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Opko Health Inc  (NASDAQ:OPK)
Q4 2018 Earnings Conference Call
Feb. 27, 2019, 4:30 p.m. ET

Contents:

Prepared Remarks:

Operator

Welcome to the OPKO Health Incorporated Business Update Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we'll hold a Q&A session. (Operator Instructions) As a reminder, this conference is being recorded, Wednesday February 27, 2019. I would now like to turn the call over to Miriam Miller. Please go ahead, ma'am.

Miriam Miller -- Investor Relations

Thank you, operator. Good afternoon, this is Miriam Miller with LHA. Thank you all for joining today's call. I'd like to remind you that any statements made during this call by management other than statements of historical facts will be considered forward-looking and as such will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward-looking statements include without limitation, the various risks described in the company's Annual Report on Form 10-K for the year ended December 31, 2018 and subsequent quarterly reports on Form 10-Q.

Importantly, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast February 27, 2019. Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.

Before we begin, let me review the format for today. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call followed by Steve Rubin, OPKO's Executive Vice President, who will provide an update on the company's various business and clinical programs. After that, Adam Logal, OPKO's Chief Financial Officer, will review the company's fourth quarter and fiscal year 2018 financial performance. Dr. Frost will provide closing remarks and then we'll open the call to questions.

Now let me turn the call over to Dr. Frost.

Phillip Frost -- Chairman and Chief Executive Officer

Thank you very much. I'd like to open the call by highlighting a few topics that I think are important. First, I'll mention BioReference Laboratories, our diagnostics unit, and the important story here, I believe, is the new people that are present in this business. Dr. Jon Cohen has joined the company following Dr. Geoffrey Monk not too long ago and between the two of them, I think we will have an unparalleled leadership group to drive the business forward in a way that's very important, as this business is in the state of I think rapid evolution and I think we have the right team in place to deal with it.

Next, I'll mention the 4Kscore test. As you know, we recently received a negative LCD from the CMS contractor, Novitas. To say the least, we were disappointed, but more than that we were surprised because we had been interacting with Novitas in a way that led us to believe that we were responding to their queries. In any case, we will make every effort to reverse this decision, and in the meantime, we are working on a submission package for FDA approval of the product.

It's a great product, it's a great test and we just finished a two-day meeting of a greatly expanded sales force and they were fully convinced that this test so important to the men who were suspected of having prostate cancer or developing prostate cancer will be a commercial success and continue to grow going forward. For the moment, we'll rely on other payers and cash sales as well as foreign sales and in this regard, I'll mention the tiny country of Israel, which started distributing the product not too long ago, and the growth has been dramatic and their projections are, if all goes well to have the number of tests used by the end of this year representing a significant portion of the sales that we achieved in America, quite dramatic.

Finally, I'll mention Rayaldee. This is a great product and as you know, it's the only one to raise the 25-hydroxyvitamin D levels in the blood while at the same time lowering parathyroid hormone levels. All this in chronic kidney disease patients. So again, here's a product that we're very optimistic on and we have important new papers that are relatively published that will highlight the unique features of this product and we think will provide the impetus for growth of the product. Because of our optimism, we're in the midst of greatly expanding the sales force that will tell the story to the nephrologists, we were the main prescribers of the product.

And finally, and Steve Rubin will expand on this, we are engaged in clinical trials that will expand the indications for the product and results and its distribution in other countries. Steve?

Steven D. Rubin -- Executive Vice President of Administration and Director

Thank you, Phil, and good afternoon everyone. 2018 was an eventful year as were the first couple months of 2019. We've seen a number of successes during that time. 2018 saw improved quarter-over-quarter sales of RAYALDEE and we also completed enrollment in trials for Type 2 diabetes and obesity and growth hormone deficiency. Through the efforts of our partner Vifor Fresenius RAYALDEE was approved in Canada and we initiated additional clinical trials including the Phase II clinical trial for higher dose RAYALDEE to treat Stage 5 CKD that will expand the breadth of RAYALDEE indications.

