What changed in this filing

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Item 5. Market for Registrant’s Common Equity

2025-03-03 compared with 2024-03-01 · 224 added, 250 removed, 483 unchanged (50% of the section changed)

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As of January 31, 2025, there were approximately 346 holders of record of our Common Stock.

We have not declared or paid any cash dividends on our Common Stock.

No cash dividends have been previously paid on our Common Stock and none are anticipated in fiscal 2024.

We repurchased no shares of Common Stock during the fourth quarter of the year ended December 31, 2023.

On July 18, 2024, the Company announced that its Board of Directors authorized the repurchase of up to $100 million of shares of Common Stock.

Under this program, the Company may repurchase shares through various methods, including open market purchases, block trades, privately negotiated transactions, and accelerated share repurchases, as well as pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1(c) of the Exchange Act, and otherwise in compliance with applicable laws.

The timing and volume of repurchases will depend on market conditions, the Company's capital management, investment opportunities, and other factors.

The program does not obligate the Company to repurchase any specific number of shares, has no set expiration date, and may be modified, suspended, or discontinued at the Company's discretion.

Under this program, the Company repurchased an aggregate of 25,825,785 shares of Common Stock at an average price of $1.56 per share for approximately $40.2 million during the year ended December 31, 2024.

The following table presents our share repurchase activity for the quarter ended December 31, 2024 (dollars in thousands, except per share amounts).

Total Number of Shares Purchased

Average Price Paid per Share

Total number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Maximum Dollar Value that May Yet be Purchased Under the Plans or Programs (1)

October 1, 2024 to October 31, 2024

November 1, 2024 to November 30, 2024

December 1, 2024 to December 31, 2024

All repurchases were made on the open market at prevailing market rates plus related expenses under our stock repurchase program, which authorizes the repurchase of up to $100 million of our common stock.

We publicly announced this program on July 18, 2024.

Recent Sales of Unregistered Securities

All sales prior to the fourth quarter of 2024 of unregistered securities were previously reported in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.

We have not declared or paid any cash dividends previously on our Common Stock.

Stock Performance Graph

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NASDAQ Biotechnology

Recent Sales of Unregistered Securities

All recent sales of unregistered securities were previously reported in a Current Report on Form 8-K or Quarterly Report on Form 10-Q.

Selected Financial Data.

Not applicable.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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We are a diversified healthcare company that seeks to establish industry leading positions in large and rapidly growing medical markets.

Our pharmaceutical business features Rayaldee , an FDA approved treatment for SHPT in adults with stage 3 or 4 CKD and vitamin D insufficiency, and Somatrogon (hGH-CTP), a once-weekly human growth hormone injection for which we have partnered with Pfizer with respect to Somatrogon (hGH-CTP)’s further development and commercialization.

Regulatory applications for Somatrogon (hGH-CTP) for the treatment of children and adolescents as young as three years of age with growth disturbance due to insufficient secretion of growth hormone, have been approved in more than 50 markets worldwide, including the United States, European Union Member States, Japan, Canada, and Australia under the brand name NGENLA®.

Aditionally, in May 2022, we acquired ModeX, a biotechnology company focused on developing innovative multi-specific immune therapies for cancer and infectious disease candidates.

ModeX has a robust early-stage pipeline with assets in key areas of immuno-oncology and infectious diseases, and we intend to further expand our pharmaceutical product pipeline through ModeX’s portfolio of development candidates.

Our diagnostics business includes BioReference, one of the nation’s largest full service laboratories with a significant sales and marketing team designed to drive growth and leverage new products.

Through BioReference, we offer our 4Kscore prostate cancer test and we provide laboratory testing services, primarily to customers in the larger metropolitan areas in New York, New Jersey, Florida, Texas, Maryland, Indiana, Virginia, California, Pennsylvania, Delaware, Washington, DC, Illinois and Massachusetts, as well as to customers in a number of other states.

We offer a comprehensive test menu of clinical diagnostics for blood, urine and tissue analysis.

This includes hematology, clinical chemistry, immunoassay, infectious disease, serology, hormones, and toxicology assays, as well as Pap smear, anatomic pathology (biopsies) and other types of tissue analysis, as well as testing for COVID-19.

We market our laboratory testing services directly to physicians, geneticists, hospitals, clinics, correctional and other health facilities.

We operate established, revenue-generating pharmaceutical platforms in Spain, Ireland, Chile, and Mexico, from which we expect to generate positive cash flow and facilitate future market entry for our products currently in development.

We have a development and commercial supply pharmaceutical company as well as a global supply chain operation.

We also own FineTech, a specialty API manufacturer in Israel.

Our pharmaceutical business features Somatrogon (hGH-CTP), a once-weekly human growth hormone injection.

We have partnered with Pfizer Inc.

(“Pfizer”) for the development and commercialization of Somatrogon (hGH-CTP).

Regulatory approvals for Somatrogon (hGH-CTP) for the treatment of growth hormone deficiency in children and adolescents have been secured in more than 50 markets, including the United States, European Union (“EU”) Member States, Japan, Canada, and Australia, where it is marketed under the brand name NGENLA®.

We also manufacture and sell Rayaldee , an FDA approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency, through our pharmaceutical division.

We have also expanded our pharmaceutical pipeline with early-stage immune therapies targeting cancer and infectious diseases through our 2022 acquisition of ModeX Therapeutics, Inc.

Our diagnostics business, BioReference Health, LLC (“BioReference”), is a highly specialized laboratory in the United States, with a sales and marketing team focused on growth and new product integration, including the 4Kscore ® prostate cancer test.

BioReference® offers a broad spectrum of diagnostic testing services for oncology, urology ( 4Kscore ), and corrections nationwide, setting new standards with our industry-leading turnaround times.

BioReference also provides comprehensive clinical and women’s health testing in New York and New Jersey.

Our test offerings are backed by a team of board-certified medical professionals and driven by the latest healthcare guidelines and standards- marketed directly to physicians, geneticists, hospitals, clinics, correctional facilities, and other healthcare providers.

On September 16, 2024 we consummated the sale of certain assets of BioReference to Laboratory Corporation of America Holdings (“Labcorp”), as described below.

The Company maintains established, revenue-generating pharmaceutical platforms in Spain, Ireland, Chile, and Mexico, our most significant such platforms, contributing to positive cash flow and facilitating market entry for our development pipeline.

In addition to these platforms, we operate a global pharmaceutical development and commercial supply company, a global supply chain operation, and manufacture specialty active pharmaceutical ingredients (API) in Israel through our subsidiary, FineTech.

Our management team possesses extensive industry experience in development, regulatory affairs, and commercialization.

Their industry relationships support the identification and pursuit of commercial opportunities.

Research and development activities are primarily conducted in facilities located in Weston, Massachusetts, Waterford, Ireland, Kiryat Gat, Israel, and Barcelona, Spain.

On March 27, 2024, the Company entered into a definitive agreement with Labcorp (the “Labcorp Asset Purchase Agreement”), pursuant to which Labcorp agreed to acquire select assets of BioReference (the “BioReference Transaction”).

The BioReference Transaction closed on September 16, 2024, and upon closing, Labcorp paid to the Company aggregate consideration of $237.5 million in cash, subject to certain adjustments as set forth in the Labcorp Asset Purchase Agreement.

These assets were part of our diagnostics segment and included BioReference's laboratory testing businesses focused on clinical diagnostics, reproductive health, and women's health across the United States, excluding BioReference's New York and New Jersey operations.

Pursuant to the Labcorp Asset Purchase Agreement, a total of approximately $23.7 million was withheld at closing and deposited by Labcorp into an escrow account to satisfy potential indemnity claims.

The escrow will be released to the Company on the twelve-month anniversary of the closing date, subject to any outstanding or liquidated indemnity claims.

The Company recorded the escrow within other current assets on the Condensed Consolidated Balance Sheet.

We recognized a gain of $121.5 million from the BioReference Transaction for the year ended December 31, 2024.

RESULTS OF OPERATIONS

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therefore, fluctuations in exchange rates affect the translation of revenues and expenses denominated in foreign currencies into USD for purposes of reporting our consolidated financial results.

During the years ended December 31, 2023, 2022 and 2021, the most significant currency exchange rate exposures were to the Euro and Chilean Peso.

During the years ended December 31, 2024, 2023 and 2022, the most significant currency exchange rate exposures were to the Chilean Peso and Euro.

Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were $52.7 million and $34.6 million at December 31, 2024 and 2023, respectively.

We are subject to foreign currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of transactions.

We are subject to foreign currency translation risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of transactions.

We limit foreign currency transaction risk through hedge transactions with foreign currency forward contracts.

Under these forward contracts, for any rate above or below the rate fixed by the contract, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.

At December 31, 2023, we had 52 open foreign exchange forward contracts relating to inventory purchases on letters of credit with various notional amounts maturing monthly through January 2024 with a notional value totaling approximately $2.9 million.

At December 31, 2022, we had 194 open foreign exchange forward contracts relating to inventory purchases on letters of credit with various notional amounts maturing monthly through January 2023 with a notional value totaling approximately $11.9 million.

At December 31, 2024, we held no open foreign exchange forward contracts.

At December 31, 2023, we held 52 open foreign exchange forward contracts related to inventory purchases on letters of credit.

These contracts matured monthly through January 2024 with a total notional value of approximately $2.9 million.

For The Years Ended December 31, 2024 and 2023

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Revenue from services for the year ended December 31, 2024 decreased by approximately $34.6 million, or 7%, compared to the year ended December 31, 2023.

The decrease in revenue for the year ended December 31, 2023 primarily reflected lower demand for COVID-19 testing and lower COVID-19 reimbursement of $189.7 million and $5.1 million, respectively.

The reduction in reimbursement reflects an increase in utilization of antigen point of care diagnostic tests as well as a change in the mix of customers, which pay varying contract prices depending on the level of services we provide.

