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DATE

Thursday, July 31, 2025, at 4:30 p.m. ET

CALL PARTICIPANTS

  • Chairman and Chief Executive Officer — Phillip Frost, M.D.
  • Vice Chairman and President — Elias Zerhouni, M.D.
  • Chief Financial Officer — Adam Logal

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RISKS

  • Chief Financial Officer Logal reported, The company's GAAP net loss for Q2 2025 was $148.4 million, or $0.19 per share, compared to $10.3 million, or $0.01 per share, in Q2 2024, explicitly noting a sharply higher year-over-year loss.
  • Chief Financial Officer Logal stated, "Globally, the adoption of the long-acting form of HGH has been slower than we and the broader market have anticipated," indicating underperformance in the international rollout of INGENLA.
  • Chief Financial Officer Logal noted that, "gross profit share has been slower than we anticipated," highlighting lower-than-expected profit contributions from the Pfizer partnership.
  • Chairman Frost commented, "Expenditures are major for us, they're largely for R&D ... they're on the high-risk side," explicitly acknowledging significant risk associated with current R&D investments.

TAKEAWAYS

  • Diagnostics Revenue: $101.1 million for Q2 2025, including $24.9 million from oncology assets scheduled for sale; down from $129.4 million in Q2 2024, primarily due to asset divestiture.
  • Diagnostics Segment Result: Operating loss for Q2 2025 improved to $18.2 million from $26.6 million a year ago, reflecting lower costs and restructuring benefits.
  • Diagnostics Cost Structure: Total expenses (GAAP) declined to $119.3 million in Q2 2025 from $156 million in Q2 2024, aided by $19 million in annualized cost savings from headcount and facility consolidation.
  • 4Kscore Volume Growth: Test volume increased approximately 12% year-over-year in Q2 2025; additional upside anticipated from new FDA approval allowing use without digital rectal exam data.
  • BioReference Headcount: Headcount is now approximately 1,900 in Q2 2025; expected to fall to 1,400–1,500 after the oncology sale in Q3 or Q4 2025.
  • BioReference Remaining Business Revenue Base: Operations excluded from asset sales generated approximately $300 million in revenue in 2024.
  • Pharmaceutical Revenue: $55.7 million in Q2 2025, up $2.9 million from Q2 2024, with product revenue at $40.7 million and RAYALDEE stable at $7.2 million but with improved margin.
  • IP Transfer Revenue: $15 million in Q2 2025, including $6.1 million from Pfizer profit share, compared to $12.3 million and $6.3 million, respectively, in Q2 2024.
  • BARDA Funding: $6.5 million recognized in Q2 2025. Full-year 2025 guidance is $30 million–$35 million in BARDA funding, supporting MODEX and infectious disease portfolios.
  • Pharma Segment Expenses: Costs and expenses for Q2 2025 were $84.4 million, up from $77.6 million, driven primarily by R&D spend, which rose to $29.8 million due to MODEX and BARDA-supported programs.
  • Pharma Operating Loss: $28.7 million compared to $24.8 million in Q2 2024.
  • Consolidated Operating Loss: Consolidated operating loss improved to $60 million in Q2 2025 from $61.7 million in Q2 2024, as diagnostics offset increasing pharma investment.
  • Convertible Debt Exchange: Completed in April 2025, eliminating over $159 million in principal debt, using approximately $65 million in cash and issuing 121 million shares; this resulted in a $92 million expense during 2025.
  • Share Repurchases: 13.6 million shares were repurchased in Q2 2025. $141.5 million in authorized capacity remains as of June 30, 2025, representing over 13% of the share count at recent prices.
  • R&D Spending Guidance: Research and development spending is expected to be $120 million–$130 million for 2025. BARDA funding will offset $30 million–$35 million of this in 2025.
  • Transaction Proceeds: $192.5 million expected from the oncology asset sale in Q3 2025, with potential total consideration up to $225 million including a performance earn-out, related to the sale of BioReference oncology assets to LabCorp, expected to close near the end of Q3 2025.
  • 2025 Revenue Outlook: Total revenue is projected at $640 million–$660 million for 2025; services at $400 million–$425 million (including $95 million–$105 million oncology); product revenue at $160 million–$170 million; and other revenue at $65 million–$75 million (with Pfizer profit share $28 million–$35 million and BARDA $30 million–$35 million).
  • 2025 Expense Outlook: Total costs and expenses are expected to be between $835 million and $865 million for 2025, excluding $15 million to $20 million in one-time restructuring costs for the diagnostics business. excluding $15 million–$20 million in one-time diagnostics restructuring for fiscal 2025, with $90 million in depreciation and amortization for 2025, and a $100 million anticipated gain on the oncology transaction closure in 2025.
  • EBITDA Path: CFO Logal stated, "We feel we're on track to deliver those cost savings and to get to that cash flow positive basis this year, both from an EBITDA and cash position."
  • Product Pipeline Progress: MODEX has two programs in Phase I and expects three additional clinical trial initiations by early 2026; top-line data from Merck collaboration on EBV vaccine will guide Phase II advancement.
  • FDA Action: July 25 approval for 4Kscore test supplemental application, enabling use without digital rectal exam input and broadening physician adoption.

