Good day. And welcome to the OPKO Health Fourth Quarter 2024 Financial Results Conference Call. All participants will be in a listen-only mode. Operator provided instructions. After today’s presentation, there will be an opportunity to ask questions. Operator provided instructions. Please note this event is being recorded. I would now like to turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, Operator. Good afternoon. This is Yvonne Briggs with Alliance Advisors IR. Thank you all for joining today’s call to discuss OPKO Health’s financial results for the fourth quarter of 2024. I’d like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward-looking, and as such, will be subject to risks and uncertainties that could materially affect the company’s expected results. These forward-looking statements include, without limitation, the various risks described in the company’s SEC filings, including the soon-to-be-filed annual report on Form 10-K for the year ended December 31, 2024, and in subsequently filed SEC reports. Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, February 27, 2025. Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call. Before we begin, let me review the format for today’s call. Dr. Phillip Frost, Chairman and Chief Executive Officer, will open the call. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of OPKO’s Pharmaceutical Business and BioReference Health, as well as discuss progress with the ModeX pipeline. After that, Adam Logal, OPKO’s Chief Financial Officer, will review the company’s fourth quarter financial results and discuss this year’s financial outlook. And then we’ll open up the call for questions. Now I’d like to turn the call over to Dr. Frost.

Good afternoon and thank you for joining us today. 2024 was a transformative year for OPKO and I’m confident about our prospects for the year ahead. ModeX made great strides to advance its pipeline as two programs entered Phase 1 clinical trials. We believe ModeX’s proprietary technology platforms hold tremendous promise and we look forward to continued progress with its multispecific antibody technology and its nanoparticle vaccine platform. Elias will provide more detail on the specific programs in a moment. Our product development pipeline also includes our once-weekly injectable dual-GLP-1 glucagon agonist, OPK-88006, which continues to show encouraging clinical pharmacology data in diabetic and metabolic mouse models. A promising orally bioavailable once-daily form has been tested in animal studies by our partner, Entera Bio. We expect both subcutaneous and orally-delivered forms to be IND-ready by the end of the year. Pfizer continues to make progress on its global commercialization of NGENLA, with sales presently growing in 42 countries. Elias and Adam will address that in more detail. For RAYALDEE, our partner in China, Nicoya, is anticipating a strong launch during 2025. From a financial point of view, we realigned OPKO’s capital structure to be in a strong position. With the infusion of cash from various transactions, we are adequately funded to advance our Pharmaceutical pipeline and to return capital to our shareholders through common stock and convertible note repurchases. We’re executing our strategy and achieving significant milestones. As I mentioned last quarter, we are managing segments of our business to drive value for OPKO through additional partnerships, business development initiatives and asset sales. We’re confident that our current business prospects and strategy will continue to add value as we execute on this strategy. We expect 2025 to be a year of progress in all aspects of our business and a good year. With that overview, I’ll turn the call over to Elias.

