What changed in this filing

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Item 1A. Risk Factors

2025-03-03 compared with 2024-03-01 · 37 added, 74 removed, 719 unchanged (13% of the section changed)

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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 incurred a net loss for the years ended December 31, 2022 and 2023.

In response to the global COVID-19 pandemic, BioReference conducted a substantial amount of COVID-19 testing that positively impacted our revenues 2020-2021.

Simultaneously, however, the volume of its core testing business decreased as a result of COVID-10.

During 2022-2023, testing needs for COVID-19 decleined as a result of declining infection rates and the normalization of living with COVID-10 following the increase in accessibility to COVID-19 vaccines and antiviral treatments.

As COVID-19 testing volumes decreased, we experienced a return to our core business testing, but growth in BioReference's core business, however, has been gradual and has not offset the substantial decline in revenue from COVID-19 testing.

Other than for the fiscal years ended December 31, 2020 and 2021, during which time BioReference conducted a substantial number of COVID-19 tests, our consolidated operations have not historically been profitable.

Our pharmaceutical business has historically generated only limited revenue from operations and we may not generate substantial revenue from the sale of proprietary pharmaceutical products or certain of our diagnostic products for some time, if at all.

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We may require additional funding, which may not be available to us on acceptable terms, or at all.

As of December 31, 2023, we had cash and cash equivalents of $95.9 million.

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, demand for our COVID-19 related testing waned during 2022 and 2023, and revenues from other sources have not offset the substantial decline in revenue from COVID-19 testing.

As of December 31, 2024, we had cash, cash equivalents and restricted cash of $445.6 million.

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 were the public and private placement of stock, the issuance of convertible notes, and credit facilities available to us.

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, 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 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.

On July 17, 2024, the Company completed a private offering of $250 million aggregate principal amount of senior secured notes (the “2044 Notes”), pursuant to a note purchase agreement dated July 17, 2024 (the “2044 Note Purchase Agreement”), by and among the Company, certain purchasers from time to time party thereto, the Company’s wholly owned subsidiaries OPKO Biologics (“OBL”) and EirGen as guarantors (OBL and EirGen collectively, the “2044 Note Guarantors”), and HCR Injection SPV, LLC, as agent.

The 2044 Note Purchase Agreement contains customary terms and covenants, including negative covenants, such as limitations on indebtedness, liens, amendments to certain material contracts and disposition of assets.

Our ability to comply with these restrictions and covenants and similar provisions in agreements governing our indebtedness from time to time is uncertain and will be affected by the levels of cash flow from operations and other events or circumstances beyond our control.

If market or other economic conditions deteriorate, our ability to comply with these covenants may be impaired.

If we violate any provisions of our agreements governing such indebtedness that are not cured or waived within the appropriate time periods provided in such agreements, a significant portion of our indebtedness may become immediately due and payable.

We might not have, or be able to obtain, sufficient funds to make these accelerated payments, which could have a material adverse effect on our financial condition.

Disruptions in the U.S.

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The license to VFMCRP potentially covers all therapeutic and prophylactic uses of the product in human patients, provided that initially the license is for the use of the product for the treatment or prevention of secondary hyperparathyroidism related to patients with stage 3 or 4 chronic kidney disease and vitamin D insufficiency/deficiency.

Effective May 5, 2020, we entered into the VFMCRP Amendment, 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 May 2021, we further amended the VFMCRP Agreement for VFMCRP to assume all the rights to Rayaldee in Japan that had been previously granted to Japan Tobacco.

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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 Restated 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 (hGH-CTP) and Pfizer’s Genotropin® (somatropin).

Under the Restated Pfizer Agreement, we are eligible to receive an aggregate of up to $275 million upon the achievement of certain regulatory milestones, of which the Company has received $175 million to date.

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

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

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In the event that Pfizer terminates the Restated Pfizer 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.

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

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.

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NGENLA may nevertheless fail to be successfully commercialized in these territories which would adversely impact our anticipated milestone payments under the Restated Pfizer Agreement and negatively affect our business, financial condition and results of operations.

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

Our business is dependent on our ability to successfully commercialize our diagnostic products .