SUMMARY

Management reported progress in executing the asset sale of BioReference oncology operations, which will provide $192.5 million in near-term liquidity with additional earn-out potential, and drive headcount and cost reductions. The transaction is expected to close near the end of Q3 2025. Operational improvements, including lower expenses and higher volumes in targeted testing segments, are supporting a path toward cash flow breakeven and profitability in diagnostics by year-end. The pharmaceutical segment experienced higher R&D spending focused on multiple pipeline programs, with cost offsets partially enabled by BARDA support. The company completed a major convertible note exchange in 2025, sharply reducing debt but incurring a $92 million expense. This was accompanied by an ongoing share repurchase initiative, with approximately $142 million remaining authorized as of Q2 2025. New FDA approval for the 4Kscore test is expected to open a broader market segment, expanding addressable volume among primary care providers and supporting future revenue growth.

  • Vice Chairman Zerhouni summarized, "With the pending sale of BioReference Oncology and related clinical testing assets to LabCorp, we expect the remaining business to show improving margins through the balance of the year and beyond."
  • Management confirmed approximately $285 million in cash, cash equivalents, and restricted cash as of Q2 2025, prior to asset sale proceeds.
  • Advancement of oral and injectable GLP-1 programs for obesity and NASH, and oral GLP-2 for short bowel syndrome, continues, with a conference presentation on GLP-2 scheduled for September 2025.
  • Chairman Frost stated, "We've taken several strategic steps to improve our balance sheet and have sufficient capital to allocate to our R&D efforts which are partially funded by strategic partners and non-dilutive sources."

INDUSTRY GLOSSARY

  • 4Kscore test: A laboratory test designed to assess the risk of aggressive prostate cancer using a panel of four blood biomarkers, recently approved for use without digital rectal exam data.
  • GLP-one/GLP-two: Glucagon-like peptide-1 and peptide-2, hormones targeted by therapeutic agents for metabolic and gastrointestinal diseases, respectively.
  • MODEX: OPKO Health's internal platform advancing multi-specific antibody and vaccine therapeutics for oncology and immunology indications.
  • BARDA: U.S. Biomedical Advanced Research and Development Authority, an agency that provides non-dilutive funding for high-priority drug and vaccine development.
  • INGENLA: The company's once-weekly long-acting growth hormone therapy, commercialized globally via partnership with Pfizer.

Full Conference Call Transcript

Operator: Good day, and welcome to the OPKO Health, Inc. Second Quarter 2025 Financial Results Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Yvonne Briggs: Thank you, operator, and good afternoon. This is Yvonne Briggs with Alliance Advisors IR. Thank you all for joining today's call to discuss OPKO Health, Inc.'s financial results for the 2025. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward-looking and as such are subject to risks and uncertainties that could materially affect the company's results. These forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-Ks for the year ended 12/31/2024, and subsequently filed SEC reports.

Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast 07/31/2025. Except as required by law, OPKO Health, Inc. 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's call. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference Health as well as OPKO Health, Inc.'s pharmaceutical business. After that, Adam Logal, OPKO Health, Inc.'s Chief Financial Officer, will review the company's second quarter financial results and discuss OPKO Health, Inc.'s financial outlook.

And then we'll open the call to questions. I'd like to turn the call over to Dr. Frost.

Phillip Frost: Good afternoon. And thank you for joining us. Today, we will report on the continued progress of OPKO Health, Inc.'s strategic initiatives and business performance. We have streamlined BioReference Health's operations as we prepare to close the sale of its oncology and related clinical testing business to LabCorp. This transaction monetizes certain assets while sharpening BioReference's focus on its core testing business and improving its financial profile. This is our second transaction with LabCorp to unlock value and accelerate BioReference's path to profitability. On the pharmaceutical side, we continue to advance our innovative therapeutic pipeline. MODEX has two programs in Phase one clinical trials with three more expected to enter the clinic late this year and early 2026.