Well, thank you, Phil, and good afternoon, everyone. As Phil mentioned, it has been a transformative year for OPKO. Starting with our Pharmaceutical segment, last month we announced that in collaboration with Merck, our Epstein-Barr virus multivalent nanoparticle vaccine entered the clinic. This investigational vaccine, based on MDX2201, is being evaluated with selected adjuvants for safety and tolerability in up to 200 healthy adults. With the start of this Phase 1 study, Merck will assume all development activities of the EBV vaccine candidate through commercialization. For this development milestone, we achieved one of our milestone payments, in addition to an upfront payment of $50 million we received upon the signing of the collaboration. We’re also eligible for additional milestone payments of up to $860 million associated with progress in the development and commercialization of the EBV vaccine, as well as royalties on global sales. The Phase 1 trial with our tetraspecific antibody MDX2001 continues to enroll patients at increasing doses. This open-label trial at four sites is expected to enroll 45 patients with a variety of solid tumors, including lung, breast, prostate, pancreatic and others. The Phase 1a portion of this study is primarily designed to evaluate the safety and immunogenicity of ascending doses of MDX2001 and to establish a biologically active dose in humans. The trial is progressing well with safety and tolerability data expected in the second half of this year and early efficacy data towards the later part of 2025 or early 2026. This program utilizes a next-generation enhanced T-cell engager that stimulates dual signaling to CD3 and CD28. The tetraspecific antibody engages T-cells through CD3 to activate the T-cells and promotes their expansion and survival by binding to CD28, a unique combination. The other two arms bind to two tumor antigens, TROP2 and c-MET, both validated targets found on a variety of solid tumors. We have two other immunology programs, including MDX2003, a tetraspecific antibody for hematologic tumors and autoimmune diseases; this molecule is in the pre-IND stage and is expected to enter the clinic late this year or early next year. In addition, we’re developing the immune modulator MDX2004 to rejuvenate and strengthen the immune system in patients who are immune-impaired or elderly by stimulating the proliferation of T-stem cells to rejuvenate and improve immune function. This program is also in the pre-IND stage, aiming for IND finalization and perhaps a Phase 1 entry in the fourth quarter of this year. Now, switching gears to our antiviral programs, we were awarded $51 million of additional funding by BARDA, including a $35 million supplement to accelerate our development of a COVID multispecific antibody and $16 million under our existing contract to develop broadly neutralizing influenza multispecific antibodies using our proprietary mSTAR antibody platform. To date, $110 million of non-dilutive funding has been committed by BARDA, with a potential total of $205 million if all options and milestones are executed. If granted, this additional funding will be used to accelerate the COVID and flu programs, to develop novel manufacturing methods to target other biodefense threats, and to develop a platform with gene-based delivery methods for use against future pandemics. Our lead anti-COVID multispecific antibody, MDX2301, is progressing to IND and Phase 1 entry, planned for the fourth quarter of this year. We continue to be active on the business development front as we explore significant interest in our various platforms with external pharma collaborations. We believe these partnerships will assist in advancing our pipeline in an accelerated and cost-efficient manner with the opportunity to further expand our programs, and we’re actively pursuing these conversations. As for our commercialized products, NGENLA is performing well, with Pfizer global commercialization ongoing. Pfizer’s work involves converting existing patients from daily administration to our once-weekly drug and securing new patients for treatment with our pediatric long-acting growth hormone drug. We continue to advance our additional pediatric and adult indications associated with up to $100 million in potential milestones. Within our long-acting biologics portfolio, we have several other molecules in development, including GLP-2 for short bowel syndrome, and as mentioned by Phil, a dual agonist GLP-1/glucagon, an analog of oxyntomodulin. GLP-1 agonists have been successful in treating diabetic and obese patients, and several clinical-stage dual GLP-1/glucagon agonists have reported efficacy in the treatment of non-alcoholic fatty liver disease with improvement in liver fibrosis score. In parallel, we have a collaboration underway with Entera Bio to develop an oral formulation of this molecule using their N-Tab technology. In vivo proof-of-concept studies in rodent and pig models have shown that a single oral dose resulted in a desirable pharmacokinetic profile and bioavailability. We’re actively working to reach the IND stage as soon as possible for both the injectable and oral forms of the oxyntomodulin analog we have developed. As discussed briefly in our last quarterly conference, let me cover BioReference Health. We completed the sale of BioReference Health lab testing businesses focused on clinical diagnostics and women’s health nationwide, but retained operations in New York and New Jersey, as well as oncology and the corrections business nationwide. This was a significant part of the restructuring we are undertaking to improve BioReference’s financial and operational performance, including reducing expenses and headcount. We right-sized the workforce down to about 2,000 from 3,300 previously. We closed underperforming facilities and streamlined operations. Our restructuring efforts are ongoing as we optimize performance. In addition, we are focusing on our areas of strength, which include our specialty testing in oncology and urology, as well as our comprehensive clinical diagnostic services in New York and New Jersey. On a comparable basis, meaning excluding the assets acquired by LabCorp, overall testing volume grew by 1% in Q4 2024 as compared to Q4 2023. Our national oncology testing segment had another favorable quarter, finalizing nine new hospital reference account contracts, including a large academic center in New York, and finishing the quarter with a 5% growth in net revenues compared to Q4 2023. Additionally, we continue to expand our oncology testing menu, focusing on cancer genomics and hereditary cancers. As for our urology segment, the 4Kscore continued to see strong performance, growing 16% in test volume and revenue for 2024 as compared to 2023. Furthermore, our Latin America and Europe Pharmaceutical divisions continue to perform well, with 9% growth compared to 2023 and a positive EBITDA trend despite foreign exchange headwinds due to the strong dollar. The royalty sales continue at similar levels, with new evidence published this year that showed that the use of RAYALDEE for patients with secondary hyperparathyroidism may delay the need for dialysis. In conclusion, overall, we are encouraged by the performance of our Biopharmaceutical and Diagnostic business segments, and are confident in our prospects for positive results across these two segments this year. With that, I’ll turn the call over to Adam to discuss our financial results.

