What changed in this filing

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Item 1A. Risk Factors

2023-02-27 compared with 2022-03-01 · 102 added, 85 removed, 738 unchanged (20% of the section changed)

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RISKS RELATED TO OUR BUSINESS

Our business has been, and may continue to be, affected by the coronavirus disease 2019 (COVID-19) outbreak.

The outbreak of the coronavirus disease 2019 (COVID-19) has evolved into a global pandemic, significantly affecting the U.S.

and most countries around the world.

The extent to which this coronavirus impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning the virus, including variants of the virus, and the actions to contain the spread of or to detect, prevent, or treat COVID-19, among others.

As a result of the demand for COVID-19 testing, the Company’s overall testing volume has increased significantly, which has positively impacted its operations.

Simultaneously, however, demand for tests that comprise the Company’s core testing business has declined.

Should the demand for COVID-19 PCR testing decline, whether from the introduction of new technologies, vaccines or therapies or a reduction in infection rates, our business, including our sales and operations, could be materially adversely affected.

Because the demand and duration of the need for COVID-19 testing are uncertain, the Company could experience significant volatility in its results of operations if the demand for testing declines and such demand is not offset by an increase in demand for the services provided by the Company’s core testing business.

We may also experience supply chain disruptions, including shortages, delays and price increases in testing equipment and supplies as a result of global disruptions in healthcare markets, which could materially adversely impact our business.

It is also possible that the Company will experience an adverse impact on cash collections as a result of the COVID-19 pandemic.

Governments have implemented travel restrictions and quarantine policies which may have a material adverse economic effect on our business.

Such restrictions may present challenges in connection with our laboratory business, our ability to successfully commercialize Rayaldee , our ability to manufacture pharmaceutical products in Ireland, Mexico, Spain, Chile and Israel, and our ability to continue clinical development of our product candidates.

Further, if the spread of the coronavirus pandemic continues and our operations are adversely impacted, our ability to meet performance obligations under contracts may be impacted.

COVID-19 could also disrupt our operations due to absenteeism by infected or ill members of management or other employees, or absenteeism by members of management and other employees who elect not to come to work due to the illness affecting others in our office or laboratory facilities, or due to quarantines.

The regulatory framework governing laboratories, diagnostic and pharmaceutical companies may be affected as governmental authorities divert resources to respond to the COVID-19 outbreak, which may have an unanticipated and unforeseen impact on our operations.

It is possible that the timing of regulatory submissions and approvals for our products, including hGH-CTP, will be adversely impacted or delayed.

With respect to our ongoing and planned clinical trials, restrictions and efforts to avoid further spread of COVID-19 may present challenges to the conduct of these trials consistent with normally applicable approaches and good clinical practice standards, and although regulators including the FDA have offered guidance applicable during the COVID-19 pandemic allowing for flexibility of standards in certain areas and alternate methods of meeting trial oversight obligations (for example, via remote monitoring), the potential impact of these challenges cannot be fully predicted at this time.

We have had a history of operating losses and may not be able to sustain profitability in the near future.

BioReference’s COVID-19 testing volume has positively impacted our profitability, but we had, prior to 2020, incurred losses since our inception.

We have had a history of operating losses and may not be able to achieve profitability in the near future.

BioReference’s COVID-19 testing volume positively impacted our profitability during 2020-2021.

Prior to 2020, we had incurred losses since our inception, and after achieving profitability for the years ended December 31, 2020 and 2021, we incurrent a net loss for the year ended December 31, 2022.

We may not continue to generate substantial revenue from COVID-19 testing as vaccine use is adopted and infection rates decline, unless such decline is offset by significant revenue generation from our other income streams.

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We continue to incur substantial research and development and general and administrative expenses related to our operations including our pre-clinical development activities and clinical trials.

We may incur losses from our operations in the future and these losses could increase as we continue our research activities and conduct development of, and seek regulatory approvals and clearances for, our product candidates, particularly if we are unable to generate or sustain profits and cash flow from sales of Rayaldee, NGENLA,

or our operations at BioReference.

If we are unable to generate or sustain profits and cash flow from our operations, our product candidates fail in clinical trials or do not gain regulatory approval or clearance, or if our approved products and product candidates do not achieve market acceptance, we may no longer be profitable.