As Phil noted, we appointed a new leadership team at BRL or BioReference Labs with Geoff Monk now serving as President and Dr. Jon Cohen joined us as Executive Chairman. Both gentlemen have deep expertise and extensive relevant experience in the management and growth of lab services and we are very pleased that they chose to join BRL. Through its GenPath Oncology Diagnostics division, BRL forged a collaboration with the National Cancer Institute to participate in the institute's precision medical clinical trial known as NCI-MATCH, in this trial patients are assigned to receive treatment based on the genetic changes found in their tumors through genomic sequencing and other tests.

We are pleased to be selective with this collaboration as it puts our GenPath Oncology diagnostics on the cutting edge of genetically based cancer therapy development. GeneDx reached another high impact milestone in June with the announced completion of 100,000 additional individual exome sequences representing one of the largest cohorts of sequence exomes by an independent clinical laboratory in the world. GeneDx has now surpassed the 140,000 exome mark. This work is important because the information we gather from the body of sequences can be used to help diagnose and therefore, better manage disease more specifically identifying variations in genes that may lead to a variety of neurological metabolic or other disorders.

GeneDx's R&D program continues to launch many new tests and has about 40 tests slated to launch this year alone, which will enable GeneDx to enter a number of new clinical markets. Most recently, we announced FDA approval of our point-of-care Sangia Total PSA test with the Claros 1 analyzer. There are 25 million PSA tests performed in the United States annually. So this approval represents a significant market opportunity. We believe there are many advantages both to patients and to physicians in offering test results right at the point of care.

Further with the momentum of this approval, we will continue our work to expand the test menu on this technology platform. We are also taking steps to attain clear waiver for the test and analyzer, which would permit the test to be performed by most medical office personnel with minimal training and are planning for scale up of our manufacturing capacity during 2019 as necessary for commercial launch. 2018 was also a year for challenges. Phil already noted the Novitas decision regarding our 4Kscore test and we are evaluating options to fuel decision and undertake other steps with the Center for Medicare and Medicaid Services to have 4Kscore covered for Medicare patients.

We will keep you apprised of our progress as our path forward is clarified. As you also know, in late December we and Dr. Frost settled the relevant actions brought against us in an SEC complaint, each without admitting or denying any of the allegations. The settlement ends what would have been an expensive, contentious and time-consuming litigation that will continue to negatively impact the well-being of the company and the focus of our employees and management. We are pleased to put this behind us, we can continue our work unimpeded by this unfortunate part of events.

And as a final topic in February, we successfully raised $200 million through the issuance of 4.50% convertible senior notes due 2025. Adam will cover this in greater detail, but this financing provides OPKO with sufficient funding to accelerate our research and development efforts, yet still provides us with the ability to reinvest in our commercial activities. I will now go into a bit more detailed overview of our programs.

Looking at specific diagnostic products, as you know, our 4Kscore blood test givess a man with elevated PSA levels a personalized prediction of his chance of having or developing an aggressive form of prostate cancer. For 2018, we processed over 79,000 tests, representing a 4% increase compared with 2017 4Kscore tests performed in the fourth quarter increased by almost 6% from Q3 2018 to the 19,500 tests, although this represented a 5% decrease from the comparable quarter in 2017. Tests processed from urologists where we are now primarily focusing our sales efforts grew 12% in 2018 compared to 2017. We intend to submit the 4Kscore test to the FDA for approval or clearance during the second quarter. I think everyone on this call understands the importance of 4Kscore and believes in the need for this test. To restate its credentials, 4Kscore test has been ordered by more than 12,000 practicing physicians worldwide with over 200,000 tests ordered. The test has been extensively studied in more than 25,000 patients with results presented in 18 peer reviewed scientific publications. Results of five new studies covering the 4Kscore tests were presented at the American Urological Association's 2018 Annual Meeting, including a study demonstrating the test's ability to stratify risk of prostate cancer mortality in men with elevated PSA.

For pharmaceuticals, turning now to that portion of our business let me start with RAYALDEE. The first and only therapy approved by the FDA that both raises 25-hydroxyvitamin D and lowers parathyroid hormone levels in patients with chronic kidney disease with a safety profile similar to a placebo. We are continuing to build sales momentum and we have seen a growth of 250% in total prescriptions for 2018 versus 2017. Total prescriptions of RAYALDEE in Q4, as reported by IQVIA, increased 21% compared with Q3. New patients increased 12% in Q4 versus Q3. Since launch, there have been a total of approximately 7,500 patients on RAYALDEE. We have also increased the number of healthcare providers who prescribe RAYALDEE. As of Q4, over 1,700 prescribers have written RAYALDEE, of which over 200 were new prescribers. We ended 2018 with RAYALDEE being available to over 80% of the overall insured population with over 60% unrestricted coverage of the Medicare population. Overall, we continue to see progress in adoption, reimbursement and awareness of RAYALDEE. Our sales team continues to demonstrate impact and our market penetration continues to grow.