We are committing significant resources to the development and commercialization of these products, and there is no guarantee that we will be able to successfully commercialize these tests.

We have limited experience in developing, manufacturing, selling, marketing and distributing innovative diagnostic tests.

If we are not able to successfully develop, market or sell diagnostic tests we develop for any reason, including the failure to obtain any required regulatory approvals, or obtain favorable reimbursement, we will not generate any meaningful revenue from the sale of such tests.

Our business is substantially dependent on our ability to generate profits and cash flow from our laboratory operations.

We have made a significant investment in our laboratory operations through the acquisition of BioReference.

We compete in the clinical laboratory market primarily on the basis of the quality of testing, reporting and information systems, reputation in the medical community, the pricing of services and ability to employ qualified personnel.

Our business depends on our ability to generate profits and cash flow from our laboratory operations.

We compete in the clinical laboratory market through BioReference, primarily on the basis of the quality of testing, reporting and information systems, reputation in the medical community, the pricing of services and ability to employ qualified personnel.

Our failure to successfully compete on any of these factors could result in the loss of clients and a reduction in our revenues and profits.

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 COVID-19 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.

During 2022-2023, 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.

As COVID-19 testing volumes decreased, we experienced a return to our core business testing but growth in BioReference's core business, however, has been gradual and has not offset the subtantial decline in revenue from COVID-19 testing.

We have engaged in significant cost reduction efforts, including reducing our workforce, in an effort to make the diagnostic business profitable and align our core business testing needs with the size of our operations.

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.

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.

Our laboratory operations have not been profitable, and our sale of certain assets to Labcorp in September 2024 in the BioReference Transaction has significantly reduced our diagnostic revenues.

While, in addition to the BioReference Transaction, we have engaged in significant cost reduction efforts, including reducing our workforce, in an effort to make the diagnostic business profitable and align our core business testing needs with the size of our operations we may not be able to return to and maintain adequate growth in our remaining testing business or client base, which 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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The clinical laboratory industry is subject to changing technology and new product introductions.

Our success in maintaining a leadership position in genomic and other advanced testing technologies will depend, in part, on our ability to develop, acquire or license new and improved technologies on favorable terms and to obtain appropriate coverage and reimbursement for these technologies.

Our success in maintaining a leadership position in advanced testing technologies will depend, in part, on our ability to develop, acquire or license new and improved technologies on favorable terms and to obtain appropriate coverage and reimbursement for these technologies.

We may not be able to negotiate acceptable licensing arrangements and it cannot be certain that such arrangements will yield commercially successful diagnostic tests.

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If the federal or state governments fail to make payments under these programs on a timely basis, our business could suffer, and our financial position, results of operations or cash flows may be materially affected.

As we evolve from a company primarily involved in development to a company also involved in commercialization of our pharmaceutical and diagnostic products, as well as our laboratory testing services, we may encounter difficulties in managing our growth and expanding our operations successfully.

As we advance our product candidates and expand our business, we will need to expand our development, regulatory and commercial infrastructure.

As our operations expand, we expect that we will need to manage additional relationships with various third parties, collaborators and suppliers.

Maintaining these relationships and managing our future growth will impose significant added responsibilities on members of our management.

We must be able to:

manage our development efforts and operations effectively;

manage our clinical trials effectively;

hire, train and integrate additional management, administrative and sales and marketing personnel;

improve our managerial, development, operational and finance systems;

implement and manage an effective marketing strategy;

and expand our facilities, all of which may impose a strain on our administrative and operational infrastructure.

Our success is dependent to a significant degree upon the involvement, efforts and reputation of our Chairman and Chief Executive Officer, Phillip Frost, M.D.

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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 to 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 shares of GeneDx Holdings Common Stock, subject to a customary purchase price adjustment mechanism.

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) equal to a maximum of 30.9 million shares of GeneDx Holdings Common Stock if paid in stock.

Based on the closing price of GeneDx Holdings Common Stock on April 29, 2022, the total upfront consideration was approximately $322 million, and the total aggregate consideration, including the potential GeneDx Milestone Consideration, was approximately $447 million.

We received 23.1 million shares of Class A Common Stock as a result of GeneDx satisfactorily achieving revenue targets as of December 31, 2022.

