Biotech of the Week: Opko Health Inc.

Opko Health (NYSE: OPK  ) is the biotech of the week for the Fool's biotech-focused show, Biotech Banter. Of course, "biotech" is a bit of a stretch with Opko, because it's working on both diagnostics and therapeutics.

On the diagnostics side, Opko Health is developing a machine that doctors can use in their offices -- it's smaller than a typical desktop computer -- that can do multiple tests off a single blood sample. While the business isn't going to significantly affect the big players in the space -- Laboratory Corporation of America (NYSE: LH  ) or Quest Diagnostics (NYSE: DGX  ) -- Opko Health's machine has the advantage that it can provide results quicker than if the doctor sends the patient to a facility run by Laboratory Corp. or Quest Diagnostics.

On the therapeutics side, Opko Health is developing Rayaldy for vitamin D insufficiency. There's some synergy with the diagnostics side because it has a test for vitamin D insufficiency to be used in its machines. In theory, an increase in diagnosis should translate into an increase in prescriptions.

Opko Health has another drug, Rolapitant, partnered with Tesaro (NASDAQ: TSRO  ) , which treats nausea and vomiting associated with chemotherapy and surgical operations. Rolapitant has passed a couple of clinical trials already and could be on the market next year.

Finally, Opko Health has a portfolio of investments in private and public drug companies, including its partner Tesaro.

While having multiple streams of income may be to Opko Health's advantage, senior biotech specialist Brian Orelli and health-care analyst David Williamson point out in the following video that that it can also make the company hard to value.

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  • Report this Comment On May 05, 2014, at 6:56 PM, johnjudge wrote:

    You forgot to mention the 4Kscore. On 3/31/2014 OPKO announced the availability of the 4KscoreTM Test through its CLIA-accredited OPKO Lab inNashville, TN. The laboratory-developed test is designed to enhance the prostate biopsy decision making process that, in the United States, leads to approximately 1 million biopsies being performed annually, with 80% of the results indicating no cancer or a low-grade cancer. The 4KscoreTM Test will help to reduce unnecessary prostate biopsies by providing information on the risk (probability) of having high-grade prostate cancer. The 4KscoreTM Test was developed by OPKO Lab, a division of OPKO Health, and tested in collaboration with 26 Urology centers across the United States from October 2013 to March 2014. Results showed that the 4Kscore TestTM was highly accurate for predicting the presence of high-grade cancer (Gleason score 7 or higher) prior to prostate biopsy.

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Brian Orelli

Dr. Orelli is a Senior Biotech Specialist. He has written about biotech, pharmaceutical, and medical device companies for The Motley Fool since 2007.

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