For the year ended December 31, 2023, clinical test volume increased $31.1 million, while clinical test reimbursement decreased $28.4 million, respectively, as a result of the mix of testing ordered.

Furthermore, as a result of our sale of GeneDx in April 2022, genomic test revenues decreased by $48.3 million for the year ended December 31, 2023.

This decrease was primarily due to a $42.5 million decrease in clinical test volume, largely attributable to the BioReference Transaction, offset by a $7.9 million increase in clinical test reimbursement rates.

Estimated collection amounts are subject to the complexities and ambiguities of billing, reimbursement regulations and claims processing, as well as considerations unique to Medicare and Medicaid programs, and require us to consider the potential for retroactive adjustments when estimating variable consideration in the recognition of revenue for the period in which the related services are rendered.

For the years ended December 31, 2023, and 2022, negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $19.2 million and $21.5 million, respectively, were recognized.

Revenue adjustments for the year ended December 31, 2023 were primarily due to lower reimbursements from Medicare payors and for the year ended December 31, 2022 were primarily due to lower COVID-19 test reimbursement estimates.

For the years ended December 31, 2024 and 2023, we recorded $1.5 million and $19.2 million, respectively, of negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods mainly due to the composition of patient payer mix.

The composition of revenue from services by payor for the years ended December 31, 2024 and 2023 was as follows:

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Client payers

Client payors include cities, states and companies for which BioReference provides COVID-19 testing services.

Cost of revenue .

Cost of revenue for the year ended December 31, 2024 decreased $43.7 million, a decrease of 10% compared to the year ended December 31, 2023.

Cost of revenue decreased primarily due to continued cost-reduction initiatives implemented at BioReference, a decline in the volume of COVID-19 tests performed during the year ended December 31, 2023 compared to 2022, and changes in the mix of testing ordered during the period.

Furthermore, cost of revenue decreased by $34.9 million as a result of our sale of GeneDx in 2022.

Cost of revenue decreased primarily due to lower employee headcount, reflecting our continued cost-reduction initiatives implemented at BioReference, changes in the mix of testing ordered during the period, and by a decrease in consumption reflecting the timing of the BioReference Transaction.

Selling, general and administrative expenses .

Selling, general and administrative expenses for the years ended December 31, 2023 and 2022 were $202.3 million and $284.4 million, respectively, respresenting a decrease of 29% from the prior period.

Selling, general and administrative expenses in our diagnostics segment decreased primarily due to continued cost-reduction initiatives implemented at BioReference as we strive to return to profitability, as well as decreased expenses due to our sale of GeneDx in 2022.

Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were $205.2 million and $202.3 million, respectively, representing an increase of 1% from the prior period.

The increase in expense is primarily related to $26.3 million in severance charges associated with cost reduction initiatives and $9.7 million in adjustments to the life of certain leases.

This was partially offset by continued cost-reduction initiatives at BioReference, which included a reduction in employee headcount and the streamlining of certain smaller operations, resulting in an overall decrease in employee-related expenses and other operating efficiencies.

The divestiture of certain laboratory operations also contributed to the reduction in employee-related expenses.

Research and development expenses .

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Total research and development expenses

The decrease in research and development expenses for the year ended December 31, 2023 was primarily due to the continued cost-reduction initiatives implemented at BioReference and partly as a result of the disposition of GeneDx.

The decrease in research and development expenses for the year ended December 31, 2024 was primarily due to a decrease in employee-related expenses as a result of the continued cost-reduction initiatives implemented at BioReference and the BioReference Transaction.

Amortization of intangible assets .

Amortization of intangible assets was $16.9 million and $20.2 million for the years ended December 31, 2024 and 2023, respectively.

Amortization expense reflects the amortization of acquired intangible assets with defined useful lives.

Amortization expense declined for the year ended December 31, 2023 due to the disposition of GeneDx and as a result of the full amortization of certain acquired intangible assets.

The decrease is primarily attributable to the BioReference Transaction, which impacted the amount of amortizable intangible assets.

Gain on sale of assets .

Gain on sale of assets for the year ended December 31, 2022 was $18.6 million due to the disposition of GeneDx.

There was no comparable transaction for the year ended December 31, 2023.

Gain on sale of assets for the year ended December 31, 2024 was $121.5 million due to the BioReference Transaction which closed during the third quarter of 2024.

Pharmaceuticals

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Total costs and expenses

Income (loss) from operations

(Loss) income from operations

Revenue from products .

Revenue from products for the year ended December 31, 2023 increased $24.7 million, or 17%, compared to the year ended December 31, 2022.

The increase in revenue was driven by growing sales from our international operations, which were positively impacted by foreign exchange fluctuations of approximately $6.3 million, as well as increased sales of Rayaldee .

Revenue from sales of Rayaldee for the years ended December 31, 2023, and 2022, was $31.0 million and $27.2 million, respectively, an increase of 14%.

Revenue from products for the year ended December 31, 2024 decreased $12.5 million, or 7%, compared to the year ended December 31, 2023.

The decrease in product revenue was primarily driven by unfavorable foreign exchange fluctuations of approximately $8.9 million from our international operations and a $2.0 million decrease in Rayaldee sales.

While we experienced higher sales volumes in 2024 compared to 2023, this increase was more than offset by unfavorable foreign exchange fluctuations.

Revenue from sales of Rayaldee for the year ended December 31, 2024, was $29.0 million compared to $31.0 million for the year ended December 31, 2023.

Revenue from transfer of intellectual property and other.

For the years ended December 31, 2023 and 2022, revenue from transfer of intellectual property and other principally reflects $90.0 million from Pfizer triggered by the FDA approval of NGENLA (Somatrogon) in 2023, and, in 2022, a $85.0 million regulatory milestone payment based on the commencement of sales from NGENLA (Somatrogon) in Europe and Japan, as well as gross profit share and royalty payments for both NGENLA (Somatrogon) and Pfizer’s Genotropin® (Somatropin) of $22.6 million and $4.4 million for the years ended December 31, 2023 and 2022, respectively.

For the years ended December 31, 2023 and 2022, revenue from transfer of intellectual property and other principally reflects $4.1 million and $9.3 million, respectively, of revenue related to the Pfizer Transaction.

For the year ended December 31, 2023, revenue from transfer of intellectual property and other included $50.0 million from Merck in consideration for the rights granted to Merck under the Merck Agreement, $7.0 million from VFMCRP triggered by German price approval for Rayaldee, and $2.5 million from Nicoya due to Nicoya’s submission of the investigational new drug application to China's Center for Drug Evaluation.

For the year ended December 31, 2022, revenue from transfer of intellectual property and other included $3.0 million related to the achievement of a sales milestone pursuant to the VFMCRP Agreement, and $2.5 million from Nicoya tied to the first anniversary of the effective date of the Nicoya agreement.

For the year ended December 31, 2024, we recorded $77.4 million in revenue from the transfer of intellectual property and other.

Revenue for the year ended December 31, 2024 principally reflects $30.0 million from Pfizer, which includes $28.3 million from gross profit share and royalty payments for both NGENLA (somatrogon) and Pfizer's Genotropin® (somatropin).

Revenue in 2024 also included $23.8 million from the BARDA Contract, a $12.5 million milestone payment from Merck, and $10.2 million from contract manufacturers' commercial milestones.

In comparison, for the year ended December 31, 2023, we recorded $180.7 million in revenue from the transfer of intellectual property and other.

This was primarily driven by a $90.0 million milestone payment, triggered by the FDA approval of NGENLA (somatrogon), and $26.7 million in revenue that included $22.6 million from gross profit share and royalty payments for both NGENLA (somatrogon) and Pfizer's Genotropin® (somatropin).

In 2023, revenue also included $50.0 million from Merck in consideration for the rights granted to Merck under the Merck Agreement, $7.0 million from VFMCRP triggered by the German price approval for Rayaldee , $2.5 million from Nicoya due to Nicoya's submission of the investigational new drug application to China's Center for Drug Evaluation, $2.4 million from contract manufacturers' commercial milestones and $1.2 million from the BARDA Contract.

Cost of revenue .

Cost of revenue for the the year ended December 31, 2023 increased by 13% to $99.5 million compared to the year ended December 31, 2022, which was driven by growing sales in our international operations due primarily to changes in product mix during the period and higher inventory costs compared to the prior period partially impacted by unfavorable foreign exchange fluctuations of $4.4 million.

Cost of revenue for the year ended December 31, 2024 decreased by 7% to $92.5 million compared to $99.5 million for the year ended December 31, 2023, which was primarily driven by favorable foreign exchange fluctuations.

Despite increased sales volumes during 2024, which typically increases cost of revenue, we were able to limit this increase due to a combination of factors, including favorable foreign currency fluctuations and a reduction in Rayaldee's cost of revenue.

Favorable foreign currency fluctuations positively impacted cost of revenue by approximately $6.1 million.

The reduction in Rayaldee's cost of revenue resulted from a lower standard cost per bottle, achieved through ongoing process improvements and favorable raw material pricing.

Selling, general and administrative expenses .

Selling, general and administrative expenses for the years ended December 31, 2024 and 2023 were $58.0 million and $55.7 million, respectively, representing an increase of 4% from the prior year period.

The increase in selling, general and administrative expenses was due to higher employee-related expenses from our international operations and from higher employee-related expenses from Rayaldee .

The increase in selling, general and administrative expenses was due to higher employee-related, professional, and legal expenses related to our international operations.

Research and development expenses .

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Total research and development expenses

The increase in research and development expenses for the year ended December 31, 2023 was primarily due to research expenses at ModeX driven by growth in our early-stage programs, including a $12.5 million payment to Sanofi under the Sanofi In-License Agreement and an increase in employee-related expenses, partially offset by lower expenses related to Somatrogon (hGH-CTP) due to the closure of the open-label extension studies in countries in which Somatrogon (hGH-CTP) received marketing authorization.

