OPKO Health Inc. (NASDAQ:OPK) had a blockbuster fourth quarter going by stellar financial results. The company might as well have served an important catalyst highly needed to steer the stock higher after a recent correction.
OPKO Financials
Booming business on the COVID-19 testing front is one factors that continues to strengthen the company’s sentiments among investors. The biopharmaceutical and diagnostics company saw the largest BioReference Laboratories volume that was up 170% compared to 2019 levels.
Likewise, the company continued to benefit from increased COVID-19 testing, with the volume on this front rising 24% over the third quarter. During the quarter, OPKO Health processed close to 4.3 million COVID-19 PCR tests, given its increased capacity of more than 100,000 tests a day.
Similarly, OPKO Health jumped to profitability, helped by strong demand for its COVID-19 testing. Net income in the quarter rose to $32.3 million or $0.05 a share. In contrast, the company generated a net loss of $112.4 million or $0.18 a share in the same period last year.
Revenues in the quarter more than doubled to highs of $494.6 million compared to $224.3 million reported in the same period last year. Services revenue more than doubled to $457.9 million from $177.9 million due to increased COVID-19 testing. Products revenue, on the other hand, slid to $30.8 million compared to $32.8 million reported last year.
The Tailwinds
Amid the impressive numbers, OPKO Health's diagnostics business remained under pressure. As the COVID-19 testing volume increased, other clinical test volumes declined. In addition, reimbursement for clinical and genomic tests was also lower in the quarter.
The pharmaceutical segment did not perform well and continues to arouse concerns, with sales for the chronic kidney disease drug Rayadalee declining due to the COVID-19 impact. Prescriptions for the drug were down from 17,900 to 15,000 in the quarter.
The big question going forward is how COVID-19 testing volumes will hold up, given that they account for more than 60% of the company’s total revenues. While lower COVID-19 vaccine efficacy could prolong the pandemic and boost testing, revenues could drop significantly on the pandemic coming under control.