Opko Health, Inc.

reduce our remaining convertible debt, and through our recently expanded share repurchase authorization, we plan to continue to reduce the number of shares outstanding in the most capital efficient way possible. Under our share repurchase authorization, we have approximately $159 million remaining, which at yesterday's closing price represents more than 113 million shares, or more than 14% of our currently outstanding shares. As Elias mentioned, we anticipate closing our second transaction with LabPorp later this year and will receive $192.5 million of closing and up to $225 million in total. As we look ahead, the following assumptions influence our financial guidance. For our pharmaceutical segment, we expect Pfizer to continue to grow sales of Ingenla and the overall HGH franchise. We assume a stable foreign currency exchange rate for our ex-U.S. pharmaceutical businesses, which has recently been challenged with large swings in certain territories. Our teams have been diligently navigating those challenges through disciplined expense control and expect that going forward. R&D expenses will reflect higher activities related to our MODX programs, including CMC efforts related to our first oncology trial, as well as furthering our GLP-1 glucagon development program. A portion of the increased MODX activities will continue to be funded through our BARDA agreements. For our diagnostic segment, we are executing our multi-year, multi-phase program to reach and improve profitability. This program continues to be focused on operational efficiencies and the reduction of fixed infrastructure costs. We expect to incur an additional $5 million in non-recurring costs during the second quarter, which primarily reflect severance costs. We have established an additional cost reduction initiative targeting a further $10 million of annualized cost savings on top of the $20 million we discussed in our last call. As a result of our recently announced transaction with LabCorp, Once closed, the remaining bio-reference will be cash flow positive and profitable as measured before non-recurring and non-cash items. In addition, we expect to realize a gain on the LabCorp transaction of approximately $100 million, which will be reflected as a reduction to operating expenses and an increase in operating income. Due to the uncertainty of the timing of closing, we are including revenue costs and expenses for the full year and will adjust the total revenue costs and expenses once the closing date is certain. As a result, we expect the following for the full year 2025. Total revenues between $675 and $685 million. Revenue from services between $405 and $425 million, including the revenue from the assets being sold to LabCorp of $95 to $105 million. revenue from products between $165 and $175 million, and other revenue between $75 and $85 million, inclusive of the revenue from our Pfizer gross profit share, which is estimated to be between $30 and $40 million, from $35 to $45 million, and barter revenue of $38 to $44 million, which was previously guided from $40 to $48 million. We expect cost and expenses to be between $825 and $875 million, excluding the non-recurring expenses related to the restructuring activities for bioreference, which are currently estimated to be between $10 to $14 million for the full year, and inclusive of cost and expenses related to the assets being sold to LabCorp of $125 to $135 million. R&D expense is expected to be between $120 and $130 million, down from $120 to $140 million, which depends on the rate of enrollment of our clinical trial and the timing for certain activities for our MODX programs, including CMC, with $37 to $43 million being offset from funding by BARDA. Depreciation and amortization expense is expected to be approximately $90 million. While we don't typically provide non-operating income and expense guidance, As a result of our convertible debt exchange, we are providing guidance as we anticipate a non-recurring other expense item related to that exchange of approximately $90 million during the second quarter of 2025, which is comprised of interest expense from debt discount, debt issuance fees, and inducement expense. That concludes our prepared remarks, and thank you all for your attention. Now, operator, let's open the call for questions.

We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your questions, please press star then 2. At this time, we will pause momentarily to assemble our roster. The first question comes from Maury Raycroft with Jefferies. Please go ahead.

Hi, this is James Zamframore. Thanks for taking our questions. Just to start off, what are some possible explanations for the negative dynamics for Ingenla? Is it more likely competition, access issues, or something commercial related to Pfizer?

Yeah, so we've seen the growth rates of the prescriptions to continue along, both for Ingenla and genotropin. So we think it's more likely to do with some of the commercial environments. We don't have color further from Pfizer just yet. on the dynamic there, but we expect this to be a first quarter only event, which is why we've only slightly reduced the guide.

Got it. And just to add on to that, could you also please comment on why you think Pfizer withdrew their EU application for the adult setting? When was the last time you met with Pfizer regarding plans to expand the franchise, and what are those plans for expansion to additional settings?

So, I'll try to expand on this, and then Elias or others could jump in as well. So, Pfizer has been working on a strategy to expand the label 4-H for, in general, for some time. We do know that they're expecting to kick off some trials for the additional pediatric indications. Within Europe, the dynamics are slightly different, and I think Pfizer chose to be more focused on the pediatric indication, given the size of the overall market. for the pediatric indications in comparison to the adult and wanted to focus their efforts there.

Got it. Thanks for taking our questions. I'll hop back in the queue.

