acquisitions of OPKO Renal, OPKO Biologics, EirGen and ModeX. We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives. The estimated useful lives by asset class are as follows: technologies -
During the third quarter of 2026, goodwill and certain intangible assets attributable to the BioReference disposal group were reclassified to assets held for sale. Accordingly, these balances are excluded from the goodwill and intangible asset amounts presented in this note.
Excluding the reclassification of goodwill and certain intangible assets to the disposal group classified as held for sale, changes in the carrying values of intangible assets and goodwill during nine months ended September 30, 2026 and 2025 were primarily due to foreign currency fluctuations between the Chilean peso, and the euro against the U.S. dollar.
The following table summarizes the changes in Goodwill by reporting unit during the nine months ended September 30, 2026.
|
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2026 |
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(In thousands) |
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Gross |
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Cumulative |
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Acquisitions, |
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Foreign |
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Balance at September 30, 2026 |
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Global Products |
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Ireland reporting unit |
|
$ |
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|
$ |
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|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Iberoamerica |
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( |
) |
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( |
) |
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FineTech |
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( |
) |
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Innovative Biotech |
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OPKO Biologics |
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ModeX |
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CURNA |
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( |
) |
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Transition Therapeutics |
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( |
) |
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Disposal group reclassified to assets held for sale |
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BioReference |
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|
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— |
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( |
) |
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|
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OPKO Diagnostics |
|
|
|
|
|
( |
) |
|
|
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|
|
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||||
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
NOTE 7 INVESTMENTS
Investments
The following table reflects the accounting method, carrying value and underlying equity in net assets of our unconsolidated investments as of September 30, 2026 and December 31, 2025:
(in thousands) |
|
As of September 30, 2026 |
|
|
As of December 31, 2025 |
|
||||||||||
Investment type |
|
Investment |
|
|
Underlying |
|
|
Investment |
|
|
Underlying |
|
||||
Equity securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Equity method |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Equity securities with no readily determinable fair value |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable interest entity, equity method |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Warrants and options |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total carrying value of investments |
|
$ |
|
|
|
|
|
$ |
|
|
|
|
||||
21
Table of Contents
Investments in equity securities
We hold investments in various equity securities, which are accounted for based on the Company's level of influence over the particular investee and whether the particular equity security has a readily determinable fair value. We have determined that our ownership in these entities, along with that of related parties, does not provide the Company with significant influence over their operations, except for our investments in Cocrystal and Entera, as discussed below. Accordingly, we account for our investments in these entities as equity securities and record changes in their fair values in other income (expense) each reporting period. Equity securities with readily determinable fair values are measured at fair value, while those without are adjusted to fair value when there is an observable price change.
We hold equity securities in Entera Bio Ltd. (“Entera”) (
During the nine months ended September 30, 2026, we received approximately
On August 31, 2026, the Company invested $
Net gains and losses on our equity securities for the nine months ended September 30, 2026 and 2025 were as follows:
|
|
For the nine months ended September 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Equity Securities: |
|
|
|
|
|
|
||
Net gains and losses recognized during the period on equity securities |
|
$ |
|
|
$ |
|
||
Less: Net gains and losses realized during the period on equity securities |
|
|
|
|
|
( |
) |
|
Unrealized net gains and losses recognized during the period on equity securities still held at the reporting date |
|
$ |
|
|
$ |
( |
) |
|
Investments in variable interest entities
We have determined that we hold variable interests in LeaderMed Health Group Limited ("LeaderMed"), Zebra Biologics, Inc. ("Zebra"), and Cocrystal Pharma, Inc. ("Cocrystal"). We made this determination as a result of our assessment that they do not have sufficient resources to carry out their principal activities without additional financial support.
LeaderMed
In September 2021, we and LeaderMed, a pharmaceutical development company with operations based in Asia, formed a joint venture to develop, manufacture and commercialize two of OPKO’s clinical stage, long-acting drug products in Greater China and eight other Asian territories. Under the terms of the agreements, we granted the joint venture exclusive rights to develop, manufacture and commercialize (a) OPK88003, an oxyntomodulin analog being developed for the treatment of obesity and diabetes, and (b) Factor VIIa-CTP, a novel long acting coagulation factor being developed to treat hemophilia, in exchange for
We sent a termination letter to LeaderMed in July 2026. Therefore this license has effectively been terminated as of October 2026.
22
Table of Contents
Zebra
We owned
In order to determine the primary beneficiary of Zebra, we evaluated our investment and our related parties’ investment, as well as our investment combined with the related parties’ investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Zebra. Based on the capital structure, governing documents and overall business operations of Zebra, we determined that, while a VIE, we do not have the power to direct the activities that most significantly impact Zebra’s economic performance and have no obligation to fund expected losses. We determined, however, that we can significantly influence control of Zebra through our board representation and voting power. Therefore, we have the ability to exercise significant influence over Zebra’s operations and account for our investment in Zebra under the equity method.
Cocrystal
On July 31, 2026, we purchased
We determined that Cocrystal is a VIE because it does not have sufficient equity at risk to finance its principal activities without additional financial support. Based on Cocrystal's capital structure, governing documents and overall business operations, including the interests of and relationships with our related parties, we determined that we do not have the power to direct the activities that most significantly impact Cocrystal's economic performance and are not its primary beneficiary. We have significant influence over Cocrystal through our ownership interest and account for our investment under the equity method.
The July 2026 investment represented, in substance, the funding of prior losses. Accordingly, during the three months ended September 30, 2026, we recognized $
Sales of investments
Gains (losses) included in earnings from sales of our investments are recorded in Other income (expense), net in our Condensed Consolidated Statement of Operations. The cost of securities sold is based on the specific identification method.
Warrants and options
In addition to our equity method investments and equity securities, we held options to purchase
Equity method investments
The Company accounts for certain investments under the equity method when it has the ability to exercise significant influence over the investee's operating and financial policies. This influence may be indicated by factors such as board representation or voting power. Under the equity method, we recognized our proportionate share of the investee's net income or loss in the Consolidated Statement of Operations.
Our equity method investments, as described below, consist of investments in Pharmsynthez (ownership
The aggregate amount of assets, liabilities, and net losses of these equity method investees as of and for the nine months ended September 30, 2026 were $
23
Table of Contents
liabilities, and net losses of our equity method investees as of and for the year ended December 31, 2025 were $
NOTE 8 DEBT
As of September 30, 2026 and December 31, 2025, our debt consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
2044 Royalty Financing |
|
$ |
|
|
$ |
|
||
2029 Convertible Notes |
|
|
|
|
|
|
||
2033 Senior Notes |
|
|
|
|
|
|
||
Chilean and Spanish lines of credit |
|
|
|
|
|
|
||
Current portion of notes payable |
|
|
|
|
|
|
||
Long term portion of notes payable |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Balance sheet captions |
|
|
|
|
|
|
||
Long term portion of convertible notes |
|
$ |
|
|
$ |
|
||
Current portion of lines of credit and notes payable |
|
|
|
|
|
|
||
Long Term notes payable included in long-term liabilities |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
2044 Royalty Financing Purchase Agreement
On July 17, 2024, the Company completed a private offering of $
The 2044 Royalty Financing Notes mature on July 17, 2044 and bear interest at the three-month Secured Overnight Financing Rate (“SOFR”), subject to a
On August 13, 2026, the Company entered into a first amendment to the 2044 Note Purchase Agreement pursuant to which the purchasers acquired an additional $
The Company evaluated the amendment in accordance with ASC 470-50, Debt - Modifications and Extinguishments, and concluded that the amended debt is not substantially different from the original debt instrument. Accordingly, the amendment was accounted for as a modification of the existing debt and no gain or loss on extinguishment was recognized.
The Company will be required to pay the noteholders a
24
Table of Contents
the 2044 Royalty Financing Notes equal to at least
If the 2044 Royalty Financing Notes have not been fully repaid by the maturity date, the Company may elect to either repay the unpaid balance of the principal amount in full, together with any accrued and unpaid interest thereon and the applicable exit fee, or elect to transfer specified royalty interests to the noteholders in satisfaction of the outstanding obligations, subject to the terms and conditions set forth in the financing documents.
The 2044 Royalty Financing Notes are secured by the Royalty Payments and the Lilly royalty payments described above, and the 2044 Royalty Financing Guarantors have guaranteed the obligations under the 2044 Royalty Financing Notes by granting a security interest in certain assets of the 2044 Royalty Financing Guarantors. The purchase agreement governing the 2044 Royalty Financing Notes contains customary terms and covenants, including negative covenants, such as limitations on indebtedness, liens, amendments to certain material contracts and disposition of assets.
2029 Convertible 144A Notes
In January 2024, we completed a private offering of $
Net proceeds from the issuance of the 2029 Convertible 144A Notes totaled approximately $
Contemporaneously with the closing of the offering of the 2029 Convertible 144A Notes, we issued and sold approximately $
On January 9, 2024, we recorded $
From the date the 2029 Convertible Notes were issued through June 30, 2024, we observed an increase in the market price of our Common Stock which resulted in a $
On April 1, 2025, the Company completed privately negotiated exchange transactions (the “Note Exchange Transactions”) pursuant to which the Company exchanged an aggregate of $
As of September 30, 2026 the 2029 Convertible Notes were convertible. Holders may convert their 2029 Convertible Notes at their option prior to the close of business on the business day immediately preceding September 15, 2028 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2024 (and only during such calendar quarter), if the last reported sale price of our Common Stock for at least
25
Table of Contents
immediately preceding calendar quarter is greater than or equal to
The conversion rate is initially equal to
We may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes. If we undergo a fundamental change, holders may require us to purchase the notes in whole or in part for cash at a fundamental change purchase price equal to
The indenture governing the notes provides for customary events of default which include (subject in certain cases to customary grace and cure periods), among others, the following: nonpayment of principal or interest; breach of covenants or other agreements in the indenture; defaults in failure to pay certain other indebtedness; judgment defaults; and certain events of bankruptcy or insolvency. Generally, if an event of default occurs and is continuing under the indenture, the trustee thereunder or the holders of at least
The following table sets forth information related to the 2029 Convertible Notes which is included in our Condensed Consolidated Balance Sheet as of September 30, 2026:
(In thousands) |
|
2029 |
|
|
Discount |
|
|
Debt |
|
|
Total |
|
||||
Balance at December 31, 2025 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
Amortization of debt discount and debt issuance costs |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|||
Balance at September 30, 2026 |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||
2033 Senior Notes
In January 2013, we issued an aggregate of $
26
Table of Contents
International Line of Credit Agreements
The Company has line of credit agreements with 11 other financial institutions as of September 30, 2026, and 12 other financial institutions as of December 31, 2025, in the U.S., Chile and Spain. These lines of credit are used primarily as sources of working capital for inventory purchases.
The following table summarizes the amounts outstanding under the Chilean and Spanish lines of credit:
(Dollars in thousands) |
|
|
|
|
|
|
|
Balance Outstanding |
|
|||||||
|
|
Interest rate on |
|
|
Credit line |
|
|
September 30, |
|
|
December 31, |
|
||||
Lender |
|
September 30, 2026 |
|
|
capacity |
|
|
2026 |
|
|
2025 |
|
||||
Itau Bank |
|
|
% |
|
$ |
|
|
$ |
|
|
$ |
|
||||
Bank of Chile |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
BICE Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Scotiabank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Santander Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Security Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Estado Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
BCI Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Internacional Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Consorcio Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Santander Bank |
|
|
% |
|
|
|
|
|
|
|
|
|
||||
Total |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
At September 30, 2026 and December 31, 2025, the weighted average interest rate on our lines of credit was approximately
At September 30, 2026 and December 31, 2025, we had notes payable and other debt (excluding the 2033 Senior Notes, the 2029 Convertible Notes, and amounts outstanding under the lines of credit described above) as follows:
|
|
September 30, |
|
|
December 31, |
|
||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
Current portion of notes payable |
|
$ |
|
|
$ |
|
||
Other long-term liabilities |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
The notes and other debt mature at various dates ranging from 2026 through 2032, bearing variable interest rates from
NOTE 9 ACCUMULATED OTHER COMPREHENSIVE LOSS
For the nine months ended September 30, 2026, changes in Accumulated other comprehensive loss, net of tax, were as follows:
|
|
Foreign |
|
|
|
|
currency |
|
|
(In thousands) |
|
translation |
|
|
Balance at December 31, 2025 |
|
$ |
( |
) |
Other comprehensive loss |
|
|
( |
) |
Balance at September 30, 2026 |
|
$ |
( |
) |
NOTE 10 FAIR VALUE MEASUREMENTS
We record fair values at an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value
27
Table of Contents
hierarchy, which prioritizes the inputs used in measuring fair value. These tiers are: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.
As of September 30, 2026, our financial assets measured at fair value included equity securities, forward foreign currency exchange contracts for inventory purchases (refer to Note 11), and restricted cash collateralized by money market funds, the latter being measured at fair value as a Level 1 financial instrument.