Thank you, Elias. The fourth quarter of 2024 reflects meaningful progress in enhancing shareholder value. The team at BioReference has continued to reduce costs and improve operating efficiency, and we have a clear path toward profitability, excluding non-cash and non-recurring charges, as well as positive cash flow in 2025. While the work at BioReference continues, the improved focus geographically and on high-value, high-margin testing resulted in a meaningful improvement in operating results, particularly after considering the non-recurring expenses that helped reduce fixed costs. Our global health business within our Pharmaceutical segment continued to deliver revenue growth and operating income expansion, while our R&D pipeline continued to make progress, as Phil and Elias have discussed. We advanced our efforts during the fourth quarter to realize the value of our assets and exited one of our liquid investments and redeployed some of that capital to buying back common stock and convertible notes. Turning to our operating results and starting with our Diagnostic segment, revenue was $103.1 million for Q4 2024, compared to $124.2 million for the 2023 period. This decrease was primarily the result of the LabCorp transaction, which closed in September. During the fourth quarter of 2024, costs and expenses totaled $124.8 million, compared to $166.4 million for the comparable period of 2023. The Q4 2024 figure included approximately $4.5 million of non-recurring costs and expenses for severance and facility closures, all incurred as expected as we realign our business to ensure sustainable growth and profitability. During the fourth quarter of 2024, operating loss was $21.7 million, compared to an operating loss of $42.3 million for the 2023 quarter. Depreciation and amortization expense for the Diagnostic segment was $6 million and $8.1 million for the 2024 and 2023 periods, respectively. Moving to our Pharmaceutical segment, revenue was $80.5 million for the fourth quarter of 2024, compared to $57.7 million for the comparable period of 2023. Revenue from products, including our International Pharmaceutical businesses, was $37.4 million, compared to $43 million for the 2023 period. Despite the challenging foreign currency environment that has impacted revenue, the profitability of the business continues to improve above our expectations. Product revenue includes revenue from RAYALDEE of $9.1 million, which was similar to 2023’s $9.3 million. Revenue from the transfer of IP was $43.1 million for the fourth quarter of 2024, compared to $14.7 million for the same quarter of 2023. This number includes a $12.5 million milestone payment earned for the initiation of our EBV clinical trial and $10.2 million of commercial milestones for our EirGen business. Our gross profit share from Pfizer was $9.5 million during the fourth quarter, compared to $12.2 million for the 2023 period, which included a catch-up payment related to the Q3 2023 launch of NGENLA in the United States. In addition, the fourth quarter of 2024 includes $11 million in R&D funding related to our BARDA agreement, compared to $1.2 million for the 2023 period. Cost and expenses for our Pharmaceutical segment were $82.6 million for the fourth quarter of 2024, compared to $73.8 million for the 2023 period. Research and development expenses were $29.8 million, compared to $18.7 million a year ago. R&D expense increased as a result of the activities for our ModeX development activities, including the Phase 1 clinical trial for our first oncology program, as well as our BARDA-supported activities. The resulting operating loss for the quarter ended December 31, 2024, was $2.1 million, compared with an operating loss of $16.1 million for the 2023 quarter. Depreciation and amortization expense for the fourth quarter of 2024 increased slightly to $18.1 million, from $17.9 million for the 2023 quarter. Turning to our consolidated