We may continue to incur losses from our operations in the future and these losses could increase as we continue our research activities and conduct development of, and seek regulatory approvals and clearances for, our product candidates, particularly if we are unable to generate or sustain profits and cash flow from sales of Rayaldee, NGENLA, or our operations at BioReference.

If we are unable to generate or sustain profits and cash flow from our operations, our product candidates fail in clinical trials or do not gain regulatory approval or clearance, or if our approved

products and product candidates do not achieve market acceptance, we may not achieve profitability.

In particular, if we are unable to successfully commercialize Rayaldee or NGENLA, we may never generate substantial revenues from Rayaldee or NGENLA.

If we are unable to obtain FDA approval for Somatrogon in the U.S., we will not be able to commercialize Somatrogon in the U.S.

If we are unable to obtain FDA approval for Somatrogon (hGH-CTP) in the U.S., we will not be able to commercialize Somatrogon (hGH-CTP) in the U.S.

and will therefore not generate revenues from NGENLA in the U.S.

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Prior to 2020, we had not generated sustained positive cash flows sufficient to offset our operating and research and development expenses and our primary sources of cash has been from the public and private placement of stock, the issuance of convertible notes and credit facilities available to us.

While we have generated significant cash from operations as a result of testing related to the COVID-19 pandemic, we are unable to predict how long the demand will continue for our COVID-19 related testing, whether pricing and reimbursement policies for testing will sustain, or whether further restrictions will be placed on elective procedures or if stay at home orders will be reinstated and accordingly, the sustainability of the cash flow is uncertain.

While we have generated significant cash from operations as a result of testing related to the COVID-19 pandemic, demand for our COVID-19 related testing has waned, and we are unable to predict whether pricing and reimbursement policies for testing will sustain, or whether restrictions will be placed on elective procedures or if stay at home orders will be reinstated and accordingly, the sustainability of the cash flow is uncertain.

If we are unable to generate a sufficient amount of product and service revenue to finance our cash requirements for research, development and operations, we will need to finance future cash needs primarily through public or private equity offerings, debt financings, or strategic collaborations.

Our ability to obtain additional capital may depend on prevailing economic conditions and financial, business and other factors beyond our control, as well as our ability to comply with credit facilities and other loan requirements.

The amended and restated credit agreement (the “A&R Credit Agreement”) with JPMorgan Chase Bank, N.A.

The amended and restated credit agreement, dated August 30, 2021 (as amended, the “ Credit Agreement”) with JPMorgan Chase Bank, N.A.

(“CB”) governing our revolving credit facility with CB contains, and other agreements that govern our indebtedness may contain restrictive and financial covenants that impose restrictions on us and certain of our subsidiaries, including covenants that require us to maintain specified financial ratios.

We have obtained waivers and/or amended our revolving credit facility with CB from time to time in the past to avoid a default under certain covenants, and our ability to comply with these financial covenants may be adversely affected in the future.

Failure to comply with specified financial covenants and other requirements could result in an event of default under our A&R Credit Agreement and/or other lenders, which, if not cured or waived, could restrict us from utilizing the facility or accelerate any repayment obligations we may have under the facility and which could have a material adverse effect on our financial condition.

Failure to comply with specified financial covenants and other requirements could result in an event of default under our Credit Agreement and/or other lenders, which, if not cured or waived, could restrict us from utilizing the facility or accelerate any repayment obligations we may have under the facility and which could have a material adverse effect on our financial condition.

Disruptions in the U.S.

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To the extent that we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or our products and product candidates or grant licenses on terms that may not be favorable to us.

Our business has been, and may continue to be, affected by the coronavirus disease 2019 (COVID-19) outbreak.

The outbreak of the coronavirus disease 2019 (COVID-19) evolved into a global pandemic, significantly affecting the U.S.

and most countries around the world.

In 2022, testing needs for COVID-19 declined as a result of declining infection rates and the normalization of living with COVID-19 following the increase in accessibility to COVID-19 vaccines and antiviral treatments.

The extent to which this coronavirus continues to impact our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning the virus, including variants of the virus, and the actions to contain the spread of or to detect, prevent, or treat COVID-19, among others.