Our financial assets and liabilities measured at fair value on a recurring basis are as follows:
|
|
Fair value measurements as of September 30, 2026 |
|
|||||||||||||
|
|
Quoted |
|
|
|
|
|
|
|
|
|
|
||||
|
|
prices in |
|
|
|
|
|
|
|
|
|
|
||||
|
|
active |
|
|
Significant |
|
|
|
|
|
|
|
||||
|
|
markets for |
|
|
other |
|
|
Significant |
|
|
|
|
||||
|
|
identical |
|
|
observable |
|
|
unobservable |
|
|
|
|
||||
|
|
assets |
|
|
inputs |
|
|
inputs |
|
|
|
|
||||
(In thousands) |
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forward contracts |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
Fair value measurements as of December 31, 2025 |
|
|||||||||||||
|
|
Quoted |
|
|
|
|
|
|
|
|
|
|
||||
|
|
prices in |
|
|
|
|
|
|
|
|
|
|
||||
|
|
active |
|
|
Significant |
|
|
|
|
|
|
|
||||
|
|
markets for |
|
|
other |
|
|
Significant |
|
|
|
|
||||
|
|
identical |
|
|
observable |
|
|
unobservable |
|
|
|
|
||||
|
|
assets |
|
|
inputs |
|
|
inputs |
|
|
|
|
||||
(In thousands) |
|
(Level 1) |
|
|
(Level 2) |
|
|
(Level 3) |
|
|
Total |
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Equity securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Common stock options/warrants |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forward contracts |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The table below presents the carrying amount, estimated fair value, and applicable fair value hierarchy tiers for our 2029 Convertible Notes. The fair value for these notes is determined using directly observable inputs other than quoted prices in active markets.
|
|
September 30, 2026 |
|
|||||||||||||||||
|
|
Carrying |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|||||
(In thousands) |
|
Value |
|
|
Fair Value |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|||||
2029 Convertible Notes |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
There have been no transfers between Level 1 and Level 2 and no transfers to Level 3 of the fair value hierarchy.
28
Table of Contents
NOTE 11 DERIVATIVE CONTRACTS
The following table summarizes the fair values and the presentation of our derivative financial instruments in the Condensed Consolidated Balance Sheets:
|
|
Balance Sheet |
|
September 30, |
|
|
December 31, |
|
||
(In thousands) |
|
Component |
|
2026 |
|
|
2025 |
|
||
Derivative financial instruments: |
|
|
|
|
|
|
|
|
||
Forward contracts |
|
Unrealized gains (losses) on forward contracts are recorded in other current assets and prepaid expenses. Unrealized (losses) on forward contracts are recorded in accrued expenses |
|
$ |
|
|
$ |
( |
) |
|
Common Stock options/warrants |
|
Investments, net |
|
|
|
|
|
|
||
We enter into foreign currency forward exchange contracts with respect to the risk of exposure to exchange rate differences arising from inventory purchases on letters of credit. Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.
To qualify the derivative instrument as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At September 30, 2026 and December 31, 2025, our derivative financial instruments did not meet the documentation requirements to be designated as hedges. Accordingly, we recognize the changes in fair value of derivative instruments, net in our Condensed Consolidated Statement of Operations.
The following table summarizes the losses and gains recorded for the three and nine months ended September 30, 2026 and 2025:
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Derivative gain (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Forward contracts |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
NOTE 12 RELATED PARTY TRANSACTIONS
We lease office space from Frost Real Estate Holdings, LLC (“Frost Holdings”) in Miami, Florida, where our principal executive offices are located. Effective August 1, 2024, we entered into an amendment to our lease agreement with Frost Holdings to decrease the lease space from approximately
On July 31, 2026, the Company purchased
In January 2024, in connection with the closing of the offering of the 2029 Convertible Notes, we issued and sold approximately $
The Company owns approximately
We hold investments in Zebra (ownership
29
Table of Contents
which represented a
Dr. Elias Zerhouni, our Vice Chairman and President, sits on the board of directors of Danaher Corporation (“Danaher”). Prior to the classification of the BioReference operations as discontinued operations, BioReference procured products and services from several subsidiaries of Danaher, including Beckman Coulter, Integrated DNA Technologies Inc., and Leica Microsystems Inc., to which BioReference has paid $
We reimburse Dr. Frost for Company-related use by Dr. Frost and our other executives of an airplane owned by a company that is beneficially owned by Dr. Frost. We reimburse Dr. Frost for out-of-pocket operating costs for the use of the airplane by Dr. Frost or Company executives for Company-related business. We do not reimburse Dr. Frost for personal use of the airplane by Dr. Frost or any other executive. For the three months ended September 30, 2026, no amount was reimbursed or accrued for Company-related travel by Dr. Frost and other OPKO executives. For the nine months ended September 30, 2026, we reimbursed or accrued $
NOTE 13 COMMITMENTS AND CONTINGENCIES
On December 29, 2022, the Israel Tax Authority (the “ITA”) issued an assessment against our subsidiary, OPKO Biologics in the amount of approximately $
The Company and BioReference entered into (i) a settlement agreement (the “Settlement Agreement”), effective July 14, 2022, with the United States of America, acting through the United States Department of Justice and on behalf of the Office of Inspector General of the Department of Health and Human Services (“OIG-HHS”), and the Defense Health Agency, acting on behalf of the TRICARE Program (collectively, the “United States”), the Commonwealth of Massachusetts , the State of Connecticut, and the relator identified therein (“Relator”), and (ii) a Corporate Integrity Agreement, effective July 14, 2022 (the “CIA”), with the OIG-HHS, to resolve the investigation and related civil action concerning alleged fee-for-service claims for payment to the Medicare Program, the Medicaid Program, and the TRICARE Program (collectively, the “Federal Health Care Programs”).
Under the Settlement Agreement, the Company and BioReference admitted only to having made payments to certain physicians and physicians’ groups for office space rentals for amounts that exceeded fair market value, and that it did
Under the CIA, which has a term of five years, BioReference is required to, among other things: (i) maintain a Compliance Officer, a Compliance Committee, board review and oversight of certain federal healthcare compliance matters, compliance programs, and disclosure programs; (ii) provide management certifications and compliance training and education; (iii) establish written compliance policies and procedures to meet federal health care program requirements; (iv) create
30
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procedures designed to ensure compliance with the Anti-Kickback Statute and/or Stark Law; (v) engage an independent review organization to conduct a thorough review of BioReference’s systems, policies, processes and procedures related to certain arrangements; (vi) implement a risk assessment and internal review process; (vii) establish a disclosure program for whistleblowers; and (viii) report or disclose certain events and physician payments. The Company’s or BioReference’s failure to comply with its obligations under the CIA could result in monetary penalties and the exclusion from participation in Federal Health Care Programs. The CIA does not apply to any of the Company’s subsidiaries other than BioReference, and its scope is generally limited to “focus arrangements”, which are those “arrangements” (as defined in the CIA) (i) between BioReference and any actual source or recipient of health care business or referrals and involves, directly or indirectly, the offer, payment, or provision of anything of value, or (ii) is between BioReference and any physician (or a physician’s immediate family member). Most of these measures have already been implemented at BioReference. Following its acquisition of BioReference, the Company and BioReference implemented robust compliance measures that substantially align with those actions required under the CIA. BioReference is included within the discontinued operations discussed in Note 2; however, the obligations under the CIA remain applicable to BioReference and therefore continue to be disclosed herein.
From time to time, we may receive inquiries, document requests, CIDs or subpoenas from the Department of Justice, OCR, CMS, various payors and fiscal intermediaries, and other state and federal regulators regarding investigations, audits and reviews. In addition to the matters discussed in this note, we are currently responding to CIDs, subpoenas, payor audits, and document requests for various matters relating to BioReference's diagnostics laboratory operations. Some pending or threatened proceedings against us may involve potentially substantial amounts as well as the possibility of civil, criminal, or administrative fines, penalties, or other sanctions, which could be material. Settlements of suits involving the types of issues that we routinely confront may require monetary payments as well as corporate integrity agreements. Additionally, qui tam or “whistleblower” actions initiated under the civil False Claims Act may be pending but placed under seal by the court to comply with the False Claims Act’s requirements for filing such suits. Also, from time to time, we may detect issues of non-compliance with federal healthcare laws pertaining to claims submission and reimbursement practices and/or financial relationships with physicians, among other things. We may avail ourselves of various mechanisms to address these issues, including participation in voluntary disclosure protocols. Participating in voluntary disclosure protocols can have the potential for significant settlement obligations or even enforcement action. The Company generally has cooperated, and intends to continue to cooperate, with appropriate regulatory authorities as and when investigations, audits and inquiries arise. No accrual has been made for these matters we are currently responding to, as there is no basis to conclude that a loss has been incurred or to estimate a range of potential loss outcomes.
We are a party to other litigation in the ordinary course of business. While we cannot predict the ultimate outcome of legal matters, we accrue a liability for legal contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. It is reasonably possible the ultimate liability could exceed amounts currently estimated, and we review established accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. To the extent new information is obtained and our views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made. Because of the high degree of judgment involved in establishing loss estimates, the ultimate outcome of such matters will differ from our estimates and such differences may be material to our business, financial condition, results of operations, and cash flows.
At September 30, 2026, we were committed to make future purchases for inventory and other items during the remainder of 2026 that occur in the ordinary course of business under various purchase arrangements with fixed purchase provisions aggregating approximately $
NOTE 14 REVENUE RECOGNITION
We generate revenues from products and intellectual property as follows:
Revenue from products
We recognize revenue from product sales when a customer obtains control of promised goods or services. The amount of revenue recorded reflects the consideration that we expect to receive in exchange for those goods or services. Our estimates for sales returns and allowances are based upon the historical patterns of product returns and allowances taken, matched against the sales from which they originated, and our evaluation of specific factors that may increase or decrease the risk of product returns. Product revenues are recorded net of estimated rebates, chargebacks, discounts, co-pay assistance and other deductions (collectively, “Sales Deductions”) as well as estimated product returns which are all elements of variable consideration. Allowances are recorded as a reduction of revenue at the time product revenues are recognized. The actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect revenue from products in the period such variances become known.
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Rayaldee is distributed in the U.S. principally through the retail pharmacy channel, which initiates with the largest wholesalers in the U.S. (collectively, “Rayaldee Customers”). In addition to distribution agreements with Rayaldee Customers, we have entered into arrangements with many healthcare providers and payors that provide for government-mandated or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of Rayaldee.
We recognize revenue for shipments of Rayaldee at the time of delivery to customers after estimating Sales Deductions and product returns as elements of variable consideration utilizing historical information and market research projections. For the three and nine months ended September 30, 2026, we recognized $
The following table presents an analysis of Rayaldee product sales allowances and accruals for the three and nine months ended September 30, 2026 and 2025:
(In thousands) |
|
Chargebacks, |
|
|
Governmental |
|
|
Returns |
|
|
Total |
|
||||
Balance at June 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Provision related to current period sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Credits or payments made |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
(In thousands) |
|
Chargebacks, |
|
|
Governmental |
|
|
Returns |
|
|
Total |
|
||||
Balance at December 31, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Provision related to current period sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Credits or payments made |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2026 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
(In thousands) |
|
Chargebacks, discounts, rebates and fees |
|
|
Governmental |
|
|
Returns |
|
|
Total |
|
||||
Balance at June 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Provision related to current period sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Credits or payments made |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
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(In thousands) |
|
Chargebacks, discounts, rebates and fees |
|
|
Governmental |
|
|
Returns |
|
|
Total |
|
||||
Balance at December 31, 2024 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Provision related to current period sales |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Credits or payments made |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2025 |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
$ |
|
||||
Provision for Rayaldee sales allowances and accruals as a percentage of gross Rayaldee sales |
|
|
|
|
|
|
|
|
|
|
|
% |
||||
Taxes collected from customers related to revenues from products are excluded from revenues.
Licensing, collaboration and other revenue
We recognize revenues from the transfer of intellectual property generated through license, development, collaboration and/or commercialization agreements. The terms of these agreements typically include payment to us for one or more of the following: non-refundable, up-front license fees; development and commercialization milestone payments; funding of research and/or development activities; and royalties on sales of licensed products. Revenue is recognized upon satisfaction of a performance obligation by transferring control of a good or service to the customer.
For research, development and/or commercialization agreements that result in revenues, we identify all material performance obligations, which may include a license to intellectual property and know-how, and research and development activities. In order to determine the transaction price, in addition to any upfront payment, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. We constrain (reduce) our estimates of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside our control that could result in a significant reversal of revenue. In making these assessments, we consider the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required.
Upfront License Fees: If a license to our intellectual property is determined to be functional intellectual property distinct from the other performance obligations identified in the arrangement, we recognize revenue from nonrefundable, upfront license fees based on the relative value prescribed to the license compared to the total value of the arrangement. The revenue is recognized when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, we apply an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition.
Research and Development Activities: If we are entitled to reimbursement from our customers for specified research and development expenses, we account for them as separate performance obligations if distinct. We also determine whether the research and development funding would result in revenues or an offset to research and development expenses in accordance with provisions of gross or net revenue presentation. The corresponding revenues or offset to research and development expenses are recognized as the related performance obligations are satisfied.
BARDA Contract (as defined in Note 15): Revenue from the BARDA Contract is generated under terms that are cost plus fee. We recognize revenue using the incurred costs output method to measure progress. Revenue will only be recognized when research and development services are performed to the extent of actual costs incurred.
Sales-based Milestone and Royalty Payments: Our customers may be required to pay us sales-based milestone payments or royalties on future sales of commercial products. We recognize revenues related to sales-based milestone and royalty payments upon the latter to occur of (i) achievement of the customer’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to our intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate.
Other Potential Products and Services: Arrangements may include an option for license rights, future supply of drug substance or drug product for either clinical development or commercial supply at the licensee’s election. We assess if these
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options provide a material right to the licensee and if so, they are accounted for as separate performance obligations at the inception of the contract and revenue is recognized only if the option is exercised and products or services are subsequently delivered or when the rights expire. If the promise is based on market terms and not considered a material right, the option is accounted for if and when exercised. If we are entitled to additional payments when the licensee exercises these options, any additional payments are generally recorded in license or other revenues when the licensee obtains control of the goods, which is upon delivery.