financial results, net income for the fourth quarter of 2024 was $14 million or $0.01 per diluted share, compared to a net loss of $66.5 million or $0.09 per share, for the 2023 period. Net income for the fourth quarter of 2024 included a realized gain of $54.1 million from the sale of GeneDx, as well as non-cash other income of $21.4 million, compared to non-cash other expense of $3.2 million in the comparable quarter related to the change in fair value of the GeneDx shares. We ended 2024 with approximately $495 million in cash, cash equivalents, liquid investments and restricted cash. We’re allocating up to $100 million for common stock purchases under our previously announced buyback program, as well as opportunistic convertible note purchases. We may accelerate or increase repurchases as market conditions change. In addition, we anticipate utilizing up to $100 million of cash in operations, including our anticipated research and development priorities that Elias discussed. After considering capital expenditures of approximately $15 million, we expect to end 2025 with at least $300 million in cash and cash equivalents before any potential non-dilutive financing transactions or third-party collaborations. As we look ahead, we’re keenly focused on delivering on the key objectives that Elias laid out, and the following assumptions influence our financial guidance. For our Pharmaceutical segment, we expect Pfizer to continue to grow sales of NGENLA and realize the benefits of the expanded gross margins due to the scale-up of its manufacturing processes. We also assume a stable foreign currency exchange rate for our ex-U.S. Pharmaceutical businesses. R&D expenses will reflect higher activities related to our ModeX programs, including CMC and efforts related to our ongoing oncology clinical trial, as well as furthering the development of our oxyntomodulin analog development program. A portion of the increased ModeX activities will continue to be funded through our BARDA agreements. For our Diagnostics segment, we are continuing our multiyear, multi-phase program to reach and improve profitability. This program is focused on operational efficiencies and the reduction of fixed infrastructure costs. We expect to incur an additional $4 million to $8 million in non-recurring costs during the first quarter, which is primarily severance and facility closure costs. We have established gross margin threshold targets that I laid out last quarter for the business to be above 27% and expect positive cash flow for the full year 2025. We have established an additional cost reduction program targeting a further $20 million of annualized cost savings throughout 2025. In addition, we expect to further rationalize our test offerings and client mix during the first half of 2025, which will allow us to further focus BioReference and realize a profitable and growing business. As a result, we expect the following for the full year 2025: total revenues between $675 million and $700 million, including revenue from services of $405 million to $425 million, revenue from products between $165 million and $175 million, and other revenue between $80 million and $95 million, inclusive of the Pfizer gross profit share estimate between $35 million and $45 million, and BARDA revenue of $40 million to $48 million. We expect costs and expenses to be between $825 million and $875 million, excluding the non-recurring expenses related to our restructuring of BioReference. R&D expense is expected to be between $120 million and $140 million, depending on the enrollment rate of our clinical trial and the timing for certain CMC activities for our ModeX programs, with $40 million to $48 million of that being offset by BARDA. We also expect depreciation and amortization expense to be approximately $90 million. This concludes our prepared remarks. Thank you all for your attention. And now, Operator, let’s open the call for questions.