Thank you. The next question comes from Eugene with HC Rain Ride. Please go ahead. Thank you for taking my question.

Could you please provide a rough timeline about the development program of the GLQ1 glucagon tablet candidate? When can we expect to see some clinical results? And also, what could be the dosing frequency in the clinical trial? Thank you.

Thanks, Jay. So, the timeline for the development program, we expect to have an IND file later this year. or by the end of this year or early next year with the trial to commence thereafter and could get results from a phase one trial by the end of 26. As it relates to dosing, it's expected to be a once weekly dosing.

Sorry, I was on mute. I couldn't answer before Adam took it and give you a perfect answer.

So apart from being an oral tablet candidate and once a week dosing, is there any other differentiating factor for this candidate compared to semaglutide or to Zeptide?

Yeah, so let me take that one. First of all, for the oral formulation, it's once a day. For the sub-Q, it's once a week. Now, GLP-1 and glucagon are a pair of I'm going to ask you about oxyntomodulant. It's an analog of oxyntomodulant. And it's really, really interesting because it does, glucagon acts on the liver, on the metabolism of the liver. And so it's really focused on whether or not this compound can be of use in MASH. And all of our preclinical work indicates that it is. So if you're looking at the niche, which we think GLP-1 glucagon will be superior, is really the MASH fatty liver disease group. So that's really where we're going, and that's what we're going to try to develop over the next year.

Okay. Thank you.

Another way to say that we're not going into all markets that relate to GLP-1 glucagon. We're focusing our entry indication is going to be in the liver, diseases that are affected by fatty liver disease, patients who are affected by fatty liver disease, and then we'll expand from that depending on the results we see in Phase 1 and Phase 1B.

Thank you. The next question comes from Jeffrey Cohen with Leidenberg-Talman. Please go ahead.

Good afternoon. Thanks for taking our questions. Adam, can you comment? So pro forma now, can you give us a sense of If anything's left on the convertible notes as well as the secured notes and number of shares pro forma.

Sure. So let me just make sure I heard you right. So on the number of shares on a pro forma basis, it went from at March 31st, it was about 671 million shares. As part of the convertible note exchange, we increased that by 121 million. So you get to just about 790 million shares, a little bit more than 790 million shares outstanding on a pro forma basis. On what's left on the convertible notes, we have approximately $129 million remaining of principal that's outstanding on an ongoing basis.

Okay, got it. That's super helpful. I appreciate it. Can you give us a sense of... the diagnostic business, and by reference, I know you outlined some numbers for the year. So we should think of that as a $300-ish million base long business for the second half of this year, as far as thinking of it on a manual basis.

Yeah, on a manualized basis, the remaining business sits between $310 and $320 million. That's right, on an annualized basis.

Okay, got it. And timing on the queue will be today or tomorrow?

Tomorrow evening, yeah.

Okay. And I got all the metrics, so I think that does it for us. Thanks for taking the questions.

Thanks, Jeff.

Thank you. The next question comes from Eric Joseph with J.P. Morgan. Please go ahead.

Hi, this is Billy on for Eric. Thanks for taking our questions. Quick one on the EBV trial, if that's okay first. With the 200 healthy volunteers looking to be read out, are there any sort of efficacy or biomarker signals you might look for in that readout that might de-risk the asset from an efficacy perspective?

So the 200 patients are divided in different cohorts because we're also using adjuvants. Merck is using adjuvant testing, different adjuvants for the vaccine. And that's what is going to be measured. We will get an idea of the immunogenicity of the vaccine with biomarkers. It's not the intent of phase one. It's mostly tolerability and safety. So by the end of that trial, we'll have a good idea of potential efficacy to indirect measures.

Thanks. And then just a quick one, if you might, just squeeze in on the TCE candidate, 2001. Is there any update on timelines as to when that safety readout might come out? And then kind of how many dosing cohorts you might expect for that first safety readout?

So the first phase was six levels. We're in the fourth. We've accomplished the fourth. We're going to fifth and sixth. Hopefully, we'll have that initial six levels, which are really important because at the end of the sixth, we get to what we think is the beginning of the efficacy range, even though we're observing whether or not we have results within these levels that we have now. And as I said before, we should be able to complete that phase before the end of this year and then enter the efficacy part of the trial probably was still a basket trial, a few different cancers, solid cancers, where we have seen some signals, and then eventually a calm down in phase 1B to one, possibly two cancers that are the most promising. So that's the way the trial is designed.

Thanks. Next question.

Thank you. The next question comes from Edward Tenthoff with Piper Sandler. Please go ahead.

Great. Thank you very much. I just want to confirm and make sure I'm getting this right. But what are the next steps for the sub-Q obesity program, MASH program? And then what is sort of the differential development plan for oral? How do you anticipate differentiating them? And what do you think the timing is for the study? Thank you.