Regarding our clinical development programs, we remain focused on progressing a diversified portfolio addressing several indications with significant unmet medical need in large markets. We have a robust pipeline of product candidates at varying stages of development, which provide opportunities for creating both near and long-term value for our shareholders. Starting with our work in renal, our partner Vifor Fresenius remains on track to file a market authorization application with the European Medicines Agency later this year as a treatment for SHPT and CKD patients. In September, we initiated a global Phase II trial with a higher strength RAYALDEE in patients with Stage 5 CKD and Vitamin D insufficiency, who require regular dialysis. Cost of this study will be shared with our development partners, Vifor Fresenius and Japan Tobacco. The first cohort of approximately 44 patients will be treated for 26 weeks in a randomized, open-label fashion with either RAYALDEE or placebo to identify the appropriate dosing to be studied in the second cohort.

Initial data readout for this first cohort is expected this year. The second cohort of more than 200 patients will be treated for 26 weeks in a randomized, double-blind fashion with one of three different doses of RAYALDEE or placebo. The primary efficacy endpoint will be correction of Vitamin D insufficiency and control of SHPT. Patients will then be treated with RAYALDEE for another 26 weeks in an open-label extension.

Turning to our metabolic and endocrinology pipeline, we have several late-stage programs under way or nearing initiation. As you know, our long-acting human growth hormone product somatrogon or hGH-CTP is partnered with Pfizer for worldwide commercialization. We were pleased to announce in August that we've completed enrollment in our global Phase III study in growth hormone deficient children. Pediatric indications represent more than 80% of the hGH market. This is a pivotal, non-inferiority study comparing for a 12-month period, a single-weekly injection of somatrogon with daily injections genotropin. This 228 patient study uses a pen device and formulation intended for commercial launch. We are hopeful that the outcomes will support a dosing change from daily to weekly administration and positively impact the quality of life for children with growth hormone deficiency. With a 12-month primary endpoint as mentioned, we expect to report top line results from this study in Q4 this year. We've recently completed enrollment in a 44 patient Phase II study evaluating the effect of hGH-CTP on the safety in growth of pediatric patients in Japan. The study compares once weekly hGH-CTP with a once-daily GHD product and is required for future somatrogon submission to the Japanese regulatory authorities.

Turning to our work with OPK88004, a selective androgen receptor modulator that has the ability to serve as an agonist, resulting in increased anabolic effects, such as increased lean body mass and physical function and decreased fat mass and as an antagonist to androgen receptors in the prostate. These promising clinical data suggests that OPK88004 can be used for the treatment of a number of symptoms such as frailty, decreased physical function and quality of life parameters associated with aging and low testosterone levels. In a press release on January 31, we announced that we are suspending the BPH trial as it was originally designed due to variability measuring changes of prostate volume and transient increases in liver enzymes observed in several men at these higher doses. The liver enzyme levels resolved after the drug was withdrawn. Based on the positive anabolic effects of OPK88004 observed in a 420 patient study in aging males, we are planning a Phase II clinical study to assess the drug in prostate cancer patients treated with Androgen Deprivation Therapy or ADT. ADT lowers testosterone to castration levels resulting in a number of side effects as decreased body mass, physical function, bone quality and increases in body fat, frailty and hot flashes. The diminished quality of life results in approximately one-third of men treated with ADT stopping treatment within six months of initiation, because of OPK88004 selective androgen activity it may be well suited to treat the severe side effects associated with ADT in men with prostate cancer, approximately one million men are receiving ADT therapy in the United States.

In mid June, we reported that enrollment was complete in our Phase IIb dose escalation trial for our once-weekly GLP1 glucagon dual agonist oxyntomodulin for the treatment of Type 2 diabetes and obesity. This study includes 115 Type 2 diabetics at 35 clinical sites in the US and was designed to assess a dosing regimen that is expected to improve weight loss and glucose control and to demonstrate an acceptable safety profile as the drug candidate is prepared to advance in the Phase III studies. We completed the study earlier this month and we expect to report the findings from this study in March of this year.