A significant catalyst for our pipeline is the Phase one data from our EBV vaccine partnered with Merck that will guide decisions regarding phase two testing. We are pleased with the progress of our collaboration with Entera Bio to develop an oral tablet formulation of PK88006, our GLP-one glucagon agonist for the treatment of obesity and NASH. Oral administration of this drug candidate has demonstrated encouraging results in animal models with in vivo data presented at the ENDO Annual Meeting in mid-July. OPKO Health, Inc. is independently developing OPK-886 for subcutaneous administration with in vivo data having been presented at the American Diabetes 85th Scientific Sessions in June.

We're also collaborating with Entera Bio on a second program to develop an oral form of our GLP-two candidate for short bowel syndrome. Our Latin American business and our Irish Contract Pharmaceutical Development and Manufacturing Unit continued to perform well with increasing revenue and expanding margins even while facing foreign currency headwinds. We've taken several strategic steps to improve our balance sheet and have sufficient capital to allocate to our R&D efforts which are partially funded by strategic partners and non-dilutive sources. In addition, we have a $200 million common stock repurchase program in place, with $141.5 million remaining capacity as of June 30.

As you've noted, we're committed to maximizing shareholder value through this strategic deployment of capital, additional partnerships, business development initiatives, and asset sales. We're confident that this strategy will continue to add value in 2025 and beyond. With that overview, I'll turn the call over to Elias.

Elias Zerhouni: Well, thank you, Phil, and good afternoon, everyone. Let's start with an update on BioReference Health, our diagnostic segment. We continue to restructure and rightsize this business toward the goal of reaching and sustaining profitability. You will recall that in March, we announced an agreement with LabCorp to sell our oncology assets for $225 million, with $192.5 million payable at closing and an earn-out of up to $32.5 million based on performance. And the earn-out will be measured six months post-close and is based on the number of specified client accounts that are retained. We expect this transaction to close near the end of the third quarter of this year.

With the pending sale of BioReference Oncology and related clinical testing assets to LabCorp, we expect the remaining business to show improving margins through the balance of the year and beyond. Post-transaction, BioReference will maintain its core clinical testing operations in New York and New Jersey and will continue to offer urology diagnostic services highlighting our proprietary 4Kscore test for prostate cancer risk assessment as well as its clinical services business with correctional facilities on a nationwide basis. The revenue of these operations represented approximately $300 million in 2024. Now reflecting our efforts to drive operational efficiencies, BioReference's financial results continue to improve.

As I mentioned in our last call, the latest reduction in force and footprint consolidation provided annualized cost savings of approximately $19 million. Our headcount stands now at approximately 1,900 for the second quarter. After the close of the oncology transaction, we expect our headcount to decrease to between 1,400 and 1,500 by the fourth quarter. Now to further grow the business, we have focused our efforts on optimizing our test menu and establishing strategic relationships in the market to increase testing volumes. By focusing in the local New York and New Jersey physician market, we have really strengthened our position with those who serve this patient base. This includes ACOs, IPAs, HQHCs, regional health systems, and specialty healthcare companies.

In addition, the combination of our menu signs and operational agility as a more focused company is instrumental in capitalizing on new revenue streams such as direct-to-consumer, employer-based testing, and early-phase clinical trials. We are also pleased to announce that on July 25, the FDA granted approval of a supplemental application for the 4Kscore test. And this approval specifically enables the performance of the 4Kscore test even when digital rectal examination information is not available. The 4Kscore test is indicated for the assessment of the likelihood of aggressive prostate cancer in men 45 years or older and reported to have age-specific elevated or abnormal screening PSA results.

In the U.S., over 90% of PSA screening tests are performed by primary care providers who will now be potential users of the 4Kscore test. Excluding the pending and closed listed sales, BioReference's testing volume grew by 1.4% in 2025 compared with a year-ago period. As for our urology segment, the 4Kscore test continued to perform well with a year-over-year increase in test volume of approximately 12%. Now the aforementioned FDA approval of our supplemental application for the 4Kscore test should provide further opportunities for growth, we believe. Now let's turn to a discussion of our therapeutic segment starting with MODEX. The Phase one Epstein-Barr virus vaccine trial by our Merck collaborators is progressing as planned.