Research and development expenses for the pharmaceutical segment for the years ended December 31, 2023 and 2022 included equity-based compensation expenses of $4.0 million and $2.6 million, respectively.

Research and development expenses for the year ended December 31, 2024, increased primarily due to growth in our BARDA collaboration and higher employee-related expenses.

These increases were partially offset by a one-time payment to Sanofi of $12.5 million made in 2023 pursuant to the Sanofi In-License Agreement, which was triggered as a result of the Merck Agreement, and lower costs related to Somatrogon (hGH-CTP) following the closure of open-label extension studies in countries where it has received marketing authorization.

Contingent consideration .

Contingent consideration for the years ended December 31, 2023 and 2022 reflected reversals of expense of $1.0 million and $1.3 million, respectively.

Contingent consideration for the years ended December 31, 2023 and 2022, was primarily attributable to changes in assumptions regarding the timing of achievement of future milestones for OPKO Renal, and potential amounts payable to former stockholders of OPKO Renal in connection therewith, pursuant to our acquisition agreement in March 2013.

Contingent consideration for the year ended December 31, 2023 reflected a reversal of expense of $1.0 million.

This was primarily attributable to changes in assumptions regarding the timing of achievement of future milestones for OPKO Renal, and potential amounts payable to former stockholders of OPKO Renal in connection therewith, pursuant to our acquisition agreement in March 2013.

We recorded no contingent consideration for the year ended December 31, 2024.

Amortization of intangible assets .

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Amortization expense reflects the amortization of acquired intangible assets with defined useful lives.

The year ended December 2023 had a full year of amortization, while the year ended December 2022 had eleven months of amortization.

The assets will be amortized on a straight-line basis over their estimated useful life of approximately 12 years.

Our indefinite lived IPR&D assets will not be amortized until the underlying development programs are completed.

Upon obtaining regulatory approval, IPR&D assets will be accounted for as a finite-lived intangible asset and amortized on a straight-line basis over its estimated useful life of approximately 12 years.

For the years ended December 31,

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Operating loss for our unallocated corporate operations for the years ended December 31, 2024 and 2023 was $41.4 million and $42.6 million, respectively, and principally reflect general and administrative expenses incurred in connection with our corporate operations.

The increase in operating loss for our unallocated corporate operations for the year ended December 31, 2023 was primarily due to an increase in employee-related and professional expenses, partially offset by a decrease in legal expenses.

Interest income .

Interest income for the years ended December 31, 2024 and 2023 was $8.4 million and $4.0 million, respectively.

The increase is driven by having higher average cash and investment balances as a result of the cash received related to our sale of GeneDx, as well as higher interest rates.

The increase reflects higher average cash and investment balances as a result of the cash received from the BioReference Transaction, the issuance of the 2044 Notes, and the sale of common stock of GeneDx Holdings Corp.

(formerly, Sema4 Holdings Corp., (“GeneDx Holdings”).

We originally acquired shares of GeneDx Holdings in the 2022 disposition of our former subsidiary, GeneDx LLC (“GeneDx”) and subsequently acquired additional shares in an underwritten offering by GeneDx Holdings.

Interest expense .

Interest expense for the years ended December 31, 2024 and 2023 was $47.5 million and $13.5 million, respectively.

Interest expense was principally related to interest incurred on the 2025 Notes, the 2023 Convertible Notes, the 2033 Senior Notes (in each case as defined in Note 7.

Debt to our audited consolidated financial statements contained in this Annual Report on Form 10-K), and BioReference’s outstanding debt under the Credit Agreement.

The increase was primarily driven by interest incurred on the 2029 Convertible Notes (as defined below) and the 2044 Notes, including amortization of deferred financing and debt issuance costs.

This increase was partially offset by the extinguishment of our outstanding 2023 Convertible Notes (as defined below) in connection with their exchange for 2029 Convertible Notes and the repurchase of a significant portion of the outstanding 2025 Notes (as defined in Note 7 of the Consolidated Financial Statements) using a portion of the net proceeds from the issuance of 2029 Convertible Notes.

Fair value changes of derivative instruments, net .

Fair value changes of derivative instruments, net for the years ended December 31, 2024 and 2023 were $26.2 million of expense and $0.8 million reversal of expense, respectively.

Derivative expense for the years ended December 31, 2023 and 2022 was principally related to the change in fair value on foreign currency forward exchange contracts at OPKO Chile.

Derivative expense for the years ended December 31, 2024 and 2023 was principally related to the change in fair value of the 2029 Convertible Notes and of foreign currency forward exchange contracts at OPKO Chile.

Other income (expense), net .

Other income (expense), net for the years ended December 31, 2023 and 2022, was $17.0 million and $155.8 million of expense, respectively.

Other income (expense), net for the years ended December 31, 2023 and 2022, included $23.0 million and $150.9 million, respectively, of expense as a result of a decrease in the fair value of our investment in GeneDx Holdings.

For the year ended December 31, 2023, we recorded $6.7 million of income as a result of GeneDx Holdings achieving specific revenue target milestones for the fiscal year ended December 31, 2022.

Foreign currency gains of $1.2 million and losses of $1.8 million were the majority of other expenses for the years ended December 31, 2023 and 2022, respectively.

Other income (expense), net for the years ended December 31, 2024 and 2023, was $206.9 million and ($17.0 million), respectively.

The increase in 2024 was primarily driven by a $140.0 million gain related to the change in fair value of our investment in GeneDx Holdings and a $64.5 million gain from the sale of 2,937,762 shares of GeneDx Holdings.

In 2023, the expense was primarily due to a $23.0 million loss related to the change in fair value of our investment in GeneDx Holdings, partially offset by a $6.7 million gain resulting from GeneDx Holdings achieving specific revenue target milestones.

Foreign currency fluctuations resulted in a $3.8 million loss in 2024 and a $1.2 million gain in 2023.

Income tax benefit (provision) .

Our income tax benefit (provision) for the years ended December 31, 2023 and 2022 was ($4.4 million) provision and $63.5 million benefit, respectively.

Our income tax benefit (provision) for the years ended December 31, 2024 and 2023 was ($42.8 million) and ($4.4 million), respectively.

For the year ended December 31, 2024, the tax rate differed from the U.S.

federal statutory rate of 21% primarily due to the relative mix in earnings and losses in the U.S.

versus foreign tax jurisdictions, and operating results in tax jurisdictions which do not result in a tax benefit.

For the year ended December 31, 2022, the tax rate differed from the U.S.

federal statutory rate of 21% primarily due to changes in the company’s estimated tax liability, the impact from the IPR&D tax basis difference on deferred attribute realization as a result of the acquisition of ModeX, as well as the relative mix of earnings and losses in the U.S.

versus foreign tax jurisdictions, and operating results in tax jurisdictions which do not result in a tax benefit.

versus foreign tax jurisdictions, impact related to the BioReference Transaction, the impact of the payments under Merck Agreement, the impact of sales of the GeneDx investment, and operating results in tax jurisdictions which do not result in a tax benefit.

Loss from investments in investees .

We have made investments in certain early stage companies that we believe have valuable proprietary technology and significant potential to create value for us as a shareholder or member.

We have invested in certain early stage companies that we believe have valuable proprietary technology and significant potential to create value for us as an equityholder.

We account for these investments under the equity method of accounting, resulting in the recording of our proportionate share of their losses until our share of their loss exceeds our investment.

Until the investees’ technologies are commercialized, if ever, we anticipate they will report net losses.

Loss from investments in investees was $0.1 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively.

Loss from investments in investees was $18.0 thousand and $107.0 thousand for the years ended December 31, 2024 and 2023, respectively.

For The Years Ended December 31, 2023 and 2022

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Total costs and expenses

Income (loss) from operations

Loss from operations

For the years ended December 31,

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Total costs and expenses

Income (loss) from operations

Revenue from services for the year ended December 31, 2022 decreased by approximately $851.5 million compared to the year ended December 31, 2021.

Loss from operations

Revenue from services for the year ended December 31, 2023 decreased by approximately $240.4 million, or 32%, compared to the year ended December 31, 2022.

The decrease in revenue for the year ended December 31, 2023 primarily reflected lower demand for COVID-19 testing and lower COVID-19 reimbursement of $189.7 million and $5.1 million, respectively.

BioReference performed 3.1 million molecular tests for COVID-19 and 325 thousand serology antibody tests during the year ended December 31, 2022, which represented 28.7% of total testing volume for that period.

In comparison, during the year ended December 31, 2021 Bio Reference performed 11.9 million molecular tests for COVID-19 and 0.7 million serology antibody tests,which represented 58.5% of total test volume for that period.

The reduction in reimbursement reflected an increase in utilization of antigen point of care diagnostic tests as well as a change in the mix of customers which have varying contract prices depending on the level of services we provide.

For the year ended December 31, 2022, clinical test volume decreased $25.8 million compared to the year ended December 31, 2021.

In addition, clinical test reimbursement decreased $54.0 million year over year as a result of the change in the mix of tests ordered.

Furthermore, as a result of our sale of GeneDx in 2022, genomic test revenues decreased by $63.9 million for the year ended December 31, 2022, as compared to the prior year.

For the year ended December 31, 2022, negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $21.5 million were recognized, primarily due to lower COVID-19 test reimbursement estimates.

For the year ended December 31, 2021, positive revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $40.4 million were recognized, primarily due to an increase in COVID-19 test reimbursement estimates.

For the year ended December 31, 2023, clinical test volume increased $31.1 million, while clinical test reimbursement decreased $28.4 million, respectively, as a result of the mix of testing ordered.