Licensing, collaboration and other revenue increased by $
NOTE 15 STRATEGIC ALLIANCES
Regeneron Pharmaceuticals Inc
On October 28, 2025, ModeX entered into a license and collaboration agreement with Regeneron Pharmaceuticals Inc. (“Regeneron”) to discover and develop multispecific antibodies for several therapeutic indications of mutual interest. The collaboration leverages ModeX’s MSTAR platform and Regeneron’s proprietary binders to develop multispecific antibody candidates that target multiple distinct biological pathways in a single molecule.
Under the terms of this agreement, ModeX received an upfront payment of $
ModeX is also eligible to receive potential future product selection payments, clinical and regulatory milestone payments, and commercial milestone payments that could exceed $
The Company evaluated the agreement under ASC Topic 606, Revenue from Contracts with Customers, and determined that Regeneron meets the definition of a customer. The Company identified four separate performance obligations under the agreement: (i) a license to certain ModeX intellectual property, including its MSTAR platform technology; and preclinical research and development services related to the (ii) oncology, (iii) immunology and inflammation, and (iv) obesity programs. The intellectual property license represents functional intellectual property and was recognized at a point in time when the license and related know-how were made available to Regeneron. Accordingly, the $
The preclinical research and development services represent separate performance obligations that are satisfied over time as the services are performed. Regeneron reimburses ModeX for allowable preclinical research costs incurred under the applicable work plans, and the Company recognizes the related reimbursements as revenue as the underlying research and development services are performed. The options for Regeneron to obtain exclusive exploitation licenses for products developed under the collaboration do not represent material rights and were not identified as performance obligations at contract inception. Consideration associated with such options, including potential development, regulatory and commercial milestone payments and sales-based royalties, will be evaluated for recognition when the applicable option is exercised and the related recognition criteria are met.
For the three and nine months ended September 30, 2026, the Company recognized approximately $
Entera Bio Ltd
On March 16, 2025, the Company and Entera Bio Ltd. (“Entera”) entered into a collaboration and license agreement (the “Entera Collaboration Agreement”). On February 3, 2026, the Company, its wholly owned subsidiary, OPKO Biologics, and
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Entera entered into an amended and restated collaboration and license agreement (the “A&R Entera Agreement”), which expanded the scope of the partnership to include the preclinical and clinical development of a daily long-acting PTH tablet (“LA-PTH”) for the treatment of hypoparathyroidism and other indications. This is in addition to the existing program for an oral dual agonist GLP-1/glucagon peptide.
Under the terms of the A&R Entera Agreement, the ownership and cost-sharing structures are as follows:
In connection with the initial March 2025 agreement, the Company purchased
On February 1, 2026, Steven D. Rubin, the Company’s Executive Vice President, Administration and a member of the Company’s Board of Directors, was appointed to the Board of Directors of Entera. Mr. Rubin's appointment to Entera's Board of Directors was not prescribed by the Entera Collaboration Agreement.
The Company granted to Entera a non-exclusive, non-sublicensable, non-transferable license to certain of the Company's technology, which collectively includes the Company foreground patents, and rights in joint information, inventions, and joint patents (including the Company’s proprietary long-acting oxyntomodulin analog OPK-88006). This license is provided to the extent necessary for Entera to fulfill its obligations under the development plan identified in the Entera Collaboration Agreement.
The Company has also agreed to a standstill period of 24 months during which it will not acquire or seek to acquire any equity interests in Entera, engage in proxy solicitations, call shareholder meetings, or attempt to influence Entera's management or policies without prior written consent from Entera's Board of Directors. Additionally, the Company was subject to a 12-month lock-up period during which it could not sell, transfer, or hedge Entera's ordinary shares without Entera's consent.
Biomedical Advanced Research and Development Authority
On September 28, 2023, ModeX was awarded a contract (as amended, the “BARDA Contract”) by the Biomedical Advanced Research and Development Authority ("BARDA"), part of the Administration for Strategic Preparedness and Response at the U.S. Department of Health and Human Services. This contract aims to advance a platform and product candidates addressing various public health threats, specifically in viral infectious diseases. The funding enables the research, development, and clinical evaluation of multispecific antibodies based on ModeX's proprietary MSTAR technology. MSTAR is a flexible, plug-and-play platform capable of incorporating multiple independent antibody binding sites into a single molecule, expanding its therapeutic potential and enabling rapid responses to emerging infections, including viral variants like COVID-19, influenza, and other pathogens.
In September 2024, ModeX entered into two amendments (the “BARDA Amendments”) to modify the scope and funding of the BARDA Contract. The BARDA Amendments structured the funding thereunder as cost-plus-fixed-fee, which included a $
In December 2025, the Company entered into a further bilateral modification to de-scope all mRNA development-related efforts using SARS-CoV-2 as an antigen model, as these activities were no longer a priority for the U.S. Department of Health and Human Services. As a result, the total value of the BARDA Contract decreased from $
As part of the research program, gene-based delivery methods for the multispecific antibodies will be developed using mRNA or DNA vectors to leverage the body's natural protein production processes. BARDA will make periodic progress assessments, and the continuation of the BARDA Contract depends on ModeX’s performance, the timeliness and quality of deliverables, and other factors. The BARDA Contract contains customary government contract provisions, including BARDA's right to terminate the contract in its discretion.
The Company evaluated the BARDA Contract under ASC Topic 606, Revenue from Contracts with Customers, and
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determined that the U.S. government meets the definition of a customer. The scope of the BARDA Contract includes preclinical, clinical, and manufacturing activities, as well as regulatory, quality assurance, management, and administrative activities. The research and development effort will progress in stages covering base and option segments, with ModeX completing specific tasks in each segment.
The Company identified three potential material promises under the BARDA Contract: (i) development of a tetravalent trispecific antibody for COVID-19; (ii) development of a multispecific protein antibody for influenza or another pathogen; and (iii) nucleic acid delivery of a multispecific antibody for influenza or another pathogen. The Company determined the promise to develop a tetravalent trispecific antibody for COVID-19 is a separate performance obligation, as it is distinct within the contract and provides standalone value. Similarly, the exercised option to develop a multispecific protein antibody for influenza or another pathogen is also a separate performance obligation. However, the Company determined that the nucleic acid delivery option does not offer incremental discounts beyond those typically provided for such goods and services, and therefore does not represent a material right. As such, the options in (iii) were not considered performance obligations at the outset of the BARDA Contract.
The Company concluded that research and development services performed under the BARDA Contract would be recognized as revenue when research and development services are performed to the extent of actual costs incurred including a fixed fee and will be reimbursed by BARDA. Costs incurred represent work performed, which corresponds with, and thereby best depicts, the transfer of control of the research and development to BARDA. Types of contract costs include labor, material, and third-party services. As such, the related BARDA revenue is recognized as revenue from transfer of intellectual property and other within the Company’s Consolidated Statements of Operations. For the nine months ended September 30, 2026 and 2025, we recorded $
Merck
On March 8, 2023, ModeX, the Company (with respect to certain sections), and Merck Sharp & Dohme LLC (“Merck”) entered into a License and Research Collaboration Agreement (the “Merck Agreement”) pursuant to which ModeX granted to Merck a license to certain patent rights and know-how in connection with the development of ModeX’s preclinical nanoparticle vaccine candidate targeting the Epstein-Barr Virus.
Under the terms of the Merck Agreement, ModeX granted to Merck an exclusive, sublicensable, royalty-bearing license to certain intellectual property to develop, manufacture, use and commercialize (i) a multivalent or monovalent vaccine assembled using our platform for Epstein-Barr Virus (“Vaccine”), and (ii) any pharmaceutical or biological preparation in final form containing a Vaccine for sale or for administration to human patients in a clinical trial for all uses (“Product”).
ModeX received an initial payment of $
Certain of the rights subject to the license provided by us under the Merck Agreement were obtained by us from Sanofi, a French corporation (“Sanofi”), pursuant to that certain License Agreement entered into as of July 1, 2021 (“Sanofi In-License Agreement”) between us and Sanofi, and a portion of the upfront payment and royalties received by us under the Merck Agreement may be payable to Sanofi under the terms of the Sanofi In-License Agreement.
As part of their strategic collaboration, ModeX and Merck have put in place a research plan to manage research and other development activities related to the development of a Vaccine or Product including a joint steering committee to facilitate the research program. As part of the research plan, they will use a third-party contract development and manufacturing organization to carry out such activities unless otherwise agreed. Development costs incurred by ModeX in furtherance of these development activities will be reimbursed by Merck. To date, we have spent $
The Merck Agreement will remain in effect until one or more Products receive marketing authorization, and, thereafter, until the expiration of all royalty obligations unless earlier terminated as permitted under the Merck Agreement. In addition to termination rights for material breach and bankruptcy, Merck is permitted to terminate the Merck Agreement in its entirety without cause after a specified notice period. If Merck terminates the Merck Agreement for convenience or by us for Merck’s uncured material breach, we may elect to receive a reversion license such that we can continue its work with Vaccines and Products which have not been terminated due to a material safety issue.
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LeaderMed
On September 14, 2021, we and LeaderMed announced the formation of a joint venture to develop, manufacture and commercialize two of OPKO’s clinical stage, long-acting drug products in Greater China and eight other Asian territories.
Under the terms of the agreements, we granted the joint venture exclusive rights to develop, manufacture and commercialize (a) OPK88003, an oxyntomodulin analog being developed for the treatment of obesity and diabetes, and (b) Factor VIIa-CTP, a novel long-acting coagulation factor being developed to treat hemophilia, in exchange for a
We sent a termination letter to LeaderMed in July 2026; therefore, this license is now terminated. We retain full rights to oxyntomodulin and Factor VIIa-CTP.
Eli Lilly and Company
On February 25, 2010, Transition Therapeutics Inc. (“Transition”), our wholly owned subsidiary acquired in 2016, through its subsidiary Waratah Pharmaceuticals Inc., entered into a worldwide license agreement with Eli Lilly and Company (“Eli Lilly”) to develop and commercialize certain oxyntomodulin-based compounds, which agreement was amended on June 13, 2013 to include provisions for backup compounds (as amended, the “Eli Lilly Agreement”), including Mazdutide, which achieved its first commercial sales in China during the third quarter of 2025.
Mazdutide is a long-acting synthetic oxyntomodulin analog and a co-agonist of GLP-1 and glucagon receptors. Under the terms of the Eli Lilly Agreement, the Company is entitled to receive a
For the nine months ended September 30, 2026, the Company recognized approximately $
NICOYA Macau Limited
On June 18, 2021, EirGen, our wholly owned subsidiary, and Nicoya, entered into a Development and License Agreement (the “Nicoya Agreement”) granting Nicoya the exclusive rights for the development and commercialization of extended release calcifediol (the “Nicoya Product”) in Greater China, which includes mainland China, Hong Kong, Macau, and Taiwan (collectively, the “Nicoya Territory”). Extended release calcifediol is marketed in the U.S. by OPKO under the tradename Rayaldee. The license grant to Nicoya covers the therapeutic and preventative use of the Nicoya Product for SHPT in non-dialysis and hemodialysis chronic kidney disease patients (the “Nicoya Field”).
EirGen received an initial upfront payment of $
On April 30, 2026, EirGen and Nicoya entered into a second amendment to the agreement. Pursuant to the amendment, the parties expanded the scope of the licensed field beyond the original indication, modified certain manufacturing-related rights in the territory, and reduced future royalty rates payable by Nicoya. As consideration for the amendment, EirGen received a
Nicoya is, at its sole cost and expense, responsible for performing all development activities necessary to obtain all regulatory approvals for the Nicoya Product in the Nicoya Territory and will be responsible for all commercial activities pertaining to the Nicoya Product in the Nicoya Territory.
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Unless earlier terminated, the Nicoya Agreement will remain in effect until such time as all royalty payment terms and extended payment terms have expired, and Nicoya shall have no further payment obligations to EirGen under the terms of the Nicoya Agreement. Nicoya’s royalty obligations expire on the later of (i) expiration of the last to expire valid patent claim covering the Nicoya Product sold in the Nicoya Territory, (ii) expiration of all regulatory and data exclusivity applicable to the Nicoya Product in the Nicoya Territory, and (iii) on a product-by-product basis,
VFMCRP
In May 2016, EirGen and Vifor Fresenius Medical Care Renal Pharma Ltd. (“VFMCRP”) entered into a Development and License Agreement (the “VFMCRP Agreement”) for the development and commercialization of Rayaldee (the “Product”) worldwide, except for (i) the United States and Canada, (ii) any country in Central America or South America (including Mexico), (iii) Russia, (iv) China, (v) South Korea, (vi) Ukraine, (vii) Belorussia, (viii) Azerbaijan, (ix) Kazakhstan, (x) Taiwan (xi) the Middle East, and (xii) all countries of Africa (the “VFMCRP Territory”), as amended. The license to VFMCRP potentially covers all therapeutic and prophylactic uses of the Product in human patients (the “VFMCRP Field”), provided that initially the license is for the use of the Product for the treatment or prevention of SHPT related to patients with CKD and vitamin D insufficiency/deficiency (the “VFMCRP Initial Indication”).
Effective May 23, 2021, we entered into an amendment to the VFMCRP Agreement pursuant to which the parties thereto agreed to include Japan as part of the VFMCRP Territory.