As of the date of this Annual Report on Form 10-K however, we do not anticipate that GeneDx will satisfy the revenue targets as of December 31, 2023 to achieve the remaining GeneDx Milestone Consideration, so we may not receive some of the anticipated benefit of the disposition of GeneDx.

In addition, as of December 31, 2023, the aggregate value of our investments in GeneDx Holdings based on the quoted market price of their respective shares of common stock and the number of shares held by us was $9.8 million, which is significantly below the value of our investment in GeneDx Holdings as of the closing date of the GeneDx Transaction.

There can be no guarantee that the price of GeneDx Holdings Common Stock will return to its value as of the closing date of the GeneDx Transaction.

Fluctuations in the price of GeneDx Holdings Common Stock are subject to market fluctuations and other factors outside our control, which are not directly linked to the financial and operational performance of the Company, but the fluctuations in the value of this investment may adversely impact the Company's financial condition and results of operations.

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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Further, the legal actions and government investigations could damage our reputation with investors and adversely affect the trading prices of our securities.

The ongoing Russia-Ukraine conflict and the recent escalation of the Israel-Hamas conflict may adversely impact our business operations and financial performance.

United States and global markets are experiencing volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the recent escalation of the Israel-Hamas conflict.

The ongoing Russia-Ukraine conflict and the recent Israel-Hamas conflict may adversely impact our business operations and financial performance.

United States and global markets have experienced volatility and disruption following the geopolitical instability resulting from the ongoing Russia-Ukraine conflict and the Israel-Hamas conflict.

In response to the ongoing Russia-Ukraine conflict, the North Atlantic Treaty Organization (“NATO”) deployed additional military forces to eastern Europe, and the United States, the United Kingdom, the European Union and other countries have announced various sanctions and restrictive actions against Russia, Belarus and related individuals and entities, including the removal of certain financial institutions from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system.

Certain countries, including the United States, have also provided and may continue to provide military aid or other assistance to Ukraine and to Israel, increasing geopolitical tensions among a number of nations.

The invasion of Ukraine by Russia and the escalation of the Israel-Hamas conflict and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies.

Although the length and impact of the ongoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, credit and capital markets, as well as supply chain interruptions and increased cyber attacks against U.S.

Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in capital markets.

The foregoing conflicts and the resulting measures that have been taken, and could be taken in the future, by NATO, the United States, the United Kingdom, the European Union, Israel and its neighboring states and other countries have created global security concerns that could have a lasting impact on regional and global economies.

Although the length and impact of the foregoing conflicts are highly unpredictable, they could lead to market disruptions, including significant volatility in commodity prices, and the credit and capital markets, as well as supply chain interruptions and increased cyber-attacks against U.S.

Additionally, any resulting sanctions could adversely affect the global economy and financial markets and lead to instability and lack of liquidity in the capital markets.

These ongoing conflicts and the resulting geopolitical instability can adversely impact our business operations and financial performance.

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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 from FDA for any of our other diagnostic product candidates that we currently plan to market.

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

Obtaining approval of an 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.

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The GDPR, which is wide-ranging in scope, governs the collection and use of personal data in the European Union and imposes operational requirements for companies that receive or process personal data of residents of the European Union that are different than those currently in place in the European Union.

We have implemented policies and procedures required to comply with the new EU regulations but may be subject for penalties if we are found to be non-compliant.

We have implemented policies and procedures required to comply with the new EU regulations but may be subject to penalties if we are found to be non-compliant.

We have had data and security breaches in the ordinary course and such breaches may continue to happen from time to time despite our best efforts to prevent such breaches and safeguard private information.

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Any changes that lower reimbursement rates under Medicare, Medicaid or private payor programs could negatively affect our business.

Most significantly, on March 23, 2010, President Obama signed into law both the Affordable Care Act and the reconciliation law known as Health Care and Education Affordability Reconciliation Act (the “Reconciliation Act”) and, combined we refer to both Acts as the “2010 Health Care Reform Legislation.” The constitutionality of the 2010 Health Care Reform Legislation was confirmed on June 28, 2012 by the Supreme Court of the U.

