OPKO Health's Q3 2025: Contradictions Emerge on Diagnostics Growth, Regulatory Milestones, MDX2001 Dosing, and Profitability Expectations

Date of Call: October 29, 2025

Financials Results

• Revenue: $151.6M consolidated (Diagnostics $95.2M vs $121.3M in Q3 2024; Pharmaceutical $56.4M, up 8% YOY from $52.4M)
• EPS: $0.03 per basic and diluted share; net income $21.6M vs $24.9M in Q3 2024 (Q3'24: $0.04 basic, $0.03 diluted)

Guidance:

• Q4 2025 revenue expected $135M–$140M (services $70M–$75M; products $40M–$45M; other $25M–$30M incl. Pfizer $10M–$12M, BARDA $7M–$9M).
• Q4 2025 total costs & expenses expected $175M–$180M (excluding nonrecurring/restructuring).
• R&D for Q4 expected $30M–$35M; depreciation & amortization ~ $24M.
• Expect Diagnostics breakeven in Q4 2025 and BioReference profitable with low-single-digit revenue growth in 2026.
• Pharma expected to grow mid-single-digits and improve operating income by low-double-digits in 2026; NGENLA profit share ~$32M–$35M.
• Plan to invest up to $100M in R&D in 2026 net of partnering reimbursements.

Business Commentary:

• BioReference Strategic Transformation:
• The sale of BioReference Health's oncology division to Labcorp provided $192.5 million at closing and $32.5 million in performance-based earn-out.

• This transaction was a strategic milestone aimed at streamlining lab operations, focusing on core clinical testing services, and driving adoption of the 4Kscore test nationwide.

• 4Kscore Test Growth and Market Expansion:

• The 4Kscore test volume increased by over 20% in Q3 compared to the previous year, with continued growth expected due to a recent FDA label expansion.

• The label change allows the test to be used without a digital rectal exam, opening it for adoption by primary care physicians who perform most PSA screenings, leading to increased market penetration.

• Financial Performance and Share Repurchase:

• OPKO Health's financial results showed net income of $21.6 million in Q3 2025, with over $428 million in cash, cash equivalents, and restricted cash.

• The company has repurchased $25.1 million worth of stock in 2025, with $126 million remaining under the current buyback program, reflecting a commitment to shareholder value enhancement.

• Research and Development Advancements:

• OPKO Health's ModeX division has advancing programs, including MDX2004 entering Phase I trials and MDX2003 expecting clinic entry in early 2026.
• The new research collaboration with Regeneron is expected to generate potential revenue of over $1 billion via milestone payments and tiered royalties for multiple programs, showcasing the potential of OPKO's R&D capabilities.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted strategic progress: sale of oncology assets yielding $192.5M at close plus $32.5M earn-out, $428M+ cash, $25.1M repurchases YTD, Regeneron collaboration and multiple ModeX programs entering or advancing in Phase I, and an expectation to reach Diagnostics breakeven in Q4 2025 with improved consolidated operating income ($48.1M vs $14.2M year-ago).

Q&A:

• Question from Maurice Raycroft (Jefferies LLC): How many patients have you dosed at the fifth dose level for MDX2001; will you proceed to dose level 6; any more color on safety or efficacy signals?
  Response: MDX2001: currently five patients at the fifth dose level (total ~30 patients exposed overall); will proceed to dose level 6 after observation period; too few patients for efficacy conclusions now.

• Question from Maurice Raycroft (Jefferies LLC): For the 4Kscore label expansion and the ~20% volume growth, is that growth directly related to the label change and how should we view 4Kscore's contribution going forward?
  Response: Recent 20% volume growth is largely independent of this quarter's label expansion; the new label expands access to primary care (no DRE required) and creates a larger addressable market, but commercialization will take time; management will provide more granularity going forward.

• Question from Yi Chen (H.C. Wainwright & Co): Can you give more color on the Regeneron collaboration scope (oncology only?) and how many programs are included?
  Response: Collaboration covers multiple therapeutic areas (oncology, immunology, metabolism) with four initial programs (expandable); Regeneron funds development and commercialization and will reimburse preclinical costs.