Effective May 5, 2020, we entered into an amendment to the VFMCRP Agreement pursuant to which the parties agreed to exclude Mexico, South Korea, the Middle East and all of the countries of Africa from the VFMCRP Territory. In addition, the parties agreed to certain amendments to the milestone structure and to reduce minimum royalties payable. The Company has received a $
We plan to share responsibility with VFMCRP for the conduct of trials specified within an agreed-upon development plan, with each company leading certain activities within the plan. EirGen will lead the manufacturing activities within and outside the VFMCRP Territory and the commercialization activities outside the VFMCRP Territory and outside the VFMCRP Field in the VFMCRP Territory and VFMCRP will lead the commercialization activities in the VFMCRP Territory and the VFMCRP Field. For the initial development plan, the companies have agreed to certain cost sharing arrangements. VFMCRP will be responsible for all other development costs that VFMCRP considers necessary to develop the Product for the use of the Product for the VFMCRP Initial Indication in the VFMCRP Territory in the VFMCRP Field except as otherwise provided in the VFMCRP Agreement. The first of the clinical studies provided for in the development activities commenced in September 2018.
In connection with the VFMCRP Agreement, the parties entered into a letter agreement pursuant to which EirGen granted to VFMCRP an exclusive option (the “Option”) to acquire an exclusive license under certain EirGen patents and technology to use, import, offer for sale, sell, distribute and commercialize the Product in the U.S. solely for the treatment of SHPT in dialysis patients with CKD and vitamin D insufficiency (the “Dialysis Indication”). Upon exercise of the Option, VFMCRP has agreed to reimburse EirGen for all the development costs incurred by EirGen with respect to the Product for the Dialysis Indication in the U.S. VFMCRP would also pay EirGen up to an additional aggregate amount of $
Payments received for regulatory milestones and sales milestones are non-refundable. The regulatory milestones are payable if and when VFMCRP obtains approval from certain regulatory authorities and will be recognized as revenue in the period in which the associated milestone is achieved, assuming all other revenue recognition criteria are met. We account for the sales milestones as royalties and sales milestones payments will be recognized as revenue in the period in which the associated milestone is achieved or sales occur, assuming all other revenue recognition criteria are met.
Pfizer Inc.
In December 2014, we entered into an exclusive worldwide agreement with Pfizer for the development and commercialization of our long-acting Somatrogon (hGH-CTP) for the treatment of growth hormone deficiency (“GHD”) in adults and children, as well as for the treatment of growth failure in children born small for gestational age (the “Pfizer Transaction”). In May 2020, we entered into an amended and restated development and commercialization license with Pfizer, effective January 1, 2020 (the “Restated Pfizer Agreement”), pursuant to which the parties agreed, among other things, to share
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all costs for Manufacturing Activities, as defined in the Restated Pfizer Agreement, for developing a licensed product for the three indications included in the Restated Pfizer Agreement.
In June 2023, the FDA approved NGENLA® (Somatrogon (hGH-CTP)) a once-weekly injection to treat pediatric growth hormone deficiency in the United States. In early 2022, the European Commission and Ministry of Health, Labour and Welfare in Japan approved NGENLA®. We have also received pricing approvals in Germany and Japan. NGENLA® is approved for the treatment of pediatric GHD in more than 50 markets, including Canada, Australia, Japan, and EU Member States. With the achievement of these milestones, including regulatory approvals and pricing clearances, the Company has received a total of $
On October 21, 2019, we and Pfizer announced that the global phase 3 trial evaluating Somatrogon dosed once-weekly in prepubertal children with GHD met its primary endpoint of non-inferiority to daily Genotropin® (somatropin) for injection, as measured by annual height velocity at 12 months.
Under the terms of the Restated Pfizer Agreement we received non-refundable and non-creditable upfront payments of $
The Restated Pfizer Agreement will remain in effect until the last sale of the licensed product, unless earlier terminated in accordance with its terms. In addition to termination rights for material breach and bankruptcy, Pfizer is permitted to terminate the Restated Pfizer Agreement in its entirety, or with respect to one or more world regions, without cause after a specified notice period. If the Restated Pfizer Agreement is terminated by us for Pfizer’s uncured material breach, or by Pfizer without cause, provision has been made for transition of product and product responsibilities to us for the terminated regions, as well as continued supply of product by Pfizer or transfer of supply to us in order to support the terminated regions.
We recognized the non-refundable $
The Restated Pfizer Agreement includes milestone payments of $
Other
We have completed strategic deals with numerous institutions and commercial partners. In connection with these agreements, upon the achievement of certain milestones we are obligated to make certain payments and have royalty obligations upon sales of products developed under the license agreements. At this time, we are unable to estimate the timing and amounts of payments as the obligations are based on future development of the licensed products.
NOTE 16 SEGMENTS
We manage our continuing operations through
The Company revised its reportable segment structure during 2026. Accordingly, prior-period segment information presented herein has been recast to conform to the current period presentation.
Global Products generally consists of our commercial pharmaceutical operations and international pharmaceutical businesses, including related commercial arrangements through which we participate in the commercialization of pharmaceutical products. Innovative Biotech generally consists of our biotechnology and development-stage programs, including our partnership with Pfizer related to NGENLA®.
Our Chief Executive Officer serves as the Chief Operating Decision Maker ("CODM").
39
Table of Contents
Segment operating income (loss) is the primary measure of profitability reviewed by the CODM. Segment operating income (loss) represents revenue less directly attributable operating expenses for each reportable segment. Corporate expenses and certain other activities not attributable to a reportable segment are presented separately. The total of the reportable segments' measure of profit or loss is reconciled to consolidated loss from continuing operations before income taxes. Interest expense, other non-operating income and expense, and income taxes are not allocated to the segments. There are
The CODM does not regularly review assets by reportable segment when evaluating performance or allocating resources. Accordingly, segment asset information is not presented.
To provide greater transparency into the factors affecting segment profitability, we disclose significant expense categories for each reportable segment in the tables below.
Global Products
Innovative Biotech
40
Table of Contents
The following table presents financial information for our reportable segments and unallocated corporate operations for the three and nine months ended September 30, 2026 and 2025:
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Revenue from products: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Licensing, collaboration and other revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Cost of revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Gross margin: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Selling, general and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Research and development: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Amortization of intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Segment operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Innovative biotech |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Corporate |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
41
Table of Contents
The following table reconciles consolidated operating loss to loss from continuing operations before income taxes for the three and nine months ended September 30, 2026 and 2025:
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Operating loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Interest income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Fair value changes of derivative instruments, net |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||
Other expense, net |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Loss before income taxes and investment losses |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss from investments in investees |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Loss from continuing operations before income taxes |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The following table presents depreciation and amortization by reportable segment and geographic revenue information for the three and nine months ended September 30, 2026 and 2025:
|
|
For the three months ended September 30, |
|
|
For the nine months ended September 30, |
|
||||||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Depreciation and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Global products |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Innovative biotech |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Ireland |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Chile |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Spain |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Israel |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Mexico |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|||||
For each of the nine months ended September 30, 2026 and 2025,
NOTE 17 LEASES
We have operating leases for office space, laboratory operations, research and development facilities, manufacturing locations, warehouses and certain equipment. We determine if a contract contains a lease at inception or modification of a contract. Our leases generally do not provide an implicit interest rate, and we therefore use our incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate we would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. We used the incremental borrowing rates as of January 1, 2019, for operating leases that commenced prior to that date. Many of our leases contain rental escalation, renewal options and/or termination options that are factored into our determination of lease payments as appropriate. Variable lease payment amounts that cannot be determined at the commencement of the lease are not included in the right-to-use assets or liabilities.
We elected the use of permitted practical expedients of not recording leases on our Condensed Consolidated Balance Sheet when the leases have terms of 12 months or less, and we elected not to separate nonlease components from lease components and instead account for each separate lease component and the nonlease components associated with that lease component as a single lease component.
The following table presents the lease balances within the Condensed Consolidated Balance Sheet as of September 30, 2026 and December 31, 2025:
42
Table of Contents
(in thousands) |
|
Classification on the Balance Sheet |
|
September 30, 2026 |
|
|
December 31, 2025 |
|
||
Assets |
|
|
|
|
|
|
|
|
||
Operating lease assets |
|
Operating lease right-of-use assets |
|
$ |
|
|
$ |
|
||
Finance lease assets |
|
Property, plant and equipment, net |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
||
Liabilities |
|
|
|
|
|
|
|
|
||
Current |
|
|
|
|
|
|
|
|
||
Operating lease liabilities |
|
Current maturities of operating leases |
|
|
|
|
|
|
||
Accrued expenses |
|
Current maturities of finance leases |
|
|
|
|
|
|
||
Long-term |
|
|
|
|
|
|
|
|
||
Operating lease liabilities |
|
Operating lease liabilities |
|
|
|
|
|
|
||
Other long-term liabilities |
|
Finance lease liabilities |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
|
|
||
Weighted average remaining lease term |
|
|
|
|
|
|
|
|
||
Operating leases (in years) |
|
|
|
|
|
|
|
|
||
Finance leases (in years) |
|
|
|
|
|
|
|
|
||
Weighted average discount rate |
|
|
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
% |
|
|
% |
||
Finance leases |
|
|
|
|
% |
|
|
% |
||
The following table reconciles the undiscounted future minimum lease payments (displayed by year and in the aggregate) under noncancelable operating leases with terms of more than one year to the total operating lease liabilities recognized on our Condensed Consolidated Balance Sheet as of September 30, 2026:
(in thousands) |
|
Operating |
|
|
Finance |
|
||
October 1, 2026 through December 31, 2026 |
|
$ |
|
|
$ |
|
||
2027 |
|
|
|
|
|
|
||
2028 |
|
|
|
|
|
|
||
2029 |
|
|
|
|
|
|
||
2030 |
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
||
Total undiscounted future minimum lease payments |
|
|
|
|
|
|
||
Less: Difference between lease payments and discounted lease liabilities |
|
|
|
|
|
|
||
Total lease liabilities |
|
$ |
|
|
$ |
|
||
Expense under operating leases and finance leases was $
Supplemental cash flow information is as follows:
|
|
For the nine months ended September 30, |
|
|||||
(in thousands) |
|
2026 |
|
|
2025 |
|
||
Operating cash outflows from operating leases |
|
$ |
|
|
$ |
|
||
Operating cash outflows from finance leases |
|
|
|
|
|
|
||
Financing cash outflows from finance leases |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
43
Table of Contents
NOTE 18 SUBSEQUENT EVENTS
We have evaluated subsequent events through the date these Condensed Consolidated Financial Statements were issued. As discussed in Note 2, on October 14, 2026, we entered into the Labcorp Purchase Agreement with Labcorp relating to the sale of substantially all of the remaining BioReference diagnostic operations. Other than the matters disclosed in Note 2, there were no material subsequent events that required recognition or additional disclosure in these Condensed Consolidated Financial Statements.
44
Table of Contents
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
OVERVIEW
You should read this discussion together with the unaudited Condensed Consolidated Financial Statements, related notes, and other financial information included elsewhere in this Quarterly Report on Form 10-Q together with our audited consolidated financial statements, related notes, and other information contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”). The following discussion contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors,” in Part I, Item 1A of the Form 10-K and as described from time to time in our other filings with the Securities and Exchange Commission. These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements.
We are a biopharmaceutical company focused on two complementary business platforms: Global Products and Innovative Biotech. Through our Global Products platform, we develop, manufacture and commercialize pharmaceutical products and services through established operations in the United States, Ireland, Spain, Chile and Mexico. Through our Innovative Biotech platform, we advance proprietary therapeutic programs, intellectual property assets and strategic collaborations intended to address significant unmet medical needs. We seek to create long-term shareholder value through a balanced business model that combines revenue-generating pharmaceutical operations with a portfolio of innovative biotechnology opportunities. Consistent with this strategy, management evaluates and manages the business through these two platforms.
Our Global Products platform includes the development, manufacture and commercialization of pharmaceutical products and services, as well as certain commercial arrangements generally associated with the commercialization of pharmaceutical products. Our portfolio includes Rayaldee®, a U.S. Food and Drug Administration (“FDA”) approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency. Rayaldee has received marketing authorizations in multiple international markets, and we continue to pursue additional commercialization opportunities through strategic partnerships. Our Global Products platform also includes established pharmaceutical operations that provide manufacturing, development and commercialization capabilities across multiple international markets.
We operate established pharmaceutical businesses internationally, with principal operations in Ireland, Spain, Chile and Mexico. These businesses generate revenue and cash flow while providing development, manufacturing, regulatory and commercial capabilities that support our broader operations. Our Irish subsidiary, EirGen Pharma Ltd. (“EirGen”), specializes in the development and commercial supply of high-potency oral solid-dose pharmaceutical products and exports products to more than 60 countries worldwide. Research and development activities are primarily conducted in facilities located in Weston, Massachusetts; Waterford, Ireland; Kiryat Gat, Israel; and Barcelona, Spain.
Our Innovative Biotech platform includes proprietary development programs, intellectual property assets, strategic collaborations, royalty interests and next-generation therapeutic technologies. We have partnered with Pfizer Inc. (“Pfizer”) for the development and commercialization of NGENLA® (somatrogon-ghla), a once-weekly human growth hormone therapy that has received regulatory approvals in more than 50 countries worldwide. Through our subsidiary, ModeX Therapeutics, Inc. (“ModeX”), we are advancing a portfolio of multispecific antibody and immunotherapy candidates focused on oncology and infectious diseases. Our Innovative Biotech platform also includes biologics research, development-stage therapeutic programs and other opportunities intended to create future value through innovation, strategic partnerships and potential commercialization.