Furthermore, as a result of our sale of GeneDx in April 2022, genomic test revenues decreased by $48.3 million for the year ended December 31, 2023.

The composition of revenue from services by payor for the years ended December 31, 2023 and 2022 was as follows:

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Cost of revenue .

Cost of revenue for the year ended December 31, 2022 decreased $474.6 million compared to the year ended December 31, 2021.

Cost of revenue decreased primarily due to a decline in the volume of COVID-19 tests performed during the year ended December 31, 2022 compared to the year ended December 31, 2021.

Cost of revenue for the year ended December 31, 2022 also decreased due to a decline in the number of genomic tests performed during the period as a result of changes in the test mix during the period.

Cost of revenue for the year ended December 31, 2022, included $6.1 million in severance costs resulting from reductions in our workforce.

Cost of revenue for the year ended December 31, 2023 decreased $181.7 million, a decrease of 29% compared to the year ended December 31, 2022.

Furthermore, cost of revenue decreased by $34.9 million as a result of our sale of GeneDx in 2022.

Selling, general and administrative expenses .

Selling, general and administrative expenses for the years ended December 31, 2022 and 2021 were $284.4 million and $357.6 million, respectively.

Selling, general and administrative expenses in our diagnostics segment increased primarily due to higher variable billing and compensation costs which resulted from an increase in volume and collections during the year ended December 31, 2022, and in marketing costs and other administrative costs directly associated with COVID-19 testing volumes.

Selling, general and administrative expenses for the year ended December 31, 2022 also include expenses incurred in connection with certain legal matters and administrative, IT, and marketing costs associated with our investment in the launch of Scarlet Health.

Research and development expenses .

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Total research and development expenses

The decrease in research and development expenses for the year ended December 31, 2022 primarily related to the development of more efficient clinical testing services at BioReference and as a result of the sale of GeneDx.

Amortization of intangible assets .

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Amortization expense reflects the amortization of acquired intangible assets with defined useful lives.

Amortization expense declined during the year ended December 31, 2022 as a result of the GeneDx Transaction and the full amortization of certain acquired intangible assets.

Amortization expense declined for the year ended December 31, 2023 due to the disposition of GeneDx and as a result of the full amortization of certain acquired intangible assets.

Gain on sale of assets.

Gain on sale of assets for the year ended December 31, 2022, was $18.6 million due to the sale of GeneDx Transaction.

Gain on sale of assets for the year ended December 31, 2022 was $18.6 million due to the disposition of GeneDx.

There was no comparable transaction for the year ended December 31, 2023.

Pharmaceuticals

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Amortization of intangible assets

Gain on sale of asset

Total costs and expenses

Loss from operations

Income (loss) from operations

Revenue from products .

Revenue from products for the years ended December 31, 2022 and 2021 was $142.8 million and $141.8 million, respectively.

The increase in revenue from products for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily attributable to an increase in sales in our international operating companies offset by foreign exchange fluctuations.

Revenue from sales of Rayaldee for the years ended December 31, 2022 and 2021, was $27.3 million and $27.0 million, respectively.

Revenue from products for the year ended December 31, 2023 increased $24.7 million, or 17%, compared to the year ended December 31, 2022.

Revenue from sales of Rayaldee for the years ended December 31, 2023, and 2022, was $31.0 million and $27.2 million, respectively, an increase of 14%.

Revenue from transfer of intellectual property and other.

Revenue from transfer of intellectual property for the year ended December 31, 2022 reflects $85.0 million of regulatory milestone payments from Pfizer due from the commencement of sales from NGENLA (Somatrogon) in Europe and Japan, as well as royalty payments and gross profit share for both NGENLA (Somatrogon) and Pfizer’s Genotropin® (somatropin), $3.0 million related to a sales milestone pursuant to the VFMCRP Agreement, and $2.5 million from Nicoya tied to the first anniversary of the effective date of the Nicoya Agreement.

During the year ended December 31, 2022, we began to receive royalty payments from sales of Rayaldee from VFMCRP pursuant to the VFMCRP Agreement, and we expect these payments to increase as VFMCRP launches Rayaldee in additional territories throughout Europe.

For the years ended December 31, 2022, and December 31, 2021, revenue from transfer of intellectual property and other includes $9.3 million and $10.8 million, respectively, of revenue related to the Pfizer Transaction.

For the year ended December 31, 2021, revenue from transfer of intellectual property and other also included $1.0 million related to the LeaderMed joint venture, $4.9 million related to the CAMP4 Agreement and a $5.0 million non-refundable upfront payment received under the Nicoya Agreement.

Cost of revenue .

Cost of revenue for the year ended December 31, 2022 decreased $2.6 million compared to the year ended December 31, 2021 primarily due to a $3.8 million inventory reserve charge for Rayaldee recognized for the year ended December 31, 2021 and changes in the product mix during these annual periods, which were partially offset by the negative impact of foreign exchange fluctuations at our international operating companies.

Cost of revenue for the year ended December 31, 2023 increased by 13% to $99.5 million compared to the year ended December 31, 2022, which was driven by growing sales in our international operations due primarily to changes in product mix during the period and higher inventory costs compared to the prior period partially impacted by unfavorable foreign exchange fluctuations of $4.4 million.

Selling, general and administrative expenses .

Selling, general and administrative expenses for the years ended December 31, 2022 and 2021 were $49.2 million and $49.4 million, respectively.

The decrease in selling, general and administrative expenses was primarily due to a decrease in legal expenses and selling expenses related to Rayaldee.

Selling, general and administrative expenses for the pharmaceutical segment for the years ended December 31, 2022 and 2021 included equity-based compensation expense of $1.2 million and $1.3 million, respectively.

Selling, general and administrative expenses for the years ended December 31, 2023 and 2022 were $55.7 million and $49.2 million, respectively, representing an increase of 13% from the prior year period.

The increase in selling, general and administrative expenses was due to higher employee-related expenses from our international operations and from higher employee-related expenses from Rayaldee .

Research and development expenses .

Research and development expenses for the years ended December 31, 2022 and 2021 were $61.3 million and $59.7 million, respectively.

Research and development expenses for the years ended December 31, 2023 and 2022 were $87.0 million and $61.3 million, respectively, representing an increase of 42% from the prior year.

Research and development expenses include external and internal expenses, partially offset by third-party grants and funding arising from collaboration agreements.

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Total research and development expenses

The increase in research and development expenses for the year ended December 31, 2022 was primarily due to research expenses at ModeX, partially offset by lower expenses related to Somatrogon (hGH-CTP) due to the closure of the open-label extension studies in countries with marketing authorization, lower expenditure on the Rayaldee COVID-19 study due to the study’s completion, and lower spending as a result of the sale of one of EirGen’s facilities in Waterford, Ireland to Horizon Therapeutics in 2021 discussed below.

Contingent consideration .

Contingent consideration for the years ended December 31, 2022 and 2021 was $1.3 million and $1.7 million reversal of expense, respectively.

Contingent consideration for the years ended December 31, 2023 and 2022 reflected reversals of expense of $1.0 million and $1.3 million, respectively.

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Amortization expense reflects the amortization of acquired intangible assets with defined useful lives.

During the year ended December 31, 2022, we reclassified $590.2 million of IPR&D related to Somatrogon (hGH-CTP) from IPR&D in our Consolidated Balance Sheet upon the approval of NGENLA (Somatrogon) in Europe and Japan, which was the primary reason for the increase in amortization of intangible assets compared to the year ended December 31, 2021.

The year ended December 2023 had a full year of amortization, while the year ended December 2022 had eleven months of amortization.

The assets will be amortized on a straight-line basis over their estimated useful life of approximately 12 years.

Gain on sale of assets .

Gain on sale of assets for the year ended December 31, 2021 was $31.5 million, which resulted from an agreement between EirGen, our wholly owned subsidiary, and Horizon Therapeutics plc, to sell one of EirGen’s facilities in Waterford, Ireland for $65 million in cash less certain assumed and accrued liabilities relating to transferred employees.

The facility housed EirGen’s sterile-fill-finish business and was no longer a core component of our ongoing operations and business strategy.

For the years ended December 31,

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Costs and expenses:

Cost of revenue

Selling, general and administrative

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Loss from operations

Operating loss for our unallocated corporate operations for the years ended December 31, 2022 and 2021 was $39.6 million and $60.3 million, respectively, and principally reflects general and administrative expenses incurred in connection with our corporate operations.

The decrease in operating loss for our unallocated corporate operations for the year ended December 31, 2022 was driven by decreases in legal and professional fees incurred partially offset by an increase in equity based compensation.

Operating loss for our unallocated corporate operations for the years ended December 31, 2023 and 2022 was $42.6 million and $39.6 million, respectively, and principally reflect general and administrative expenses incurred in connection with our corporate operations.

Interest income .

Interest income for the years ended December 31, 2022 and 2021 was not significant as our cash investment strategy emphasizes the security of the principal invested and fulfillment of liquidity needs.

Interest income for the years ended December 31, 2023 and 2022 was $4.0 million and $2.0 million, respectively.

The increase is driven by having higher average cash and investment balances as a result of the cash received related to our sale of GeneDx, as well as higher interest rates.

Interest expense .

Interest expense for the years ended December 31, 2023 and 2022 was $13.5 million and $12.1 million, respectively.

Interest expense was principally related to interest incurred on the 2025 Notes, the 2023 Convertible Notes, the 2033 Senior Notes (each as defined below), as well as on BioReference’s outstanding debt under the Credit Agreement.

The decrease in interest expense was primarily due to the impact of the adoption of ASU 2020-06 on the 2025 Notes.

Due to the adoption of ASU 2020-06, interest expense decreased for the year ended December 31, 2022 compared to the prior year period due to the elimination of the discount created by recognizing a component of convertible debt in equity.