This trial will evaluate up to 200 healthy adults for safety and tolerability and is comprised of two parts with a different adjuvant for each. We're currently waiting for the analysis of the Phase one results that will guide Merck's decisions on progression to Phase two trials. Several products are advancing in our immuno-oncology and immunology portfolio. The most advanced is our first-in-class MDX-2001 c-Met TROP-2 CD3, CD28, tetraspecific T cell engager antibody that has progressed to its fifth dose level in a Phase one clinical trial.

We expect to enroll the highest dose level by the end of the year, after which we will focus on assessing signals of efficacy in select tumors known to express high levels of TROP-2 or c-Met at biologically active doses. Thereafter, we will focus on the tumors that appear most responsive. Now, two additional programs are expected to enter the clinic late this year or early next year, including our MDX-2003 tetraspecific T cell engager antibody for lymphoma and leukemia and the MDX-2004, the immune rejuvenator for multiple oncology and immunology indications. Our immunology portfolio is focused on the use of multi-specific antibodies for immune-impaired patients, including those with cancer, chronic diseases, and the elderly.

Our most advanced product aims to address the unmet need in such patients at high risk for COVID complications. We anticipate that Phase one studies will begin early next year. This work, as you remember, is funded by BARDA, which is also supporting the advancement of multi-specific antibodies to prevent influenza currently at the pre-IND stage. We continue to work collaboratively with BARDA, which contributed non-dilutive funding of $59 million last year and an additional $51 million so far this year to advance these programs. Now, as mentioned by Dr. Frost, moving to OPKO-88006, our novel long-acting GLP-one receptor glucagon receptor dual agonist, we presented a poster on preclinical data at the American Diabetes Association 85th Scientific Session in June.

The therapeutic benefits of OPKO-88006 on quantitative biological hallmarks of NASH in mouse models were superior to semaglutide and tirzepatide, suggesting that OPKO-88006 could be a promising GLP-one glucagon receptor dual agonist for the treatment of obesity and NASH. We are encouraged by these results in OPKO-88006's therapeutic potential. As Phil mentioned, our collaboration with Entera Bio continues to advance as we're in the pre-IND stage with an oral version of OPK-ADA. The oral program combines our proprietary long-acting oxyntomodulin analog and Entera's proprietary NTAP technology. At the recent ENDO meeting in San Francisco, we presented new pharmacologic and pharmacokinetic in vivo data for oral OPK-88006 showing excellent bioavailability.

In addition, we're working with Entera Bio on another program for short bowel syndrome, which represents a significant unmet need. Short bowel syndrome patients have a reduced ability to absorb nutrients and fluids and are at risk of malnutrition, unintended weight loss, and additional symptoms due to the loss of essential vitamins and minerals. The European Society for Clinical Nutrition and Metabolism Congress, or ESPEN, accepted our abstract regarding the PKP of our oral GLP-two tablets for the treatment of short bowel syndrome. This presentation will take place in September in Prague. Finally, our Latin America pharmaceutical division and RAYALDEE continue to perform to plan with sustained revenues and margins, and Adam will provide you also an update on INGENLA.

So in summary, we're pleased with our progress in advancing our first-in-class therapeutic multi-specific antibodies for oncology and immunology indications, as well as our multi-vaccine candidate that are progressing in clinical development at Merck and our metabolic disease program with our OPKO-88006 GLP-one glucagon coagonist in both oral and injectable forms for obesity and NASH, as well as an oral GLP-two agonist for short bowel syndrome. We're confident that the structuring efforts we're undertaking will position BioReference to be more efficient and profitable following the completion of the second asset sale. Now let me turn the call over to Adam to discuss our financial results. Adam?

Adam Logal: Thank you, Elias. Let's begin with our Diagnostics business. Revenue for 2025 was $101.1 million, including $24.9 million from the oncology assets being sold. This compares with $129.4 million in Q2 2024, with the decline primarily due to the LabCorp transaction that closed in September 2024. Revenue in our non-oncology business continues to see steady growth highlighted by an increase in 4Kscore volumes of nearly 12%, which Elias mentioned, and has been accelerating throughout the year. Total costs and expenses were $119.3 million, down from $156 million last year. This includes $29.4 million related to the oncology assets and approximately $2 million in expected one-time costs for severance during the 2025 quarter.

As a result, our diagnostic operating loss improved to $18.2 million compared to $26.6 million in Q2 2024. Depreciation and amortization expense came in at $4.9 million, down from $6.3 million in 2024. Importantly, as Elias mentioned, the actions we've taken throughout the first half of this year and those planned as we close the oncology transaction are expected to deliver over $25 million in annualized cost savings. We remain on track to achieve cash flow breakeven and positive cash from operations in 2025. Turning to our pharmaceutical business, revenue was $55.7 million, up $2.9 million from 2024's $52.8 million.