Operator provided instructions. The first question comes from Maury Raycroft from Jefferies. Please go ahead.

Hi. Thanks for taking my questions. I’ll just start with BioReference. Just wondering if you can bookend timelines, provide any more granularity on which quarter you anticipate that you could reach profitability, and maybe talk a little bit more about how you’re currently thinking about balancing spend while you continue to expand your testing menu for oncology?

Adam, you want to take that?

Sure. So, Maury, as I mentioned, we saw meaningful improvement in Q4. When you think about earlier in the year, the third quarter, we were at about a $20 million EBITDA loss. Q4 cut that loss by a bit more than half. We see a pretty good glide path into the first quarter to achieve breakeven during the quarter and then profitability thereafter. We’re going to have a few charges in the first quarter while we finish up the restructuring we initiated last year, but we see a solid pace to achieving breakeven and then profitability. As far as the spend, there’s not significant incremental investment being made into the test menu. The team is being efficient in bringing up the new modalities that Elias laid out, and there’s not a significant push to spend heavily on the menu expansion at this time.

Got it. Okay. That’s helpful. And for EBV, you mentioned the $12.5 million milestone for Merck. Can you say what the Phase 2 milestone could look like if Merck decides to advance the program? And then can you clarify if Merck would do a press release on a data update for this program and what timing could look like for that?

I can take that.

So timing-wise, Maury, it’s a study for 200 patients, and you can recruit quite quickly with these trials. My estimate would be safety data in the second quarter and then analysis to follow, with a decision to move to Phase 2 likely in the third quarter. That would trigger a significant milestone. I don’t know the exact milestone amount to disclose now; we’ll have to ask Merck or Adam. At that point, there would be an announcement of progression of the program toward Phase 2.

We’re not able to disclose the milestone amounts under our agreement until they’re earned.

Got it. Okay. Well, thank you for taking my questions. I’ll hop back in the queue.

The next question comes from Jeffrey Cohen from Ladenburg Thalmann. Please go ahead.

Hello and thank you for taking our questions. I wonder if you could first elaborate on some of the initial comments from Dr. Frost on the dual agonist with Entera Bio. Could you tell us a little bit more as far as what’s being studied during this period? Is it oral or injectable, and is it weekly or daily, and are you aiming to go after type 1 diabetics? Is that the intention?

So I’ll start, and then Dr. Frost might add. The dual agonist has two forms: an injectable form and, through our partner, an oral form. We’re pursuing both. The injectable is about once weekly; the oral is a once-daily regimen. In terms of physiology, GLP-1/glucagon dual agonists can increase metabolism when glucagon is included, which can have beneficial effects for patients who are diabetic, obese, and patients with liver fat or non-alcoholic fatty liver disease (NASH or MASH). Those are the primary populations where this oxyntomodulin analog can be applied. We’re still in the pre-IND phase, and the results to date are promising. Phil, do you want to add?

No. I think you’ve covered it.

Okay. Got it. That’s helpful. And then secondly, could you talk a little bit about the launch of RAYALDEE in China with Nicoya? How large of a commercial organization are they anticipating and what do we expect to hear out of the launch through 2025?

I don’t have the specific details on Nicoya’s commercial team size. We would expect the initial launch to be fairly limited as they begin sales in smaller territories of China, but once they achieve formal NDA approval they will move into a broader launch phase throughout the year. It’s a milestone and royalty-driven transaction for us, so we’ll report milestones and royalties in due course.

Okay. Got it. And then lastly for us, you did mention the $26.9 million from BARDA followed by the $24.1 million and indicated potential $110 million. Could you give us an indication of what time period that might be?

I can try. We previously received $59 million for COVID development and then an additional $35 million as a supplemental award, which supports the COVID program. That program is expected to last the next one to two years, depending on recruitment. The goal this year is to bring the first COVID molecule to the clinic in Q3 or Q4 and enter the clinic as soon as we can to demonstrate safety. We expect significant milestones over the next two years. For flu, we received a $16 million firm contract, and if we meet milestones for Flu A, Flu B and pandemic flu components, that would increase funding. The total potential envelope for BARDA is about $205 million, of which $110 million have been committed to date; the remainder, about $95 million, would be committed subject to milestones over the next two to three years.

The dollars that we’re expecting in 2025 are between $40 million and $48 million.

Perfect. Thanks for the clarification.

The next question comes from Edward Tenthoff from Piper Sandler. Please go ahead.

Great. Thanks. And if I may, just a quick housekeeping question. Adam, can you please repeat the product sales guidance you mentioned, and then I have a follow-up question?

Sure. The product sales are $165 million to $175 million.

$165 million to $175 million. Great. Thank you. And then when it comes to ModeX data this year with respect to the cancer program, what should we be expecting in terms of data this year, and what’s the latest with respect to the hematologic cancer program? Thank you.

In terms of ModeX data, MDX2001 targets TROP2 and c-MET on solid tumors and uses CD3 and CD28 to activate and expand T-cells. It is already in the clinic and we are in dose escalation. The primary purpose is to evaluate safety and tolerability. We expect safety data likely toward the fourth quarter of this year. Signals of efficacy require reaching therapeutic, safe doses, which may occur later; we might see some efficacy signals this year but more likely in early 2026. The hematologic program, which targets CD19 and CD20, is in pre-IND development now. CMC is being finalized and the IND package is being prepared for submission toward the end of the year, so we should not expect data from that program until next year.