Interest expense was principally related to interest incurred on the 2025 Notes, the 2023 Convertible Notes, the 2033 Senior Notes, and BioReference’s outstanding debt under the BioReference Credit Agreement.

Fair value changes of derivative instruments, net .

Fair value changes of derivative instruments, net for the years ended December 31, 2022 and 2021, was $649 thousand and $846 thousand of reversal of expense, respectively, which were principally related to the change in fair value on foreign currency forward exchange contracts at OPKO Chile.

Fair value changes of derivative instruments, net for the years ended December 31, 2023 and 2022 were $0.8 million of expense and $0.7 million reversal of expense, respectively.

Derivative expense for the years ended December 31, 2023 and 2022 was principally related to the change in fair value on foreign currency forward exchange contracts at OPKO Chile.

Other income (expense), net .

Other income (expense), net for the years ended December 31, 2023 and 2022, was $17.0 million and $155.8 million of expense, respectively.

Other income (expense), net for the year ended December 31, 2022, includes $150.9 million of expense due to the decrease in the fair value of our investment in GeneDx Holdings.

Other income (expense), net for the year ended December 31, 2021 primarily consisted of a $11.1 million non-cash loss related to the exchange of $55.4 million of the outstanding 2025 Notes and net unrealized losses recognized during the period on our investments in our equity securities.

For the year ended December 31, 2023, we recorded $6.7 million of income as a result of GeneDx Holdings achieving specific revenue target milestones for the fiscal year ended December 31, 2022.

Foreign currency gains of $1.2 million and losses of $1.8 million were the majority of other expenses for the years ended December 31, 2023 and 2022, respectively.

Income tax benefit (provision) .

Our income tax benefit (provision) for the years ended December 31, 2022 and 2021 was $63.5 million and $(15.5) million, respectively, and reflects results using our expected effective tax rate.

Our income tax benefit (provision) for the years ended December 31, 2023 and 2022 was ($4.4 million) provision and $63.5 million benefit, respectively.

For the year ended December 31, 2023, the tax rate differed from the U.S.

federal statutory rate of 21% primarily due to a $22.5 million discrete benefit resulting from reduced tax rates applicable to foreign deferred tax liabilities, the impact from the IPR&D tax basis difference on deferred attribute realization as a result of the acquisition of ModeX, as well as the relative mix of earnings and losses in the U.S.

versus foreign tax jurisdictions, and operating results in tax jurisdictions which do not result in a tax benefit compared to year ended December 31, 2021.

federal statutory rate of 21% primarily due to the relative mix in earnings and losses in the U.S.

versus foreign tax jurisdictions, the impact of the payments under the Merck Agreement, and operating results in tax jurisdictions which do not result in a tax benefit.

For the year ended December 31, 2022, the tax rate differed from the U.S.

versus foreign tax jurisdictions, and operating results in tax jurisdictions which do not result in a tax benefit.

Loss from investments in investees .

We have made investments in certain early stage companies that we perceive to have valuable proprietary technology and significant potential to create value for us as a shareholder or member.

We have made investments in certain early stage companies that we believe have valuable proprietary technology and significant potential to create value for us as a shareholder or member.

We account for these investments under the equity method of accounting, resulting in the recording of our proportionate share of their losses until our share of their loss exceeds our investment.

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LIQUIDITY AND CAPITAL RESOURCES

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

Cash used in operations of $28.2 million for year ended December 31, 2023 principally reflects milestone payments of $90.0 million, $7.0 million and $2.5 million from Pfizer, VFMCRP and Nicoya, respectively, which were offset by general and administrative expenses related to our corporate operations and research and development expenses.

Cash used in investing activities of $18.2 million for the year ended December 31, 2023 primarily reflects an investment of $5.0 million in GeneDx Holdings Class A common stock, capital expenditures of $16.3 million, offset by proceeds from the sale of property plant and equipment of $2.7 million.

Cash used in financing activities of $11.3 million primarily reflects net borrowings on our lines of credit and $3.0 million redemption of the 2033 Senior Notes.

We have historically not generated sustained positive cash flow sufficient to offset our operating and other expenses, and our primary sources of cash have been from the public and private placement of equity, the issuance of the 2023 Convertible Notes, the 2025 Convertible Notes, and credit facilities available to us.

In January 2024, we completed a private offering of $230.0 million aggregate principal amount of our 3.75% Convertible Senior Notes due 2029 (the “144A Notes”) in accordance with the terms of the note purchase agreement (the “144A Note Purchase Agreement”) entered into by and between by the Company and J.P.

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

Cash used in operations of $183.5 million for year ended December 31, 2024 principally reflects general and administrative expenses related to our corporate operations, research and development activities and sales and marketing activities related to our pharmaceutical and diagnostic business.

Cash provided by investing activities was $352.2 million for the year ended December 31, 2024 primarily reflected both the proceeds from the BioReference Transaction and the sale of equity securities, offset by capital expenditures.

Cash provided by financing activities of $184.2 million primarily reflected the issuance of our 2029 Convertible Notes and the issuance of the 2044 Notes, which was partially offset by the redemption of the 2025 Notes, repurchase of shares of our Common Stock, and net repayments on our lines of credit.

We have historically not generated sustained positive cash flow sufficient to offset our operating and other expenses, and our primary sources of cash have been from the public and private placement of equity and debt, as well as credit facilities available to us.

On January 7th, 2025, ModeX announced the dosing of the first participant in a Phase 1 study of an EBV vaccine candidate being developed in collaboration with Merck.

This achievement triggered a $12.5 million cash milestone payment from Merck to ModeX under the Merck Agreement, pursuant to which Merck obtained a license to certain patent rights and know-how in connection with the development of ModeX’s preclinical nanoparticle vaccine candidate targeting the Epstein-Barr Virus.

Under the terms of the Merck Agreement, ModeX is eligible to receive up to an additional $860.0 million upon the achievement of certain commercial and development milestones.

ModeX and Merck have established a strategic collaboration with a detailed research plan to guide the development of such a vaccine or related product.

This plan includes the creation of a joint steering committee, and the potential use of third-party contract development and manufacturing organization carry out such activities unless otherwise agreed.

Merck will reimburse ModeX for development costs incurred as part of this research plan.

To date, we have incurred $25.0 million of development costs related to the Epstein-Barr Virus, which Merck has reimbursed in full.

In September 2024, ModeX entered into the BARDA Amendments which increased funding by $26.9 million, for the ongoing development, manufacturing, and execution of a Phase 1 clinical trial for a next-generation MSTAR multispecific antibody with broad neutralizing activity against known variants of SARS-CoV-2.

The BARDA Amendments also included BARDA's exercise of an option for the development of a multispecific protein antibody for influenza or another pathogen, with the additional funding allocated to cover the expanded work.

These modifications increased the total value of the BARDA Contract to $110.0 million, with a potential value of $205.0 million if BARDA exercises all options thereunder to expand ModeX's services.

The BARDA Contract covers a five-year period through February 2028.

We expect this funding will support the development of a second novel multispecific antibody to SARS-CoV-2, from preclinical through Phase 1 trials, as well as preclinical work on gene-based expression of multispecific antibodies to SARS-CoV-2, including mRNA and/or DNA vectors.

In addition, ModeX plans to begin development of influenza multispecifics with gene and/or protein delivery modalities.

As of December 31, 2024, the aggregate amount remaining to be funded by BARDA, which is subject to performance obligations and excluding unexercised contract options, was $85.0 million.

On September 16, 2024, the Company consummated the BioReference Transaction, pursuant to which Labcorp acquired select assets of BioReference.

Labcorp paid to the Company aggregate consideration of $237.5 million in cash, subject to certain adjustments as set forth in the Labcorp Asset Purchase Agreement.

The assets acquired by Labcorp included BioReference's laboratory testing businesses focused on clinical diagnostics, reproductive health, and women's health across the United States, excluding New York and New Jersey.

During the year ended December 31, 2024, the Company sold 2,937,762 shares of GeneDx Holdings common stock at various prices for approximately $166.6 million in aggregate proceeds.

The sale reduced the Company's total ownership in GeneDx Holdings to 2.3% as of December 31, 2024.

As of December 31, 2024, the aggregate value of our GeneDx Holdings investment was $47.7 million based on the closing market price of the GeneDx Holdings common stock on such date.

On July 18, 2024, our Board of Directors authorized the repurchase of up to $100 million of our Common Stock.

Under this program, we may repurchase shares through various methods, including open market purchases, block trades, privately negotiated transactions and accelerated share repurchases, as well as pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1(c) of the Exchange Act, and otherwise in compliance with applicable laws.

The timing and volume of repurchases will depend on market conditions, our capital management, investment opportunities, and other factors.

The program does not obligate us to repurchase any specific number of shares, has no set expiration date, and may be modified, suspended, or discontinued at our discretion.

Through December 31, 2024, the Company repurchased an aggregate of 25,825,785 shares of Common Stock at an average price of $1.56 per share for approximately $40.2 million under this repurchase program.

On July 17, 2024, we completed a private offering of $250 million aggregate principal amount of the 2044 Notes in accordance with the terms of the 2044 Note Purchase Agreement.

The 2044 Notes are secured by the Company’s profit share payments from Pfizer under the Restated Pfizer Agreement.

The 2044 Notes bear interest at the 3-month SOFR plus 7.5%, subject to a minimum interest rate of 4.0% per annum.

The 2044 Notes mature in July 2044, with interest-only payments required for the first four years.

In January 2024, we completed a private offering of $230.0 million aggregate principal amount of our 3.75% Convertible Senior Notes due 2029 (the “2029 Convertible 144A Notes”) in accordance with the terms of the note purchase agreement (the “144A Note Purchase Agreement”) entered into by and between the Company and J.P.

Morgan Securities LLC (the "Initial Purchaser").