Product revenue was $40.7 million, up slightly from 2024's $40.5 million, reflecting an increase in our Spanish and Mexican businesses partially offset by foreign exchange headwinds in Chile. RAYALDEE contributed $7.2 million in both the 2025 and 2024 periods with improved margins during 2025 due to the lower government rebates. IP transfer revenue rose to $15 million, up from $12.3 million, which includes our Pfizer profit share of $6.1 million compared to $6.3 million for 2024. While the 2025 gross profit share has been slower than we anticipated, we are optimistic about the efforts Pfizer has made and expect to make throughout the remainder of 2025. On the global commercialization efforts of the program.

Globally, the adoption of the long-acting form of HGH has been slower than we and the broader market have anticipated. However, we continue to see trends of accelerated transition to the once-weekly formulation. Based on the available market data, INGENLA holds about one-third of the global long-acting market. As the market continues to move to the once-weekly dosing, we believe Pfizer will continue to grow its portion of the total market. In addition, BARDA funding increased to $6.5 million from $5 million, reflecting the expanded program activity for our infectious disease antibody programs. Costs and expenses were $84.4 million, up from $77.6 million, driven by increased R&D investments.

R&D totaled $29.8 million, up from $23.7 million, primarily due to the MODEX development programs, including our BARDA-supported programs. As Elias mentioned, we are making progress within our clinical development program and with spending on our ongoing Phase one trial as well as expenses to support an additional five IND filings within the next twelve months for GLP-one glucagon, oncology, immunology, and infectious disease programs. As a result, our pharmaceutical operating loss was $28.7 million compared to $24.8 million last year. Depreciation and amortization expense was $18.1 million, slightly more than 2024's $17.9 million.

For our consolidated results, consolidated operating loss improved slightly during 2025 to $60 million compared to $61.7 million as a result of the improved results at BioReference partially offset by the increased investments in our pharmaceutical research and development programs. As you'll recall, we completed our convertible note exchange on 04/01/2025. As a result, we recorded approximately $92 million of expense during 2025. While our 2024 net loss benefited from an increase in the value of one of our investments, which resulted in a gain of $60 million during 2024. As a result, our net loss for Q2 2025 was $148.4 million or $0.19 per share, compared to $10.3 million or $0.01 per share in Q2 2024.

As we think about our balance sheet and capital allocation, we ended the quarter with approximately $285 million in cash, cash equivalents, and restricted cash. We remain focused on optimizing our capital structure while maintaining our investments into our innovative R&D programs. As I mentioned, we completed the convertible note exchange earlier this quarter using approximately $65 million in cash and issuing 121 million shares, eliminating over $159 million in principal debt. This meaningfully improved our overall debt position. Under our expanded share repurchase authorization, as Phil mentioned, we repurchased approximately 13.6 million shares during Q2 2025 and have approximately $142 million remaining authorized, which represents more than 13% of our current share count at recent trading ranges.

Cash used in operations during Q2 increased from our normal levels due to certain working capital adjustments, including a negotiated lease exit at one of our BioReference facilities, as well as income taxes paid on our transactions that closed in 2024. We also invested approximately $8 million into Entera Bio related to our oral GLP-one program. Looking forward, we expect to close our second LabCorp transaction later this year, which will bring in $192.5 million at closing with potential proceeds of up to $225 million. As we move to our outlook, we continue to execute our multiphase plan to drive profitability in our Diagnostics business by reducing the fixed infrastructure costs and improving our operational efficiency.

Following the oncology transaction, the remaining BioReference business is expected to reach cash flow positive and profitability during 2025. This will exclude non-recurring and non-cash items, and we have not adjusted our outlook for the closing of the oncology transaction, but we'll do so once the closing date is certain.

For the full year 2025 outlook, we expect total revenue to be between $640 million and $660 million, revenue from services of $400 million to $425 million, including $95 million to $105 million from our oncology assets, revenue from products of $160 million to $170 million, and other revenue of $65 million to $75 million, including our Pfizer profit share of $28 million to $35 million and support from BARDA of $30 million to $35 million. Total costs and expenses are expected to be between $835 million and $865 million, excluding $15 million to $20 million of one-time restructuring costs for our diagnostics business.

