Key Takeaways:
OPKO Health reported a second-quarter loss of 1 cent per share, narrower than the consensus estimate of a loss of 8 cents, as pharmaceutical revenue surged 59.8% and the company raised its full-year revenue outlook.
"The better-than-expected performance reflected higher pharmaceutical revenues, including income related to the amended Nicoya licensing agreement," management said in the earnings release.
Revenue rose 4.3% year over year to $163.5 million, surpassing the $131.1 million consensus by 24.7%. Pharmaceutical revenue climbed to $89 million from $55.7 million a year earlier, driven by higher product sales and intellectual property transfers tied to the Nicoya deal. Diagnostics revenue fell 26.3% to $74.5 million, reflecting the September 2025 sale of oncology assets to Labcorp, which contributed $24.9 million in the prior-year quarter. Excluding the divestiture, core diagnostics revenue edged down to $68.2 million from $69.3 million.
Gross margin expanded to 48.9% from 31.5%, as gross profit rose to $80 million from $49.4 million. Total costs and expenses declined 21.4% to $170.5 million, with cost of service revenue falling 29.1%. The consolidated operating loss narrowed to $7 million from $60 million, aided by an $18.1 million Labcorp earnout gain. The diagnostics segment swung to an operating income of $4.8 million from an $18.2 million loss a year ago.
Product revenue rose 5.4% to $42.9 million, supported by higher sales in Spanish and Mexican operations and a $1.8 million favorable currency impact. RAYALDEE revenue increased to $8.1 million from $7.2 million, benefiting from favorable gross-to-net adjustments. Management said international pharmaceutical operations continued to perform well and RAYALDEE sales exceeded internal expectations.
OPKO exited the quarter with $314.4 million in cash, down from $341.9 million at the end of the first quarter. The company repurchased $13.2 million of common stock during the period, bringing cumulative buybacks to $105.3 million under the existing authorization, with $94.7 million remaining.
For the third quarter, OPKO expects total revenue of $131 million to $142 million, including service revenue of $73 million to $78 million, product revenue of $40 million to $44 million, and intellectual property and other revenue of $16 million to $20 million. Management raised full-year 2026 revenue guidance to $560 million to $585 million from the prior range of $530 million to $560 million and lowered the cost and expense outlook to $710 million to $740 million.
Within the pipeline, ModeX is enrolling patients in Phase 1 studies of MDX2003 for B-cell lymphoma, MDX2001 for solid tumors, and MDX2004 for heavily pretreated cancers. A BARDA-funded Phase 1 study of MDX2301 for COVID-19 prevention is expected to complete enrollment in the third quarter, with early data targeted for late 2026 or early 2027. The company also initiated a Phase 1/2a study of OPK-88006, a once-weekly dual GLP-1/glucagon agonist, in healthy volunteers and patients with presumed MASH. OPKO plans to advance a long-acting growth hormone receptor antagonist, OPK8801001, into clinical trials by year-end.
Shares rose 11.3% in pre-market trading. The guidance raise signals management expects pharmaceutical momentum to continue, driven by the Nicoya partnership and international operations. Investors will watch for early data from the ModeX and GLP-1 programs in late 2026 and early 2027 as potential catalysts.
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