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Shares of Opko Health, Inc. (NASDAQ: OPK), a multinational pharmaceutical and diagnostics company, are down 16.1% as of 11:18 a.m. EST Friday. An announcement that its human growth hormone candidate, which is partnered withPfizer(NYSE: PFE),failed to outperform a placebo has unsettled investors during the last trading session of the year.
Opko's hGH-CTP was heading for the finish line with a pivotal trial that could have supported an application for treatment of adults with growth hormone deficiency. The big pharma's Genotropin is one of the top selling treatments in a space estimated at around $3 billion annually.
Third quarter sales of Pfizer's Genotropin suggest an annualized run rate of about $588 million, and Opko's longer-lasting candidate might have performed even better with a more convenient dosing schedule.
Opko Health isn't throwing in the towel just yet. Although hGH-CTP failed to significantly reduce trunk fat mass compared to a placebo after 26 weeks of treatment, the company has identified "one or more outliers" that might be responsible for the flop.
While Opko's response sounds like it's clutching at straws, the good news is that the trial failure is hardly a death blow to the diverse healthcare company. Pfizer already gave the company a non-refundable $295 million payment to license the candidate.
Opko has yet to turn the profitability corner, but surging growth in diagnostic revenue through the recent acquisition of Bio-Reference Laboratories narrowed losses to less than $1 million in the third quarter. The launch of its already approved secondary hyperparathyroidism therapy Rayaldee, and a potential approval for an intravenous form ofTesaro partnered anti-chemotherapy induced nausea drug Varubi could make Friday's flop easy to forget in the new year.
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