The biotech company Opko Health Inc. (OPK) may resell royalties for the growth hormone drug to the Blackstone Group (BX). Although the news was unconfirmed but it worked as catalyst for OPKO’s shares to rise more than 14 percent in December 2 trading.
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Back in 2014, Opko Health made an exclusive deal to sell its established growth hormone somatrogon worldwide to Pfizer (PFE). According to the agreement, Pfizer paid $295 million in advance to Opko Health with the potential to obtain milestone payments of up to $275 million. Pfizer expects to apply for approval of the hormone somatrogon from U.S. regulators by the end of this year.
In the first half of 2021, the company also plans to apply the drugs for approval in Europe and Japan. Thus in the coming quarters, the start of sales and thus royalty payments for Opko Health will begin. There was an unconfirmed story in the same week about the intention of Opko Health to sell growth hormone royalties to Blackstone.
Sian Capital, the activist shareholder, previously insisted on selling this royalty. It is difficult to assess the financial conditions since there are no verified details from the transaction participants. It is likely that investors will have to wait for an explanation from Opko Health.
One of the leading companies of Opko Health during COVID-19 is its BioReference Laboratories department, which handles diagnostic tests for COVID-19. The world is currently experiencing a second coronavirus wave, which supports the loading of laboratories for the company.
But it should be understood that OPKO Health has seen a decrease in sales of its other tests, such as cancer, in recent quarters with the rise in sales of COVID-19 tests. The explanation was that because of the decrease in planned operations, research for many diseases was halted.
Opko Health Inc. (OPK) was down -5.12% on Friday, December 11 concluding the session at $4.45.