So in closing, 2018 and the first part of 2019 has been a busy period for us with both successes and challenges. Yet, we affirm our commitment to our business model and our product pipeline. We have advanced multiple products across our diverse portfolio and continue to see increases in sales and performance indicators for RAYALDEE. We are pleased to have received FDA approval for Claros 1 and we applaud our partner Vifor Fresenius for their work to secure approval for RAYALDEE in Canada. And we look forward to the global expansion of the RAYALDEE franchise in partnership with Japan Tobacco and Vifor Fresenius.

We are pleased to announce completion of enrollment in both our pediatric hGH and diabetes programs. These milestones represent significant progress in our development of these therapeutics. We are advancing a robust clinical development program that addresses several large markets. We expect to make meaningful progress with these programs and to achieve several important milestones.

And with that overview, let me turn the call over to Adam for a discussion of our fourth quarter and full-year financial performance.

Adam Logal -- Vice President and Chief Financial Officer

Thank you, Steve. During the last few months, we have strengthened our balance sheet through two separate financing transactions. In November, we completed a $93 million equity offering with Dr. Frost, Dr. Hsiao and our other long-term investors, which resulted in our ending cash balance at $96.5 million. Additionally, on February 5, we completed the $200 million convertible debt offering. In connection with the closing of the convertible debt offering, we terminated the $60 million unsecured line of credit with Dr. Frost. These financing transactions have provided us with the flexibility to accelerate our R&D efforts, while providing us with the ability to reinvest into our commercial activities.

As Steve mentioned, we are expanding our commercial organization for RAYALDEE to accelerate the growth rates for that line of business. In addition, the R&D initiative Steve mentioned had been competing for available funds and those financings provide us with the ability to accelerate those programs. Overall, our financial performance during the fourth quarter came in slightly below our own expectations as a result of the challenging quarter for the lab industry overall as well as some non-recurring, non-cash impairments we recorded.

Overall, our net loss during the fourth quarter of 2018 decreased to $76.1 million or $0.13 per share compared to a net loss of $217.9 million or $0.39 per share for the comparable period of 2017. Our revenues improved to $221.9 million for the fourth quarter of 2018 compared to $161 million for the 2017 period.

Moving to cost and expenses, we continue to invest in our R&D projects, where we incurred $33.3 million for the fourth quarter of 2018 compared to $34.2 million for the 2017 period. In addition, during the fourth quarter of 2018, we recorded A non-cash impairment charge for our goodwill and in-process research and development programs of $21.8 million. These charges principally related to our API business, which lost a significant customer during the fourth quarter, as well as the suspension of our BPH clinical trial for our SARM, which Steve discussed.

Moving to our lab business. Revenue from services increased to $183.1 million compared to $119.4 million for the comparable period of 2017. As a reminder, the 2017 period included $73.3 million of revenue adjustments. Overall, reimbursement within our lab business continues to be challenging within our esoteric testing business, including GeneDx, where denial rates are increasing as payors increase pre-authorization requirements. Our payer team as identifying ways for us to prevent those denials in the first instance and our billing team is working diligently on improving our overall appeal(ph) success rates. Continuing to improve our cost to serve remains an important focus as we will see another year of reimbursement headwinds led by the impact of PAMA.

Regarding our pharmaceutical division's performance, we recognized $6 million of revenue related to the sales of RAYALDEE during the quarter. We saw the impact of improved payor coverage and access, including expanded Medicare coverage that has impacted our gross to net revenue calculations. Going forward, we anticipate our net revenue to remain between 50% and 55% of gross revenues, which reflects an increase in our estimated sales returns and allowances.

Total pharmaceutical product revenue for the quarter was $25.4 million compared to $33.8 million for the 2017 period. The fourth quarter of 2017 included the recognition of all RAYALDEE shipped from launch through the end of 2017, which was $9.1 million. Revenue related to the transfer of intellectual property for the fourth quarter was $13.4 million compared to $7.8 million for the 2017 period.

