What happened

Opko Health (NASDAQ:OPK), 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.