The $230.0 million aggregate principal amount of 144A Notes includes $30.0 million aggregate principal amount of 144A Notes purchased on the Closing Date by the Initial Purchaser in accordance with its exercise in full of its option to purchase additional 144A Notes under the 144A Note Purchase Agreement.

The Company received net proceeds from the issuance of the 144A Notes of approximately $222.0 million, after deducting fees and estimated offering expenses payable by the Company.

The Company used approximately $50.0 million of the net proceeds from the offering of the 144A Notes to repurchase shares of the Company’s common stock, par value $0.01 per share, from purchasers of the 144A Notes in privately negotiated transactions effected with or through the Initial Purchaser or its affiliate.

The purchase price per share of the Common Stock repurchased in such transactions equaled the closing sale price of the Common Stock on January 4, 2024, which was $0.9067 per share.

Also, contemporaneously with the pricing of the 144A Notes, the Company entered into separate, privately negotiated transactions with certain holders of the Company’s outstanding 4.50% Convertible Senior Notes due 2025 to repurchase, on the closing date, approximately $144.4 million aggregate principal amount of such notes.

The Company effected such repurchases for cash, using $146.3 million of the net proceeds from the offering of the 144A Notes.

Additionally, the Company issued and sold approximately $71.1 million aggregate principal amount of its 3.75% Convertible Senior Notes due 2029 (the “Affiliate Notes” and, together with the 144A Notes, the “Notes”) pursuant to the terms of a note purchase agreement entered into on January 4, 2024 (the “Affiliate Note Purchase Agreement”) by and among the Company and certain investors including, Frost Gamma Investments Trust, a trust controlled by Phillip Frost, M.D., the Company’s Chairman and Chief Executive Officer, and Jane H.

We received approximately $220.0 million of net proceeds from the issuance of the 2029 Convertible 144A Notes, after deducting fees and estimated offering expenses.

We used approximately $50.0 million of the net proceeds to repurchase shares of our Common Stock from purchasers of the 2029 Convertible 144A Notes in privately negotiated transactions at a purchase price equal to the closing sale price per share of Common Stock on January 4, 2024, which was $0.9067.

Contemporaneously with the pricing of the 2029 Convertible 144A Notes, we entered into separate, privately negotiated transactions with certain holders of the outstanding 2025 Notes to repurchase, on the closing date, approximately $144.4 million aggregate principal amount of such notes.

We effected such repurchases for cash, using $146.3 million of the net proceeds from the offering of the 2029 Convertible 144A Notes, following which only $170 thousand aggregate principal amount of the 2025 Notes remained outstanding.

Additionally, we issued and sold approximately $71.1 million aggregate principal amount of our 3.75% Convertible Senior Notes due 2029 (the “2029 Convertible Affiliate Notes” and, together with the 2029 Convertible 144A Notes, the “ 2029 Convertible Notes”) pursuant to the terms of a note purchase agreement entered into on January 4, 2024 (the “Affiliate Note Purchase Agreement”) by and among the Company and certain investors including, Frost Gamma Investments Trust, a trust controlled by Phillip Frost, M.D., the Company’s Chairman and Chief Executive Officer, and Jane H.

Hsiao, Ph.D., MBA, the Company’s Vice-Chairman and Chief Technical Officer (collectively, the “Affiliate Purchasers”).

Pursuant to the Affiliate Note Purchase Agreement, the Company issued and sold the Affiliate Notes to the Affiliate Purchasers in exchange for $55.0 million aggregate principal amount of the Company’s existing 5% Convertible Promissory Notes, together with approximately $16.1 million of accrued but unpaid interest thereon, held by the Affiliate Purchasers.

Holders may convert their notes at their option prior to the close of business on the business day immediately preceding September 15, 2028 only under the following circumstances:

Pursuant to the Affiliate Note Purchase Agreement, the Company issued and sold the 2029 Convertible Affiliate Notes to the Affiliate Purchasers in exchange for $55.0 million aggregate principal amount of the Company’s existing 5% Convertible Promissory Notes (the "2023 Convertible Notes"), together with approximately $16.1 million of accrued but unpaid interest thereon, held by the Affiliate Purchasers.

Following such exchange, no 2023 Convertible Notes remained outstanding.

At December 31, 2024, $280.6 million aggregate principal amount of the 2029 Convertible Notes was outstanding.

Holders may convert their 2029 Convertible Notes at their option prior to the close of business on the business day immediately preceding September 15, 2028 only under the following circumstances:

(1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2024 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day;

(2) during the five consecutive business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined herein) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on each such trading day;

or (3) upon the occurrence of specified corporate events.

(2) during the five consecutive business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Common Stock and the applicable conversion rate on each such trading day;

or (3) upon the occurrence of specified corporate events specified in the indenture governing the 2029 Convertible Notes.

On or after September 15, 2028 until the close of business on the business day immediately preceding the maturity date, holders may convert their notes at any time, regardless of the foregoing conditions.

Upon conversion of a note, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our Common Stock, at our election.

However, before we satisfy the share reservation condition, we will be required to elect to deliver solely cash or, subject to certain limitations, a combination of cash and shares of our common stock upon conversion.

The conversion rate is initially equal to 869.5652 shares of Common Stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $1.15 per share of Common Stock).

The conversion rate for the 144A Notes will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest.

In addition, following certain corporate events that occur prior to the maturity date of the notes or if we deliver a notice of redemption, in certain circumstances we will increase the conversion rate of the 144A Notes for a holder who elects to convert its notes in connection with such a corporate event, or notice of redemption as the case my be.

We may not redeem the notes prior to the maturity date, and no sinking fund is provided for the notes.

If we undergo a fundamental change, holders may require us to purchase the notes in whole or in part for cash at a fundamental change purchase price equal to 100% of the principal amount of the notes to be purchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date.

The notes will be our senior unsecured obligations and will rank senior in right of payment to any indebtedness that is expressly subordinated in right of payment to the notes, and equal in right of payment with all of our existing and future unsecured indebtedness that is not so subordinated (including, without limitation, our Existing Convertible Notes).

The notes will also be effectively subordinated to all of our existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness (including, without limitation, with respect to our assets pledged for our non-recourse pledge of certain equity interests in certain of our subsidiaries in connection with the BioReference Credit Agreement (as defined herein)) and structurally subordinated to all existing and future liabilities (including trade payables) of our subsidiaries (including, without limitation, liabilities of our subsidiaries under the BioReference Credit Agreement).

On September 28, 2023, ModeX was awarded a BARDA Contract by BARDA, part of the Administration for Strategic Preparedness and Response at the U.S.

Department of Health and Human Services, to advance a platform and specific candidates designed to address a range of public health threats in viral infectious diseases.

Pursuant to the BARDA Contract, we will receive $59.0 million over a five-year period through February 2028 for the development, manufacturing, and execution of a Phase 1 clinical trial for a next-generation MSTAR multispecific antibody with broad neutralizing activity against known variants of SARS-CoV-2.

We are eligible to receive up to an additional $109.6 million from BARDA upon achieving particular milestones to develop multispecific antibodies targeting other viral pathogens such as influenza.

As of December 31, 2023, the aggregate amount remaining to be funded by BARDA, subject to performance obligations and excluding unexercised contract options, was $57.8 million.

In June 2023, the FDA approved NGENLA (Somatrogon), a once-weekly injection to treat pediatric growth hormone deficiency in the United States.

With the achievement of the FDA approval milestone, during the year ended December 31, 2023, we received and recorded $90.0 million of revenue under the Restated Pfizer Agreement.

On March 8, 2023, ModeX, the Company (with respect to certain sections), and Merck entered into the Merck Agreement pursuant to which Merck obtained a license to certain patent rights and know-how in connection with the development of ModeX’s preclinical nanoparticle vaccine candidate targeting the Epstein-Barr Virus.

We received an initial, one-time, non-refundable upfront payment of $50.0 million in April 2023 in consideration of the rights granted to Merck under the Merck Agreement.

ModeX is also a party to the Sanofi In-License Agreement and certain of the rights provided by ModeX to Merck under the Merck Agreement were obtained by ModeX from Sanofi pursuant to the Sanofi In-License Agreement.

Under the Sanofi In-License Agreement Sanofi is entitled to certain of the upfront payment, milestones and royalties received by ModeX under the Merck Agreement, and, accordingly, we paid $12.5 million to Sanofi during the year ended December 31, 2023.

As part of their strategic collaboration, ModeX and Merck have put in place a research plan to manage research and other development activities related to the development of a vaccine assembled using our platform for Epstein-Barr Virus or Product (as defined in the MErck Agreement) including a joint steering committee to facilitate the research program.

As part of the research plan, they will use a third-party contract development and manufacturing organization to carry out such activities unless otherwise agreed.

Development costs incurred by ModeX in furtherance of these development activities will be reimbursed by Merck.

To date, we have spent $14.2 million of development costs related to the Epstein -Barr Virus, for which Merck has provided reimbursement in full.

On May 9, 2022, the Company entered into the ModeX Merger Agreement (as defined in Note 1 to the audited consolidated financial statements contained in this Annual Report on Form 10-K), pursuant to which we acquired ModeX.

The Company paid the entirety of the $300.0 million purchase price in shares of Common Stock issued to the former stockholders of ModeX.

Such shares were valued at $219.4 million, based on the closing price per share of our Common Stock of $2.44 as reported by NASDAQ on the closing date, which reflected the deduction from the purchase price of the value of certain equity awards issued by the Company to ModeX employees in an aggregate amount equal to $12.4 million on the closing date.

Included in the total fair value of consideration transferred of $221.7 million were $2.3 million of fully vested equity awards.

On April 29, 2022, the Company completed the sale of GeneDx.

GeneDx Holdings paid to the Company aggregate consideration of $150 million in cash (before deduction of transaction expenses and other customary purchase price adjustments), together with the Closing Shares (as defined in Note 1 to the audited consolidated financial statements contained in this Annual Report on Form 10-K).