Looking forward to the first quarter of 2019, we expect revenue from services to be between $175 million and $190 million. This anticipated decrease is principally the result of our continuing reimbursement declines with the range reflecting various volume expectations.

Turning to product revenues for the first quarter. We expect them to come in between $25 million and $28 million, including RAYALDEE revenues between $6.7 million and $7.5 million while revenues from the transfer of intellectual property are expected to be between $15 million and $20 million.

Looking at anticipated expenses for the first quarter, we expect costs and expenses to be between $280 million and $290 million including research and development expense of $33 million to $38 million.

With that, I'll turn back the call back to Dr. Frost for any final comments.

Phillip Frost -- Chairman and Chief Executive Officer

I don't have any other comments and we'll open the floor for questions, if there are any?

Questions and Answers:

Operator

(Operator Instructions) And our first question is from the line of Maury Raycroft from Jefferies.

Maury Raycroft -- Jefferies -- Analyst

Hi, everyone. Congrats on the progress and thanks for taking my questions. First question is on RAYALDEE. So at the beginning of the call, you mentioned that there is some new publications that could be coming out soon. Can you provide any general previews to what to expect in those publications and when we could see them?

Phillip Frost -- Chairman and Chief Executive Officer

I'll let our expert in Vitamin D Charlie Bishop respond.

Charles W. Bishop -- Chief Executive Officer, OPKO Renal

All right. Thanks for the question. We have a paper that's been accepted for publication in the American Journal of Nephrology, which is entitled rationale for increasing the serum total 25-D target in CKD. The paper shows for the first time with prospective data that the serum total 25-D or Vitamin D target is not where the clinical practice guidelines have placed it at 30 nanograms per mill rather it's substantially higher.

And that means that the standard of care, which is used to correct Vitamin D insufficiency in CKD patients is completely unable to reach that target. 90% of CKD patients are treated with nutritional Vitamin D and our data, which will be coming out very shortly, shows that nutritional Vitamin D simply cannot reach that level.

RAYALDEE on the other hand is the ideal therapy for raising serum total 25-D levels, it makes sense that if you want to increase the Vitamin D levels in the blood, you give 25-hydroxy D and that's reactive in RAYALDEE, We can raise serum total 25-D easily to the level that our data show is required in order to control elevated PTH.

Maury Raycroft -- Jefferies -- Analyst

Got it. That's very helpful. And will these publications, I assume they're going to be used to some extent while marketing, could some of the data or potentially even the reference be added to the label RAYALDEE?

Charles W. Bishop -- Chief Executive Officer, OPKO Renal

It's a great question. So accompanying this particular publication, which was scheduled to come out in February, but it's delayed because there's going to be a cover editorial by an independent author and we're waiting for that editorial to be drafted. Both the paper and the editorial will be used in our promotional efforts. And we are preparing for that right now. And there's possibility that we might be able to get clarifications in our label as well.

Maury Raycroft -- Jefferies -- Analyst

Got it. Okay. And also for RAYALDEE, you mentioned that you just started recruiting for the Phase II in hemodialysis patients with SHPT and you have the ongoing Phase IV in CKD and VDI with SHPT. So first I am wondering how important is that Phase IV that's ongoing and when could we expect an update from that trial? And then for both the Phase II and the Phase IV, can you provide any more context in how the data could be used for commercial efforts?

Charles W. Bishop -- Chief Executive Officer, OPKO Renal

Great question. So we do have a Phase IV study ongoing that's comparing RAYALDEE to commonly used treatment regimens in the United States, as well as in Europe. The data will help us from a promotional standpoint, provided that they turn out positively, which we expect. They also will help us with their pending filing in Europe for RAYALDEE as a treatment for secondary hyperparathyroidism in Stage III/Stage IV CKD. The European filing requires a comparison against immediate release calcifediol, that is one of the comparative arms in this Phase IV study.

We're confident from the early data that the results will be very good. Our timeline for finishing this study will be later this year, this is an open label study. So we're able to track the data as we go. With regard to the dialysis study that's ongoing, the medical textbooks teach that RAYALDEE can't possibly work in a patient that doesn't have a functional kidney. But our data from Phase III trials in Stage III and Stage IV CKD show that the PTH lowering response with RAYALDEE is identical in Stage III and Stage IV and is independent of EGFR. The rationale for this is that RAYALDEE gets activated outside the kidney and our package insert allows for that possibility, so we're going to be very excited to report later this year the results from our ongoing dialysis study.

