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 Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator 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 CFO, 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 developed 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 mice models. A promising orally bioavailable once-daily form has been an animal test by our partner, Entera Bio. We expect both sub-cue 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 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 our 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 all 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 was -- 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. And so with the start of this Phase 1 study going forward, Merck will assume all development activities of the EBV vaccine candidate through commercialization. For this development milestone, we achieved one of our milestone payments and this is 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 virus 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 1 portion -- 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, hopefully available 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, and the tetraspecific antibody engages T-cells through CD3 to activate the T-cells and promotes their extension and survival by binding to CD28,…

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 help 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 expenses, 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…

[Operator 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, I think, we are -- we talked about the fourth quarter results showing meaningful improvement. When you think about this quarter, the third quarter of the year, we were at about a $20 million EBITDA loss. Q4 cut that a little bit more than in half. So we see a pretty good glide path into the first quarter to achieve breakeven during the quarter and then profitability thereafter. So I think that’s the best glide path for timing. We’re going to have a few charges in the first quarter while we finish up that restructuring that we initiated last year, but see a pretty good pace to achieving that, and all signs say we’ll get there. As far as the spend, we are not -- there’s not significant investment being made into the test menu. The team is doing a good job of being efficient and bringing up those new modalities that Elias laid out, and I think, there’s not a significant push there to spend dollars.

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, right? And so I cannot speak for Merck, obviously, but estimates would be results would be in because you can recruit quite quickly with these trials, maybe second quarter and then the analysis will go through, and then the decision will be to go not to Phase 2, which will probably be taken in the third quarter. And so that does trigger a significant milestone. I don’t know if we can give the number right now. We’ll have to ask Merck or Adam if you know. And at that point, obviously, there will be, obviously, an announcement of progression of the plan -- of the portfolio towards Phase 2. I mean the program.

Yeah. And we’re not able to disclose the milestones 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 complete my answers, because what we’ve done is the dual agonist, there are two forms. There’s an injectable form and through our partner, an oral form. We’re pursuing both. And the injectable rate is about once a week. It’s a weekly injection. The oral is a daily regimen, if you will. So those are the two parameters, if you will, from the clinical point of view. Now, in terms of the physiology of a GLP-1/glucagon, there are a few like that already in the market, in development, which have shown that when you add glucagon, you actually increase metabolism, which has some potentially very beneficial effects for patients who are diabetics, obese, and who may have also liver fat or what we call fatty liver disease or NASH or MASH. So those are the specific populations where this analog of Oxyntomodulin that we have developed can actually get applied. We’re still in the pre-IND phase, and the only thing I can say is, and I’ll let Dr. Frost speak to it, is that the results are quite, let’s say, promising. I don’t know, Phil, if you want to add to what I’m saying.

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?

Yeah. So the size of the commercial team, I don’t have the particular details from Nicoya. We would expect the initial launch to be fairly small as they begin some sales out of one of the smaller territories of China. But throughout the year, once they achieve formal NDA approval, they’ll go into a broader launch phase. It’s a milestone and royalty-driven transaction for us, so we’ll report those out 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.

I can.

Yeah. Go ahead, Adam. Go ahead.

Yeah. I was just going to say, the dollars that we’re expecting in 2025 is between $40 million and $48 million. Elias, if you could talk about some of the activities, by all means.

Yeah. So, Jeff, if you recall, we received $59 million for COVID development and then we received an additional $35 million. And that is the COVID program at this time. And so $59 million plus $35 million is $84 million. And so that program is going to basically last the next two years, a year and a half, depending on how well we can recruit. The goal this year is to bring the first molecule to the clinic for us Q3, Q4 of this year, and enter the clinic with that as soon as we can, because it seems like it’s really important to show that, there is safety in these antibodies for patients. So we expect to have significant milestones past this year. In the case where the milestones are past and positive, like what BARDA has asked us to actually innovate in terms of manufacturing, which we have done, and they are quite positive on that. And if we can prove that we can produce at a much reduced cost, if you will, and then we’ll have an extension of our program. If -- on the other hand, we are also working on flu and we receive $16 million as a contract, a firm contract on flu, and if we can meet the milestones not only for Flu A and Flu B, but also pandemic flu, then that would be also increased. The total envelope, a budgetary envelope for this program with BARDA is about $205 million, of which $110 million essentially have been committed, and about the rest, $95 million, will be committed subject to milestones.

Perfect. Thanks for the clarification.

Over the next two years, next two and a half years, three years, depends on how the milestones are met.

Got it. Thanks for the clarification. Thank you for taking our questions.

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.

So in terms of the ModeX data, it’s related to what we call MDX2001, which is a multispecific antibody that has a target called TROP2 and a target called c-MET, which attaches to solid tumors, and then a CD3, CD28, which has a dual-action activation and expansion of T-cells that can kill the tumor. This one is in the clinic already and we’re going to what we call the dose escalation. The primary purpose of that is to evaluate safety and tolerability of the molecule. We will get those results probably within this year towards the fourth quarter. And then you really want to see signals of efficacy, but you don’t get those until you really reach what we call therapeutic, safe therapeutic doses, which will occur, and maybe we’ll be lucky to have some this year, but primarily it will occur in 2026, probably the first half of 2026. In terms of the CD19, CD20, which is what you’re referring to, it is essentially going in the pre-IND phase of development right now. CMC is being finalized. The files are being put together to go to the FDA towards the end of the year. So…

And…

…. there will be no data on that one until next year.

Yeah. Have you disclosed what the targets are for the hematologic?