As a result of the demand for COVID-19 testing, the Company’s overall testing volume increased significantly in 2020 and 2021, which positively impacted its operations in such years.

Simultaneously, however, demand for tests that comprise the Company’s core testing business has declined.

As the demand for COVID-19 PCR testing declined in 2022, we have seen a gradual increase in the demand for services of our core testing business.

The demand and duration of the need for COVID-19 testing are uncertain, however, and the Company could experience significant volatility in its results of operations if the demand for testing increases again and the demand for the services provided by the Company’s core testing business decreases.

It is also possible that the Company will experience an adverse impact on cash collections as a result of the COVID-19 pandemic.

It is possible that the timing of regulatory submissions and approvals for our productswill be adversely impacted or delayed.

Our research and development activities may not result in commercially viable products.

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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.

EirGen received an initial upfront payment of $5 million and is eligible to receive an additional $5 million upon the

first to occur of (A) a predetermined milestone and (B) the first anniversary of the effective date.

EirGen received an initial upfront payment of $5 million and was eligible to receive an additional $5 million upon the first to occur of (A) a predetermined milestone and (B) the first anniversary of the effective date (the “First Milestone”).

However, the parties amended the Nicoya Agreement to provide that Nicoya pay $2.5 million plus accrued interest by October 31, 2022 in partial satisfaction of the First Milestone, and $2.5 million upon the earlier of (i) submission of the investigational new drug application by Nicoya or its affiliated party, and (ii) February 15, 2023.

EirGen is also eligible to receive up to an additional aggregate amount of $115 million upon the achievement of certain development, regulatory and sales-based milestones by Nicoya for the Nicoya Product in the Nicoya Territory.

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If we do not successfully develop Somatrogon (hGH- CTP) and/or Pfizer does not successfully commercialize Somatrogon (hGH-CTP ), our business could be adversely affected.

In December 2014, we entered into a development and commercialization agreement with Pfizer relating to our long-acting hGH- CTP for the treatment of GHD in adults and children (the “Pfizer Agreement”).

In December 2014, we entered into a development and commercialization agreement with Pfizer relating to our long-acting hGH-CTP for the treatment of GHD in adults and children (the “ Original Pfizer Agreement”).

Under the Pfizer Agreement, we are eligible to receive up to $275 million upon the achievement of certain regulatory milestones.

Upon the launch of Somatrogon (hGH-CTP) for pediatric GHD, we are eligible to receive a regional, tiered gross profit share based upon sales of both Somatrogon and Pfizer’s Genotropin® (somatropin).

Upon the launch of Somatrogon (hGH-CTP) for pediatric GHD, we are eligible to receive a regional, tiered gross profit share based upon sales of both Somatrogon (hGH-CTP) and Pfizer’s Genotropin® (somatropin).

We are responsible for the development program and are obligated to pay for the development up to an agreed cap, which has been exceeded.

In May 2020, we entered into an Amended and Restated Development and Commercialization License Agreement (the “Restated Pfizer Agreement”) with Pfizer, effective January 1, 2020, pursuant to which the parties agreed, among other things, to share all costs for Manufacturing Activities, as defined in the Restated Pfizer Agreement, for developing a licensed product for the three indications included in the Agreement.

The Restated Pfizer Agreement did not change the milestone payments, royalties and profit share provisions under the Original Pfizer Agreement.

While hGH-CTP has been approved in the EU, Japan, Canada and Australia under the name NGENLA, Pfizer received a Complete Response Letter from the FDA in January 2022 in response to the BLA we and Pfizer submitted in 2020.

We and Pfizer are evaluating the FDA’s comments and will work with the agency to determine an appropriate path forward.

In the event that the parties are able to obtain regulatory approvals to market a product covered by the Pfizer Agreement, we will be substantially dependent on Pfizer for the successful commercialization of such product.

We and Pfizer have evaluated the FDA’s comments and will work with the agency to determine an appropriate path forward.

In the event that the parties are able to obtain regulatory approvals to market a product covered by the Restated Pfizer Agreement, we will be substantially dependent on Pfizer for the successful commercialization of such product.