So both of them, we're working diligently to enter phase one. So we're in the pre-IND phase for both of them, CMC phase for both of them. And they've been manufactured. We will have our GMP Material ready, we're completing and interacting with the FDA about the design of these trials. Initially, it would pretty much be, you know, safety, as you know, with Phase I trials, measuring side effects, measuring dose, range, and so on. So it's prep work, if you will, in view of a more – more advanced development in phase 2A and 2B. But what we're talking about here is phase 1A and B. To answer that question that you're just asking, what is the right, you know, PKPD and pharmacological behavior that we need to measure before we go further in phase 2?

Okay, thank you.

The next question comes from Yale Jen with Laidlaw and Company. Please go ahead.

Good afternoon, and thanks for taking the questions. I have two here. The first one is that you mentioned a little bit earlier in terms of power situation at this point. Could you elaborate a little bit more in terms of whether you see something more negative or positive at this point? And then I have a follow-up question.

Could you repeat the question? I'm not sure I got it.

The government tariff situation. Yeah, tariff.

Yeah. Yeah. Thank you. I'll let Adam answer for operations overseas and then I'll answer for R&D.

Sure. Thanks, Elias. So for tariff, you know, we're obviously monitoring it. We're looking throughout our supply chain for R&D. Mostly for bioreference, you know, we do buy most of our products here from the U.S. Some of it is manufactured internationally. So we're looking at all the different alternatives to minimize any impact. But as we sit here today, we think it's a manageable risk, but we'll continue to to monitor it. As it relates to our pharmaceutical products, we do import both Rialdi, and we know Pfizer sells Ingenla and Genotropin, and they're manufactured in Ireland, so continue to monitor those. Obviously, the U.S. market, or the cost of goods is a minor component of the total cost structure, so we wouldn't expect it to have a significant impact, and obviously the HGH franchise is a global franchise, so it only impacts the U.S. market.

And for R&D, we primarily depend on European and also Chinese CROs and CDMOs. That has been essentially a minor amount of services that we need to obtain outside of the U.S., and as far as we can tell we don't see a significant impact on R&D operations from tariffs.

Okay, great, thanks. And maybe the follow-up in terms of the mesh product, mesh development, sorry. Do you anticipate this target for the earlier stage of mesh or much more the later stage in the fibrosis part of it in the text?

Right, that's a great question. So we're still thinking through it, obviously. We are inclined to really use the product where it's most needed, and that is F3 or F3 NASH or F4, early F4 NASH, pre-cirrhotic NASH at the beginning. We do not believe there's as much of a need for F2 and F3, early F3, because of the alternatives that you have on the market right now. So that's where we are focusing our efforts, but we haven't yet decided that.

Okay, great. Thanks, Doc. I appreciate the response.

Thank you. The next question comes from Michael Petoskey with Barrington Research. Please go ahead.

Hey, good evening. Adam, could you repeat, I'm sorry, it got a little garbled on my end, the revised guidance for barter revenue?

Yeah, it's 38 to 44, which is down from 40 to 48. Okay.

All right. And then on NGINLA and just the idea that, hey, we think this is a one-quarter issue, I mean, is that based on sort of, you know, the script data or is it based on any kind of conversations with Pfizer, at least preliminary conversation with Pfizer, sort of suggesting that? Or can you just sort of, I guess, dig into that a little bit for me?

Sure. So we talked to Pfizer at least once a quarter just to get general updates. They haven't indicated that there were anything in our first quarter conversation. We haven't spoken with them since we've received these results. But we do look at the script data, and the script data continues to indicate a growing franchise and no significant changes. So we're not certain if it was anything on a gross to net basis that impacted it or on the manufacturing side, if there were any charges that came through there that impacted the gross profit share. I'll note that last year, the first quarter was the low quarter of the year, and we're would expect, as I guided, that this was a non-recurring issue for us, and it'll rebound to historical norms.

All right. And then just on the diagnostics business, I understand that the oncology will be sold, but if that asset had not been sold, would you have been able to get to sort of cash flow break even this year or not?

Yeah. Part of our plans, Mike, we had a couple of different ones. One was to work to find a way to monetize it through a transaction like we entered into with LabCorp. The other was to continue to exit certain lines of testing and certain clients that have high demands for service that our scale just wouldn't allow us to reach. So we had fully expected to get there and certainly could.

Okay. All right. Very good. Thanks, guys.

Thank you. This concludes our question and answer session. I would like to turn the conference back over to Dr. Philip Frost, Chairman and Chief Executive Officer, for any closing remarks.

I want to thank you all for your participation, for your good questions, and we look forward to talking to you again at the end of the next quarter. Thank you again.

The conference has now concluded. Thank you for attending today's presentation. You may now