Maury Raycroft -- Jefferies -- Analyst

Great. Okay, thank you very much. I'll hop back in the queue.

Phillip Frost -- Chairman and Chief Executive Officer

Any other questions?

Operator

Indeed. Our next question is from the line of Yale Jen from Laidlaw & Company.

Yale Jen -- Laidlaw & Company -- Analyst

Good afternoon and thanks for taking the questions. And first, let me add, Adam, appreciate that you provide first quarter '19 guidance, so that's very helpful for modeling purpose. But would you be able to provide little bit more longer term sort of projection for the full year 2019 in terms how do you see the top line as well as the operating expenses on an annualized basis?

Adam Logal -- Vice President and Chief Financial Officer

Thanks, Yale. So, we, obviously, gave Q1 guidance. We'll continue to provide updates as the year progresses. I think there is some uncertainty for us on the overall outlook, just given the 4K reimbursement challenges and headwinds that we're facing, in addition that we sum(ph) the way the lab industry is, it's been kind of pretty choppy in the fourth quarter. We're starting to see some rebound here in the first quarter, but obviously based on the guidance I provided, we are expecting to come in lower than prior year. So I think as we think about the year, we want to get some more time behind us.

From an OpEx perspective, we do think the lab business will continue to pull out efficiencies as we did in 2018 and Jeff and the team there are very focused on any challenges that we have on the top line have to be addressed through the operating expense lines.

Yale Jen -- Laidlaw & Company -- Analyst

Okay, that's very helpful. Appreciate it. In terms of the timeline for the clear waiver for the Claros PSA test, is there any timeline in terms of how that may be completed or being approved, I guess?

Steven D. Rubin -- Executive Vice President of Administration and Director

It's too early for me to answer that. So we were going to have our pre-submission discussion with FDA shortly, which will give us a little better insight but it's a little premature for me to answer that now.

Jane H. Hsiao -- Chief Technology Officer

In addition, FDA is actually just finalizing their guidance in terms of CLIA waiver, yes.

Yale Jen -- Laidlaw & Company -- Analyst

Okay, that's very helpful. And maybe last question here is that in terms of submitting 4Kscore for FDA approval. First of all, have you guys spoke with the agency regarding whether would there be any sort of study needed? And longer term, if you get approved. how would you see that potentially benefit on the sort of commercial side in terms of the commercial outlook?

Jane H. Hsiao -- Chief Technology Officer

I can address the FDA question. This is Jane Hsiao.

Yale Jen -- Laidlaw & Company -- Analyst

Hi, How are you?

Jane H. Hsiao -- Chief Technology Officer

Hi, Good. So we have been working with the FDA about requirement for 4Kscore test review and approved by FDA. So guidance has been provided to us. And over the last year to 18 months, we've been working on diligently to generate the data both on the laboratory performance requirement to field clinical studies. So we are at the end of completing all those and that's why we feel comfortable that submission to agency is going to happen shortly.

Yale Jen -- Laidlaw & Company -- Analyst

And there's no -- go ahead, I'm sorry,

Steven D. Rubin -- Executive Vice President of Administration and Director

No. Go ahead. Finish up, Yale.

Yale Jen -- Laidlaw & Company -- Analyst

Is there any sort of clinical study will be needed, additional clinical study will be needed or you can just submit what you have, sort of complete in the near future and to submit that package.

Jane H. Hsiao -- Chief Technology Officer

Indeed, there is additional clinical study, basically more from the performance aspect and which were done. So to just give you some example of the type of clinical study FDA asked for is, they want us to do it in the clinic showing that the 4K together with the standard of care for diagnosing prostate cancer is consistent with our claim and you have to do it at the 4K at various level of PSA at a different level and things like that. So we completed all those tests.

Steven D. Rubin -- Executive Vice President of Administration and Director

And from the commercial value of it actually, Yale, we think it will add value, even though the clinical laboratory review is quite rigorous, especially New York State licenses and the like. It still remains in a premature round of FDA approval. And additionally, it is one of those items that Novitas has had continually in their draft reports, or draft coverage determination. So we think it will be very useful for us to have it.