It is uncertain whether any efforts to amend the Affordable Care Act will be successful or enacted into law, and if enacted, what the impact might be on our business.

It is also uncertain how the current administration intends to alter 2010 Health Care Reform Legislation, if at all including whether regulatory changes to the implementation of the 2010 Health Care Reform Legislation will restrict patient access to affordable insurance or other third-party payor sources and impact their access to novel, biosimilar and complex generic products.

In addition, litigation may prevent some or all of the legislation from taking effect.

We cannot assure you as to the ultimate content, timing, or effect of changes, nor is it possible at this time to estimate the impact of any such potential legislation.

In August 2022, President Joe Biden signed the Inflation Reduction Act (the "IRA") into law.

Among other things, the IRA contains changes to drug product reimbursement by Medicare, and (i) directs HHS to negotiate the price of certain drugs covered by Medicare, (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpaces inflation, and (iii) makes several changes to the Medicare Part D benefit, including a limit on annual out-of-pocket costs and a change in manufacturer liability under the program.

Although there have been legal challenges to the IRA, the provisions began to take effect in 2023 and could impact pricing for any covered drug product.

To enhance compliance with applicable health care laws, and mitigate potential liability in the event of noncompliance, regulatory authorities, such as the U.

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We have a large amount of goodwill and other intangible assets and we are required to perform an annual, or in certain situations a more frequent, assessment for possible impairment for accounting purposes.

At December 31, 2023, we have goodwill and other intangible assets of $0.8 billion.

At December 31, 2024, we have goodwill and other intangible assets of $724.3 million.

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.

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Based on the current financial performance of our diagnostics segment and our Ireland reporting unit, which includes EirGen and Rayaldee , if future results are not consistent with our estimates and assumptions, then we may be exposed to impairment charges, which could be material.

At December 31, 2023 , the combined goodwill of our diagnotics segment and our Ireland reporting unit was $367.3 million.

At December 31, 2024, the goodwill of our diagnostics segment totaled $219.7 million and the goodwill of our Ireland reporting unit totaled $79.4 million.

There can be no assurance that future reviews of our goodwill and other intangible assets will not result in impairment charges.

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RISKS RELATED TO OWNERSHIP OF OUR COMMON STOCK

The trading prices of our securities may fluctuate significantly.

The trading prices of our Common Stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:

The trading price of our Common Stock may fluctuate significantly.

The trading price of our Common Stock may fluctuate significantly in response to numerous factors, some of which are beyond our control, such as:

the announcement of new products or product enhancements by us or our competitors;

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Further, the securities market in general, and the market for biotechnology, pharmaceutical, diagnostic and medical device companies in particular, has experienced extreme price and volume fluctuations in recent years.

Continued market fluctuations could result in extreme volatility in the trading prices of our Common Stock, which could cause a decline in the value of our securities.

Continued market fluctuations could result in extreme volatility in the trading price of our Common Stock, which could cause a decline in the value of our securities and a loss of all or a portion of your investment in us.

Directors, executive officers, principal stockholders and affiliated entities own a substantial amount of our capital stock, and they may make decisions that you do not consider to be in the best interests of our stockholders.

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

A significant short position in our stock could have a substantial impact on the trading price of our stock.

A significant short position in our Common Stock could have a substantial impact on the trading price of our stock.

Historically, there has been a significant “short” position in our Common Stock.

As of January 31, 2024, investors held a short position of approximately 97,072,172 million shares of our Common Stock which represented approximately 13.9% of our outstanding Common Stock.

As of January 31, 2025, investors held a short position of approximately 88,641,089 shares of our Common Stock, which represented approximately 13.2% of our outstanding Common Stock as of such date.

The anticipated downward pressure on our stock price due to actual or anticipated sales of our stock by some institutions or individuals who engage in short sales of our Common Stock could cause our stock price to decline.

Such stock price decrease could encourage further short-sales that could place additional downward pressure on our stock price.

This could lead to further increases in the already large short position in our Common Stock and cause volatility in our stock price.

This could lead to further increases in the already large short position in our Common Stock and cause additional volatility in our stock price.

The volatility of our stock may cause the value of a stockholder’s investment to decline rapidly.

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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