RECENT DEVELOPMENTS
Planned Sale of Remaining BioReference Diagnostic Operations
On September 30, 2026, our Board of Directors approved a plan to sell substantially all of the remaining diagnostic operations of BioReference Health, LLC ("BioReference") to Laboratory Corporation of America Holdings (“Labcorp”). On October 14, 2026, we entered into an Asset Purchase Agreement with Labcorp relating to the transaction. The planned disposition includes certain assets of BioReference's clinical and anatomic pathology laboratory testing business, including assets associated with clinical and women's health testing services, urology, corrections and BioReference's proprietary 4Kscore® prostate cancer test, together with certain liabilities related to those operations. The transaction excludes specified assets and liabilities that will remain with us following completion of the sale. Accordingly, the results of our diagnostic operations have been classified as discontinued operations and are presented separately from continuing operations in the accompanying condensed consolidated financial statements for all periods presented. See Note 2 to our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for additional information regarding the transaction and discontinued operations presentation.
45
Table of Contents
2044 Royalty Financing Notes Amendment
On August 13, 2026, we entered into a First Amendment to the Note Purchase Agreement governing our senior secured royalty notes (the "2044 Royalty Financing Notes"). Pursuant to the amendment, the purchasers acquired an additional $125.0 million aggregate principal amount of senior secured royalty notes, increasing the aggregate principal amount of the facility to $375.0 million. The amendment also expanded the repayment and collateral framework to include certain royalty payments receivable under our license agreement with Eli Lilly and Company ("Eli Lilly") related to Mazdutide. We believe the net proceeds from the issuance and sale of the additional notes enhance our liquidity and financial flexibility while supporting the continued advancement of our product portfolio.
Nicoya Amendment
On April 30, 2026, EirGen entered into a second amendment (the "Second Amendment") to its Development and License Agreement (the "Nicoya Agreement") with NICOYA Macau Limited ("Nicoya") relating to the development and commercialization of Rayaldee® in Greater China, which includes mainland China, Hong Kong, Macau and Taiwan. Under the amended agreement, the parties expanded the scope of the licensed field and revised certain commercial terms. As partial consideration for the reduction in future royalty rates, EirGen received a 15% equity interest in Nicoya Therapeutics Cayman, Nicoya's parent company. We believe the transaction enhances our long-term participation in the potential value of the Rayaldee franchise in Greater China while maintaining our strategic relationship with Nicoya as it progresses toward broader commercialization in the region.
Completion of the Oncology Transaction
During the second quarter of 2026, we received $18.4 million of earnout consideration related to the September 2025 sale of BioReference's oncology diagnostics business to Labcorp. During the third quarter of 2026, we received approximately $19.8 million from the release of escrow funds retained in connection with that transaction. No additional earnout consideration is expected to be received.
Stock Repurchase Program
On April 4, 2025, the Company announced that its Board of Directors authorized an increase of $100.0 million to the Company’s existing common stock, $0.01 par value per share ("Common Stock") repurchase program, originally established on July 18, 2024, increasing the program’s aggregate capacity to $200.0 million. As of December 31, 2025, the Company had repurchased 60,383,629 shares of Common Stock for an aggregate cost of approximately $87.2 million. During the nine months ended September 30, 2026, the Company repurchased an additional 20,835,105 shares of Common Stock at an average price of $1.37 per share, for an aggregate cost of approximately $28.4 million.
Tariffs and Trading Relationships
The U.S. trade environment has experienced changes in 2026, including changes in tariffs applicable to certain imported pharmaceutical products. In April 2026, the U.S. government issued a presidential proclamation establishing tariffs on certain patented pharmaceutical products and related pharmaceutical ingredients imported into the United States. Under the current framework, certain qualifying imports from the European Union are generally subject to a 15% tariff rate.
These new measures did not have a material impact on our results of operations for the nine months ended September 30, 2026. We are continuing to monitor the implementation of these trade policies and evaluate their potential effect on our global supply chain and future financial results.
RESULTS OF OPERATIONS
Foreign Currency Exchange Rates
Approximately 79.2% of our revenue for the nine months ended September 30, 2026, was denominated in currencies other than the U.S. Dollar (USD). This compares to 72.7% for the same period in 2025. Our financial statements are reported in USD; therefore, fluctuations in exchange rates affect the translation of foreign-denominated revenue and expenses. During the nine months ended September 30, 2026 and the year ended December 31, 2025, our most significant currency exchange rate exposures were to the Chilean peso and euro. Gross accumulated currency translation adjustments, recorded as a separate component of shareholders’ equity, totaled $29.9 million and $17.6 million at September 30, 2026 and December 31, 2025, respectively.
We are subject to foreign currency transaction risk due to fluctuations in exchange rates between the time a transaction is initiated and settled. To mitigate this risk, we use foreign currency forward contracts. These contracts fix an exchange rate,
46
Table of Contents
allowing us to offset potential losses (or gains) caused by exchange rate changes at the settlement date. As of September 30, 2026, we held $9.5 million in open foreign exchange forward contracts related to inventory purchases on letters of credit, compared to $13.6 million in open contracts as of December 31, 2025.
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
Our consolidated income from operations for the three months ended September 30, 2026 and 2025 was as follows:
|
|
For the three months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from products |
|
$ |
41,811 |
|
|
$ |
37,676 |
|
|
$ |
4,135 |
|
|
|
11 |
% |
Licensing, collaboration and other revenue |
|
|
23,603 |
|
|
|
18,749 |
|
|
|
4,854 |
|
|
|
26 |
% |
Total revenues |
|
|
65,414 |
|
|
|
56,425 |
|
|
|
8,989 |
|
|
|
16 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
23,351 |
|
|
|
21,374 |
|
|
|
1,977 |
|
|
|
9 |
% |
Selling, general and administrative |
|
|
24,837 |
|
|
|
22,269 |
|
|
|
2,568 |
|
|
|
12 |
% |
Research and development |
|
|
32,177 |
|
|
|
29,797 |
|
|
|
2,380 |
|
|
|
8 |
% |
Amortization of intangible assets |
|
|
16,458 |
|
|
|
16,539 |
|
|
|
(81 |
) |
|
|
(0 |
)% |
Total costs and expenses |
|
|
96,823 |
|
|
|
89,979 |
|
|
|
6,844 |
|
|
|
8 |
% |
Loss from operations |
|
$ |
(31,409 |
) |
|
$ |
(33,554 |
) |
|
$ |
2,145 |
|
|
|
6 |
% |
Total Revenue. Total revenue increased approximately $9.0 million, or 16%, to $65.4 million for the three months ended September 30, 2026, compared to $56.4 million for the same period in 2025. The increase was primarily attributable to higher royalty revenue from Eli Lilly, increased sales of Rayaldee and growth in our international operations.
Loss from operations. Loss from operations decreased $2.1 million, or 6%, to $31.4 million for the three months ended September 30, 2026, compared with $33.6 million for the same period in 2025. The improvement was primarily attributable to stronger operating results within our Global Products segment, partially offset by increased research and development expenditures associated with our innovative pipeline programs.
Global Products
|
|
For the three months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from products |
|
$ |
41,811 |
|
|
$ |
37,676 |
|
|
$ |
4,135 |
|
|
|
11 |
% |
Licensing, collaboration and other revenue |
|
|
6,638 |
|
|
|
1,764 |
|
|
|
4,874 |
|
|
|
276 |
% |
Total revenues |
|
|
48,449 |
|
|
|
39,440 |
|
|
|
9,009 |
|
|
|
23 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
23,319 |
|
|
|
21,351 |
|
|
|
1,968 |
|
|
|
9 |
% |
Selling, general and administrative |
|
|
13,317 |
|
|
|
11,710 |
|
|
|
1,607 |
|
|
|
14 |
% |
Research and development |
|
|
1,621 |
|
|
|
3,307 |
|
|
|
(1,686 |
) |
|
|
(51 |
)% |
Amortization of intangible assets |
|
|
4,183 |
|
|
|
4,264 |
|
|
|
(81 |
) |
|
|
(2 |
)% |
Total costs and expenses |
|
|
42,440 |
|
|
|
40,632 |
|
|
|
1,808 |
|
|
|
4 |
% |
Income (loss) from operations |
|
$ |
6,009 |
|
|
$ |
(1,192 |
) |
|
$ |
7,201 |
|
|
|
604 |
% |
Operating Income. Operating income from Global Products increased to $6.0 million for the three months ended September 30, 2026, as compared to an operating loss of $1.2 million for the same period in 2025. The improvement was primarily attributable to stronger operating results within our Global Products segment, driven by higher royalty revenue from Eli Lilly, increased sales of Rayaldee and growth in our international operations. Operating income included approximately $1.9 million of depreciation expense, $4.2 million of amortization expense and $0.2 million of equity-based compensation expense. Foreign currency fluctuations had an approximately $0.1 million unfavorable impact on operating results during the period.
Revenue from products. Revenue from Global Products increased $4.1 million, or 11%, to $41.8 million for the three months ended September 30, 2026, as compared with $37.7 million for the same period in 2025. The increase was primarily attributable to higher sales of Rayaldee, which increased to $8.6 million for the three months ended September 30, 2026, as
47
Table of Contents
compared to $7.5 million for the same period in 2025, primarily due to favorable gross-to-net adjustments as a result of changes to our Medicare Coverage. In addition, revenue from our international operations increased approximately $3.0 million, reflecting stronger performance in certain international markets, including our animal health business, as well as higher revenue from EirGen driven by increased sales volumes and a favorable product mix. The increase in international revenue included an approximately $0.7 million favorable impact from foreign currency fluctuations, primarily due to the appreciation of the Chilean peso and Mexican peso relative to USD.
Licensing, collaboration and other revenue. Licensing, collaboration and other revenue increased by $4.9 million to $6.6 million for the three months ended September 30, 2026 from $1.8 million for the same period in 2025. The increase was primarily attributable to $5.8 million of royalty revenue recognized from Eli Lilly. This increase was partially offset by lower contract manufacturers' commercial milestone revenue recognized by EirGen compared to the same period in 2025.
Cost of revenue. Cost of revenue increased by $2.0 million, or 9%, for the three months ended September 30, 2026, as compared to the same period in 2025. The increase was primarily attributable to higher costs at EirGen resulting from increased sales volumes, changes in product mix, and higher services, repairs and maintenance expenses. The increase also reflected higher product costs associated with increased Rayaldee sales. Included in the increase was an approximately $0.5 million unfavorable impact from foreign currency fluctuations, primarily due to the appreciation of the Chilean peso and Mexican peso relative to USD.
Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended September 30, 2026 and 2025 were $13.3 million and $11.7 million, respectively, representing an increase of $1.6 million, or 14%, from the prior-year period. The increase was primarily attributable to higher personnel-related expenses and increased commercial and administrative spending, including higher freight and distribution costs. These increases were partially offset by lower personnel-related costs associated with reduced headcount in certain operations.
Research and development expenses. Research and development expenses for the three months ended September 30, 2026 and 2025 were $1.6 million and $3.3 million, respectively, representing a decrease of $1.7 million, or 51%, from the prior-year period. The decrease was primarily attributable to the recognition of a $1.4 million Irish research and development tax credit by EirGen during the three months ended September 30, 2026, which offset research and development expense for the period.
Research and development expenses include external and internal expenses, partially offset by third-party grants and funding from collaboration agreements. External expenses include clinical and non-clinical activities performed by contract research organizations, lab services, purchases of drug and product materials and manufacturing development costs. Internal expenses include employee-related expenses such as salaries, benefits and equity-based compensation expense. Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities.
The following table summarizes the components of our research and development expenses:
Research and Development Expenses |
|
For the three months ended |
|
|||||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
External expenses: |
|
|
|
|
|
|
||
Earlier-stage programs |
|
$ |
847 |
|
|
$ |
1,040 |
|
Research and development employee-related expenses |
|
|
1,753 |
|
|
|
1,957 |
|
Other internal research and development expenses |
|
|
394 |
|
|
|
310 |
|
Government grants, tax credits and other funding |
|
|
(1,373 |
) |
|
|
— |
|
Total research and development expenses |
|
$ |
1,621 |
|
|
$ |
3,307 |
|
Amortization of intangible assets. Amortization of intangible assets was $4.2 million and $4.3 million for the three months ended September 30, 2026 and 2025, respectively. Amortization expense remained relatively consistent period over period. The slight decrease was primarily attributable to the impact of foreign currency fluctuations on intangible assets denominated in foreign currencies.
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Table of Contents
Innovative Biotech
|
|
For the three months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Licensing, collaboration and other revenue |
|
$ |
16,965 |
|
|
$ |
16,985 |
|
|
$ |
(20 |
) |
|
|
(0 |
)% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
27 |
|
|
|
23 |
|
|
|
4 |
|
|
|
17 |
% |
Selling, general and administrative |
|
|
1,121 |
|
|
|
881 |
|
|
|
240 |
|
|
|
27 |
% |
Research and development |
|
|
30,383 |
|
|
|
26,303 |
|
|
|
4,080 |
|
|
|
16 |
% |
Amortization of intangible assets |
|
|
12,275 |
|
|
|
12,275 |
|
|
|
— |
|
|
|
— |
% |
Total costs and expenses |
|
|
43,806 |
|
|
|
39,482 |
|
|
|
4,324 |
|
|
|
11 |
% |
Loss from operations |
|
$ |
(26,841 |
) |
|
$ |
(22,497 |
) |
|
$ |
(4,344 |
) |
|
|
(19 |
)% |
Loss from operations. Loss from operations increased $4.3 million for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to increased investment in our ModeX development programs. Operating results included approximately $0.6 million of depreciation expense, $12.3 million of amortization expense, primarily related to the human growth hormone intangible asset, and $0.6 million of equity-based compensation expense. Foreign currency fluctuations had an immaterial favorable impact on operating results during the period.
