Please ensure Javascript is enabled for purposes of website accessibility

Why Opko Health, Inc. Stock Is Soaring Today

By George Budwell – May 9, 2018 at 11:53AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's stock perks up on a Q1 earnings beat.

What happened

Opko Health (OPK 1.07%), a multinational pharma and diagnostics company, saw its shares rise by more than 20% in early morning trading today. What sparked this breakout? 

Opko reported better-than-expected first quarter earnings after the bell yesterday. Digging into the details, the company beat Wall Street's revenue estimate by a healthy $18 million for the three month period. 

As of 11:03 a.m. EDT, Opko's shares are up by 22% in the wake of this news. 

Man in a business suit pointing to an upward trending graph with his index finger.

Image source: Getty Images.

So what

Opko has been a chronic underachiever for awhile now, which is a big reason why the company's shares lost a whopping 47% of their value in 2017. However, the company reported that the commercial launches of its chronic kidney disease drug Rayaldee and prostate cancer test 4K score were finally starting to gain momentum. That's certainly welcome news for Opko's shareholders. 

Now what

Opko's first quarter earnings weren't all rainbows and sunshine, however. The company did report a sizable net loss of $43.1 million for the quarter. If Opko can't curtail its expenses in a big way soon, it will need to raise a large chunk of capital in short order. The company, after all, exited the first quarter with a mere $99.9 million remaining in cash and cash equivalents. 

Another point of concern is the fact that Rayaldee's sales are still nowhere near where they should be at this point. In the first quarter, Opko booked a paltry $3.7 million of revenue from Rayaldee. That's a far cry from the drug's multi-billion peak sales estimate that was being floated prior to its commercial launch. 

So, with a secondary offering almost guaranteed in the next few months, investors may want to shy away from this struggling biopharma stock for the time being. 

George Budwell has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

OPKO Health, Inc. Stock Quote
OPKO Health, Inc.
OPK
$1.89 (1.07%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
326%
 
S&P 500 Returns
102%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.