OPKO Health, Inc. OPK is well-poised for growth in the coming quarters, courtesy of its potential in RAYALDEE. The optimism surrounding the stock is backed by RAYALDEE’s performance and strategic partnerships. However, stiff competition and overdependence on RAYALDEE are concerns.

Shares of this Zacks Rank #3 (Hold) company have gained 48.1% in the past year compared with the industry's 6.5% growth. The S&P 500 has gained 25.5% in the said time frame.

This renowned multinational biopharmaceutical and diagnostics company has a market capitalization of $1.03 billion. The company predicts 8% growth for 2024 and expects to maintain its strong performance. In the trailing four quarters, OPKO Health surpassed earnings estimates thrice and missed on one occasion, the average beat being 46.39%.

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Factors Favoring OPK Stock

Potential of RAYALDEE: Within the pharmaceutical business, Rayaldee has been OPKO Health’s leading renal product in the U.S. market for the last two years. Rayaldee is the first and only therapy approved by the FDA for the treatment of SHPT in adults with stage three or four chronic kidney disease and vitamin D insufficiency. Rayaldee has been witnessing decent momentum, courtesy of successful efforts from the sales team.

The drug is distributed in the United States principally through the retail pharmacy channel, which initiates with the largest wholesalers in the United States (collectively known as Rayaldee Customers). In addition to distribution agreements with Rayaldee Customers, OPKO Health has entered into arrangements with many healthcare providers and payors that provide for government-mandated or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of Rayaldee.

Accelerated Clinical Trials Buoys Optimism: OPKO Health has undertaken various trials and has been part of many with respect to its products. On the earnings call of third-quarter 2024, OPKO Health’s management confirmed that the enrollment and dosing are currently underway in the MDX2001 Phase 1 trial for the treatment of solid tumor cancers. MDX2001, a tetraspecific antibody, is designed to optimize Tcell function while preventing tumor antigen escape. The Phase 1a portion is primarily designed to evaluate the safety and immunogenicity of ascending doses of MDX2001 in patients with various solid tumors.

On the same call, management continued that in the last few years, several European countries have initiated population-based prostate cancer screening trials to evaluate whether a screening algorithm that included both PSA and biomarker tests can reduce over-diagnosis of prostate cancer. OPKO Health’s 4Kscore test has been included in several of these mass screening trials and demonstrated the value of the 4Kscore test in stratifying men with elevated PSA and a high probability of prostate cancer.

OPKO Health’s other immunobiology programs, MDX-2003, a tetraspecific antibody for liquid tumors and autoimmune indications, as well as MDX-2004, an immune modulator, multi-specific antibody, are progressing to INDs and are expected to enter the clinic next year.

Strong Q3 Results: OPKO Health exited the third quarter of 2024 with better-than-expected earnings and encouraging revenues from the transfer of intellectual property and others. Management’s confirmation that enrollment and dosing are currently underway in the MDX2001 Phase 1 trial for the treatment of solid tumor cancers and the announcement of promising results of an orally delivered oxyntomodulin analog raise our optimism about the company. OPK has also been awarded $51 million of additional funding under an existing BARDA contract to develop COVID multispecific antibodies and to initiate an influenza program is also encouraging.

Factors That May Offset the Gains for OPK

Overdependence on RAYALDEE: OPKO Health's financial success depends heavily on the commercialization of Rayaldee, its only approved pharmaceutical product in the United States. Failure to effectively market Rayaldee could severely impact the company's revenues, profitability and overall business operations. Additionally, Rayaldee's market reputation, safety and perceived efficacy are crucial. Any negative publicity, safety concerns or rumors about the product could significantly harm OPKO's business, undermining the product's acceptance and damaging its financial outlook.

Stiff Competition: OPKO Health faces significant competition in both its pharmaceutical and diagnostics businesses. Major pharmaceutical, diagnostic companies and research institutions have much larger financial and operational resources, enabling them to invest heavily in R&D and marketing, often more than a broader revenue base. Competitors like Quest Diagnostics and Laboratory Corporation of America dominate the diagnostics sector, making it challenging for OPKO to compete. This disparity in resources and research may limit OPKO's ability to innovate and scale as effectively as its larger rivals, potentially hindering the company’s growth and market share.

Estimate Trend of OPK

OPKO Health is witnessing a positive estimate revision trend for 2024. In the past 60 days, the Zacks Consensus Estimate for its loss has narrowed from 26 cents to 23 cents per share.

The Zacks Consensus Estimate for the company’s fourth-quarter 2024 revenues and loss per share is pegged at $155.1 million and 9 cents, respectively. The revenue estimate indicates 14.7% decline from the year-ago quarter’s reported number.

Key Picks

Some better-ranked stocks in the broader medical space are Masimo MASI, Accuray ARAY and Abbott Laboratories ABT.

Masimo, carrying a Zacks Rank #2 (Buy) at present, has an estimated growth rate of 11.8% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 31.7% against the industry’s 1% decline in the past six months.

Accuray, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1200% for 2025. Its earnings missed estimates in three of the trailing four quarters and met in one, delivering an average negative surprise of 141.97%.

ARAY’s shares have gained 8.8% against the industry’s 1% decline in the past six months.

Abbott, carrying a Zacks Rank of 2 at present, has an estimated earnings growth rate of 10% for 2025. It delivered a trailing four-quarter average earnings surprise of 1.64%.

ABT’s shares have risen 8.5% in the past six months compared with the industry’s 7.2% growth.

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