Licensing, collaboration and other revenue. Licensing, collaboration and other revenue for the three months ended September 30, 2026 and 2025 was $17.0 million for both periods. Lower revenue recognized under the contract awarded to ModeX by the Biomedical Advanced Research and Development Authority (“BARDA”) (as amended, the “BARDA Contract”) was substantially offset by collaboration revenue recognized under our agreement with Regeneron Pharmaceuticals Inc. (“Regeneron”). Royalty revenue recognized from Pfizer remained relatively consistent with the prior-year period.
Cost of revenue. Cost of revenue for the three months ended September 30, 2026 and 2025 was immaterial.
Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended September 30, 2026 and 2025 were $1.1 million and $0.9 million, respectively, representing an increase of $0.2 million, or 27%, from the prior-year period. The increase was primarily driven by higher employee-related costs.
Research and development expenses. Research and development expenses for the three months ended September 30, 2026 and 2025 were $30.4 million and $26.3 million, respectively, representing an increase of $4.1 million, or 16%, from the prior-year period. The increase was primarily attributable to increased investment in our ModeX development programs as these programs continued to advance through preclinical and clinical development activities, as well as higher employee-related expenses supporting these programs. These increases were partially offset by lower manufacturing expenses for biological products.
Research and development expenses include external and internal expenses, partially offset by third-party grants and funding. External expenses include clinical and non-clinical activities performed by contract research organizations, lab services, manufacturing activities and other development costs. Internal expenses include employee-related expenses such as salaries, benefits and equity-based compensation expense. Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities.
The following table summarizes the components of our research and development expenses:
Research and Development Expenses |
|
For the three months ended |
|
|||||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
External expenses: |
|
|
|
|
|
|
||
Manufacturing expense for biological products |
|
$ |
11,822 |
|
|
$ |
12,115 |
|
Phase 3 studies |
|
|
377 |
|
|
|
189 |
|
Post-marketing studies |
|
|
85 |
|
|
|
46 |
|
Earlier-stage programs |
|
|
7,772 |
|
|
|
4,956 |
|
Research and development employee-related expenses |
|
|
9,340 |
|
|
|
8,271 |
|
Other internal research and development expenses |
|
|
1,047 |
|
|
|
900 |
|
Third-party grants and funding from collaboration agreements |
|
|
(60 |
) |
|
|
(174 |
) |
Total research and development expenses |
|
$ |
30,383 |
|
|
$ |
26,303 |
|
49
Table of Contents
Amortization of intangible assets. Amortization of intangible assets was $12.3 million for both the three months ended September 30, 2026 and 2025. Amortization expense remained consistent period over period and primarily relates to the amortization of our human growth hormone ("hGH") intangible asset.
Corporate
|
|
For the three months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
$ |
5 |
|
|
$ |
— |
|
|
$ |
5 |
|
|
|
— |
% |
Selling, general and administrative |
|
|
10,399 |
|
|
|
9,678 |
|
|
|
721 |
|
|
|
7 |
% |
Research and development |
|
|
173 |
|
|
|
187 |
|
|
|
(14 |
) |
|
|
(7 |
)% |
Total costs and expenses |
|
|
10,577 |
|
|
|
9,865 |
|
|
|
712 |
|
|
|
7 |
% |
Loss from operations |
|
$ |
(10,577 |
) |
|
$ |
(9,865 |
) |
|
$ |
(712 |
) |
|
|
(7 |
)% |
Operating loss for our unallocated corporate operations was $10.6 million for the three months ended September 30, 2026, compared to $9.9 million for the same period in 2025. These results primarily reflect employee-related and general administrative expenses incurred in connection with our corporate operations that are not allocated to our operating segments. Operating results included approximately $0.9 million of equity-based compensation expense and an insignificant amount of depreciation expense and benefited from a favorable foreign currency impact of approximately $0.2 million. The increase in operating loss was primarily attributable to higher employee-related expenses.
Other
Interest income. Interest income for the three months ended September 30, 2026 and 2025 was $2.9 million and $2.7 million, respectively. The increase was primarily due to higher average cash and cash equivalents balances during the 2026 period compared to the prior year period.
Interest expense. Interest expense increased to $13.5 million for the three months ended September 30, 2026, compared to $11.3 million for the same period of 2025. The increase was primarily attributable to higher interest expense associated with the 2044 Royalty Financing Notes and our 3.75% Convertible Senior Notes due 2029 (the “2029 Convertible 144A Notes”).
Fair value changes of derivative instruments, net. Fair value changes of derivative instruments, net for the three months ended September 30, 2026 and 2025, were income of approximately $0.3 million and an immaterial expense, respectively. This was principally related to foreign currency forward exchange contracts at OPKO Chile.
Other income, net. Other income (expense), net was income of $3.9 million for the three months ended September 30, 2026, as compared to income of $1.2 million for the same period in 2025. The increase was primarily attributable to a $4.2 million gain recognized on our investment in EnteraBio Bio Ltd. ("Entera"). This increase was partially offset by unfavorable foreign currency fluctuations, which resulted in foreign currency losses of $0.1 million during the three months ended September 30, 2026 compared to foreign currency gains of $1.1 million during the same period in 2025.
Income tax benefit. Our income tax benefit for the three months ended September 30, 2026 and 2025 was $7.3 million and $8.1 million, respectively. While the U.S. federal statutory income tax rate is 21%, our consolidated effective tax rate for both periods differed from this rate primarily due to the relative mix of earnings and losses generated in the U.S. versus foreign tax jurisdictions, as well as the operating results in tax jurisdictions which do not result in a tax benefit.
Loss from investments in investees. We have invested in certain early-stage companies that we believe have valuable proprietary technology and the potential to create long-term value as an equity holder. We account for these investments under the equity method of accounting. Loss from investments in investees was $5.0 million and an immaterial amount for the three months ended September 30, 2026 and 2025, respectively. The increase was primarily attributable to the recognition of $5.0 million of previously suspended equity method losses associated with our investment in Cocrystal Pharma, Inc. (“Cocrystal”) following our July 2026 purchase of additional shares of Cocrystal common stock. See Note 7 to our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for further information.
50
Table of Contents
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2026 AND 2025
Our consolidated income from operations for the nine months ended September 30, 2026 and 2025 was as follows:
|
|
For the nine months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from products |
|
$ |
122,795 |
|
|
$ |
113,261 |
|
|
$ |
9,534 |
|
|
|
8 |
% |
Licensing, collaboration and other revenue |
|
|
83,661 |
|
|
|
45,978 |
|
|
|
37,683 |
|
|
|
82 |
% |
Total revenues |
|
|
206,456 |
|
|
|
159,239 |
|
|
|
47,217 |
|
|
|
30 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
70,750 |
|
|
|
69,210 |
|
|
|
1,540 |
|
|
|
2 |
% |
Selling, general and administrative |
|
|
73,567 |
|
|
|
69,536 |
|
|
|
4,031 |
|
|
|
6 |
% |
Research and development |
|
|
94,254 |
|
|
|
90,345 |
|
|
|
3,909 |
|
|
|
4 |
% |
Amortization of intangible assets |
|
|
49,327 |
|
|
|
49,064 |
|
|
|
263 |
|
|
|
1 |
% |
Total costs and expenses |
|
|
287,898 |
|
|
|
278,155 |
|
|
|
9,743 |
|
|
|
4 |
% |
Loss from operations |
|
$ |
(81,442 |
) |
|
$ |
(118,916 |
) |
|
$ |
37,474 |
|
|
|
32 |
% |
Total revenue. Total revenue increased $47.2 million, or 30%, to $206.5 million for the nine months ended September 30, 2026, as compared with $159.2 million for the same period in 2025. The increase was primarily attributable to revenue recognized from shares received in connection with our investment in Nicoya, higher royalty revenue from Eli Lilly, increased sales of Rayaldee and growth in our international operations.
Loss from operations. Loss from operations decreased $37.5 million, or 32%, to $81.4 million for the nine months ended September 30, 2026, compared with $118.9 million for the same period in 2025. The improvement was primarily attributable to revenue recognized from shares received in connection with our investment in Nicoya and higher royalty revenue from Eli Lilly, partially offset by increased research and development expenditures associated with our innovative pipeline programs.
Global Products
|
|
For the nine months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Revenue from products |
|
$ |
122,795 |
|
|
$ |
113,261 |
|
|
$ |
9,534 |
|
|
|
8 |
% |
Licensing, collaboration and other revenue |
|
|
43,075 |
|
|
|
4,897 |
|
|
|
38,178 |
|
|
|
780 |
% |
Total revenues |
|
|
165,870 |
|
|
|
118,158 |
|
|
|
47,712 |
|
|
|
40 |
% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
70,661 |
|
|
|
69,145 |
|
|
|
1,516 |
|
|
|
2 |
% |
Selling, general and administrative |
|
|
38,564 |
|
|
|
34,496 |
|
|
|
4,068 |
|
|
|
12 |
% |
Research and development |
|
|
8,505 |
|
|
|
10,900 |
|
|
|
(2,395 |
) |
|
|
(22 |
)% |
Amortization of intangible assets |
|
|
12,502 |
|
|
|
12,240 |
|
|
|
262 |
|
|
|
2 |
% |
Total costs and expenses |
|
|
130,232 |
|
|
|
126,781 |
|
|
|
3,451 |
|
|
|
3 |
% |
Income (loss) from operations |
|
$ |
35,638 |
|
|
$ |
(8,623 |
) |
|
$ |
44,261 |
|
|
|
513 |
% |
Operating income (loss). Operating income (loss) increased $44.3 million to $35.6 million for the nine months ended September 30, 2026, as compared with an operating loss of $8.6 million for the same period in 2025. The improvement was primarily attributable to revenue recognized from shares received in connection with our investment in Nicoya, increased royalty revenue from Eli Lilly, higher sales of Rayaldee and growth in our international operations. Operating income included approximately $4.7 million of depreciation expense, $12.5 million of amortization expense and $0.7 million of equity-based compensation expense. Foreign currency fluctuations had an approximately $1.1 million favorable impact on operating results during the period.
Revenue from products. Revenue from products increased $9.5 million, or 8%, to $122.8 million for the nine months ended September 30, 2026, compared with $113.3 million for the same period in 2025. The increase was primarily driven by higher sales of Rayaldee of approximately $2.0 million and increased revenue from our international operations of approximately $7.5 million. International revenue growth reflected stronger performance in certain markets, including Spain, Chile and Mexico,
51
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as well as a favorable product mix. International revenue growth also benefited from approximately $5.7 million of favorable foreign currency impact, primarily due to the appreciation of the Chilean peso and Mexican peso relative to USD.
Licensing, collaboration and other revenue. Licensing, collaboration and other revenue increased $38.2 million to $43.1 million for the nine months ended September 30, 2026, from $4.9 million for the same period in 2025. The increase was primarily driven by $29.4 million in revenue recognized from shares received in connection with our investment in Nicoya (refer to Note 7 and Note 15 to our consolidated financial statements in this Quarterly Report on Form 10-Q) and $10.3 million of royalty revenue from Eli Lilly. These increases were partially offset by a $1.7 million decrease in contract manufacturers' commercial milestones from our Ireland operations.
Cost of revenue. Cost of revenue increased by $1.5 million, or 2%, for the nine months ended September 30, 2026 as compared to the same period in 2025. The increase was primarily driven by higher product costs associated with increased product sales. Included in the increase was an approximately $3.2 million unfavorable impact from foreign currency exchange rates, primarily due to the appreciation of the Chilean peso and Mexican peso relative to USD. These increases were partially offset by lower production costs and operational efficiencies within our international manufacturing platforms.
Selling, general and administrative expenses. Selling, general and administrative expenses for the nine months ended September 30, 2026 and 2025 were $38.6 million and $34.5 million, respectively, representing an increase of $4.1 million, or 12%, from the prior year period. The increase was primarily attributable to higher personnel costs, commercial spending and freight expenses within our international operations, as well as increased commercial expenses at EirGen. Included in the increase was an approximately $0.9 million unfavorable impact from foreign currency fluctuations, primarily due to the appreciation of the Chilean peso and Mexican peso relative to USD.
Research and development expenses. Research and development expenses for the nine months ended September 30, 2026 and 2025 were $8.5 million and $10.9 million, respectively, representing a decrease of $2.4 million, or 22%, from the prior-year period. The decrease was primarily attributable to lower spending on earlier-stage programs, including reduced product development activities at EirGen, and lower employee-related expenses.
Research and development expenses include external and internal expenses, partially offset by third-party grants and funding. External expenses include clinical and non-clinical activities performed by contract research organizations, lab services, purchases of drug and product materials and other development costs. Internal expenses include employee-related expenses such as salaries, benefits and equity-based compensation expense. Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities.
The following table summarizes the components of our research and development expenses:
Research and Development Expenses |
|
For the nine months ended |
|
|||||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
External expenses: |
|
|
|
|
|
|
||
Post-marketing studies |
|
$ |
54 |
|
|
$ |
19 |
|
Earlier-stage programs |
|
|
2,487 |
|
|
|
4,244 |
|
Research and development employee-related expenses |
|
|
6,005 |
|
|
|
6,536 |
|
Other internal research and development expenses |
|
|
1,332 |
|
|
|
1,491 |
|
Government grants, tax credits and other funding |
|
|
(1,373 |
) |
|
|
(1,390 |
) |
Total research and development expenses |
|
$ |
8,505 |
|
|
$ |
10,900 |
|
Amortization of intangible assets. Amortization of intangible assets was $12.5 million and $12.2 million, respectively, for the nine months ended September 30, 2026 and 2025. Amortization expense primarily reflects the amortization of the Rayaldee intangible asset and intangible assets associated with our commercial pharmaceutical operations. The increase compared to the prior-year period was primarily due to foreign currency fluctuations.