Based on the closing stock price of GeneDx Holdings as of April 29, 2022, the total upfront consideration represented approximately $322 million.

Additionally, subject to GeneDx achieving certain revenue targets for the fiscal years ended December 31, 2022 and 2023, we were 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’ Class A common stock if paid in stock.

In 2023, we received 23.1 million shares of Class A Common Stock with respect to Milestone Consideration (as defined in Note 1 to the audited consolidated financial statements contained in this Annual Report on Form 10-K) for the year ended December 31, 2022;

however, we do not expect to receive any GeneDx Milestone Consideration with respect to the year ended December 31, 2023.

As of December 31, 2023, the aggregate value of our GeneDx Holdings investment based on the quoted market price of their respective shares of common stock and the number of shares held by us was $13.0 million.

In April 2022, Pfizer notified OPKO that NGENLA (Somatrogon), a once-weekly injection to treat pediatric growth hormone deficiency, received pricing approval in Germany and Japan.

NGENLA was granted marketing authorization by the Ministry of Health, Labour and Welfare in Japan and by the European Commission in January and February of 2022, respectively.

With the achievement of these milestones, we received $85.0 million in milestone payments in 2022 under the Restated Pfizer Agreement.

In February 2019, we issued $200.0 million aggregate principal amount of the 2025 Notes in an underwritten public offering.

The 2025 Notes bear interest at a rate of 4.50% per year, payable semiannually in arrears on February 15 and August 15 of each year.

These notes mature on February 15, 2025, unless earlier repurchased, redeemed or converted.

In May 2021, we entered into exchange agreements with certain holders of the 2025 Notes pursuant to which the holders exchanged $55.4 million in aggregate principal amount of the outstanding 2025 Notes for 19,051,270 shares of our Common Stock (the “Exchange”).

In February 2018, we issued the 2023 Convertible Promissory Notes in the aggregate principal amount of $55.0 million, with an original maturity date in February 2023.

Each holder of a 2023 Convertible Note has the option, from time to time, to convert all or any portion of the outstanding principal balance of such 2023 Convertible Note, together with accrued and unpaid interest thereon, into shares of our Common Stock at a conversion price of $5.00 per share.

As of December 31, 2023, the total commitments under our amended and restated credit agreement, dated August 30, 2021 (as amended, the “Credit Agreement”) with JPMorgan Chase Bank, N.A.

(“CB”) and our lines of credit with financial institutions in Chile and Spain were $37.9 million, of which $25.3 million was drawn as of December 31, 2023.

The conversion rate for the 2029 Convertible Notes is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest.

We may not redeem the 2029 Convertible Notes prior to the maturity date.

As of December 31, 2024, the total commitments under our lines of credit with financial institutions in Chile and Spain were $30.8 million, of which $13.5 million was drawn as of December 31, 2024.

At December 31, 2024, the weighted average interest rate on these lines of credit was approximately 5.52%.

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There is no assurance that these lines of credit or other funding sources will be available to us on acceptable terms, or at all, in the future.

The Credit Agreement provides for a $50.0 million secured revolving credit facility and includes a $20.0 million sub-facility for swingline loans and a $20.0 million sub-facility for the issuance of letters of credit.

The Credit Agreement matures on August 30, 2025, and is guaranteed by all of BioReference’s domestic subsidiaries, subject to certain exceptions.

The Credit Agreement is also secured by substantially all assets of BioReference and its domestic subsidiaries, subject to certain exceptions, as well as a non-recourse pledge by us of our equity interest in BioReference.

Availability under the Credit Agreement is based on a borrowing base composed of eligible accounts receivable of BioReference and certain of its subsidiaries, as specified therein.

As of December 31, 2023, $12.7 million remained available for borrowing under the Credit Agreement.

In connection with our agreements with Merck, Pfizer, VFMCRP, Nicoya and CAMP4, we are eligible to receive various milestone payments and royalty considerations.

Separately, on September 16, 2024, BioReference fully repaid its obligations and terminated the BioReference Credit Agreement.

BioReference paid approximately $9.7 million to settle its obligations, incurring no prepayment premium or penalty.

In connection with our agreements with Merck, Pfizer, VFMCRP, and Nicoya, we are eligible to receive various milestone payments and royalty considerations.

Under the terms of the Merck Agreement, we received an initial payment of $50.0 million and are also eligible to receive up to an additional $860.0 million upon the achievement of certain commercial and development milestones under several indications.

We are also eligible to receive tiered royalty payments ranging from high single digits to low double digits upon achievement of certain sales targets of the Product (as defined in the Merck Agreement).

On January 7, 2025, ModeX announced the dosing of the first participant in a Phase 1 study for an EBV vaccine candidate being developed in collaboration with Merck which triggered a $12.5 million milestone payment from Merck under the Merck Agreement.

Under the terms of the Restated Pfizer Agreement, we have received or are eligible to receive up to an additional $275.0 million upon the achievement of certain regulatory milestones, including $90 million triggered by the FDA approval in the United States and $85 million due to the commencement of sales of NGENLA (Somatrogon) in Europe and Japan, which we received in 2022.

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We are also eligible to receive tiered, double digit royalty payments at rates in the low double digits on net product sales within the Nicoya Territory and in the Nicoya Field.

Under the terms of the CAMP4 Agreement, we received an initial upfront payment of $1.5 million.

In connection with our acquisitions of CURNA, OPKO Diagnostics and OPKO Renal, we agreed to pay future consideration to the sellers upon the achievement of certain events.

As of December 31, 2023, we had no contingent consideration recorded in accrued expenses and other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets.

As of December 31, 2022, $1.0 million of contingent consideration was recorded in accrued expenses and other long-term liabilities.

Refer to Note 6.

We believe that the cash and cash equivalents on hand at December 31, 2023 and the amounts available to be borrowed under our lines of credit are sufficient to meet our anticipated cash requirements for operations and debt service beyond the next 12 months.

We believe that cash, cash equivalents and restricted cash on hand at December 31, 2024 are sufficient to meet our anticipated cash requirements for operations and debt service beyond the next 12 months.

We based this estimate on assumptions that may prove to be wrong or are subject to change, and we may be required to use our available cash resources sooner than we currently expect.

If we acquire additional assets or companies, accelerate our product development programs or initiate additional clinical trials, we will need additional funds.

Our future cash requirements, and the timing of those requirements, will depend on a number of factors, including the approval and success of our products and products in development, particularly our long acting Somatrogon (hGH-CTP) for which we have received approval in over 50 markets, including the United States, Europe, Japan, Australia and Canada, the commercial success of Rayaldee , BioReference’s financial performance, possible acquisitions and dispositions, the continued progress of research and development of our product candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing, our success in developing markets for our product candidates and results of government investigations, payor claims, and legal proceedings that may arise, including, without limitation class action and derivative litigation to which we are subject, and our ability to obtain insurance coverage for such claims.

Our future cash requirements, and the timing of those requirements, will depend on a number of factors, including the approval and success of our products and products in development, particularly our long acting Somatrogon (hGH-CTP) for which we have received approval in over 50 markets, including the United States, Europe, Japan, Australia and Canada, the commercial success of Rayaldee , BioReference’s financial performance, possible acquisitions and dispositions, the continued progress of research and development of our product candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing, our success in developing markets for our product candidates and results of government investigations, payor claims, existing legal proceedings and those that may arise in the future.

We have historically not generated sustained positive cash flow, and if we are not able to secure additional funding when needed, we may have to delay, reduce the scope of, or eliminate one or more of our clinical trials or research and development programs or possible acquisitions or reduce our marketing or sales efforts or cease operations.

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Operating leases

Capital leases

2033 Senior Notes, 2025 and 2023 Convertible Notes

Finance leases

2029, 2025, and 2033 Convertible Notes

Mortgages and other debts payable

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Product license agreements effective during the lesser of 15 years or patent expiration whereby payments and amounts are determined by applying a royalty rate on uncapped future sales.

Contingent consideration that includes payments upon achievement of certain milestones including meeting development milestones such as the completion of successful clinical trials, NDA approvals by the FDA and revenue milestones upon the achievement of certain revenue targets all of which are anticipated to be paid within the next seven years and are payable in either shares of our Common Stock or cash, at our option, and that may aggregate up to $125.0 million.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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Ultimately, potential changes in these assumptions may impact the estimated fair value of a reporting unit and result in an impairment if the fair value of such reporting unit is less than its carrying value.

Net intangible assets other than goodwill were $0.9 billion and $1.0 billion at December 31, 2023 and 2022, respectively, including IPR&D of $195.0 million at December 31, 2023 and 2022.

Net intangible assets other than goodwill were $811.6 million and $935.3 million at December 31, 2024 and 2023, respectively, including IPR&D of $195.0 million at December 31, 2024 and 2023.

Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products and IPR&D.

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Based on the current financial performance of our diagnostic 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.

No impairment charges were recognized for the years ended December 31, 2024, 2023, or 2022.

During the year ended December 31.

2022, we reclassified $590.2 million of IPR&D related to Somatrogon (hGH-CTP) from IPR&D in our Consolidated Balance Sheet upon the approval of NGENLA (Somatrogon) in Europe and Japan.

The assets are being amortized on a straight-line basis over their estimated useful life of approximately 12 years.

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Client payors include physicians, hospitals, employers, and other institutions for which services are performed on a wholesale basis, and are billed and recognized as revenue based on negotiated fee schedules.

Client payors also include cities, states and companies for which BioReference provides COVID-19 testing services.

Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients.

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For the year ended December 31, 2024, and 2023, negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $1.5 million and $19.2 million, respectively, were recognized.