The success of the collaboration arrangement with Pfizer is dependent in part on, among other things, the skills, experience and efforts of Pfizer’s employees responsible for the project and Pfizer’s commitment to the arrangement.

The Pfizer Agreement is terminable for any reason by Pfizer upon ninety days written notice to OPKO.

In the event that Pfizer terminates the Agreement or fails to devote sufficient resources to successfully develop and commercialize any product resulting from the collaboration arrangement, our ability to earn milestone payments or receive royalty or profit sharing payments would be adversely affected, which would have a material adverse effect on our financial condition and prospects and the trading prices of our securities.

The Restated Pfizer Agreement is terminable for any reason by Pfizer upon ninety days written notice to OPKO.

In the event that Pfizer terminates the Agreement or fails to devote sufficient resources to continue to successfully develop and commercialize any product resulting from the collaboration arrangement, our ability to earn milestone payments or receive royalty or profit sharing payments would be adversely affected, which would have a material adverse effect on our financial condition and prospects and the trading prices of our securities.

Our business is substantially dependent on our ability to achieve regulatory approval for the marketing of Somatrogon (hGH-CTP) in pediatric and adult patients and the commercial success of this product.

On October 21, 2019, we and Pfizer announced that the global phase 3 trial evaluating hGH-CTP (Somatrogon) dosed once-weekly in pre-pubertal 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.

On October 21, 2019, we and Pfizer announced that the global phase 3 trial evaluating Somatrogon (hGH-CTP) dosed once-weekly in pre-pubertal 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.

In addition, change in height standard deviation scores at six and 12 months, key secondary endpoints, were higher in the hGH-CTP dosed once-weekly cohort in comparison to the Genotropin® (somatropin) dosed once-daily cohort.

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In January 2021, we and Pfizer announced that the FDA had accepted for filing the BLA submission for the pediatric indication which was submitted in October 2020.

In January 2022, Pfizer received a Complete Response Letter with respect to

the pediatric indication.

Pfizer and the Company are evaluating the best path forward for hGH-CTP in the U.S.

In January 2022, Pfizer received a Complete Response Letter with respect to the pediatric indication.

Pfizer and the Company have evaluated the best path forward for hGH-CTP in the U.S.

but there can be no assurances that we will receive an approval for hGH-CTP for the treatment of pediatric GHD by the FDA.

There can be no assurance that a BLA will be submitted for the adult indication or that we will obtain marketing approval for either the pediatric or adult indication.

There can be no assurance that we will obtain marketing approval for either the pediatric or adult indication.

Before they can be marketed, our products in development must be approved by the FDA or similar foreign governmental agencies.

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Any of these occurrences could have a material adverse impact on our business, results of operation and financial condition.

Consistent with the potentially immunogenic properties of protein and peptide pharmaceuticals, patients treated with NGENLA may develop antibodies to somatrogon.

Consistent with the potentially immunogenic properties of protein and peptide pharmaceuticals, patients treated with NGENLA may develop antibodies to Somatrogon (hGH-CTP).

Antibodies may be transient or persistant and can have no effect or can neutralize the therapeutic effect of the protein.

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Additionally, the observed incidence of antibody (including neutralizing antibody) positivity in an assay may be influenced by several factors including assay methodology, sample handling, timing of sample collection, concomitant medications, and underlying disease.

For these reasons, comparison of the incidence of antibodies to Somatrogon in the studies described below with the incidence of antibodies in other studies or to other products may be misleading.

For these reasons, comparison of the incidence of antibodies to Somatrogon (hGH-CTP) in the studies described below with the incidence of antibodies in other studies or to other products may be misleading.

Our business is dependent on our ability to develop, launch and generate revenue from our diagnostic products.

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To offset efforts by payors to reduce the cost and utilization of clinical laboratory services, we will need to obtain and retain new clients and business partners and grow the laboratory operations.

In response to the global pandemic, BioReference has been conducting a substantial amount of COVID-19 testing that has positively impacted our revenues.

Simultaneously, however, the volume of its core testing business has decreased as a result of COVID-19.

A significant reduction in COVID-19 tests ordered, specimens submitted by existing clients, or payment rates, without offsetting growth in our core business testing or client base,

would impact our ability to successfully maintain the growth our business has experienced and could have a material adverse impact on our ability to generate profits and cash flow from the laboratory operations in the future.

