What happened

Shares of Opko Health (NASDAQ:OPK) gained a stately 19.6% in July, according to data from S&P Global Market Intelligence. What drove this sizable upturn?

Opko's shares have been steadily creeping upward of late because of the growing optimism that the company is close to turning around its laboratory services business known as BioReference Labs, as well as the flagging commercial launch of secondary hyperparathyroidism drug Rayaldee.

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In brief, Opko hired industry veteran Geoff Monk last May to lead BioReference's reorganization, and the company also successfully expanded Rayaldee's insurance coverage in the United States -- a feat that's apparently resulting in a quantum leap in prescriptions. 

So what

The chronic underperformance of both its laboratory services segment and Rayaldee's commercial launch have weighed heavily on Opko's shares over the past two years. If the company can get these dual value drivers back on track, there's a chance this company can generate some enormous returns on capital for investors. Opko's shares, after all, are down by more than 71% from their three-year high -- even after last month's hefty rally. 

Now what

Although Opko does have a rich clinical pipeline and other assets in its product portfolio, investors are likely to remain keenly focused on the performance of BioReference and Rayaldee for the time being. The good news is that both of these value drivers are starting to show verifiable signs of life. In the second quarter, for instance, BioReference significantly reduced its operating expenses under its new leadership team, and Rayaldee's prescriptions jumped by a whopping 36% from the first quarter of this year.  

So while it's still early days in terms of Opko's turnaround, there are reasons to be optimistic. As such, aggressive investors on the hunt for above-average growth opportunities may want to check out this beaten-down healthcare play. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.