Yale Jen -- Laidlaw & Company -- Analyst

So could you theoretically also resubmit to the Novitas once you get a FDA approval instead of just CLIA up for this??

Steven D. Rubin -- Executive Vice President of Administration and Director

Off course, it will be something, obviously, new important information that they themselves have indicated as important.

Yale Jen -- Laidlaw & Company -- Analyst

Okay, great. Thanks a lot and I appreciate taking the questions.

Phillip Frost -- Chairman and Chief Executive Officer

Okay. Any other questions?

Operator

Indeed. (Operator Instruction) Our next question is from the line of Michael Petusky from Barrington Research.

Michael Petusky -- Barrington Research -- Analyst

Thank you. A few questions. Earlier, there was a comment that you guys would be greatly expanding the RAYALDEE sales force I guess, what's the current number of sales reps on RAYALDEE and then what's the guideline for how much you're expanding that?

Adam Logal -- Vice President and Chief Financial Officer

Yeah, we currently have 64 sales reps and six managers that are in place, we've expanded right now by about 20% and we're considering the timing of doing additional expansion .

Michael Petusky -- Barrington Research -- Analyst

So it's 20% off of 64 or...

Steven D. Rubin -- Executive Vice President of Administration and Director

Yeah. So, currently we have plans for mid-70s of our sales reps to be in place in the field in April and we're moving forward with evaluation of whether or not to move forward with additional people, what the timing is for that this year.

Michael Petusky -- Barrington Research -- Analyst

Okay. Thank you. And then moving onto BRL Adam, do you have like the segment margins, their EBITDA margins, op margins, anything like that for the quarter?

Adam Logal -- Vice President and Chief Financial Officer

Yes. So like we haven't filed our K, we'll file our K by the end of the week. So I am kind of limited to what we put out in the press release.

Michael Petusky -- Barrington Research -- Analyst

Do you by any chance -- since the case is not going to be filed tonight, do you have any ability to fill in like D&A for the quarter, CapEx for the quarter, anything like that or...

Adam Logal -- Vice President and Chief Financial Officer

Yeah, I mean D&A is consistent with last quarter, so there wouldn't be any surprises within there.

Michael Petusky -- Barrington Research -- Analyst

Okay, CapEx?

Adam Logal -- Vice President and Chief Financial Officer

CapEx is marginally down.

Michael Petusky -- Barrington Research -- Analyst

Okay. Stock comp, do have any recollection of that one?

Adam Logal -- Vice President and Chief Financial Officer

Yeah. Again it's consistent with last quarter. There weren't meaningful changes there.

Michael Petusky -- Barrington Research -- Analyst

Okay, all right. And forgive me, Adam, I may have missed this, I briefly was off the call for about 30 seconds, it sounded like you may have been answering this, but are you guys essentially -- the expectation given the reimbursement headwinds at BRL are you guys essentially expecting kind of a down revenue year for '19?

Adam Logal -- Vice President and Chief Financial Officer

So I think we're not -- I don't want to get ahead of ourselves. I do think that Q1 is particularly challenging and uncertain coming off the year-end volumes that we saw, we've been bullish on volume potentials and it remained that way. I think we're getting to have a better sense of the reimbursement component(ph) over these next couple of weeks and in May should be able to provide a broader outlook, Mike.

Michael Petusky -- Barrington Research -- Analyst

Okay, all right. Thank you.

Operator

(Operator Instruction)

Phillip Frost -- Chairman and Chief Executive Officer

Well, if there are no other questions, I want to thank all the participants today and we look forward to greeting you at the call to commemorate the end of the first quarter. Thank you.

Operator

Thank you. Ladies and gentlemen, that does conclude your conference call for today. We thank you for your participation, and ask you please disconnect your lines.

Duration: 40 minutes

Call participants:

Miriam Miller -- Investor Relations

Phillip Frost -- Chairman and Chief Executive Officer

Steven D. Rubin -- Executive Vice President of Administration and Director

Adam Logal -- Vice President and Chief Financial Officer

Maury Raycroft -- Jefferies -- Analyst

Charles W. Bishop -- Chief Executive Officer, OPKO Renal

Yale Jen -- Laidlaw & Company -- Analyst

Jane H. Hsiao -- Chief Technology Officer

Michael Petusky -- Barrington Research -- Analyst

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