In response to the global pandemic, BioReference conducted a substantial amount of COVID-19 testing that positively impacted our revenues in previous years.

Simultaneously, however, the volume of its core testing business decreased as a result of COVID-19.

As COVID-19 testing volumes decrease, we have seen a return to our core business testing.

Growth in our core business, however, has been gradual.

If we are unable to return to and surpass adequate

growth in our core business testing or client base, it could have a material adverse impact on our ability to generate profits and cash flow from the laboratory operations in the future.

Discontinuation or recalls of existing testing products, failure to develop, or acquire, licenses for new or improved testing technologies or our clients using new technologies to perform their own tests could adversely affect our business.

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If our drug products are not listed on sufficient number of PDP formularies or if the PDPs’ levels of reimbursement are inadequate, our business, results of operations and financial condition could be materially adversely affected.

Private health plans, such as managed care plans and pharmacy benefit management (“PBM”) programs may also not include our products on formularies, and may use other techniques that restrict access to our products or set a lower reimbursement rate than anticipated.

Private health plans, such as managed care plans and pharmacy benefit management programs may also not include our products on formularies, and may use other techniques that restrict access to our products or set a lower reimbursement rate than anticipated.

A significant portion of our revenues come from government subsidized healthcare programs such as Medicaid and Medicare.

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Moreover, seeking acquisition and divestiture opportunities and evaluating and completing them require significant investment of time and resources, may disrupt the Company’s business and distract management’s attention from day-to-day business operations.

We may fail to realize the anticipated benefits of the sale of GeneDx and we could recognize an impairment charge in the future, depending on Sema4’s stock price when the transaction closes.

In January 2022, Sema4 and OPKO announced they have signed the GeneDx Merger Agreement, pursuant to which Sema4 will acquire GeneDx for an upfront payment of $150 million in cash, together with 80.0 million shares of Sema4 Common Stock, subject to a customary purchase price adjustment mechanism.

Additionally, Sema4 agreed to pay OPKO up to an additional $150.0 million, which may be paid in Sema4 Common Stock, cash or a combination thereof in Sema4’s discretion, subject to GeneDx achieving certain revenue targets for the fiscal years ending December 31, 2022 and 2023.

Based on the closing stock price of Sema4 Common Stock as of January 14, 2022, the total upfront consideration is approximately $473 million, and the total aggregate consideration including potential milestones is approximately $623 million.

If GeneDx is not able to successfully achieve its growth objectives, some of the anticipated benefits of the sale may not be realized fully.

As of December 31, 2021, GeneDx met the held-for-sale accounting criteria and the related assets and liabilities are

classified as held for sale in the consolidated balance sheet.

Depending upon the value Sema4 shares upon closing of the transaction, an impairment charge may be incurred.

We may fail to realize the anticipated benefits of the sale of GeneDx.

Pursuant to the GeneDx Merger Agreement, on April 29, 2022, GeneDx Holdings Corp.

(formerly, Sema4), acquired GeneDx from us for an upfront payment of $150 million in cash, together with 80.0 million Closing Shares, subject to a

customary purchase price adjustment mechanism.

Additionally, subject to GeneDx achieving certain revenue targets for the fiscal years ending December 31, 2022 and 2023, we are eligible to receive an earnout payment in cash or stock, at GeneDx Holdings’ discretion, (the “Milestone Consideration”) equal to a maximum of 30.9 million shares of GeneDx Holdings’ Class A common stock if paid in stock.

Based on the closing price of GeneDx Holdings Common Stock on the closing date, the total upfront consideration was approximately $322 million, and the total aggregate consideration, including the potential Milestone Consideration, was approximately $447 million.

If GeneDx does not successfully achieve its growth objectives for 2023, some of the anticipated benefits of the sale may not be realized fully, as we may then not be entitled to receive the full Milestone Consideration.

If the FDA or other applicable regulatory authorities approve generic products that compete with any of our products or product candidates, the sale of our products or product candidates may be adversely affected.

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Contract research organizations may also assist us in the collection and analysis of data.

These investigators and contract research organizations are independent

contractors and we will not be able to control, other than by contract, the amount of resources, including time, that they devote to products that we develop.

