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Opko Health Inc Reports Operating Results (10-Q)

November 09, 2009 | About:

10qk

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Opko Health Inc (OPK) filed Quarterly Report for the period ended 2009-09-30.

eXegenics Inc. is biopharmaceutical company specializing in the development of therapeutic and diagnostic products for human diseases with an emphasis on the treatment and prevention of cancer and infectious diseases. Its research and development activities relate principally to its proprietary Paclitaxel production system using fermentation and genetic engineering in agreements with Bristol-Myers Squibbthe treatment of Polycystic Kidney Disease using paclitaxelQuantum Core Technologyour proprietary rational drug design targeting the human genome. Opko Health Inc has a market cap of $530.09 million; its shares were traded at around $2.09 with and P/S ratio of 56.15.

Highlight of Business Operations:

Selling, general and administrative expense. Selling, general and administrative expense for the three months ended September 30, 2009, was $3.1 million compared to $3.7 million of expense for the comparable period of 2008. Selling, general and administrative expenses during the three months ended September 30, 2009 and 2008, primarily include personnel expenses, including equity-based compensation expense of $0.8 million and $0.9 million, respectively, and professional fees. The decrease in selling, general and administrative expenses primarily reflects decreased personnel costs and sales commissions to our international distributors.

Gross margin. Gross margin for the nine months ended September 30, 2009, was $1.8 million compared to gross margin of $0.4 million for the comparable period of 2008. Gross margin for the nine months ended September 30, 2009, improved as a result of the cost reduction initiatives we began implementing in 2008 to reduce our costs associated with the OCT/SLO product. During the first half of 2008, we changed a number of suppliers and processes related to our OCT/SLO product which resulted in lower manufacturing costs, resulting in higher gross margins on that product during the second half of 2008 and the first nine months of 2009. During the nine months ended September 30, 2008, we incurred approximately $0.9 million in expense related to production development including bringing a portion of the manufacturing process for our OCT/SLO product in-house.

Selling, general and administrative expense. Selling, general and administrative expense for the nine months ended September 30, 2009, was $9.3 million compared to $12.3 million of expense for the comparable period of 2008. Selling, general and administrative expenses during the first nine months of 2009 and 2008, primarily include personnel expenses, including equity-based compensation expense of $2.3 million and $3.8 million, respectively, and professional fees. The decrease in selling, general and administrative expenses primarily reflects decreased personnel costs, including severance and approximately $1.4 million related to the acceleration of vesting for stock options in connection with the termination of certain employees in 2008. In addition, there were decreased sales commissions to our international distributors in the nine months of 2009. Partially offsetting these decreases was an increase in professional fees during the nine months ended September 30, 2009, as compared to the 2008 period. We anticipate selling, general and administrative expenses will increase during the remainder of 2009 while we increase our sales and marketing activities to promote and support our OCT/SLO product, including the launch costs in the U.S. and participation in additional tradeshows in the U.S. and internationally.

On September 18, 2009, we entered into a securities purchase agreement (the Preferred Purchase Agreement) with the private investors named therein (the Preferred Investors), pursuant to which the Preferred Investors agreed to purchase an aggregate of 1,209,677 shares (the Preferred Shares) of the Companys newly-designated 8.0% Series D Cumulative Convertible Preferred Stock, par value $0.01 per share (Series D Preferred Stock), at a purchase price of $24.80 per share, together with warrants (the Warrants) to purchase up to an aggregate of 3,024,196 shares of the Companys common stock, par value $.01 (the Common Stock) at an exercise price of $2.48 per share (the Preferred Investment). Initially, the Series D Preferred Stock is convertible into ten shares of the Companys Common Stock, and the Preferred Shares purchase price was based on the average closing price of the Companys Common Stock as reported on the NYSE Amex for the five days preceding the execution of the Preferred Purchase Agreement. In connection with the Preferred Investment, the Company issued the Preferred Shares on September 28, 2009.

On May 26, 2009, May 29, 2009, and June 1, 2009, we entered into stock purchase agreements with a total of seven accredited investors (Investors) pursuant to which the Investors agreed to make a $31.0 million investment in the Company in exchange for 31,000,000 shares of our Common Stock, par value $.01 (the Shares), at $1.00 per share.

On February 23, 2009, we entered into a stock purchase agreement with the Gamma Trust pursuant to which the Gamma Trust agreed to make a $20.0 million investment in exchange for 20,000,000 shares of our common stock, par value $.01 (the Shares), at $1.00 per share, representing an approximately 20% discount to the average closing price of our common stock on the NYSE Amex exchange for the five trading days immediately preceding the effective date of Audit Committee and stockholder approval of the transaction. We issued the Shares and received the proceeds of $20.0 million on April 27, 2009.

Read the The complete Report

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10qk
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