This includes $125 million to $135 million in expenses related to our oncology assets, and it includes $120 million to $130 million of research and development spending, which will be partially offset by $30 million to $35 million in BARDA funding. We expect depreciation and amortization expense to be approximately $90 million, and we also anticipate a $100 million gain on the oncology transaction, which will reduce operating expenses and increase operating income in the quarter in which we close. With that, I'd like to open up the call for questions. Operator?

Operator: Certainly. We will now begin the question and answer session. Our first question comes from Maury Raycroft with Jefferies. Please go ahead.

Maury Raycroft: Hi, this is James on for Maury. Congrats on the update. Thanks for taking our questions. Given that new prescriptions and total prescriptions for INGENLA were up in 2Q, do you expect that the $6.1 million in INGENLA GENOTROPIN profit share in 2Q is due to lower gross to net from co-pay assistance in 1Q carrying over to 2Q? And have you received any insights from Pfizer on 2Q sales? Or do you plan to follow-up with them for clarification? And I have a follow-up.

Adam Logal: Hey, James. Thanks for the questions. And we definitely saw an improvement in the U.S. market as it relates to the prescription trends that you identified. We continue to see some of the international markets that are in the early days of launches continuing to work through some of the higher cost inventory that's set out there. We expect the remainder of the year to pick back up to the traditional levels. But we saw strength broadly across all of the geographic markets for INGENLA. So we're pretty optimistic about where that's headed.

James: Got it. Thanks. And then follow-up is does EBITDA margin for the Diagnostics business tracking in 2Q versus 1Q? And how are you setting expectations for EBITDA profitability in 3Q or 4Q? Kind of going along with that, this approval of the supplemental application for the 4Kscore test. Can you talk about implications for growth in 4Kscore test sales in the coming quarters?

Adam Logal: Yeah. So let me pull the EBITDA question apart. So when we think about the diagnostic segment, we're continuing to see quarter-over-quarter improvements, and a lot of the steps we've taken to drive costs down are bearing fruit. If you were to look at the $18.2 million operating loss that resulted in Q2, consider the $2 million of non-recurring expenses in there. You start to see that $4.5 million comes from the oncology business that's set to close later this year. And depreciation and amortization expense of $4.9 million gets you to about a $6 million or a couple of million dollar a month loss in that segment.

A lot of the costs, as Elias mentioned, are expected to come out when we close the oncology transaction in a couple of months' time and get our headcount even further down. We've been pretty judicious about making sure we maintain that business with the infrastructure, if I referenced, that's required to get through the closing. But once the closing occurs, we'll be able to bring the overall cost structure down as we plan. We feel we're on track to deliver those cost savings and to get to that cash flow positive basis this year, both from an EBITDA and cash position.

As it relates to 4Kscore, so we've seen really good upward growth on the test this year so far. We mentioned it's about 12% up. I think July that really has started to accelerate, and that is before we have the FDA label change and really opens up the market for us to think about primary care docs being able to order the test. So we think the upside is meaningful. And as I mentioned, being at 12% higher in July, we think again, that the opportunity is pretty important. That test has a strong margin profile with a relatively small sales force calling on docs today.

James: Got it. Thanks so much for answering my questions. I'll hop back in the queue.

Adam Logal: Thanks, James.

Operator: Our next question comes from Edward Tenthoff with Piper Sandler. Please go ahead.

Edward Tenthoff: Great. Thank you very much. So my question has to do with the obesity efforts. And specifically with an increasingly crowded landscape, how do you envision oxyntomodulin differentiating either as an injectable or with an oral formulation that's partnered with Entera? Thanks.

Elias Zerhouni: Yeah. Thanks for the question. I mean, fundamentally, we think there is a differentiation because what we found out actually, and we studied the molecule that we created, that not only is it effective in obesity, but glucagon increases the metabolism. But more importantly, glucagon has an effect downstream of glucagon on FGF21, which rises with our molecule. FGF21 is known actually to be anti-fibrosis or correct fibrosis as we know from other molecules that have been developed around FGF21. So we believe based on the results we have, and then the preclinical data, that really a very good profile for the drug. Number one, we believe that it will have merits for NASH patients combined with obesity and diabetes.

So we will have to look at the second advantage, obviously, is that with the Entera, we can create an oral form, excuse me, of the molecule. And frankly, that is something that in the information that we have from physicians is welcome because, you know, they like to stabilize the patient and convert them into oral forms to maintain the weight loss and maintain the effects over time without having to continue with the injectable. So those are the two aspects.