CD19, CD20. Is it dual?

Okay.

Yeah.

Yeah. No. Dual B cells. Thank you.

Yeah. Yeah.

Are you considering that for autoimmune disease as well or?

No. That’s a good question. And I can tell you’re on top of the subject. And yes, the answer is yes.

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. Just a general sort of macro question, which is that with the recent government changes, do you guys worry about the vaccine, sort of the prospect of the vaccine, as well as maybe the other funding in the future or that’s probably not necessarily a concern.

Yeah. That’s a great question. And we don’t know. So far, I mean, basically, remember, we are -- if you’re talking about the EBV vaccine, I mean, so far we haven’t heard anything from our partner that would justify not progressing a major vaccine like this, which has a tremendous benefit to patients, especially that it relates to preventing not only mononucleosis, but cancer, secondary cancers, and maybe, maybe multiple sclerosis. So that I don’t think will be affected in terms of a clinical trial. Now you hear the things about vaccines in Washington and the potential controversy there. And so some people feel maybe that there will be less support for early development of new vaccines. We’re not in that field. We’re in the antibody field. We’re in multispecifics and we keep very close contact with our contracting officers. And so far we haven’t had any indication given the importance of being prepared for pandemics and residual endemic phenomena like COVID returning every year now, and flu that in fact, there’s still continuing interest in supporting these kinds of programs of programs that we are leaders in.

Okay. Great. Thanks a lot and congrats…

And let me just say, sorry, I don’t have a crystal ball about what’s happening in Washington right now. So we’ll have to wait and see, but right now, no indication of no, we are not worried so far, let’s say.

That sounds good. And none of us have that as well. And thanks a lot. I appreciate it and best of luck. Okay.

Thank you.

The next question comes from Yi Chen from H.C. Wainwright. Please go ahead.

Hi. This is Eduardo on for Yi. I guess related to that question about the impact of the Trump administration and government specifically for the BARDA sponsored programs. If anything were to happen, this current funding kind of, is it sufficient to progress the current kind of clinical trials that you want to conduct in 2025? Are you guys really counting on that $40 million to $48 million?

No. I mean, the money that has been committed to-date with the extra, the supplemental $35 million, can carry us through to developing a lead molecule and all the way through Phase 1 and at the edge of Phase 2. We could also within that, depending on how things go develop a backup molecule, but not carry it through Phase 1, okay. And the plan that BARDA has proposed to us and funded is that we would do the full development all the way through Phase 1 and the beginning of Phase 2, at which point they may be interested in continuing it or they will say, great, you continue on your own or get a partner to continue it, depending on the results that you get. So at this point, I feel pretty secure that the $110 million that we have received from them are pretty safe and committed and can carry us through to an inflection point here. Now the second part, the one that is not committed I have no guess and no indication of that being taken away or continued. I don’t know.

Got it. That’s really helpful. But good to know. And also any update on the HIV monoclonal or has focused kind of shifted more towards EBV COVID and flu, because that’s where the kind of incentives are right now.

Yeah. I let Gary Nabel on the line and he is the lead on that. So I let Gary respond to you.

Thank you. Yeah. And thank you for the question. And the short answer is, we have made good progress with that molecule. As you know, we had a first generation HIV that went into a multispecific antibody that went into clinical trials and it was well tolerated, a low immunogenicity and good half-life. We’ve now made a second generation that has been optimized for potency. So it’s about 10 fold more potent than the first generation and it takes advantage of our proprietary mSTAR format. So we’re basically at the point where we have -- we’re about to declare a lead candidate. We have one that would be able to move forward and we are in discussions with various partners about how to advance that program. But the, the molecule itself looks good and we’ve been able to leverage our experience from the BARDA programs, both in terms of the CMC and the yields and the scalability. So we are optimistic about that molecule.

Okay. Great. That’s encouraging. And then one final one regarding MDX2001, your tetravalent antibody and the solid tumor trial. I’m curious, you guys are selecting, obviously, it’s kind of a basket trial, it seems with the different indications. What specific cutoff? I know you guys are selecting for elevated expression of c-MET and TROP2. I’m curious what fraction of patients within, I guess, it’s variable with each of the indications, but roughly meet that criteria for recruitment.

It’s a large proportion of TROP2 and c-MET are quite widely distributed in multiple kinds of tumors at very significant levels of expression. So it doesn’t seem to be a limiting factor. And we haven’t even used actually a selection criterion based on biomarkers because it’s very high percentage of tumors. At least the tumors we picked have demonstrated the high level of c-MET, TROP2 expression, lung tumors, gastric tumors, breast cancer. The most common solid tumors are really and we can provide you with more data if you want offline on the, because we know what that is. But Gary, you want to add something to that question?

Yeah. I can add a little bit. We have looked at the relative expressions, and I would say that, we’ve debated using like a 45% cutoff for surface expression and with that 45% expression, you pick up a vast majority of the tumors of those types. As you know, there’s close to 13 different solid tumors that have both c-MET and TROP2. But that might be, as Elias is implying, that might be maybe overly conservative because when we look at cells that have low expression, even 10% of the maximum levels that we see, you still get killing even when you have 10% expression. So I think our presumption is that it should work against the vast majority. And it’s likely in the trials that we’ll take all comers and then once we look at the efficacy data, we’ll be able to sort out what the threshold might be for efficacious responses.

Got it. So you are measuring expression levels, but you’re not excluding based on those biomarkers.

Right. That’s correct.

Yeah. Go ahead, Gary.

No. No. That’s exactly right. 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.