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Table of Contents
Innovative Biotech
|
|
For the nine months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Licensing, collaboration and other revenue |
|
$ |
40,586 |
|
|
$ |
41,081 |
|
|
$ |
(495 |
) |
|
|
(1 |
)% |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
|
71 |
|
|
|
65 |
|
|
|
6 |
|
|
|
9 |
% |
Selling, general and administrative |
|
|
3,051 |
|
|
|
2,980 |
|
|
|
71 |
|
|
|
2 |
% |
Research and development |
|
|
84,919 |
|
|
|
78,626 |
|
|
|
6,293 |
|
|
|
8 |
% |
Amortization of intangible assets |
|
|
36,825 |
|
|
|
36,824 |
|
|
|
1 |
|
|
|
0 |
% |
Total costs and expenses |
|
|
124,866 |
|
|
|
118,495 |
|
|
|
6,371 |
|
|
|
5 |
% |
Loss from operations |
|
$ |
(84,280 |
) |
|
$ |
(77,414 |
) |
|
$ |
(6,866 |
) |
|
|
(9 |
)% |
Loss from operations. Loss from operations increased $6.9 million, or 9%, to $84.3 million for the nine months ended September 30, 2026, as compared with $77.4 million for the same period in 2025. The increase was primarily attributable to increased expenditures on certain ModeX therapeutic development programs and growth hormone-related development activities, partially offset by lower spending on BARDA-supported programs and certain other research and development initiatives. Operating results included approximately $1.6 million of depreciation expense, $36.8 million of amortization expense, primarily related to the human growth hormone intangible asset, and $2.6 million of equity-based compensation expense. Foreign currency fluctuations had an immaterial unfavorable impact on operating results during the period.
Licensing, collaboration and other revenue. Licensing, collaboration and other revenue decreased by $0.5 million to $40.6 million for the nine months ended September 30, 2026, from $41.1 million for the same period in 2025. The decrease was primarily attributable to lower revenue recognized under the BARDA contract. The decrease was partially offset by higher royalty revenue from NGENLA and collaboration revenue recognized under ModeX's agreement with Regeneron.
Cost of revenue. Cost of revenue for the nine months ended September 30, 2026 and 2025 was immaterial.
Selling, general and administrative expenses. Selling, general and administrative expenses for the nine months ended September 30, 2026 and 2025 were $3.1 million and $3.0 million, respectively, representing an increase of $0.1 million, or 2%, from the prior-year period. The increase was primarily driven by higher employee-related costs.
Research and development expenses. Research and development expenses for the nine months ended September 30, 2026 and 2025 were $84.9 million and $78.6 million, respectively, representing an increase of $6.3 million, or 8%, from the prior-year period. The increase was primarily attributable to increased investment in our ModeX development programs, including higher spending on earlier-stage and Phase 3 programs, as these programs continued to advance through preclinical and clinical development activities, as well as higher employee-related expenses. These increases were partially offset by lower manufacturing expenses for biological products and other internal research and development expenses.
Research and development expenses include external and internal expenses, partially offset by third-party grants and funding. External expenses include clinical and non-clinical activities performed by contract research organizations, lab services, manufacturing activities and other development costs. Internal expenses include employee-related expenses such as salaries, benefits and equity-based compensation expense. Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities.
The following table summarizes the components of our research and development expenses:
Research and Development Expenses |
|
For the nine months ended |
|
|||||
(In thousands) |
|
2026 |
|
|
2025 |
|
||
External expenses: |
|
|
|
|
|
|
||
Manufacturing expense for biological products |
|
$ |
26,914 |
|
|
$ |
36,016 |
|
Phase 3 studies |
|
|
2,112 |
|
|
|
231 |
|
Post-marketing studies |
|
|
177 |
|
|
|
75 |
|
Earlier-stage programs |
|
|
25,955 |
|
|
|
15,091 |
|
Research and development employee-related expenses |
|
|
26,697 |
|
|
|
23,275 |
|
Other internal research and development expenses |
|
|
3,398 |
|
|
|
5,582 |
|
Third-party grants and funding from collaboration agreements |
|
|
(334 |
) |
|
|
(1,644 |
) |
Total research and development expenses |
|
$ |
84,919 |
|
|
$ |
78,626 |
|
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Table of Contents
Amortization of intangible assets. Amortization of intangible assets was $36.8 million for both the nine months ended September 30, 2026 and 2025. Amortization expense remained consistent period over period and primarily relates to the amortization of our hGH intangible asset.
Corporate
|
|
For the nine months ended |
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|
% Change |
|
||||
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue |
|
$ |
18 |
|
|
$ |
— |
|
|
$ |
18 |
|
|
|
— |
% |
Selling, general and administrative |
|
|
31,952 |
|
|
|
32,060 |
|
|
|
(108 |
) |
|
|
(0 |
)% |
Research and development |
|
|
830 |
|
|
|
819 |
|
|
|
11 |
|
|
|
1 |
% |
Total costs and expenses |
|
|
32,800 |
|
|
|
32,879 |
|
|
|
(79 |
) |
|
|
(0 |
)% |
Loss from operations |
|
$ |
(32,800 |
) |
|
$ |
(32,879 |
) |
|
$ |
79 |
|
|
|
0 |
% |
Operating loss for our unallocated corporate operations was $32.8 million for the nine months ended September 30, 2026, compared to $32.9 million for the same period in 2025. These results primarily reflect employee-related and general administrative expenses incurred in connection with our corporate operations that are not allocated to our operating segments. The decrease in operating loss was primarily attributable to lower selling, general and administrative expenses, including lower professional fees, partially offset by higher employee-related expenses. Operating results benefited from a favorable foreign currency impact of approximately $0.6 million and included approximately $2.8 million of equity-based compensation expense. Depreciation expense was not material during the period.
Other
Interest income. Interest income for the nine months ended September 30, 2026 and 2025 was $8.4 million and $10.1 million, respectively. The decrease in interest income was primarily driven by lower average interest rates and a lower average balance of cash and cash equivalents invested during the 2026 period compared to the prior year period.
Interest expense. Interest expense decreased to $35.7 million for the nine months ended September 30, 2026, compared with $97.0 million for the same period in 2025. The decrease was primarily attributable to the absence of $59.1 million of charges recorded in the 2025 period related to the Note Exchange Transactions (as defined in Note 8 to our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q), consisting of the amortization of $54.7 million of unamortized debt discount and $4.4 million of debt issuance costs. . The decrease was also driven by a $3.3 million reduction in interest expense associated with the 2029 Convertible 144A Notes. These decreases were partially offset by a $1.3 million increase in interest expense related to our 2044 Royalty Financing Notes. In addition, interest expense associated with our international credit facilities decreased modestly compared with the prior-year period, primarily reflecting lower outstanding borrowings.
Fair value changes of derivative instruments, net. Fair value changes of derivative instruments, net for the nine months ended September 30, 2026 and 2025, was $0.1 million and $0.3 million of expense, respectively. The activity was principally related to foreign currency forward exchange contracts at OPKO Chile.
Other income (expense), net. Other income (expense), net changed by $36.0 million to $4.1 million of income for the nine months ended September 30, 2026, compared to $31.9 million of expense for the prior year period. The change was primarily attributable to the absence of a $32.6 million inducement expense recorded during the 2025 period related to the Note Exchange Transactions (as defined in Note 8 to our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q). In addition, we recognized a $4.2 million gain related to our investment in Entera, and foreign currency transactions resulted in a $1.6 million gain during the 2026 period, compared with a $1.5 million loss during the prior-year period. These favorable changes were partially offset by the absence of a $3.9 million gain recognized during the 2025 period from the sale of our remaining investment in GeneDx Holdings Corp.
Income tax benefit. Our income tax benefit for the nine months ended September 30, 2026 and 2025 was $18.7 million and $29.0 million, respectively. While the U.S. federal statutory income tax rate is 21%, our consolidated effective tax rate for both periods differed from this rate primarily due to the relative mix of earnings and losses generated in the U.S. versus foreign tax jurisdictions, as well as the operating results in tax jurisdictions which do not result in a tax benefit.
Loss from investments in investees. We have invested in certain early-stage companies that we believe have valuable proprietary technology and the potential to create long-term value as an equity holder. We account for these investments under
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Table of Contents
the equity method of accounting. Loss from investments in investees was $5.0 million and an immaterial amount for the nine months ended September 30, 2026 and 2025, respectively. The increase was primarily attributable to the recognition of $5.0 million of previously suspended equity method losses associated with our investment in Cocrystal following our July 2026 purchase of additional shares of Cocrystal common stock. See Note 7 to our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q for further information.
LIQUIDITY AND CAPITAL RESOURCES
On September 30, 2026, we had cash, cash equivalents and restricted cash of approximately $403.2 million. Cash used in operating activities was $99.1 million for the nine months ended September 30, 2026, primarily reflecting research and development expenditures associated with our innovative pipeline programs, employee-related and general administrative expenses, and sales and marketing activities supporting our pharmaceutical operations. Cash provided by investing activities was $25.0 million for the nine months ended September 30, 2026, primarily reflecting $38.1 million of proceeds from the Oncology Transaction, including $18.4 million of earnout consideration received during the second quarter of 2026 and the release of approximately $19.8 million of escrow funds, including accrued interest during the third quarter of 2026. These inflows were partially offset by capital expenditures of $7.6 million and investments in investees of $5.2 million. Cash provided by financing activities was $96.3 million for the nine months ended September 30, 2026, primarily reflecting net proceeds of approximately $123.1 million from the issuance of an additional $125.0 million aggregate principal amount of 2044 Royalty Financing Notes and $2.8 million of net borrowings under lines of credit, partially offset by $28.4 million of share repurchases. We have historically not generated sustained positive cash flow sufficient to offset our operating and other expenses, and our primary sources of liquidity have been public and private issuances of equity and debt securities, asset dispositions, royalty financing arrangements and available credit facilities.
On September 15, 2025, we consummated the Oncology Transaction, pursuant to which Labcorp acquired BioReference’s oncology diagnostics and related clinical testing services assets for total consideration of $192.5 million, consisting of $173.3 million in cash and $19.2 million held in escrow, with approximately $19.8 million subsequently received including accrued interest. During September 2026, substantially all of the escrow funds, together with accrued interest, were released to the Company, net of any indemnification obligations.
On April 4, 2025, the Company announced that its Board of Directors has authorized an increase of $100.0 million to the Company’s existing Common Stock repurchase program, bringing the aggregate capacity of the program to $200.0 million. Approximately $115.7 million of Common Stock had been repurchased under the existing program since its authorization in July 2024. Under this program, the Company may repurchase shares from time to time through various methods, including open market purchases, block trades, privately negotiated transactions, accelerated share repurchases, as well as pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and otherwise in compliance with applicable laws. The timing and amount of any repurchases is subject to general market conditions, the Company's capital management, investment opportunities, and other factors. The repurchase program does not obligate the Company to repurchase any specific number of shares, has no time limit, and may be modified, suspended, or discontinued at any time at the Company's discretion.
On April 1, 2025, the Company consummated the Note Exchange Transactions related to its 2029 Convertible 144A Notes, pursuant to which the Company exchanged $159,221,000 aggregate principal amount of the 2029 Convertible 144A Notes for 121,437,998 shares of Common Stock and cash payments totaling approximately $63.5 million, inclusive of accrued and unpaid interest. The exchanged 2029 Convertible 144A Notes were subsequently retired. This debt retirement significantly reduced our long-term debt obligations and resulted in lower ongoing interest expense for the current period.
In September 2024, ModeX entered into two amendments (the “BARDA Amendments”) to modify the scope and funding of the BARDA Contract. The BARDA Amendments structured the funding thereunder as cost-plus-fixed-fee, which included a $26.9 million supplement to further advance the development of COVID-19 multispecific antibodies and provided $24.1 million for the development of a multispecific protein antibody for influenza or another pathogen. In December 2025, the Company entered into a further bilateral modification to de-scope all mRNA development-related efforts using SARS-CoV-2 as an antigen model, as these activities were no longer a priority for the U.S. Department of Health and Human Services. As a result, the total value of the BARDA Contract decreased from $110.0 million to $103.5 million, and the total potential value of the overall contract, inclusive of all options, decreased from $205.0 million to $198.5 million. As of September 30, 2026, the aggregate amount remaining to be funded by BARDA, which is subject to performance obligations and excluding unexercised contract options, was $33.5 million.
On July 17, 2024, the Company completed a private offering of $250.0 million aggregate principal amount of the 2044 Royalty Financing Notes. On August 13, 2026, the Company entered into a First Amendment to the Note Purchase Agreement pursuant to which the purchasers acquired an additional $125.0 million aggregate principal amount of 2044 Royalty Financing Notes, increasing the aggregate principal amount outstanding under the facility to $375.0 million. The amendment also expanded
55
Table of Contents
the repayment and collateral framework to include certain royalty payments receivable under the Company's license agreement with Eli Lilly related to Mazdutide. The Company accounted for the amendment as a modification of the existing debt. The 2044 Royalty Financing Notes bear interest at the three-month Secured Overnight Financing Rate (“SOFR”), subject to a 4.0% floor, plus 7.5% and mature in July 2044.
As of September 30, 2026, the total commitments under our lines of credit with financial institutions in Chile and Spain were $29.8 million, of which $12.0 million was drawn as of September 30, 2026. On September 30, 2026, the weighted average interest rate on these lines of credit was approximately 5.3%. These lines of credit are short-term and are used primarily as a source of working capital. The highest aggregate principal balance at any time outstanding during the nine months ended September 30, 2026 was $12.7 million. We intend to continue to draw under these lines of credit as needed. There is no assurance that these lines of credit or other funding sources will be available to us on acceptable terms, or at all, in the future.