It has a biological aspect that we believe will be very valuable at NASH, and then it has not just the convenience, but really a stabilization of the regimen that you have to keep patients on to maintain the obesity reduction and the metabolic improvements that you hope to achieve.

Edward Tenthoff: That's very helpful. And then when it comes to actually proving that out in the phase one study, are there endpoints you're envisioning or different case populations? Or how do you think you can actually tease that out in the clinical trials?

Elias Zerhouni: Alright. So that's a great question. So our plan is to really go into patients who have biomarker evidence of NASH and are obese. Okay? And really go into that phase one data on that population of patients that will eventually be of interest if we get both safety and some sign of signal of efficacy with biomarkers. We're not going to do biopsies study. We don't want to do that until we have good evidence that both the dose and the effect are really differentiating. Okay? So that's the idea.

And we're basically focused on patients who have, for example, liver stiffness, liver fat, and evidence that they are not only obese, but they have a fatty liver that could lead to fibrosis eventually and liver failure. Those are the patients we're going to focus on in phase one. With a cost that is quite reasonable. But then, obviously, these developments are quite expensive. We're not going to pursue that all around our own, and we have a lot of interest coming our way about potential collaborations once we achieve the data that we need to have to really create the value of the asset forward.

Edward Tenthoff: That's really helpful. Thanks for the color, Elias.

Elias Zerhouni: Thank you.

Operator: Thank you. Our next question comes from Yale Jen with Laidlaw and Company. Please go ahead.

Yale Jen: Good afternoon, and thanks for taking the questions. I just want to follow-up on what Ed just mentioned earlier. What do you what's your estimate of the size in terms of patients both have obesity as well as NASH? And then would that be the specific sort of indication you're gonna explore in the phase one study when you presumably start later this year or early next year?

Elias Zerhouni: Yeah. The answer is great question. The answer is yes. We're focused on that population. We're gonna try to focus on the patients that have biomarkers that indicate that they're in what we call S2, S3, S4 NASH, degrees of NASH, stages of NASH. And those are the patients we're going to focus on. We're going to look for, as any phase one, for safety signals and dosing ranges, and we're not really looking for definitive efficacy, but we will look for biomarker trends that will help us. Now in terms of total number of patients, to me to tell you the number, but the exact number, but we're thinking between a hundred and hundred seventy patients.

To do the full phase one.

Yale Jen: Okay. Great. That's very helpful. Maybe one follow-up question here. Which is that in terms of the collaboration you have with, you have both OPKO-88006 and, also, you have a compound addressing short bowel syndrome. Yeah. Just like to know a little bit get a little bit more color in terms of what's the difference between these two compounds and specifically the short bowel syndrome compound that we are probably not have too much ideas about.

Elias Zerhouni: Right. So the GLP-one glucagon receptor coagonist is completely different than the GLP-two. Right? GLP-two is a separate molecule. And not at all in physiologically, not at all comparable to the GLP-one. I mean, although they have close names, but they're not. So the GLP-two has a huge function in actually intestinal absorption regulation. That's why it's really something that a lot of people want to develop for people who have short bowel syndrome, malnutrition, tendering with that. It's an unmet need that has not been served very well. You know, people get infusions of parenteral nutrition, infusion of, you know, food supplements and so on, and it's not as good as effective.

And that's why the program was developed to address that unmet need. It's a completely separate population, completely different than the obesity NASH population we're trying to address with the GLP-one glucagon. And now our collaboration with Entera is obviously adding an option which is an oral version. We find to be quite attractive to offer a spectrum of approaches, injectable to oral and vice versa.

Yale Jen: Maybe squeeze one more in here, which is when you anticipate this program to enter clinical study, would that be next year? And thanks.

Elias Zerhouni: Yes. I think so. Yeah. When exactly, I don't know. It depends on FDA. Depends on regulatory, and but yes. I mean definitely next year.

Yale Jen: Okay, great. Thanks.

Operator: Thank you. Our next question comes from Yi Chen with H.C. Wainwright and Company. Please go ahead.

Yi Chen: Thank you for taking my question. My question is related to the long-acting GLP-one receptor glucagon receptor. So today, many patients taking GLP-one drugs discontinue treatment due to GI side effects and the current GLP-one drug caused lean muscle mass loss as well as fat loss, which is a big problem for elderly patients. So does your dual agonist have the potential to improve either of these two aspects of the current GLP-one drugs on the market today?

