Opko Health Tanks 10% Despite Solid Q3 Covid Testing Revenue

Shares of Opko Health fell 9.5% in the extended trading session on Thursday after the company reported its third-quarter results.

Opko Health (OPK) posted EPS of $0.04 in 3Q20 compared to a loss per share of $0.11 in 3Q19. The company’s 3Q20 EPS was in line with analysts’ estimates and gained from an 87.1% Y/Y rise in revenue to $428.1 million. Analysts estimated revenue of $378.7 million.

Mainly, the company’s services revenue increased by 111% to $382.5 million due to robust COVID-19 testing volumes. Opko Health’s BioReference Laboratories experienced a 61% rise in COVID-19 PCR (polymerase chain reaction) testing volume in 3Q when compared to the second quarter.

Also, product revenue was up 9.5% Y/Y to $28.7 million in 3Q driven by higher sales at Opko Chile and a 9.5% rise in Rayaldee sales. The company said that as per data analytics provider IQVIA, Rayaldee prescriptions increased 13% to 16,700 in 3Q.

Last month, Opko initiated a Phase 2 clinical trial with Rayaldee as a treatment for mild to moderate COVID-19. The trial is expected to enroll about 160 subjects, many with stage 3 or 4 chronic kidney disease, who are at higher risk for developing more severe illness. (See OPKO stock analysis on TipRanks)

Opko shares have risen by a whopping 185.4% year-to-date and the $8 average analyst price target indicates further upside potential of 90.5% in the coming months. The Street has a Strong Buy consensus for Opko Health based on 4 unanimous Buys.

In September, Barrington Research analyst Michael Petusky reiterated a Buy rating for Opko Health with a price target of $7 after a virtual meeting with the company’s CFO Adam Logal and Executive Vice President Steve Rubin. From the update provided by the management, the analyst gathered that the company’s lab business has significantly benefited from its ability to land COVID‐19 related PCR and antibody serology testing agreements since the crisis began to impact the US.

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