Our liquidity will be impacted by the successful achievement of various milestones and the generation of royalty revenues under our existing collaboration and licensing agreements. As of September 30, 2026, the potential payments from these agreements (each as defined in Note 15 to our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q) were as follows:
Merck Agreement:
Restated Pfizer Agreement:
VFMCRP Agreement:
Nicoya Agreement:
Eli Lilly Agreement:
The timing and ultimate receipt of these milestone and royalty payments are subject to the achievement of the specified events and certain risks and uncertainties inherent in drug development and commercialization. For further discussion of these risks, please refer to “Item 1A-Risk Factors” of the Form 10-K.
We believe that the cash, cash equivalents and restricted cash on hand on September 30, 2026, together with anticipated cash flows from operations, available borrowings under our credit facilities and other sources of liquidity, will be sufficient to meet our anticipated cash requirements for operations and debt service beyond the next 12 months. We based this estimate on assumptions that may prove to be wrong or are subject to change, and we may be required to use our available cash resources
56
Table of Contents
sooner than we currently expect. If we acquire additional assets or companies, accelerate our product development programs or initiate additional clinical trials, we may need additional funds. Our future cash requirements, and the timing of those requirements, will depend on a number of factors, including the approval and success of our products and products in development, particularly our long acting Somatrogon (hGH-CTP) for which we have received approval in over 50 markets, including the United States, Europe, Japan, Australia and Canada, the commercial success of Rayaldee, the commercial launch of Mazdutide by our partners, possible acquisitions and dispositions, the continued progress of research and development of our product candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing, our success in developing markets for our product candidates and results of government investigations, payor claims, existing legal proceedings (including litigation with the Israel Tax Authority) and those that may arise in the future. We have historically not generated sustained positive cash flow and if we are not able to secure additional funding when needed, we may have to delay, reduce the scope of, or eliminate one or more of our clinical trials or research and development programs or possible acquisitions or reduce our marketing or sales efforts or cease operations.
The following table summarizes certain contractual obligations based on recognized balance sheet amounts and scheduled payments as of September 30, 2026. Lease obligations are presented at their recognized present value.
Contractual obligations |
|
Remaining |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
(In thousands) |
|
December 31, 2026 |
|
|
2027 |
|
|
2028 |
|
|
2029 |
|
|
2030 |
|
|
Thereafter |
|
|
Total |
|
|||||||
Open purchase orders |
|
$ |
42,801 |
|
|
$ |
1,742 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
44,543 |
|
Operating leases present value |
|
|
2,004 |
|
|
|
7,614 |
|
|
|
6,854 |
|
|
|
5,434 |
|
|
|
4,123 |
|
|
|
8,602 |
|
|
|
34,631 |
|
Finance leases present value |
|
|
349 |
|
|
|
1,045 |
|
|
|
207 |
|
|
|
204 |
|
|
|
204 |
|
|
|
1,613 |
|
|
|
3,622 |
|
2029 and 2033 Convertible Notes |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
92,408 |
|
|
|
— |
|
|
|
50 |
|
|
|
92,458 |
|
2044 Royalty Financing |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
370,225 |
|
|
|
370,225 |
|
Mortgages and other debts payable |
|
|
566 |
|
|
|
833 |
|
|
|
850 |
|
|
|
503 |
|
|
|
— |
|
|
|
— |
|
|
|
2,752 |
|
Lines of credit and current notes payable |
|
|
13,149 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
13,149 |
|
Interest commitments |
|
|
1,175 |
|
|
|
4,651 |
|
|
|
4,647 |
|
|
|
193 |
|
|
|
— |
|
|
|
— |
|
|
|
10,666 |
|
Total |
|
$ |
60,044 |
|
|
$ |
15,885 |
|
|
$ |
12,558 |
|
|
$ |
98,742 |
|
|
$ |
4,327 |
|
|
$ |
380,490 |
|
|
$ |
572,046 |
|
The contractual obligations presented above include obligations that will remain with the Company following completion of the planned disposition of substantially all remaining BioReference operations.
The preceding table does not include information with respect to the amounts of obligations that are not currently determinable, including the following:
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There were no material changes to our critical accounting policies and estimates described in our Form 10-K that have had a material impact on our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q and related notes.
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Table of Contents
RECENT ACCOUNTING PRONOUNCEMENTS
Accounting standards yet to be adopted.
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, Income Statement (Subtopic 220-40): Disaggregation of Income Statement Expenses is effective prospectively to financial statements issued for reporting period after the effective date or retrospectively to any or all prior periods presented in the financial statements, for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.
Recently adopted accounting standards.
In November 2024, the FASB issued ASU 2024-04, Debt (Subtopic 470-20): Debt with Conversion and Other Options. (“ASU 2024-04”) clarifies the assessment of whether a transaction should be accounted for as an induced conversion or extinguishment of convertible debt when changes are made to conversion features as part of an offer to settle the instrument. ASU 2024-04 is effective for reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods. Early adoption is permitted for entities that have adopted ASU 2020-06. We adopted ASU 2024-04 prospectively effective January 1, 2025. The adoption of ASU 2024-04 did not have a material impact on our condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q.
In 2021, the Organization for Economic Co-operation and Development (“OECD”) established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution (“Pillar Two”) to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate. On December 15, 2022, the EU member states agreed to implement the OECD’s global minimum tax rate of 15%. The OECD issued Pillar Two model rules and continues to release guidance on these rules. Various participating countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax, some effective beginning in 2024. We considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and there is no material impact to our tax results for the period. We anticipate further legislative activity and administrative guidance, and will continue to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in.
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Table of Contents
Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest rates.
Foreign Currency Exchange Rate Risk – We operate globally, and we are subject to foreign exchange risk in our commercial operations as portions of our revenues are exposed to changes in foreign currency exchange rates, primarily those for the Chilean peso and the euro.
From time to time, we manage our exposure to fluctuations in foreign currency exchange rates through the use of foreign exchange forward contracts. Certain firmly committed transactions may be hedged with foreign exchange forward contracts. As exchange rates fluctuate, gains and losses on the exposed transactions are partially offset by gains and losses related to the hedging contracts. Both the exposed transactions and the hedging contracts are translated and fair valued, respectively, at current spot rates, with gains and losses included in earnings. We do not enter into foreign exchange or other derivative contracts for trading or speculative purposes.
Our derivative activities, which consist of foreign exchange forward contracts, are intended to economically hedge forecasted cash flows that are exposed to foreign currency risk. The foreign exchange forward contracts generally require us to exchange local currencies for foreign currencies based on pre-established exchange rates at the contracts’ respective maturity dates. As exchange rates change, gains and losses on these contracts are generated based on the change in the exchange rates that are recognized in the Condensed Consolidated Statements of Operations and offset the impact of the change in exchange rates on the foreign currency cash flows that are hedged. If the counterparties to the exchange contracts do not fulfill their obligations to deliver the contracted currencies, our results of operations could be negatively impacted due to effectively unhedged currency related fluctuations. Our foreign exchange forward contracts primarily hedge exchange rates on the Chilean peso to the U.S. dollar. If the Chilean peso were to strengthen or weaken in relation to the U.S. dollar, our loss or gain on the hedged foreign currency cash flows would be substantially offset by the derivative contracts.
Approximately 79.2% of our revenue for the nine months ended September 30, 2026 was denominated in currencies other than the U.S. Dollar (USD). This compares to 72.7% for the same period in 2025. Our financial statements are reported in USD; therefore, fluctuations in exchange rates affect the translation of foreign-denominated revenue and expenses. During the nine months ended September 30, 2026 and the year ended December 31, 2025, our most significant currency exchange rate exposures were to the Chilean peso and euro. Gross accumulated currency translation adjustments, recorded as a separate component of shareholders’ equity, totaled $29.9 million and $17.6 million at September 30, 2026 and December 31, 2025, respectively. For information on such open foreign exchange forward contracts for the nine months ended September 30, 2026 and 2025 see “Management’s Discussion and Analysis—Results of Operations— Foreign Currency Exchange Rates.” We do not engage in trading market risk sensitive instruments or purchasing hedging instruments or “other than trading” instruments that are likely to expose us to significant market risk, whether interest rate, foreign currency exchange, commodity price, or equity price risk.
Interest Rate Risk – Our exposure to interest rate risk relates to our cash and investments and to our borrowings. We generally maintain an investment portfolio of money market funds and marketable securities. The securities in our investment portfolio are not leveraged and are subject to minimal interest rate risk due to their very short-term nature. We currently do not hedge interest rate exposure. Because of the short-term maturities of our investments, we do not believe that a change in interest rates would have a significant negative impact on the value of our investment portfolio except for reduced income resulting from declining interest rates.
At September 30, 2026, we had cash, cash equivalents and restricted cash of $403.2 million. The weighted average interest rate related to our cash, cash equivalents and restricted cash for the nine months ended September 30, 2026 was approximately less than 1%. As of September 30, 2026, the principal outstanding balance under our Chilean and Spanish lines of credit was $12.0 million in the aggregate at a weighted average interest rate of approximately 5.3%.
Our 2044 Royalty Financing Notes bear interest at a variable rate based on three-month SOFR, subject to a 4.0% floor, plus 7.5%. Accordingly, increases in three-month SOFR above the applicable floor would increase our interest expense. Based on the $375.0 million principal amount outstanding as of September 30, 2026, a hypothetical 100 basis point increase in three-month SOFR would increase annual interest expense by approximately $3.8 million. The Company is exposed to interest rate risk associated with changes in SOFR; however, the impact of such changes will depend on the amount outstanding under the facility and prevailing interest rates at the applicable measurement date.
Our outstanding convertible senior notes have fixed rates of interest; therefore, we are not exposed to interest rate risk on those instruments.
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The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we may invest our excess cash in debt instruments of the U.S. Government and its agencies, bank obligations, repurchase agreements and high-quality corporate issuers, and money market funds that invest in such debt instruments, and, by policy, restrict our exposure to any single corporate issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, we maintain investments at an average maturity of generally less than three months.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the Securities and Exchange Commission. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on management’s evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2026.
Changes to the Company’s Internal Control Over Financial Reporting
There have been no changes to the Company’s internal control over financial reporting that occurred during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
See Note 13 Commitments and Contingencies to the Company’s Condensed Consolidated Financial Statements.
Item 1A. Risk Factors
There have been no material changes to our risk factors as previously disclosed in our Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The following table presents our share repurchase activity for the quarter ended September 30, 2026.
Period |
|
Total Number of Shares Purchased |
|
|
Average Price Paid per Share |
|
|
Total number of Shares Purchased as Part of Publicly Announced Plans or Programs |
|
|
Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs |
|
||||
July 1, 2026 to July 31, 2026 |
|
|
1,450,000 |
|
|
$ |
1.44 |
|
|
|
1,450,000 |
|
|
|
92,529,825 |
|
August 1, 2026 to August 31, 2026 |
|
|
3,950,000 |
|
|
|
1.43 |
|
|
|
3,950,000 |
|
|
|
86,937,570 |
|
September 1, 2026 to September 30, 2026 |
|
|
1,650,000 |
|
|
|
1.61 |
|
|
|
1,650,000 |
|
|
|
84,316,395 |
|
Total |
|
|
7,050,000 |
|
|
$ |
1.49 |
|
|
|
7,050,000 |
|
|
|
84,316,395 |
|
Item 3. Defaults Upon Senior Securities
None.
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Item 4. Mine Safety Disclosures
Not Applicable.
Item 5. Other Information
During the quarter ended September 30, 2026,
Item 6. Exhibits
Exhibit 2.1†# |
Asset Purchase Agreement, dated as of October 14, 2026 by and among BioReference Health, LLC, OPKO Health, Inc. and Laboratory Corporation of America Holdings, filed with the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on October 15, 2026, and incorporated herein by reference. |
Exhibit 10.1†#*
|
First Amendment to Note Purchase Agreement, dated August 13, 2026, by and among the Company, certain purchasers party thereto, OPKO Biologics Ltd., Eirgen Pharma Limited and HCR Injection SPV, LLC as agent. |
Exhibit 10.2* |
Form of Note dated August 13, 2026. |
Exhibit 31.1* |
Certification by Phillip Frost, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended September 30, 2026. |
Exhibit 31.2* |
Certification by Adam Logal, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended September 30, 2026. |
Exhibit 32.1** |
Certification by Phillip Frost, Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended September 30, 2026. |
Exhibit 32.2** |
Certification by Adam Logal, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended September 30, 2026. |
Exhibit 101.INS |
Inline XBRL Instance Document |
Exhibit 101.SCH |
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
Exhibit 104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
† Pursuant to Item 601(a)(5) of Regulation S-K, schedules and similar attachments to this exhibit have been omitted because they do not contain information material to an investment or voting decision and such information is not otherwise disclosed in such exhibit. The Company will supplementally provide a copy of any omitted schedule or similar attachment to the U.S. Securities and Exchange Commission or its staff upon request.
# Pursuant to Item 601(b)(2)(ii) of Regulation S-K, certain provisions and terms of this exhibit have been redacted because the Company customarily and actually treats that information as private or confidential and the omitted information is not material. The Company will supplementally provide an unredacted copy of this exhibit to the U.S. Securities and Exchange Commission or its staff upon request.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 4, 2026 |
OPKO Health, Inc. |
|
|
|
/s/ Adam Logal |
|
Adam Logal |
|
Senior Vice President and Chief Financial |
|
Officer |
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