Elias Zerhouni: I hope that on GI side effects we will be able to, I can't tell you it will or will not. Titrate properly and that's an open question. I think when you look at the data of others who have GLP-one glucagon molecules, you might have the hope that will be the case. But, you know, every molecule is different. Ours is really, on a preclinical basis, has a very good profile. Now in terms of lean mass, I don't think there will be a major difference. The baby one because glucagon is, you know, enhancing metabolism. I don't think anybody knows the answer exactly.

Some trials by Boehringer Ingelheim and others seem to show a little bit better profile, but I really wouldn't stick my neck out here and say we will definitely have better profiles on both of these counts. But I hope that we will because of the difference in metabolic action.

Yi Chen: Okay. Thank you.

Operator: Thank you. Our next question comes from Michael Petusky with Barrington Research. Please go ahead.

Michael Petusky: Hi, good evening. Adam, I was writing as fast as I could, but not as quick as you were talking. What was the BARDA revenue in the quarter? Was it 5.6%, did you say?

Adam Logal: Yes. So BARDA revenue in the quarter, let me make sure I get it right. It was six sorry. It was 6.5. Yeah.

Michael Petusky: Oh, six sorry. 6.5. Okay. Thank you. Thank you. And the guide for revenue for BARDA for the year?

Adam Logal: Sure. So it was $30 million to $35 million for the year.

Michael Petusky: And then, I guess, as you sort of think about the go forward after the oncology deal closes. Does your assumption of sort of, you know, cash flow breakeven, etcetera, does that require a higher revenue run rate than sort of the, let's call it, $300 million annualized that'll be left post the close? Or, like, essentially, does that top line have to grow in order to sort of achieve or can it sort of roughly stay around this level?

Adam Logal: Yeah. So we've got plans for the revenue to grow. But achieving cash flow breakeven and being positive is not dependent on us achieving our growth plan.

Michael Petusky: And then I just wanna, I guess, obviously get cash on the balance sheet. You'll have more cash on the balance sheet presumably in the next ninety days or so. Could you guys just talk capital allocation priorities for in terms of that balance sheet cash? Thanks.

Adam Logal: Yes. So I'll start us off, Mike, and let Elias and others weigh in. As we kind of laid out early this year, we think about cash really for dollar for dollar of what we're spending or investing in the R&D programs for us to be investing back into the balance sheet. And that's been pretty close to where we've been this year for the first half. I think when we did the debt exchange in April, that accelerated the use of cash for our balance sheet strengthening a little bit faster than probably what we planned in January. But I'd say to this year, you know, we expected to use a little over $100 million in investing in R&D.

You know, we remain on track with that. And as it relates to how much cash we've put in our stock buyback program, as well as the convertible debt exchanges, you know, we're approaching $80 million so far this year. Would expect to continue to buy back shares as opportunities exist. As we think forward, it's probably not going to continue at that same accelerated pace on the capital side. We'll also be mindful of how we are able to partner any of our R&D programs to continue to try to find non-dilutive sources of cash to fund those programs and accelerate those like we did with our relationships with BARDA. So hopefully, that helps.

Michael Petusky: It does. Can I just ask maybe just a slight clarifying question? The stock obviously is, in my opinion, it hasn't reacted much to sort of some of the improvements that you guys are making. It seemed like you're on the path to making particularly in the lab business. And I'm just curious, does that create, I guess, any extra urgency in terms of sort of completing the common share repurchase?

Adam Logal: Yeah. I mean, the board has authorized us to go up to $200 million. So we have about $142 million or $141.5 million left to deploy. And I don't think we will be shy about using it as the balance sheet allows.

Michael Petusky: Awesome. Thanks, guys.

Adam Logal: Yep.

Operator: Thank you. This concludes our question and answer session. I would like to turn the conference back over to Dr. Frost for any closing remarks.

Phillip Frost: Thank you. Thank you all for your good and for participating in general. I'll close by observing that many of the things that we have talked about at previous meetings have really come to fruition. We have emphasized in the past the use of our assets in such a way that will be beneficial for the company and the shareholders. And the disposition of the two parts of our reference so far are good examples of that. And the remaining part is certainly becoming a more valuable asset, which we're very happy about. So far as the expenditures are concerned, which are major for us, they're largely for R&D, and we consider those as Adam mentioned investments.

And we consider them to be interesting and good investments in the sense that many of the projects are quite novel. They're on the high-risk side, I would say. And so can't guarantee anything. But we also believe that the potential returns for these projects are significant. And it's for that reason we feel good about what we're doing. So I'll leave you with those thoughts. And again, thank you once again and look forward to being with you again a quarter from now.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.