• Question from Yi Chen (H.C. Wainwright & Co): Do milestone payments include preclinical and clinical milestones and could first milestones occur in 2026?
  Response: Yes — milestones span preclinical through clinical; Regeneron reimburses preclinical work and milestones include post-Phase I development, and near-term milestones could reasonably occur in 2026.

• Question from Kevin DeGeeter (Ladenburg Thalmann): How will you select patients/tumor types for MDX2001 Phase Ib expansion?
  Response: After establishing safety/biologic activity, select tumor types with high CMet and Trop2 expression and those more likely to respond to immunotherapy (priority: NSCLC, renal cell, certain melanoma PD-1 failures), with potential expanded basket cohorts thereafter.

• Question from Kevin DeGeeter (Ladenburg Thalmann): What are the baked-in gross margin assumptions for the remaining diagnostic services assets?
  Response: Management expects diagnostic gross margins in Q4 to be mid-20s% and to reach high-20s%–low-30s% in H1 2026.

• Question from Edward Tenthoff (Piper Sandler): Beyond the Merck EBV deal, are there other partner updates in infectious diseases for ModeX?
  Response: Yes — BARDA-funded flu and COVID programs advancing (flu preclinical encouraging), ongoing discussions in HIV, and potential to move more infectious-disease candidates into Phase I; management continues partner discussions.

• Question from Edward Tenthoff (Piper Sandler): What other indications might MDX2004 (immune rejuvenator) be developed for beyond oncology?
  Response: MDX2004 could be explored for chronic infections and immune-deficient populations (hepatitis B, chronic infections, diabetics, HIV) once safety is established.

• Question from Edward Tenthoff (Piper Sandler): Could MDX2004 be combined with multispecific cancer assets?
  Response: Yes — combinations are feasible (with PD-1s, CAR-Ts or other immunotherapies); will require experimental data but is a clear potential path.

• Question from Yale Jen (Laidlaw & Co.): Do you anticipate Merck will report Phase I EBV vaccine data in the near term or wait until Phase II?
  Response: Merck will decide timing, but management expects Merck to report results when data are complete; reporting is likely and will inform Phase II design.

• Question from Yale Jen (Laidlaw & Co.): Will Merck or OPKO publicly announce the start of Phase II if they proceed?
  Response: Yes — the decision and Phase II initiation would be publicly shared and necessary to recruit the target population.

• Question from Yale Jen (Laidlaw & Co.): Why design the CD19/CD20-targeting tetraspecific when expression overlaps — what's the rationale?
  Response: Dual targeting prevents or delays antigen-loss escape variants (tumors can downregulate one antigen post-therapy); the molecule works if it binds either antigen, enabling broader and more durable control and potential earlier-line use.

• Question from Michael Petusky (Barrington Research): Is the $4.2M severance in addition to the $25.2M costs associated with the sold assets?
  Response: Yes — the $4.2M severance is separate from the $25.2M of costs tied to the sold oncology assets.

• Question from Michael Petusky (Barrington Research): Will you provide YTD or Q3 revenue disclosure for 4Kscore?
  Response: Not disclosed yet; management will take the request and begin providing more clarity on 4Kscore revenue metrics going forward.

• Question from Michael Petusky (Barrington Research): For the 2026 lab low-single-digit growth guide, what are the assumptions on volume and pricing?
  Response: Assumes low-single-digit volume growth and stable pricing; potential upside exists if 4Kscore reimbursement improves.

• Question from Michael Petusky (Barrington Research): Comments on the Pfizer profit-share guide and conversion to weekly dosing?
  Response: Market conversion to long-acting formulations is slower than expected; Pfizer holds ~1/3 market share globally per IQVIA/Symphony data; management modeled a 10%–15% increase in profit share over current year, targeting ~$32M–$35M in 2026.

• Question from Michael Petusky (Barrington Research): You said 4Kscore volumes were up ~20% in the quarter — is revenue up roughly the same?
  Response: Yes — 4Kscore revenue increased roughly in line with the ~20% volume growth.

Contradiction Point 1

Diagnostics Growth and Market Expansion

It involves differing views on the growth and market expansion of the Diagnostics business, particularly the 4Kscore test, which could impact investor expectations and strategic planning.