And are you considering that hematologic program for autoimmune disease as well?

Yes. That is under consideration, and the program could apply to autoimmune disease as well.

Cool, and thanks, guys.

The next question comes from Yale Jen from Laidlaw and Company. Please go ahead.

Great, and thanks for taking the question. With the recent changes in government, do you worry about the outlook for vaccine programs or other government funding in the future, or is that not a significant concern?

That’s a good question. So far, we have not heard anything from our partners that would justify not progressing the EBV vaccine, which has clear potential benefits including preventing mononucleosis and certain cancers and possibly multiple sclerosis. We’re monitoring developments in Washington but, given the importance of pandemic preparedness and endemic threats like COVID and influenza, we have not seen indications that support for these kinds of programs will be withdrawn. We keep close contact with our contracting officers, and at this time there is continuing interest in supporting these programs.

Okay. Great. Thanks a lot and congrats.

The next question comes from Yi Chen from H.C. Wainwright. Please go ahead. (Note: Eduardo Martinez-Montes is on for Yi).

Hi. This is Eduardo on for Yi. Related to the impact of the new administration on BARDA-sponsored programs: if anything were to happen, is the current funding sufficient to progress the clinical trials you want to conduct in 2025? Are you counting on the $40 million to $48 million in 2025?

No, the funding that has been committed to date, including the supplemental $35 million, can carry us through developing a lead molecule and through Phase 1 and to the edge of Phase 2. Depending on results, we could also develop a backup molecule within that budget. The plan BARDA has funded is to support full development through Phase 1 and the beginning of Phase 2, at which point they may continue support or expect us to find a partner to continue development. I feel secure that the $110 million received from BARDA is committed and can carry us to an inflection point. The additional funds beyond that are tied to milestones and we have no guarantee on those at this time.

Got it. That’s helpful. Any update on the HIV monoclonal program, or has focus shifted more toward EBV, COVID and flu because of current incentives?

I’ll let Gary Nabel respond; he’s leading that program.

Thank you. We have made good progress with the HIV program. Our first-generation HIV multispecific antibody went into clinical trials and was well tolerated with low immunogenicity and good half-life. We have now developed a second-generation molecule that is about tenfold more potent than the first and takes advantage of our proprietary mSTAR format. We are at the point of declaring a lead candidate. We are in discussions with various partners about how to advance the program. The molecule looks good, and we’ve been able to leverage our experience from the BARDA programs for CMC, yields and scalability. We are optimistic about this molecule.

Okay. Great. That’s encouraging. Then regarding MDX2001, the tetraspecific antibody in the solid tumor trial: you’re running a basket trial. What specific expression cutoff are you using for c-MET and TROP2, and roughly what fraction of patients meet that criteria across indications?

TROP2 and c-MET are widely distributed in multiple tumor types at significant expression levels, so expression has not been a limiting factor. We haven’t even used strict biomarker-based exclusion criteria because a very high percentage of tumors express these targets. The tumor types we selected—lung, gastric, breast, among others—have demonstrated high levels of c-MET and TROP2 expression. We can provide more detailed biomarker distribution data offline.

We have examined expression levels and debated using a roughly 45% cutoff for surface expression; with a 45% cutoff you still pick up a vast majority of tumors of those types. However, even cells with lower expression, down to about 10% of maximal levels, show killing in our preclinical models. So our presumption is that MDX2001 should work against the vast majority of tumors. In the trial we’re taking all comers and will determine thresholds for efficacy based on clinical responses.

Got it. So you are measuring expression levels but not excluding patients based on those biomarkers at this time.

Right. That’s correct. At the moment, we’re taking all comers.

Okay. That’s really helpful. Thanks. Those are all my questions.

This concludes our question-and-answer session. I would like to turn the conference back over to Dr. Frost for closing remarks.

I want to thank you all for your participation and for your good questions. We look forward to meeting with you again next time.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.

Thank you.

Thank you.