Revenue adjustments for the year ended December 31, 2023 were primarily due to the composition of patient pay mix and for the year ended December 31, 2022 were primarily due to lower COVID-19 test reimbursement estimates.

Revenue adjustments for the year ended December 31, 2024 were primarily due to the composition of patient pay mix and for the year ended December 31, 2023 were primarily due to lower reimbursements from Medicare payors.

Third-party payors, including government programs, may decide to deny payment or recoup payments for testing they contend were improperly billed or not medically necessary, against their coverage determinations, or for which they believe they have otherwise overpaid (including as a result of their own error), and we may be required to refund payments already received.

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If we are entitled to additional payments when the licensee exercises these options, any additional payments are generally recorded in license or other revenues when the licensee obtains control of the goods, which is upon delivery.

For the years ended December 31, 2023, 2022 and 2021, we recorded $180.7 million, $105.7 million and $25.8 million of revenue from the transfer of intellectual property and other, respectively.

For the years ended December 31, 2023, and 2022, revenue from transfer of intellectual property and other principally reflects $90.0 million from Pfizer triggered by the FDA approval of NGENLA (Somatrogon), and in 2022, a $85.0 million regulatory milestone payments based on the commencement of sales from NGENLA (Somatrogon) in Europe and Japan, as well as gross profit share and royalty payments for both NGENLA (Somatrogon) and Pfizer’s Genotropin® (Somatropin) of $22.6 million and $4.4 million, respectively, for the years ended December 31, 2023, and 2022.

For the years ended December 31, 2023, 2022, and 2021, revenue from transfer of intellectual property and other principally reflects $4.1 million, $9.3 million and $10.8 million, respectively, of revenue related to the Pfizer Transaction (as defined in Note 16).

For the year ended December 31, 2023, revenue from transfer of intellectual property and other included $50.0 million from Merck in consideration for the rights granted to Merck under the Merck Agreement, $7.0 million from VFMCRP triggered by the German price approval for Rayaldee and $2.5 million from Nicoya due to Nicoya’s submission of the investigational new drug application to China's Center for Drug Evaluation.

For the year ended December 31, 2022, revenue from transfer of intellectual property and other included $3.0 million related to a sales milestone pursuant to the VFMCRP Agreement, and $2.5 million from Nicoya tied to the first anniversary of the effective date of the agreement.

For the year ended December 31, 2021, revenue from transfer of intellectual property and other principally included $1.0 million related to the LeaderMed joint venture, $4.9 million related to the CAMP4 Agreement and a $5.0 million non-refundable upfront payment received under the Nicoya Agreement.

Contract liabilities relate to cash consideration that OPKO receives in advance of satisfying the related performance obligations.

Changes in the contractual liabilities balance for the years ended December 31, 2023 are as follows:

(In thousands)

Balance at December 31, 2022

Balance at December 31, 2023

Revenue recognized in the period from:

Amounts included in contracts liability at the beginning of the period

Revenue from the transfer of intellectual property and other, which includes milestone payments, royalties, and other collaboration revenues, totaled $77.4 million, $180.7 million, and $105.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.

For the year ended December 31, 2024, such revenue included $30.0 million from Pfizer, inclusive of $28.3 million from gross profit share and royalty payments for both NGENLA (Somatrogon) and Pfizer's Genotropin® (Somatropin), $23.8 million from the BARDA Contract, a $12.5 million milestone payment from Merck under the Merck Agreement, and $10.2 million from contract manufacturers' commercial milestones.

For the year ended December 31, 2023, revenue from the transfer of intellectual property included $116.7 million from Pfizer, which included a $90.0 million milestone payment triggered by the FDA approval of NGENLA (Somatrogon), $22.6 million from gross profit share and royalty payments for both NGENLA (Somatrogon) and Pfizer's Genotropin® (Somatropin), $50.0 million from Merck in consideration for the rights granted under the Merck Agreement, $7.0 million from VFMCRP triggered by the German price approval for Rayaldee , $2.5 million from Nicoya due to Nicoya's submission of the investigational new drug application to China's Center for Drug Evaluation, $1.2 million from the BARDA Contract, and $2.4 million from contract manufacturers' commercial milestones.

For the year ended December 31, 2022, revenue from the transfer of intellectual property included $98.7 million from Pfizer, inclusive of an $85.0 million regulatory milestone payment based on the commencement of sales of NGENLA (Somatrogon) in Europe and Japan and $4.4 million from gross profit share and royalty payments for both NGENLA (Somatrogon) and Pfizer's Genotropin® (Somatropin), $3.0 million related to a sales milestone pursuant to the VFMCRP Agreement and $2.5 million from Nicoya tied to the first anniversary of the effective date of that agreement.

Concentration of credit risk and allowance for doubtful accounts .

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Inventory obsolescence expense for the years ended December 31, 2024, 2023 and 2022 was $2.1 million, $8.1 million and $4.1 million, respectively.

Contingent consideration.

Each period we revalue the contingent consideration obligations associated with certain prior acquisitions to their fair value and record increases in the fair value as contingent consideration expense and decreases in the fair value as a reduction in contingent consideration expense.

Changes in contingent consideration result from changes in the assumptions regarding probabilities of successful achievement of related milestones, the estimated timing in which the milestones are achieved and the discount rate used to estimate the fair value of the liability.

Contingent consideration may change significantly as our development programs progress, revenue estimates evolve and additional data is obtained, impacting our assumptions.

The assumptions used in estimating fair value require significant judgment.

The use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

RECENT ACCOUNTING PRONOUNCEMENTS

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We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Recently adopted accounting standards

In November 2023, the FASB issued ASU No 2023-07, Segment Reporting (Topic 280):

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ASU 2023-07 enhances disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280.

ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations.

The amendments in ASU 2023-07 improve financial reporting by requiring all public entities to disclose incremental segment information on an annual and interim basis to enable investors to develop more useful financial analyses.

Topic 280 requires that a public entity disclose certain information about its reportable segments, for example, a public entity is required to report a measure of segment profit or loss that the CODM uses to assess segment performance and make decisions about allocating resources.

ASC 280 also requires other specified segment items and amounts, such as depreciation, amortization, and depletion expense, to be disclosed under certain circumstances.

The ASU 2023-07 amendments do not change or remove those disclosure requirements.

The amendments in ASU 2023-07 also do not change how a public entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

A public entity should retrospectively apply ASU 2023-07 amendments to all prior periods presented in the financial statements.

The amendments in ASU 2023-07 are effective for all public entities for fiscal years beginning after December 15, 2023 (e.g., for calendar-year-end public entities, annual periods beginning on January 1, 2024 — i.e., December 31, 2024, Form 10-K), and interim periods within fiscal years beginning after December 15, 2024 (e.g., for calendar-year-end public entities, interim periods beginning on January 1, 2025 — i.e., Form 10-Q for the first quarter of 2025).

Early adoption is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In December 2022, the European Union member states voted unanimously to adopt a Directive implementing the Pillar 2 (global minimum tax) rules, giving member states until December 31, 2023, to implement the Directive into national legislation.

Further details regarding implementing these rules are expected, and if implemented, such reform may increase our tax liabilities, compliance costs and reduce our profitability.

Pillar 2 is effective from January 1, 2024, and will be treated as a period cost in future years and does not impact operating results in 2023.

Recently adopted accounting standards .

ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its CODM uses to assess segment performance and to make decisions about resource allocations.

ASU 2023-07 is effective for the Company beginning with the fiscal year ended December 31, 2024.

The guidance is being applied prospectively.

In 2021, the Organization for Economic Co-operation and Development (“OECD”) established an inclusive framework on base erosion and profit shifting and agreed on a two-pillar solution (“Pillar Two”) to global taxation, focusing on global profit allocation and a 15% global minimum effective tax rate.

On December 15, 2022, the EU member states agreed to implement the OECD’s global minimum tax rate of 15%.

The OECD issued Pillar Two model rules and continues to release guidance on these rules.

The inclusive framework calls for tax law changes by participating countries to take effect in 2025.

Various countries have enacted or have announced plans to enact new tax laws to implement the global minimum tax.

We considered the applicable tax law changes on Pillar Two implementation in the relevant countries, and there is no material impact to our tax results for the period.

We anticipate further legislative activity and administrative guidance in 2025, and will continue to evaluate the impacts of enacted legislation and pending legislation to enact Pillar Two Model Rules in the non-US tax jurisdictions we operate in.

In August 2020, the FASB issued ASU No.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equty (Subtopic 815-40).” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock.

The ASU is effective for public entities for fiscal years beginning after December 15, 2021, with early adoption permitted.

As required, we adopted ASU 2020-06 on January 1, 2022 and used the modified retrospective approach for all convertible debt instruments at the beginning of the period of adoptions.

Results for reporting periods beginning January 1, 2022 are presented under ASU 2020-06, while prior period amounts were not adjusted and continue to be reported in accordance with historic accounting guidance.

Under the modified approach, entities applied the guidance to all financial instruments that are outstanding as of the beginning of the year of adoption with the cumulative effect recognized as an adjustment to the opening balance of retained earnings.

ASU 2020-06 eliminates the cash conversion and beneficial conversion feature models in ASC 470-20 that require an issuer of certain convertible debt and preferred stock to separately account for embedded conversion features as a component of equity.

The adoption of ASU 2020-06 at January 1, 2022 resulted in an increase of the 2025 Convertible notes of $21.6 million, a reduction of the Accumulated deficit of $17.5 million and a reduction of Additional paid-in capital of $39.1 million.

2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” This standard simplified the accounting for convertible instruments.

We adopted ASU 2020-06 on January 1, 2022, using the modified retrospective approach.

This resulted in an increase of $21.6 million to the 2025 Convertible Notes, a reduction of $17.5 million to the Accumulated deficit, and a reduction of $39.1 million to Additional paid-in capital.

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 5. Market for Registrant’s Common Equity