These investigators and contract research organizations are independent contractors and we will not be able to control, other than by contract, the amount of resources, including time, that they devote to products that we develop.

If independent investigators fail to devote sufficient resources to the development of product candidates or clinical trials, or if their performance is substandard, it will delay the marketing approval or clearance and commercialization of any products that we develop.

Further, the FDA requires that we comply with standards, commonly referred to as good clinical practice, for conducting, recording and reporting clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity, and confidentiality of trial subjects are protected.

If our independent clinical investigators and contract research organizations fail to comply with good clinical practice, the results of our clinical trials could be called into question and the clinical development of our product candidates could be delayed.

independent clinical investigators and contract research organizations fail to comply with good clinical practice, the results of our clinical trials could be called into question and the clinical development of our product candidates could be delayed.

Failure of clinical investigators or contract research organizations to meet their obligations to us or comply with federal regulations and good clinical practice procedures could adversely affect the clinical development of our product candidates and harm our business, results of operations, and financial condition.

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If such attacks are successful, they could disrupt our operations and result in unauthorized persons gaining access to confidential or proprietary information.

A breach or security incident affecting these third parties could harm our business, results of operations and reputation, and subject us to liability, governmental investigation, significant damage to our reputation or otherwise adversely affect our business.

A breach or security

incident affecting these third parties could harm our business, results of operations and reputation, and subject us to liability, governmental investigation, significant damage to our reputation or otherwise adversely affect our business.

Although the Company has security measures implemented, cyber-attacks and threats against us and our third-party providers continue to evolve and are often not recognized until such attacks are launched against a potential target.

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Our strategy depends on our ability to rapidly identify and seek patent protection for our discoveries.

In addition, we will rely on third-party collaborators to file patent applications relating to proprietary technology that we develop jointly during

certain collaborations.

In addition, we will rely on third-party collaborators to file patent applications relating to proprietary technology that we develop jointly during certain collaborations.

The process of obtaining patent protection is expensive and time-consuming.

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Any patents we have obtained, or obtain in the future, may be challenged, invalidated, unenforceable, or circumvented.

In addition, court decisions may introduce uncertainty in the enforceability or scope of patents owned by biotechnology, pharmaceutical, and medical device companies.

In addition, court decisions may introduce uncertainty

in the enforceability or scope of patents owned by biotechnology, pharmaceutical, and medical device companies.

Any challenge to, finding of unenforceability or invalidation or circumvention of, our patents or patent applications would be costly, would require significant time and attention of our management, and could have a material adverse effect on our business, results of operations and financial condition.

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We or our licensors may not successfully prosecute the patent applications which are licensed to us.

Even if patents

issue in respect of these patent applications, we or our licensors may fail to maintain these patents or may determine not to pursue litigation against other companies that are infringing these patents.

Even if patents issue in respect of these patent applications, we or our licensors may fail to maintain these patents or may determine not to pursue litigation against other companies that are infringing these patents.

Without protection for the intellectual property we have licensed, other companies might be able to offer substantially identical products for sale, which could adversely affect our competitive business position and harm our business, results of operations and financial condition.

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Intellectual property litigation, regardless of outcome, is expensive and time-consuming, could divert management’s attention from our business and have a material negative effect on our business, operating results or financial condition.

If there is a successful claim of infringement against us, we may be

required to pay substantial damages (including treble damages if we were to be found to have willfully infringed a third party’s patent) to the party claiming infringement, develop non-infringing technology, stop selling our tests or using technology that contains the allegedly infringing intellectual property or enter into royalty or license agreements that may not be available on acceptable or commercially practical terms, if at all.

If there is a successful claim of infringement against us, we may be required to pay substantial damages (including treble damages if we were to be found to have willfully infringed a third party’s patent) to the party claiming infringement, develop non-infringing technology, stop selling our tests or using technology that contains the allegedly infringing intellectual property or enter into royalty or license agreements that may not be available on

acceptable or commercially practical terms, if at all.

Our failure to develop non-infringing technologies or license the proprietary rights on a timely basis could harm our business.

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In such a case, we might be required to pay royalties, damages and costs to firms who own the rights to these patents, or we might be restricted from using any of the inventions claimed in those patents.