Is the 4Kscore's 20% growth due to label expansion? - Maurice Raycroft (Jefferies LLC, Research Division)

2025Q3: The growth in 4Kscore is not directly related to the label expansion, which changes to include use without a digital rectal exam. The new label allows for adoption by primary care doctors, expanding the market. - Elias Zerhouni(President & Vice Chairman)

What are your EBITDA profitability expectations for Q3 and Q4? What is the expected growth in 4Kscore test sales after the supplemental application approval? - James D Stamos (Jefferies)

2025Q2: The 4Kscore test grew 12% in Q2 and is expected to accelerate further with the FDA label change, opening the market for primary care providers. - Adam E. Logal(CFO)

Contradiction Point 2

Regulatory Collaboration and Milestones

It involves differing interpretations of the collaboration and milestone payments with Regeneron, which could affect partnership strategies and financial projections.

Do milestone payments include preclinical and clinical milestones? When might the first 2026 milestone occur? - Yi Chen (H.C. Wainwright & Co, LLC, Research Division)

2025Q3: Yes, the agreement includes preclinical and post-Phase I milestones. The first milestone could occur in 2026 after reimbursement for preclinical studies and costs. - Elias Zerhouni(President & Vice Chairman)

How does the collaboration with Regeneron differ from that with Novartis? - Yi Chen (H.C. Wainwright & Co, LLC, Research Division)

2025Q2: We now have a multiyear collaboration with Regeneron to work on new metabolic and oncology targets using their antibody library with an exclusive license to their excluded antibody targets. - Elias Zerhouni(President & Vice Chairman)

Contradiction Point 3

Diagnostic Service Business Growth and Profitability

It involves differing expectations and explanations for the growth and profitability of the diagnostic service business, which is a significant component of OPKO Health's revenue.

Is the 20% growth in 4Kscore directly related to label expansion? - Maurice Raycroft (Jefferies LLC, Research Division)

2025Q3: On an annualized basis, the 4Kscore is up around 20% versus 2024... Growth is accelerating, and we're working with payers to align volume potential with policies. We anticipate further growth as primary care doctor adoption increases. - Adam Logal(CFO)

Could you provide an update on the Diagnostics business? - Jeffrey Cohen (Ladenburg Thalmann)

2025Q1: On an annualized basis, the kind of remaining business sits between $310 million and $320 million. - Adam Logal(CFO)

Contradiction Point 4

MDX2001 Dosing and Efficacy Signals

It involves the dosing and efficacy signals of MDX2001, which are critical for the advancement and potential success of the drug in clinical trials.

How many patients have been dosed at dose level 5 for MDX2001, and will you proceed to dose level 6? Have any efficacy signals been observed? - Maurice Raycroft (Jefferies LLC, Research Division)

2025Q3: Five patients have been dosed at the fifth dose level of MDX2001. The dose level 6 will likely be attempted, contingent upon the appropriate observation period. - Gary Nabel(CIO)

What are your expectations for ModeX data this year, especially regarding cancer programs? - Edward Tenthoff (Piper Sandler & Co., Research Division)

2024Q4: Safety and tolerability data for MDX-2001 is expected by Q4 2025, with efficacy signals potentially in 2026. - Elias Zerhouni(VP & President)

Contradiction Point 5

Diagnostic Service Business Profitability

It concerns the profitability expectations for the diagnostic service business, which is crucial for financial forecasting and investor confidence.

What are the underlying assumptions for achieving sustainable gross margins in the diagnostic services business? - Kevin DeGeeter (Ladenburg Thalmann & Co. Inc., Research Division)

2025Q3: Q4 gross margins expected to be in the mid-20s, with Q1 expected to reach high 20s to low 30s. - Adam Logal(SVP & CFO)

When will BioReference reach profitability and how to balance spending while expanding the oncology testing menu? - Maurice Raycroft (Jefferies)

2024Q4: BioReference is on track to achieve breakeven in Q1 and profitability thereafter. Non-recurring costs of $4-8 million are expected in Q1. - Adam Logal(CFO)