We may become subject to product liability for our diagnostic tests, clinical trials, pharmaceutical products and medical device products.

We may become subject to product liability claims for our diagnostic tests, clinical trials, pharmaceutical products and medical device products.

Our success depends on the market’s confidence that we can provide reliable, high-quality pharmaceuticals, medical devices, and diagnostics tests.

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Settlements of suits involving the types of issues that we routinely confront may require monetary payments as well as corporate integrity agreements.

For example, to resolve a investigation and related civil action concerning alleged fee-for-service claims for payment to Medicare, Medicaid, and the TRICARE Program, 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, 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.

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 not report or return any such overpayments to the Federal Health Care Programs (the “Covered Conduct”).

The Covered Conduct had commenced prior to the Company’s acquisition of BioReference in 2015.

With the exception of the Covered Conduct, the Company and BioReference expressly denied the allegations of the Relator as set forth in her civil action, and the Company agreed to pay a total of $10,000,000 plus accrued interest from September 24, 2021 at a rate of 1.5% per annum.

Under the CIA, which has a term of 5 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 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 Medicare, Medicaid, and TRICARE.

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.

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To date, we have only submitted one NDA which was approved in June 2016, and one BLA which was approved for filing in January 2021.

We have received FDA approval of the PMA for our Sangia Total PSA Test using the Claros Analyzer, a novel diagnostic instrument system to provide rapid, high performance blood test results in the point-of-care setting, in January 2019 and, in December 2021, for our 4Kscore test for use in men age 45 and older who have not had a prior prostate biopsy or are biopsy negative and have an age-specific abnormal total PSA and/or abnormal digital rectal exam, but we have not received marketing approval or clearance for any of our other diagnostic product candidates.

In response to the BLA we submitted for Somatrogon Pfizer received a Complete Response Letter, which we and Pfizer are reviewing to determine the best path forward for Somatrogon.

We have received FDA approval for our 4Kscore test for use in men age 45 and older who have not had a prior prostate biopsy or are biopsy negative and have an age-specific abnormal total PSA and/or abnormal digital rectal exam, but we have not received marketing approval or clearance for any of our other diagnostic product candidates that we currently plan to market.

In response to the BLA we submitted for Somatrogon (hGH-CTP) Pfizer received a Complete Response Letter, to which we and Pfizer are responding.

Obtaining approval of a NDA or PMA can be a lengthy, expensive, and uncertain process.

With respect to medical devices, while the FDA reviews and clears a premarket notification in as little as three months, there is no guarantee that our products will qualify for this more expeditious regulatory process, which is reserved for Class I and II devices, nor is there any assurance that even if a device is reviewed under the 510(k) process that the FDA will review it expeditiously or determine that the device is substantially equivalent to a lawfully marketed non-PMA device.

lawfully marketed non-PMA device.

If the FDA fails to make this finding, then we cannot market the device.

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We train our marketing and sales force against promoting our products for uses outside of the cleared or approved indications for use, known as “off-label uses.” If the FDA determines that our promotional materials or training constitute promotion of unsupported claims or an off-label use, it could request that we modify our training or promotional materials or subject us to regulatory or enforcement actions, including the issuance of an untitled letter, a warning letter, injunction, seizure, civil fine or criminal penalties.

It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs, and the curtailment of our operations.

It is also possible that other federal, state or foreign enforcement authorities might take action if they

consider our business activities to constitute promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs, and the curtailment of our operations.

We and the manufacturers of our products are also required to comply with current Good Manufacturing Practices (“cGMP”) regulations or the FDA’s QSR regulations, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation.

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Under the False Claims Act (“FCA”), whistleblower or qui tam provisions allow a private individual to bring actions on behalf of the federal government alleging that the defendant has submitted a false claim to the federal government, and to share in any monetary recovery.

In recent years, the number of suits brought by private individuals has increased dramatically and we may be subject to such suits.

In recent years, the number of suits brought by private individuals has increased

dramatically and we may be subject to such suits.

Violations of the FCA could result in enormous economic liability and could have a material impact on us.

21 unchanged sentences

Waste management is subject to federal and state regulations governing the transportation and disposal of medical waste including bodily fluids.

In New Jersey, we are subject to the Comprehensive Medical Waste Management Act (“CMWMA”), which requires us to register as a generator of special medical waste.

In New Jersey, we are subject to the Comprehensive Medical Waste Management Act, which requires us to register as a generator of special medical waste.

All of our medical waste is disposed of by a licensed interstate hauler.

These records are audited by the State of New Jersey on a yearly basis.

We are also subject to the Federal Hazardous Materials Transportation Law, 49 U.S.C.

5101 et seq., and the Hazardous Materials Regulations (“HMR”), 49 CFR parts 171-180.

The federal government has classified hazardous medical waste as hazardous materials for the purpose of regulation.

We are also subject to the Federal Hazardous Materials Transportation Law, and the Hazardous Materials Regulations.

The federal government has classified hazardous medical waste as hazardous materials for the purpose of these regulations.

Failure to comply with such federal, state and local laws and regulations could subject us to denial of the right to conduct business, fines, criminal penalties and/or other enforcement actions, any of which could have a material adverse effect on our business.

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Congress has considered, at least yearly in conjunction with budgetary legislation, changes to one or both of the Medicare fee schedules under which we receive reimbursement, which include the physician fee schedule for anatomical pathology services, and the clinical laboratory fee schedule for our clinical laboratory services.

For example, currently there is no copayment or coinsurance required for clinical laboratory services, although there is for our services that are paid under the physician fee schedule.

For example, currently there is no copayment or coinsurance required for clinical laboratory services, although there is for our services that are paid under the

physician fee schedule.

However, Congress has periodically considered imposing a 20 percent coinsurance on laboratory services.

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While we have employed economic cash flow and fair value hedges to minimize the risks associated with these exchange rate fluctuations, the hedging activities may be ineffective or may not offset more than a portion of the adverse financial impact resulting from currency variations.

Accordingly, we cannot assure you that fluctuations in the values of the currencies of countries in which we operate will not materially adversely affect our future results of operations.

Accordingly, we cannot assure you that

fluctuations in the values of the currencies of countries in which we operate will not materially adversely affect our future results of operations.

We may be exposed to liabilities under the Foreign Corrupt Practices Act, and any determination that we violated the Foreign Corrupt Practices Act could have a material adverse effect on our business.

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At December 31, 2022, we have goodwill and other intangible assets of $1.6 billion.

Goodwill is tested at least annually for impairment or when events or

changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

Goodwill is tested at least annually for impairment or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

Examples of qualitative factors include our share price, our financial performance compared to budgets, long-term financial plans, macroeconomic, industry and market conditions as well as the substantial excess of fair value over the carrying value of net assets from the annual impairment test previously performed.

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and Pfizer received a Complete Response Letter in January 2022.

Pfizer and OPKO are evaluating the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon in the United States.

If we are unable to successfully commercialize Somatrogon in the U.S., or changes in projections and assumptions negatively impact our forecast of net cash flows, we may be exposed to a material impairment charge related to the IPR&D for Somatrogon.

Pfizer and OPKO have evaluated the FDA’s comments and will work with the agency to determine the best path forward for Somatrogon (hGH-CTP) in the United States.

If we are unable to successfully commercialize Somatrogon (hGH-CTP) in the U.S., or changes in projections and assumptions negatively impact our forecast of net cash flows, we may be exposed to a material impairment charge related to the IPR&D for Somatrogon.

RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

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Phillip Frost, M.D., our Chairman and CEO, is deemed to beneficially own, in the aggregate, approximately 31.6% of our Common Stock as of February 15, 2023.

As a result, Dr.

a result, Dr.

Frost, acting with other members of management, would have the ability to significantly impact the election of our Board of Directors, the adoption or amendment of provisions in our Certificate of Incorporation, the approval of mergers and other significant corporate transactions and the outcome of issues requiring approval by our stockholders.

This concentration of

ownership may also have the effect of delaying or preventing a change in control of our company that may be favored by other stockholders.

This concentration of ownership may also have the effect of delaying or preventing a change in control of our company that may be favored by other stockholders.

This could prevent transactions in which holders of our securities might otherwise recover a premium for their securities over current market prices.

26 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors