OPKO Health, Inc. Aktie

Good day, and welcome to the OPKO Health First Quarter 2026 Financial Results Conference Call. [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, and 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 first quarter of 2026.

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, are subject to risks and uncertainties that could materially affect the company's results. Those forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2025.

Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, April 28, 2026. 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.

Regarding the format of today's call, Dr. Phillip Frost, Chairman and Chief Executive Officer, will provide opening remarks. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of OPKO's Therapeutics segment as well as BioReference Health. After that, Adam Logal, OPKO's CFO, will review the company's first quarter financial results and discuss OPKO's financial outlook, and then we'll open the call to questions.

Now I'd like to turn the call over to Dr. Frost.

Thank you for joining us today. During the first quarter, we made meaningful progress with our strategic initiatives with particular emphasis on advancing our ModeX product development pipeline.

ModeX now has 5 programs in the clinic, spanning vaccines, oncology and immunology, all with the potential to be first and best-in-class in their therapeutic areas. Days after the close of the first quarter, we dosed our first subjects in the Phase I clinical trial of MDX2301, our BARDA-funded multispecific antibody for the prevention of COVID in high-risk populations.

Shortly thereafter, we announced the dosing of the first patient in the Phase I trial to evaluate MDX2003, a tetraspecific T-cell engager in patients with relapsed or refractory B-cell lymphoma. We also continue to advance our other oncology candidates in clinical development, MDX2001, a tetraspecific T-cell engager targeting solid tumors and MDX2004, a multispecific immune rejuvenator. Over the course of this year, we expect ModeX to achieve a number of clinical and partnership milestones as these programs progress and in the case of our EBV vaccine approach later-stage development with our partner, Merck.

Our collaboration with Regeneron is progressing well as we align their extensive antibody binder libraries with our multispecific engineering platform across various indications in metabolism, oncology and immunology. This collaboration is another example of strategic partnerships that are a good source of nondilutive capital to support our R&D efforts. The potential total value of the Regeneron collaboration exceeds $1 billion in milestones plus future royalties.

In our Diagnostics business, Q1 reflects our second full quarter with the new BioReference footprint following our oncology divestiture. We're now centered on our core regional clinical laboratory operations in New York and New Jersey, our correctional health business and our national specialty urology testing franchise anchored by the 4Kscore test. We continue to streamline our infrastructure and cost base to achieve profitable growth from this segment.

We closed the quarter with a solid cash balance. This reflects past asset sales, continued R&D support from our partners and contributions from our international Pharmaceutical operations. This financial strength enables us to fund our R&D portfolio at a meaningful level and to return capital to shareholders through our stock repurchase program.

With that overview, I'll turn the call over to Elias.

Well, thank you, Phil, and good afternoon, everyone. Let me start with the biopharma side of our business because that's where we're making tremendous progress advancing our pipeline right now. As Dr. Frost said, we now have 5 assets in the clinic and expect an additional program for our in vivo CAR-T cell platform to commence first-in-human clinical trials this year.

So let me review our programs and provide updates on each of them. Our collaboration with Merck is focused on the vaccine against Epstein-Barr virus that combines 4 EBV antigens developed by ModeX with Merck's adjuvants. In the Phase I trial, Merck enrolled over 200 subjects to evaluate safety, tolerability and immunogenicity and various subgroup studies and analysis are underway to understand the responses in EBV-naive subjects and patients as young as 12 years of age, which will be important for future studies.

So we expect Merck to have the data needed to inform a Phase II design by the end of this year with initiation of a Phase II clinical study anticipated next year, subject to Merck's decisions and announcements. Now for MDX2001, which is our lead immuno-oncology candidate for solid tumors, including head and neck, esophageal, pancreatic, lung and prostate cancers, MDX2001, as you know, is a tetraspecific T-cell engager directed at 2 tumor antigens, cMet and Trop2 and 2 T-cell activators, CD3 and CD28.

The goal is to drive a deeper and more durable response by simultaneously recognizing heterogeneous tumor antigen expression and providing both CD3 and CD28 activators and enhancers to T cells, thereby enhancing activation and T-cell survival. Enrollment in our Phase I study is continuing into 2 parallel cohorts to support dose escalation and optimize the dosing regimen. We have dosed more than 30 patients so far across multiple tumor types and have reached dose levels approximately tenfold higher than the starting dose, all with acceptable safety.

We plan to present Phase Ia data at a conference in the second half of this year. In addition, Phase Ib is expected to start later this year, focusing on the tumor types most likely to show signs of efficacy. We're also commencing work to enable subcutaneous formulations. For our next program, MDX2004, which is our first-in-class multispecific immune rejuvenator that simultaneously engages CD3, CD28 and 4-1BB to not only activate but also expand and sustain stem-like and memory T cells in the immune system.

Preclinical data has demonstrated that MDX2004 expands stem T cells, increases T-cell activation and stimulates proliferation of CD8 and CD4 memory subsets. And so these data support its potential as a pipeline in a product across cancers and chronic infections among the elderly and immune-impaired subjects. MDX2004 entered Phase I in the third quarter of last year, and we're currently in the dose escalation stage in heavily pretreated cancer patients.

The trial includes both PD-1 naive patients and patients previously treated with PD-1 inhibitors with the goal of determining whether immune rejuvenation can restore or prolong responses. Our objective this year is to complete Phase Ia, define an appropriate dosing schedule and prepare for expansion into select tumor types and longer term into broader immune impairment indications.

Now our newest molecule in the clinic is MDX2003. It's our tetraspecific T-cell engager and expander targeting both CD19 and CD20 on B cells and CD3 and CD28 on T cells. The intent is to address tumor antigen heterogeneity and escape mechanisms, which we see with CD19 only or CD20 only approaches by maintaining activity even when one B-cell marker is lost, while CD28 co-stimulation supports sustained T-cell function. We recently initiated a Phase I trial in B-cell lymphomas and leukemias in Australia and Israel with additional sites to follow.

In parallel, we're evaluating the optimal path to explore autoimmune indications for MDX2003, which has the potential to play a role in autoimmunity. In March, ModeX presented 2 posters at the ESMO Targeted Anticancer Therapies Congress 2026 in Paris, further highlighting the breadth of our oncology portfolio. One presentation profiled MDX2004, describing the ongoing first-in-human trial in patients with advanced tumors and introducing the concept of immune rejuvenation as a differentiated approach to restoring antitumor immunity.

The second was focused on MDX2003 and showcased its potent preclinical activity across multiple B-cell malignancy models and its potential relevance in autoimmunity. In addition to our own research, we're very pleased with the progress under our collaboration with Regeneron, which, as Dr. Frost mentioned, combines their extensive library of clinically validated monoclonal antibody binders with our modular multispecific architecture across immunology, oncology and metabolic diseases.

Together, the teams are focused on advancing 4 initial discovery program -- programs using the ModeX platform to rapidly generate and optimize multispecific antibody candidates with the potential to expand into additional targets over time. Regeneron is responsible for funding preclinical, clinical and commercial development of the selected assets, while OPKO is eligible for research, development, regulatory and commercial milestones that could exceed $1 billion as well as tiered royalties on global sales up to the low double digits.

Now moving to infectious diseases. MDX2301 is the first ModeX multispecific antibody program to enter the clinic under our collaboration with BARDA. MDX2301 is a tetravalent bispecific antibody that targets distinct and conserved regions of the SARS-CoV-2 spike receptor binding domain. And by -- it is designed for broad coverage and long duration of protection because it really attacks 2 separate regions of the virus, which prevents escape of the virus through mutations.

The initial indications are prophylaxis in high-risk immunocompromised populations who cannot be protected by immunization, vaccination and used in post-exposure outbreak settings with potential expansion into acute treatment of COVID and the treatment of long COVID. To date, remarkably, this multispecific antibody has demonstrated high potency against all known variants of SARS-CoV-2 and continues to be effective against all circulating variants of the virus.

We initiated the Phase I trial of MDX2301, which is evaluating safety and tolerability across different routes of administration and dosing regimens in healthy volunteers and in adults at high risk of severe COVID. And the first dose cohort is completed and BARDA is funding the program, including the clinical trial costs. BARDA is also supporting our multispecific influenza program, which targets conserved regions of hemagglutinin to enable broad coverage across influenza A and B strains. We're currently conducting pre-IND work using challenged models to select the lead clinical candidate and we expect this program to move closer to the commencement of clinical trials with the potential for additional financial support from BARDA.

To date, BARDA has committed over $100 million since the inception of these 2 programs. Now over the past several years, ModeX has also built a multimodal in vivo CAR-T and gene delivery platform that we believe is highly differentiated versus traditional ex vivo CAR-T approaches because it combines our unique multispecific technology with proprietary in vivo CAR technologies. Using lipid nanoparticles conjugated with cell-specific multispecific antibodies on the surface, we can deliver mRNA or DNA payloads, encoding CARs directly to specific immune cell subset, not only just T cells, but also B cells or NK cells to generate functional CAR-T cells in vivo at lower effective doses.

Preclinical data has been obtained in humanized mice and nonhuman primates and a presentation of this work will be made at the ASGCT meeting in Boston next month. And we believe this technology offers several potential advantages that is, it is off-the-shelf, can be redosed and leverages our multispecific antibodies for cell-specific targeting and built-in activation via CD3/CD28. It also uses site-specific antibody conjugation and proprietary lipids to support manufacturability at scale and reduce off-target delivery to the liver.

In nonhuman primate studies, we have shown proof-of-concept for in vivo CAR-T generation, deep B-cell depletion in blood and tissues and a favorable tolerability profile. These effects were achieved at doses that were a fraction of those reported for completing platforms -- for competing platforms, sorry. We're now in IND-enabling studies for our lead CD19-targeted in vivo CAR-T program and expect entry into the clinic by the end of this year or early 2027.

Now turning to our endocrine and metabolic programs. We continue to advance our subcutaneous injection formulation of OPKO 88006 (sic) [ OPK-88006 ] for the treatment of MASH. OPK-88006 is an analog of the natural GLP-1 glucagon hormone, oxyntomodulin. And we're planning a first-in-human single ascending dose and multiple ascending dose Phase I/IIa clinical study with data expected by the second half of 2027.

The findings will be used to guide the further development of our oral oxyntomodulin in partnership with Entera Bio. We also recently expanded our relationship with Entera to include a third joint program for a first-in-class long-acting PTH tablets for patients with hypoparathyroidism. And this program combines OPKO's proprietary long-acting PTH variants with Entera's N-Tab technology.

And we and Entera each hold a 50% ownership interest in this program, and we will share development costs equally. Presuming favorable PK/PD data, we're targeting an IND filing later this year. Now our international Pharmaceutical operations continued to experience solid growth during Q1 with healthy contributions to the overall business. For the quarter, global Pharmaceutical product sales grew about 9% versus the prior year due to favorable demand trends as well as foreign currency tailwinds.

Our partner, Pfizer, continues its global commercial expansion of our long-acting growth hormone product, NGENLA. Now as a final topic for today, I'd like to turn attention to our Diagnostics business. Following the sale of BioReference's oncology assets to Labcorp in 2025, BioReference is now a regionally focused clinical laboratory with a national specialty testing franchise, highlighting our proprietary 4Kscore test. We operate with a more efficient footprint with an expanding menu of higher-margin services.

In the first quarter of 2026, BioReference's streamlined business showed a volume increase of more than 3% in the number of accessions per day compared to the previous quarter. This performance was reflected in particularly strong volume in our [ SQHC ] and corrections business lines plus momentum in our higher-margin services.

Margins also saw improvement versus Q4, primarily driven by the aforementioned volume increase and continued efficiency gains, including an additional 4% reduction in headcount. Within Diagnostics, 4Kscore continues to be an important part of our test offering and the recent label update, which removes the digital rectal examination requirement positions us to broaden adoption beyond urologists and gradually build a presence in primary care.

And we see 4Kscore as a unique high-value asset with the potential to deliver significant revenue and profitability as we broaden payer coverage and continue educating both urologists and primary care physicians about its clinical utility. With our geographically focused footprint, rightsized workforce, expanding menu and proprietary 4Kscore test, we are seeing a nice performance improvements at BioReference, and we believe that these continued efforts achieve breakeven in the business -- will help achieve breakeven in the business by the middle of the year.

In summary, our progress with the ModeX pipeline, along with our partnerships and collaborations, international Pharmaceutical portfolio and restructured Diagnostics business have really transformed OPKO into a more targeted innovation-led organization with multiple key catalysts coming up later this year.

So with that, I'll turn the call over to Adam to review our financial results and outlook. Adam?

Thank you, Elias. We ended the quarter with a strong cash position with over $341 million in cash, cash equivalents and restricted cash, which is more than sufficient to fund our ongoing operating needs and development plans, while we also are returning capital to our shareholders.

Let's start with the financial performance of our Diagnostics business. The financial results for the first quarter met our expectations, and we are encouraged by the progress the team has made, sequentially improving the operating loss by $5.3 million and by $11 million over the Q1 of last year. We have restructured this business and remain on track to achieve breakeven as measured by results from operations before noncash expenses by the middle of the year.

Revenue for Q1 2026 was $72.2 million, including $6.5 million from our 4Kscore test. Revenue in Q1 2025 was $102.8 million, with the year-over-year decline expected due to the oncology customer accounts included in the Labcorp transaction that closed in September of 2025. Revenue from our retained business slightly declined versus the prior year, principally due to test mix changes as we shifted some unprofitable but higher-priced esoteric testing to our strategic partners, along with snowstorms that impacted the New York, New Jersey market, which we mentioned in our February call.

Total costs and expenses were $85.1 million, down from $126.8 million last year, reflecting the September 2025 transaction closing as well as the continued efforts to rationalize our cost structure to align with our focused geographic footprint and testing offerings. Our Diagnostic operating loss was $13 million compared to $23.9 million in Q1 2025. Depreciation and amortization for this segment came in at $3.9 million, down from $5.7 million in 2025.

Turning to our Pharmaceutical business. Revenue was $52 million in Q1 compared to $47.1 million in the prior year. Revenue from product sales increased to $38 million, up from $34.8 million, reflecting higher sales volume in our international operations and foreign exchange tailwinds during the quarter. As we continue to focus on the profitability of Rayaldee, the gross to net improvements we began to realize last year have resulted in meaningful positive cash flow from operations in 2026, while maintaining overall revenue levels.

Rayaldee contributed $6.3 million during Q1 of both 2026 and 2025, reflecting slightly improved gross to net, offset by a slight decline in volume. Our Pfizer profit share was $6.4 million for the quarter, reflecting a 42% increase to 2025's $4.5 million. Pfizer's progress on the global commercialization of NGENLA continues to show consistent growth. The 2025 profit share was negatively impacted by certain gross to net and inventory revaluations that did not recur in 2026.

In addition, BARDA funding was $4 million in the first quarter of 2026 compared to $7 million a year ago, reflecting the start of our COVID clinical program under this collaboration, while the 2025 period included higher levels of CMC activities for our infectious disease programs. As a result, IP transfer and other revenue was $14 million compared to 2025's $12.3 million.

Costs and expenses for our Pharmaceutical business were $81.7 million, similar to 2025's $81.9 million, reflecting a favorable sales mix of higher-margin products while we continue to meaningfully invest in our R&D programs. R&D for Q1 2026 totaled $28.8 million, down slightly from $30.2 million in the 2025 quarter due to lower CMC-related activities, partially offset by increased levels of our early-stage clinical trials.

As a result, our Pharmaceutical operating loss was $30 million in Q1 2026 compared to last year's operating loss of $34.8 million. Depreciation and amortization expense was $18.3 million, which was slightly higher than $17.8 million from last year.

For our consolidated financial results, total revenues for Q1 2026 were $124.2 million compared to $149.9 million in the first quarter of 2025. Consolidated operating loss for Q1 2026 was $51 million improved from 2025's $67.2 million loss. Our net loss for Q1 2026 was $54.8 million or $0.07 per share, which improved from 2025's net loss of $67.6 million or $0.10 per share.

Looking forward to the outlook for our second quarter of 2026, we expect total revenue to be between $127 million to $132 million, with revenue of services from $72 million to $76 million, with the range reflecting several assumptions around testing volumes and reimbursement pricing. We expect Pharmaceutical product revenue of $38 million to $42 million, and we expect IP and other revenue to be between $15 million to $19 million, including the Pfizer profit share of $6 million to $8 million.

Total costs and expenses for Q2 are expected to come in between $180 million and $190 million, excluding the earn-out anticipated from Labcorp related to the closing of our second transaction as well as any onetime -- onetime restructuring costs. With our expanding investments in R&D, we expect R&D to become between $32 million and $38 million, partially offset by $5 million to $7 million in BARDA funding. And we expect depreciation and amortization expense of approximately $24 million.

We're affirming our full year guidance that we introduced when we reported our Q4 results, which are included in our earnings release. And as of the end of Q1, we had approximately $108 million authorized to repurchase shares of our common stock.

With that, we have concluded our prepared remarks, and we'll open the call for questions.

[Operator Instructions] The first question comes from Maury Raycroft with Jefferies.

Can you hear me now?

Go ahead.

Sorry about that. Starting off, I was going to ask one on 4Kscore. And wondering if you can comment on the proportion of payer policies that have been updated to reflect your new FDA label? And what else needs to be done on this front? And can you talk about what you're doing to get more primary care docs on board with the Diagnostic? And are there education efforts underway there?

Yes. So I'll start off, Maurice. So on the payer policies, we are continuing to work across the board, starting with Medicare to update their coverage determination to more accurately reflect the FDA label. But beyond that, we are engaging with payers. I'll say there's not many payers that had a requirement for DRE on the commercial setting or outside of Medicare. So we are continuing to look at that from an overall perspective. So as it relates to going into the primary care market, we are waiting for that LCD to get updated before we more aggressively go into the primary care market. And we would expect that to happen in the middle of this year.

Got it. Okay. And anything more you can say on how we should think about growth expectations for the base business and what 4Kscore -- how 4Kscore will contribute to that growth over the course of the year?

Yes. So I think you'll see in the implied way that the math works between the first half and second half, you'll see some growth coming in the back half of the year, driven by some of the expectations we have around 4K and just generally a more focused footprint on BioReference's New York, New Jersey businesses. So 4K grew significantly last year. The comps this year were a little bit more challenging. So we didn't see the same level of growth that we saw last year, but we would have an expectation that we should achieve double-digit growth on 4K volumes this year, which will lead to us getting into that range of $300 million to $312 million for the total business of BioReference.

Got it. Okay. That's helpful. And maybe one other question on NGENLA, GENOTROPIN profit share. Wondering if you can comment more on just your latest communications with Pfizer related to forecast there? And can you clarify whether you're observing commercial impact from the Dear Doctor letter that Pfizer sent to prescribers over the course of summer last year and that Pfizer is doing more on that front to increase switching from GENOTROPIN to NGENLA?

Yes. So we have continued to see pretty good growth for NGENLA is part of the total franchise between GENOTROPIN and NGENLA. So we think Pfizer has been quite aggressive in seeing that conversion pull through and continuing to maintain their share or grow their share beyond some of the other long-actings in the growth hormone space, both here in the U.S. but also globally.

We've been -- we've seen pretty significant growth quarter-over-quarter and year-over-year for the NGENLA share. We still think that Pfizer owns around 1/3 of the global long-acting market. The conversions are happening at a consistent pace, not as aggressively as we previously had expected, but certainly ramping upwards. And as it relates to Pfizer sharing their outlooks or forecast, they don't necessarily give us anything forward-looking as it relates to how we should expect the entire franchise to grow. I think I covered all the questions, Maury.

The next question comes from Brian Cheng with JPMorgan.

Maybe just first, I want to know a little bit more about your expectations for your tetravalent TCE T-cell lymphoma trial. Can you walk through what you'll be looking for from that study? What will be good response data to see early on? And do you have a sense of what will be a good line of setting for this specific mechanism? And I have a follow-up.

I think Gary, who's leading the ModeX can answer that. That's a great question actually. That's good to talk about. Gary?

Yes. Thanks, Elias. Well, obviously, the first order of business is to show acceptable toxicity, and that's where the early Phase I data becomes important. We don't expect to see anything different from other candidates that have gone forward, but we need to get through that first. Once we go into the therapeutic efficacy, what we're particularly interested in is looking at the failures to the CD20 multispecifics or bispecifics and for example, molecules like glofitamab for which resistance becomes evident quite frequently.

And so we think as a starting indication, this will be a population where we can essentially salvage a therapeutic response. I should also -- and then eventually, that gives us the opportunity to move up in terms of the actual order of -- and priority of treatment. The other indication that we shouldn't forget is that by depleting B cells with CD19 and CD20, this molecule has an opportunity to be used in autoimmunity. There are opportunities, for example, in lupus and other autoimmune B-cell diseases where we will look for its ability to reduce the inflammatory reaction. And those will come after we get the initial safety data, but not much delayed after that. So there are multiple indications that we think we can pursue.

Got it. That's very helpful. And then maybe just one more on the Merck partnership on the EBV vaccine. Any update in terms of data disclosure perhaps later this year? And also can you give us a better sense about the next step for that program?

Gary?

Sure. Yes, Elias, do you want me to cover that as well.

Yes, please.

Yes, the -- yes. So as you know, we began the Phase I study a while ago with 2 different adjuvants i.e. that where we compared their efficacy one to another, both in naive individuals, but -- and also in virally infected or formerly virally infected individuals. The reason we're looking at both populations is that ultimately, the vaccine is intended for patients who are EBV-naive. But another consideration we have to watch out for is that the vaccine doesn't have any untoward effects on the people who are EBV positive.

The vaccine trial has gone smoothly. Enrollment has been very facile and no surprises. We are not disappointed at all in terms of the immunogenicity that we're seeing. But what we are trying to do in anticipation of Phase II is to get a better read on the EBV negative patients who are a much smaller proportion of the overall population. So we have been filling in those blanks with the idea that we will then down select 1 of the 2 adjuvants and simplify the formulations for Phase II.

So I do think that information will be available certainly by the end of the year. And we won't disclose any trial results, obviously, until all the data are in. But I think you will hear about the evolving plans for Phase II and then what the rationale and what the data is behind that. And I just don't want to get too far in front of it because these are really decisions that Merck will make. And so we don't want to do anything that steps outside of the guidelines they normally use for advancing their products.

The next question comes from Yi Chen with H.C. Wainwright.

My first question is the reported first quarter revenue is just a little bit below your previous guidance. So can you talk about which segment in revenue sort of underperformed a little bit in the first quarter? And how should we look at the second quarter revenue guidance?

Yes. Where the majority of that shortfall came was actually related to our other revenue and IP revenue. So we had planned activities to do some additional CMC activities under our BARDA contract, and those got delayed until later this year. So that was about almost $6 million of the shortfall, which is what took us below where we had previously guided. So from a net bottom line perspective, no impact because R&D came in lower than we had forecasted, along with the associated revenue that would have been recorded. Hopefully, that makes sense.

Got it. Got it. And also with respect to the commercial plan for MDX2301 for prevention of COVID-19, do you have any plan to commercialize it just by yourself in the future? Or is it going to be a contract with the government?

Well, I'll start and let Gary also comment. I mean from our point of view, I mean depending upon the results we observed, I mean, we have 2 markets that really need such a molecule given its ability to resist mutations or so far has been an antibody that has shown activity against all known variants. So we think that the immune-impaired population would be cancer patients or patients under therapies that are immunosuppressive or cannot really get vaccinated or mount an immune response. Those would be the primary population that would really benefit from such a molecule.

And that's about 30 million people in the U.S. In terms of developing it, we definitely are looking for a partner to co-develop or find a way because I think it's going to require that sort of expertise and experience in the marketplace around the immune-impaired populations, whether it be cancer centers or other nursing homes and all that. So yes, the question is what population immune-impaired. Doing it on our own? No, probably with a partner that can have -- add to our clinical development process. Gary, am I missing anything?

Well, yes, thanks, Elias. The only thing I would add is that just to be clear, there can be 2 different partners or 2 different sources of revenue. So clearly, as this gets to the point of being approved, this is a product that BARDA would want to stockpile. And so yes, there would be some -- assuming we get to that point, some kind of a contract with the government to provide material to the stockpile. I think both BARDA and we feel that the best way of addressing future threats from COVID is to also make sure it's out there and available for those who need it.

And so that's why Elias is saying we think there's a great unmet need in people who don't respond to vaccines, people who have underlying cancers or elderly who can't mount effective immune responses. And so yes, we, one way or another, want to address that market. And I think that at this point, it's probably just too early to say what commercial partner or what commercial infrastructure we might choose to pursue. I think our eye is mostly on the next steps of getting the approvals for in-licensure from FDA. That's kind of a near-term target.

The next question comes from Kevin DeGeeter with Ladenburg Thalmann.

My question is first on the in vivo CAR-T program. We've seen a lot -- continue to see a lot of activity on the M&A front in the space. Can you just remind us maybe of 2 things. One, how you see the differentiation of your in vivo CAR-T platform from some of the others that are slightly more advanced in early-stage clinical development? And then just two, how you see key milestones that you need to execute against to bring that program into the clinic late in '26 or early '27?

I'll start and Gary, if -- let me start and then you can cover what I'm missing. So actually, the in vivo CAR-T program is not a new program. This is something we have been doing for several years, thinking about it from the point of view of differentiation. What differentiation do we talk about?

Number one, as you know, in the lipid nanoparticles by themselves do not target specific cells. And so we thought that the #1 differentiation would be targeting of the lipid nanoparticle better than the competition does. And in this case, we knew that we could use our multi-specific platform to target different types of cells and in different ways by conjugating an antibody on top of the LNP, but conjugating in a covalent way. So it's attached. It doesn't fall away.

And then when that's done, it goes to the proper target cells in a proportion that is favorable to the activity of the CAR-T technology. So that leads to, a, a differentiation; b, the ability to multiply the number of targets you can -- and number of cells you can -- number of type of cells you can address, but also it reduces the need for higher doses because you don't have a loss of LNPs in areas where there is no targeting. So that's number one. So differentiation one is unique technology combination of LNPs that we actually improved ourselves in a proprietary way with lipids that are really designed for what we do, plus chemical conjugation that is unique in the business.

And so having the multispecifics for the LNP gave us potential. Second is we use what we know best, which is a targeting and activation, which also leads us to actually have effects at 5 to 10x lower doses than the competition, which obviously improves the therapeutic window. And so that's the second one. The third one is the fact that we found ways of having cargoes that are both RNA and DNA. And that is very promising because others haven't been able to achieve that.

And last but not least, because we have a multispecific technology, we can create chimeric antigens that are also bispecific or trispecific themselves. So that gives you a sense. Now the other question, key milestones. We've already completed all the nonhuman primate studies. We're in the middle of creating the CMC essentially, which will be finished in terms of drug product within the next few months, 3, 4 months, 5 months, maybe. And then preparing, in fact, the launch of the first trial, human trial before the end of this year, we hope. Those are the milestones for us to get into the clinic and show both safety and efficacy, what we believe is going to be a more effective way of truly deploying this very promising technology. I stop here. Gary, did I miss anything that you want to add color to?

Yes, I think you covered it very well, Elias. The only minor things I would add are that we -- while our lead program is targeted towards in vivo CAR-T cells, we've also learned how to use other antibodies to target genes into other cell types so that we can target B cells, we can target NK cells.

And so we see this really as the leading edge of a very exciting broad platform that builds on our knowledge of the multispecific platforms. So -- and the one other application that Elias didn't mention is that obviously, it can be used for gene correction using CRISPR recombinases to modulate or make sure the DNA is permanently kept or in other cases, transiently expressed.

So it's just a very fertile area. And the only other thing I would emphasize because I think we implied it, but didn't come out and say it is that we're planning to do the initial studies using the IIT mechanism in China, which allows us to go faster, allows us to do -- for us to be more efficient and for us to also do it with lower cost. So it will accelerate our efforts there. And that's where when Elias was talking about the preclinical package, we also have some safety data that we will be providing the investigators who will be conducting the study. But everything is on track, and we're very excited about it because it's a whole new world in terms of both antibodies and gene delivery.

The next question comes from Yale Jen with Laidlaw & Co.

Just we have 2 here. The first one is in terms -- based on the guidance for the 2026, we believe the Diagnostic business seems having a continuous growth quarter-over-quarter in that pattern. So you mentioned about the 4Kscore. Would there be any other aspect of factors also could drive the revenue growth on that operation? And we have a follow-up.

Yes. So Yale, the main drivers beyond 4K is really the first full year of the focus on the New York, New Jersey market. So the commercial team has been very aggressive in identifying new opportunities and growth opportunities in those markets. It's all still within the typical clinical and women's health portions of the business. There are some adjacent lines that we continue to explore and work towards, but it is core accounts being one in the market, and we have a very rich and deep pipeline the team is executing against.

Okay. Great. And maybe just one question for MDX2001. Given that Trop1 is one of the targets, just curious at this stage, is the triple-negative breast cancer one of the targets? Or how should we think about the next stage in terms of the target selection, tumor type selection and development?

Yes. So as you know, we're doing trials in patients who have -- who are not responding to other tumors. Triple-negative breast cancer also has high expression of Trop2 and cMet. So it is part of our list of 14 cancers that could be responsive. But we're going to focus on the ones that have shown promising responses, but we haven't had a lot of triple negatives in our population so far.

And so we hope to have them and eventually grow that population when we get into the Phase Ib, the next phase. We are also trying to enrich the population right now that we are near or at the right regimen and dose. So that's certainly a tumor that we'd like to have more of in our samples, but it is theoretically possible to have an effect on triple-negative breast cancer.

And maybe just to refresh my memory, when we should anticipate the next data readout for MDX2001?

Well, like I said, we're finishing the dose escalation and the regimen and how do you do this? When you do immuno-oncology, as you know, there's not a one-size-fits-all protocol. There's step dosing that you use or you don't use steroids and then at what level you really do the interval, 1 week. Also, we are developing because we are very encouraged by what we see with our IV. We're now developing the liquid formulation so we can use subcu delivery, which would be easier on the patients. And so we're exploring all of that.

And obviously, once we finish this towards the third quarter, beginning of fourth quarter, we will have basically the plans for the Phase Ib pretty much in place by then. So at the end of the third quarter, beginning of fourth quarter, we'll be able to complete this current phase.

The next question comes from Edward Tenthoff with Piper Sandler.

Great. And excited about everything going on at OPKO. Looking forward to the in vivo data at ASGCT and MDX2001 data in the second half. One quick question. Did you say you would run the Phase I study for in vivo in China? And is that with a partner? Or are you partnering with a specific university there?

I'm sorry, I couldn't hear. Which product are you talking about?

In vivo...

For in vivo, the in vivo CAR-T.

In vivo CAR-T, I think he's referring to.

Right. Yes. So we're absolutely -- we have a team actually right now there interviewing the clinical sites and with a partner, local partner. And so I don't know at this point who will -- 1 or 2 sites actually, the 2 sites are very interested in participating. So we are basically doing due diligence on that right now. I can't tell you which site and when, but they are very, very anxious to really participate in this trial given the uniqueness of this particular platform.

Very neat. And when it comes to the immune rejuvenator, I appreciate it's still early, but what do you see as the regulatory path here? Is this something that you'd have to use in combination with other IO agents? And if so, does it make sense to partner with?

Yes. So this is a great question as always. So we have actually 2 arms in our Phase I. As we described, there's a PD-1 naive population and a PD-1 exposed population of prior exposure to PD-1. Now a lot of people, when they look at this molecule, the most common question we say, we don't have to take a cancer target. Well, PD-1 also doesn't have a cancer target.

There's a checkpoint inhibitor. The difference is that MDX2004 is an accelerator. It really enhances the response. It does not unblock the response. And when you just unblock, obviously, you may be unblocking very exhausted T cells. And so that's why we came up with this concept of rejuvenation. So think of it as basically KEYTRUDA or an OPDIVO of a different kind, which will be combined, obviously, with other therapies at some point. But we have to show also to the FDA that a monotherapy also has an effect, and that's what we're doing right now. It's a monotherapy trial where for patients that are either naive to PD-1 or have been exposed to PD-1 but have progressed. I hope that helps you.

Very much. And then lastly, did I hear correctly that the plan was to advance subcu oxyntomodulin before advancing the oral formulation? In other words, sort of seeing what you learn from subcu first and then taking the oral into the clinic with Entera technology?

That is [ Dr. Shao ] runs the program, and that is exactly what is happening. We need to understand better with the Phase I/IIa, the behavior of the drug in an injectable format. So then once we fix that range, then you can really do the implementation of the oral because then you know what to target in terms of PK, in terms of area under the curve and Cmax and side effects and so on. So we decided -- and Dr. Shao decided it was better to get that information first instead of having many, many different approaches and dosing with the oral. So we think it would simplify, in fact, the path to oral.

The next question comes from the line of Michael Petusky with Barrington Research.

So I think, Adam, I think you referred to in terms of the Diagnostic business, one of the drivers in the second half would be opportunities that, that team is pursuing and sort of in a focused way in New York, New Jersey. Do you guys have line of sight of new business pieces that may be starting midyear? Or like is there -- are there data points that you guys have put together or is essentially, hey, at this point, these guys are sort of getting after it?

So thanks for the question, Mike. So you're right. So the team is pretty mature in a lot of the onboarding of the accounts that are required to hit the numbers, and we feel confident we didn't change our full year outlook. For the quarter, we show -- or for the year, we showed quarter-over-quarter growth. The -- some of that growth is coming from 4K, but a lot of it is coming from the traditional business that we have a very clear line of sight to.

Okay. Great. And then just sort of sticking with the same segment. In terms -- I think you guys referred to that there was a little bit of a headcount reduction. I think you were talking about in Q1 in that business. As you sort of look out, are there other cost and expense reduction initiatives that you would anticipate throughout the remainder of the year?

Yes. Elias mentioned the 4% headcount reduction that happened in the first quarter of this year. We -- unlike prior years where we had major cost-out initiatives that we executed against, a lot of this year is really turning into operating efficiencies. So ensuring that we've got the right counts of people doing the right things. But there's no significant cost-out plan to achieve the results. It's continuing achieving the operating efficiency that we're targeting. And I think the quarterly or sequential improvements will continue to show that.

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

I want to thank everybody for participating and for the good questions that we've been able to answer. We look forward to meeting with you again to discuss the results of the next quarter. So with that note, I wish you a good evening. Thank you.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Thank you.

Hello, and welcome to the OPKO Health Fourth Quarter 2025 Financial Results Conference Call. [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, and 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 2025.

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, are subject to risks and uncertainties that could materially affect the company's results. Those forward-looking statements include, without limitation, various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2025, that was just filed earlier today.

Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, on February 26, 2026. 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.

Regarding the format of today's call, Dr. Phillip Frost, Chairman and Chief Executive Officer, will provide opening remarks. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference Health as well as OPKO's therapeutic segment. After that, Adam Logal, OPKO's CFO, will review the company's fourth quarter financial results and discuss OPKO's financial outlook. Then we'll open the call to questions.

Now I'd like to turn the call over to Dr. Frost.

Good afternoon, and thank you for joining us today. OPKO exited 2025 with tremendous momentum as we executed on the priorities we laid out earlier in the year. These included positioning our Diagnostics business for a return to profitability, advancing our ModeX pipeline, leveraging nondilutive funds from strategic partnerships to offset our R&D budget, and strengthening our balance sheet. We're looking forward to the year ahead as we have multiple value-creating catalysts for 2026 and beyond.

At BioReference, 2025 was transformative, with the closing of the second asset sale. In September, we completed the sale of our oncology division and related testing services. This allowed us to focus on BioReference on its core clinical laboratory business in the New York and New Jersey region, as well as correctional health and our 4Kscore test nationally. This divestiture streamlines our infrastructure and reduces fixed costs while freeing capital to support our broader strategic objectives. BioReference is now positioned to meet our goal of sustained profitable growth in 2026. We believe that our more focused footprint, combined with the accelerating adoption of 4Kscore, give us a clear path to modest revenue growth and improving margins this year.

On the therapeutic side, ModeX continues to be a central component of our long-term strategy. We now have multiple clinical-stage programs, an EBV vaccine that's partnered with Merck, our proprietary multispecific immuno-oncology and immunology candidates, including those intended for immune rejuvenation and for the immune-impaired.

In 2025, we also began an important collaboration with Regeneron that aligns our deep antibody discovery capabilities with our unique multispecific platform to pursue targets in metabolism, oncology, and immunology. The value of this collaboration potentially exceeds $1 billion in milestones alone. Regeneron is responsible for reimbursing ModeX for its work in creating antibody candidates, utilizing ModeX's proprietary platform, and for funding all development and commercial efforts for candidates it selects for further development.

From a financial perspective, we entered 2026 with a strong cash position that was bolstered by asset sales, BARDA funding, partnership payments, and positive operating contributions from our international pharmaceutical business. This has allowed us to invest meaningfully in our R&D portfolio while returning capital to shareholders through share repurchases. Last year, we bought back over $109 million in common shares and convertible notes. We look forward to the year ahead as we advance the ModeX pipeline with multiple clinical and partnership catalysts and continued focus on operating efficiencies as BioReference returns to profitability.

With that overview, I'll turn the call over to Elias.

Well, thank you, Phil, and good afternoon, everyone. I'll start with ModeX. ModeX is now firmly established as a clinical-stage platform company spanning vaccines, oncology, and immunology. We have 3 programs in the clinic already, and 2 more entering the clinic over the next few months.

Our EBV vaccine is partnered with Merck, includes our 2 antigens in combination with Merck's adjuvants, and Merck enrolled over 200 subjects in the Phase I trial that is evaluating safety, tolerability, and immunogenicity, enabling further development by Merck. Our lead immuno-oncology candidate, MDX2001, is a tetraspecific T-cell engager directed at 2 tumor antigens, cMET and TROP2, and 2 T-cell activators, CD3 and CD28. This candidate continues to progress through Phase I dose escalation in solid tumors. To date, we have dosed more than 25 patients across multiple tumor types and have reached dose levels that are approximately tenfold higher than the starting dose with acceptable safety. We're now refining the final dose and regimen to be used in Phase Ib expansion cohorts, focusing on specific tumor types.

MDX2004 is our first-in-class multispecific immune rejuvenator for advanced cancers. This trispecific molecule simultaneously engages CD3, CD28, and 4-1BB to stimulate T-cell activation, proliferation, and persistence, with the goal of restoring the immune system. By restoring and maintaining T-cell activity, this immune rejuvenator may address a broad range of cancers by potentially reversing immune dysfunction associated with chemotherapy, chronic illness, infections, and aging. MDX2004 entered Phase I late last year in Australia and subsequently in Israel.

With MDX2003, we are now developing a tetraspecific antibody that binds CD19 and CD20 on cancerous B cells and CD3 and CD28 on T cells. This is in line with emerging data showing the benefit of targeting both CD19 and CD20 in difficult-to-treat B-cell lymphomas and leukemias. MDX2003 is designed to maintain efficacy even if one B-cell marker is lost or greatly reduced, which is a common way for tumors to escape CD19-only treatments, and to build in CD28 co-stimulation so that T cells can stay active and able to kill cancer cells longer.

We presented a poster at the ASH Annual Meeting in December, which described our preclinical findings. We have received regulatory IND approval in Australia and we will begin first-in-human trials in a few weeks for cancer. But I should note that this tetraspecific antibody also has potential to treat diseases associated with autoimmunity, an indication we're separately considering for entry into the clinic.

A highlight of the fourth quarter, as Phil said, was the announcement of an agreement with Regeneron, which brings together their extensive library of clinically validated monoclonal antibody binders with our multispecific engineering platform to pursue 4 initial programs across metabolism, oncology, and immunology, with potential to expand beyond the initial targets. Under this collaboration, Regeneron will fully fund preclinical and clinical development and commercialization for selected assets, and OPKO is eligible for research, development, regulatory, and commercial milestones that could exceed $1 billion, as well as up to low-double-digit royalties on global sales. Our joint teams are actively working towards nominating lead candidates, with the goal of achieving the first milestone of these programs as these programs move into formal developments.

Now turning to infectious diseases in the immune-impaired, our BARDA-supported programs for multispecific COVID-19 and influenza antibodies continue to move forward. We recently received IND clearance from the FDA for MDX2301, our COVID multispecific antibody, which is aimed at high-risk immunocompromised populations, and this program is to enter the clinic in the first half of 2026. Our influenza program against both flu A and flu B is in the pre-IND stage. We're currently evaluating the lead clinical candidates in challenge models to prioritize one for further clinical testing, with potential incremental funding from BARDA. In 2025, we received $28.5 million in nondilutive funding from BARDA for these 2 programs, and a total of $54 million since inception, and BARDA will assume the cost of the clinical trials.

Over the past 3 years, we've also been building an in vivo CAR-T platform that we believe represents the next generation of cellular immunotherapies. And like traditional CAR-T approaches, our platform uses multispecific antibodies to greatly expand potential applications by targeting our proprietary lipid nanoparticles to any desired cell type and enabling the creation of multispecific chimeric antigen receptors, showing excellent B-cell depletion and safety in nonhuman primate experiments. We view this flexible, differentiated, and unencumbered technology as a unique asset within our portfolio, generating significant interest from potential partners as we enter the late stages of the pre-IND process, hoping to enter the clinic either late this year or the beginning of 2027.

During the fourth quarter, we continued to advance OPK-88006, an analog of natural dual GLP-1/glucagon incretin oxyntomodulin towards the first-in-human phases, and we are in the late stages of the pre-IND work to study healthy and presumed metabolic dysfunction-associated steatohepatitis, for short MASH, participants, as both a weekly injectable product and, in partnership with Entera Bio, a once-daily oral formulation, which has been selected based on encouraging oral bioavailability in nonhuman primates.

In addition, under the collaboration with Entera, we recently announced a program to develop a first-in-class oral long-acting PTH tablet for patients with hypoparathyroidism. This program combines OPKO's proprietary long-acting PTH variants with Entera's proprietary N-Tab technology. OPKO and Entera will each hold a 50% ownership interest in this program and will each be responsible for half of the program's development costs. Given the favorable PK/PD data announced last December, we're accelerating the development time line of this product and expect to file an IND application with the FDA mid-this year.

Now our international pharmaceutical operations continue to be a source of steady cash flow and operating income. In 2025, global pharmaceutical product sales grew by 17% versus the prior year quarter, and I'll let Adam go through the numbers in more detail. But our partnering strategy continues to provide meaningful cash flow, and we're pleased that our partner, Lilly, has brought mazdutide to the Chinese market, and we received our first royalty payment in the fourth quarter.

Finally, turning to our diagnostic business. In mid-September, we completed the sale of BioReference's oncology assets to Labcorp, transforming BioReference into a streamlined, regionally-focused clinical laboratory with a national specialty testing franchise anchored by 4Kscore. We now operate with a more efficient footprint, supported by correctional health nationally, and also an expanding menu of higher-margin services. In 2025, the post-transaction remaining operations represented approximately $300 million in revenue.

Fourth quarter testing volume in the BioReference business, excluding the divested oncology assets, grew slightly, and we continued to realize the benefits of our cost reduction initiatives, including a workforce reduction of roughly 29% from the previous year to approximately 1,400 FTEs and other targeted operational efficiencies. These efforts have significantly improved our margins and support our expectation that BioReference will deliver positive operating income and cash flow in 2026.

Of note, our 4Kscore test remains a key growth driver. Fourth quarter volume increased more than 6% year-over-year, and we expect the updated label, which does not require a digital rectal examination anymore, to support continuing momentum and entry in the primary care market. In third quarter last year, FDA approved this labeling change to dissociate the elevated PSA from suspicious nodules for the use of the 4Kscore. The intended-use population are men ages greater than 45 with age-stratified elevated PSA, or men without elevated PSA but a suspicious nodule. Most of the PSA screening are performed by primary care physicians, and the age-stratified elevated PSA and the precision of the 4Kscore test results would facilitate physician's decision to further assess the probability of clinically significant prostate cancer before a biopsy or MR imaging decision. We view 4Kscore as a valuable, differentiated franchise that can generate meaningful revenue and profit as we expand payer coverage and educate both urologists and primary care providers on its clinical utility.

So collectively, our diagnostic transformation, our clinical progress across the company, and high-quality partnerships have positioned us as a more focused, therapeutically driven company with multiple near and midterm inflection points.

With that, I'll turn the call over to Adam to review our financial results and outlook. Adam?

Thank you, Elias. Capital allocation remains our top priority as we ended the quarter with $369 million in cash and cash equivalents and restricted cash, which is more than sufficient to fund our ongoing operations and development plans while we also returned capital to our shareholders. Our strong cash position allowed us to repurchase 9.8 million shares during the fourth quarter of 2025. And for the full year, we repurchased 34.6 million shares for approximately $47 million. We have approximately $113 million remaining under our buyback authorization and expect to accelerate our repurchases over the short term.

We deployed over $109 million in convertible note and common stock repurchases during 2025 and almost $230 million since the start of 2024, demonstrating our commitment to strengthening our balance sheet and returning that capital to our shareholders.

Let's turn to the financial performance, starting with our Diagnostics business. Q4 was our first full quarter since closing our second transaction with Labcorp, and we are encouraged by the progress the team has made. Revenue for Q4 2025 was $71.1 million, including $7 million from our 4Kscore test, which grew in revenue by a little more than 16% compared to 2024's $6 million. Revenue in Q4 2024 was $103.1 million, with the year-over-year decline primarily due to revenue attributable to the Labcorp transaction that closed in September. Revenue from our retained business declined principally due to test mix changes as we shifted some of our unprofitable but higher-priced esoteric testing to our strategic partners, which was partially offset by slight volume increases.

Total costs and expenses were $89.4 million, down from $124.8 million last year, reflecting the September 2025 Labcorp transaction, as well as the continued efforts to rationalize our cost structure to align with our focused geographic footprint and testing offerings. Included in operating expenses were $5.8 million of nonrecurring expenses related to reducing our headcount, asset write-offs, as we transition into our new operating footprint. Our Diagnostics operating loss was $18.3 million, compared to $21.7 million in Q4 2024, and depreciation and amortization came in at $4.1 million, down from $6 million in 2024.

Revenue from our Pharmaceutical segment was $77.4 million in Q4 2025, compared to $80.5 million in the prior year. Revenue from product sales increased to $43.7 million, up from $37.4 million, reflecting foreign exchange tailwinds in the 2025 quarter, as well as higher sales volumes in our international operations. As we continue to focus on the profitability of Rayaldee, the gross-to-net improvements that we have realized in 2025 have resulted in meaningful positive cash flow from operations while maintaining our overall revenue levels. Rayaldee contributed $8.8 million during Q4 2025, compared to 2024's $9.1 million, reflecting lower government rebates during the 2025 period, partially offset by an approximately 17% decline in volumes.

Our Pfizer gross profit share was $12.5 million, reflecting a 30% increase to 2024's $9.6 million. The fourth quarter of 2025 reflects the highest gross profit share recorded to date and reflects Pfizer's progress on the global commercialization of NGENLA.

During Q4 2025, we recorded $7.2 million of revenue from our new collaboration with Regeneron, while the 2024 period included $12.5 million of milestone payments from Merck for our EBV collaboration. In addition, BARDA funding was $6.9 million, compared to 2024's $11 million, reflecting activity levels for our infectious disease antibody programs that BARDA supports. The 2024 period included a higher level of CMC activities, while the 2025 period reflected activities in preparation for our upcoming Phase I clinical trial for MDX2301.

Finally, the fourth quarter of 2025 included $4.3 million paid by Eli Lilly for royalties on mazdutide, which is being commercialized by Innovent in China. This reflects royalties on sales from July to December 2025. As a result, IP and other revenue was $33.7 million compared to 2024's $43.1 million.

Costs and expenses for our Pharmaceutical business were $88 million, up from $82.6 million, reflecting our investments in our R&D programs. R&D for Q4 2025 totaled $32.4 million, up from $29.8 million in the 2024 quarter, due to our increasing ModeX development activities. As a result, our pharmaceutical operating loss was $10.7 million, compared to last year's operating loss of $2.1 million. Depreciation and amortization was $18.3 million, which was consistent with 2024's $18.1 million.

Our consolidated financial results include total revenues for Q4 2025 of $148.5 million, compared to $183.6 million in the fourth quarter of 2024. Our consolidated operating loss for Q4 2025 of $38.3 million, compared to $33.1 million for the 2024 period. The 2024 period benefited from the Merck milestone payment, which was approximately $5 million more than 2025's Regeneron milestone payment. Our net loss for Q4 2025 was $31.3 million, or $0.04 per share, compared to net income of $14 million, or $0.01 per diluted share, in Q4 2024, which included the benefit from gains of certain of our underlying investments.

Looking forward to our outlook for the first quarter of 2026, we expect total revenue to be between $125 million and $140 million, with revenue from services of $71 million to $75 million, and this range reflects several of the weather impacts that have already occurred in January and February in the Northeast, which have already impacted our volumes by $3 million to $5 million. We expect pharmaceutical product revenue of between $38 million and $45 million, and we expect IP and other revenue to be between $15 million to $20 million, including Pfizer's gross profit share of $5 million to $6 million.

The first quarter reflects the reset of the global revenue base and in prior years has been negatively impacted by gross-to-net adjustments and inventory revaluations that Pfizer records. Total costs and expenses are expected to come in between $170 million to $180 million, excluding any onetime restructuring costs, with our expanding investments in R&D to come in between $30 million to $32 million, partially offset by $7 million to $9 million in collaboration funding, and depreciation and amortization expense of approximately $24 million.

Moving to the outlook for the full year, we expect total revenue of $530 million to $560 million, with revenue from services contributing $300 million to $312 million, and pharmaceutical product revenue of $160 million to $170 million. Other revenue from our partnering and collaboration agreements of $70 million to $80 million, including Pfizer gross profit share of $34 million to $37 million. Total costs and expenses are expected to be in the range of $725 million to $750 million. Our full year investment in R&D is expected to be between $125 million and $135 million, offset by $22 million to $26 million in BARDA funding and reimbursement from Regeneron under our collaboration agreements.

Finally, depreciation and amortization expense is expected to be approximately $100 million in 2026. And as I mentioned earlier, we have approximately $113 million authorized to repurchase shares of our common stock. We expect to continue to accelerate our repurchase program over the next several days and weeks, continuing to focus on our investments into our R&D programs with capital being allocated to our repurchase program.

That concludes our prepared remarks. Operator, let's open the call to questions.

[Operator Instructions] Our first question comes from Maury Raycroft of Jefferies.

It's James on for Maury. Congrats on the progress in the quarter. I'll just start with MDX2001. Can you discuss the timing of a potential data disclosure and how you're setting expectations for the proportion of patients from the 25 that you've dosed so far, how many of those could be evaluable for efficacy? Also, can you confirm whether you still plan to advance to the sixth dose level or whether you're seeing sufficient activity at the fifth dose level to begin backfilling certain dose cohorts? And should we be thinking about these disclosure as first half or second half event?

So in terms of the dose, I think we are at the dose that we were perceived. We are adjusting the regimen, how many micrograms per week or every 2 weeks, we're adjusting that right now. We will not go to a much higher dose level based on the information we have. We have dosed 25 patients. We do see signs of efficacy. It's too early, obviously, to report formally, but we will announce the results of our Phase Ia trial in an upcoming conference and enter Phase Ib for the tumors that show the most promising signs of efficacy. And that will probably be advancing so that we will have results that we can share by the end of 2026.

And then just another quick one on NGENLA profit share. It's increased to $12.5 million this quarter, consistent with the upward trajectory in weekly prescription trends that we've been seeing. Can you provide more color on the key drivers of the profit share increase? And what are the assumptions underpinning the guidance for profit share of $34 million to $37 million in '26?

James, thanks. So we've seen good continued growth globally for Pfizer. Really, what drove the fourth quarter increase was certain regions have moved up in the overall tiering structure. So in one of the regions, they actually hit the third tier. So the overall gross profit percentage sharing has been moving up in those regions. We've also seen Pfizer continue to take market share, again, on a global basis and increasing it in markets where they've historically been behind. So we're pretty pleased with where they've been able to head, and in the fourth quarter came in ahead of where we had expected, based on the growth rates that they've been able to deliver. So we see the $34 million to $37 million as being achievable at current growth rates and certainly could accelerate should they have some more wins on a global basis.

Our next question comes from Brian Cheng of J.P. Morgan.

Maybe just first on the BioReference side of the business. Can you give a bit more color in the growth that you're seeing, especially in the 4Kscore diagnostic test segment? Is the 6% growth that you saw here driven by particularly momentum in the primary care setting? And how should we think about just the stability of this growth trajectory, especially in the 4Kscore diagnostic test? And then I have a follow-up.

So Brian, we have not made any meaningful effort yet into the primary care setting. While we have the FDA label change, we're still working with payers to ensure coverage. So the volume increases have all been coming from the work within the urology field. So we'll expect to continue to push that growth upwards and think it can accelerate as we make progress with payers. The overall revenue growth came from improved revenue cycle management and selling into the right payer mix. We've continued to see overall benefits of the 4Kscore and expect that to grow at a high-single-digit, low-double-digit pace into 2026, and that could accelerate as we make progress within the primary care setting as payers come along.

And just on the Merck partnership for the Epstein-Barr virus vaccine, we noticed that there are additional studies being performed. What are those specific studies that will move this program to move into the Phase II phase? And any sense of the timing when those studies will be completed?

I'll defer to Gary Nabel, who is the leader of the collaboration with Merck. Gary, can you respond?

Yes. I'd be happy to give you some more color on that. The studies that are ongoing at the moment are designed to give us a little bit more information on the EBV-naive patients. The initial Phase I took all comers. And since the rates of seropositivity are so high in the U.S. and throughout the world, and the vaccine ultimately is intended for patients who've never been exposed to the virus, we'd like to see a little bit more data on that seronegative population because they'll be the subject of Phase II.

So the other activity that's ongoing is to see if we can reduce the age of inclusion in the trial. In the current Phase I, it was age 18 and older. While we're getting material ready for Phase II and beyond, we can now take this opportunity to reduce the age of entry down to 12 years of age. So it's really positioning ourselves for more success and the most relevant formulation to succeed in the prevention studies when they begin.

Do you want to talk about the timing also, Gary?

Yes. In terms of the timing, I expect by the end of the year, we would have most of the data that we need to make the decisions. And I think we're looking at a time frame for Phase II that would start next year, not in this current year.

Our next question comes from Yale Jen of Laidlaw & Co.

I'm just going to follow up on the EBV. In terms of the first data readout with the study already completed, do you anticipate Merck to provide that? And the second follow-up on this question really -- this part is really that has Merck made the final -- made the definitely go/no-go decision, and the current study is simply just to supplement or extend that versus the go/no-go decision has not yet officially made? Then I have a follow-up.

Yes. I'd say the short answer to your question is that it is a decision for Merck to make and to announce. So I don't want to get too far ahead of the curve. What I will say is that the data we've seen thus far is encouraging. And I think that we, at the moment, really want to just make sure that everything is in place so that when we start the Phase II, the Phase II goes seamlessly and beyond, that we can go straight from Phase II to Phase III to the launch using the same batches and the same preparations of the vaccine. So what I can tell you is that we are encouraged, but the final decisions really should be coming from Merck, and I don't want to get ahead of ourselves in that regard.

Appreciate that. Maybe just another question here, really. In terms of the collaboration with Entera, we noticed that there's also a GLP-1/glucagon combo assets. You guys seem to have not yet talked much about it. Could you reveal some information on that one and the current status of that one as well?

So the GLP-1/glucagon is what we call oxyntomodulin in our report, and that's the name that is used for that. So it's pretty much at the very late stages of IND submission. I think in terms of the oral formulation with Entera, we're pursuing that given the results we had in December, which are very, very promising. And in terms of the injectable, we're getting ready to enter Phase I once we get the IND cleared.

Congrats on all the progress in the ModeX side.

Our next question comes from Edward Tenthoff of Piper Sandler.

I'm really impressed with so much going on at the company these days, and the improvements in the balance sheet, too, to pay for all of this research. I wanted to ask a little bit about the in vivo CAR-T, and it really is an interesting opportunity for the ModeX technology. Can you elaborate a little bit more in terms of how you're delivering the construct so that you can express the CARs on either T cells or other specific cells?

Yes. So what we've developed here is really a unique approach to in vivo CAR-T, characterized by a few factors. Number one, we found a way to conjugate covalently the targeting antibodies that are on the surface of the lipid nanoparticle. So we're using lipid nanoparticles, which can have a cargo of either mRNA or DNA. And our ability to target with multispecifics allows us to be able to target T cells, B cells, NK cells. So it's a very versatile platform, which is very interesting.

We have advanced the program in terms of the CMC and as well as the nonhuman primate experiments that are really necessary to achieve IND progression. So the characteristics of this in vivo CAR-T really are quite fascinating because the possibilities are enormous, because the CAR-T receptor itself, the chimeric receptor itself, can be actually multispecific as well. As you know, currently, they are all monospecifics, but we've been able to achieve both monospecific CAR-Ts as well as multispecific CAR-T development. So we believe, and others do, and we've had a lot of interest -- incoming interest on this platform-that this asset is really something that is, in my view, a large component of the value of ModeX at this time.

Yes. Very, very interesting. I appreciate that color. And if I may ask just one additional question, also on MDX2004, the immune rejuvenator. I'm thinking about this almost as like an immunostimulatory agent. How do you envision developing it because it could have very broad utility?

You're referring to MDX2004? Is that what you're talking about?

Yes, correct.

Yes. So MDX2004 is pretty much a rejuvenator of the immune system. As you know, many patients have exhausted immune systems when they fight cancer and they receive multiple treatments, chemotherapy and other immuno-oncology drugs. And what we found is that the need is to really reinforce the immune system in these situations. As you know, PD-1 is a checkpoint inhibitor. So what it does, it removes the brake on the immune cells, the T cells in particular. But that doesn't guarantee that the T cells are going to be effective, because you remove the brake, but the car may not advance, right? What MDX2004 does, it is an accelerator. It really provides energy, gas, if you will, to rejuvenate the T cells and the stem cells and the memory cells so that the immune system can rev up and continue its fight against cancer cells.

In terms of development, we're going into both patients who have been -- cancer patients who have been treated in multiple lines and testing whether or not a rejuvenation of the immune system will really reignite the positive anticancer effectiveness of the immune system, right? In addition, we're doing it in patients who are PD-1 naive and patients who've had PD-1s in the past, but where the effects of the PD-1 has basically faded. So that's the first step. So we have a 2-arm trials with PD-1 naives and PD-1 previously exposed, and then we're really testing whether or not it's a tolerable molecule that can be administered without too much safety issues, and observe whether or not it can prolong or rejuvenate the response -- the immune system response. So far, we have dosed 8 patients, and things are going well.

Our next question comes from Yi Chen of H.C. Wainwright & Co.

This is Eduardo on for Yi. I was just hoping if I could get you guys to repeat the specific clinical milestones for MDX2001 and MDX2004 in 2026, just to have some clarity there.

Well, so MDX2001 is pretty straightforward. It's completion of the dose regimen and entry into Phase Ib, right? That's really what it is. And then for MDX2004, we're doing the escalation -- the Phase I escalation. We passed the first step, and we're going into the second. And there are multiple steps that are planned, which is Phase Ia, which we hope to complete by -- within this year, and determine what the optimal dose is for this therapy. I'll point out the fact that this therapy may be effective in more indications than just tumors, simply because you have many patients who are immunosuppressed for reasons other than harboring a cancer. So Phase Ib for MDX2001 and the Phase Ia for MDX2004.

And then shifting over to the BioReference margin expansion and the expense bridge, I think the guidance said $725 million to $750 million in total expense, which seems a little high following the divestiture. Just wondered if you could add some more color there in terms of the OpEx for the new BioReference.

Adam can cover that. Adam can you cover?

Yes, sure. So we would expect, Eduardo, the overall expense base to continue to decline at BioReference as we've continued to work the overall operating efficiency upwards and starting to work the margin profile up. Really, where the expense expansion is coming from is within the R&D efforts. And it's going to be dependent on some of the successes that we've been talking about in other programs and the timing of where they start, that's where the expense expansion is. Everything else from the operating company side, we should see stable or reductions.

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

Thank you all for participating and for your good questions. We look forward to meeting with you again after the first quarter to discuss those results. Thank you again and have a good evening.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Good afternoon, and welcome back. Thanks for joining us for another session at the 44th JPMorgan Healthcare Conference. I'm Brian Cheng. I'm one of the senior biotech analysts here at the firm. On stage, we have the team from OPKO Health. And here, the session here is a fireside session with the team. Maybe the OPKO team can introduce themselves, who do we have on this stage?

Sorry. Can you hear me okay?

Yes.

I'm Elias Zerhouni, I'm the President of OPKO Health. I became President of OPKO Health because I cofounded a company called ModeX Therapeutics, which was acquired by OPKO Health in 2022. As part of that, I ended up being President of the acquiring company. And I'm a former Head of R&D at Sanofi, I'm a former Head of NIH and I was also a former academic at Johns Hopkins University.

And I'm Adam Logal, I'm the CFO of OPKO.

Elias, it will be great to kick off our conversation here. For those of you who don't for those people that are in the audience who don't fully know the OPKO Health story, you'll be going to get an overview of what you're working on. And if you can go through different components of the business and how you're thinking about the catalyst looking for it, that would be great.

Yes. Thank you, Brian. First of all, let me say that OPKO Health represents a large range of companies going from a clinical diagnostic laboratory known as BioReference Health to a biotech company called ModeX Therapeutics. And so it's really a large span of biopharma that is covered by OPKO Health.

So let me cover for you the relevant things that have happened over the past year, 1.5 years [indiscernible] so you understand. Our strategy has been to truly focus on therapeutics as much as possible and also divest from clinical diagnostics as much as possible to rebalance our balance sheet. And Adam can talk to you about that. We are in a very strong position now. We've been able to divest of about 40% of our clinical diagnostic business because of its overextension around the country, which was quite expensive and negative in terms of profitability. And we are reaching now breakeven and profitability with the remaining business, which is centered in New York and New Jersey and with the services, both in terms of clinical diagnostics, but also cancer diagnostics with our lead cancer task called the 4Kscore. And we can give you more detail about that.

Then on the other hand, of the clinical diagnostic business, we have the biotech business, ModeX Therapeutics, which was cofounded by Dr. Gary Nabel and myself as part of a spin out of a laboratory that both of us created at Sanofi. And as we move down of Sanofi, we realized that Sanofi was not going to pursue the research we started, and we made a decision to create a separate company and recover our labs. So we did that. Now the laboratory of ModeX and the idea behind ModeX Therapeutics is the following. There is no single disease that you can name that has a single treatment -- I mean, a single therapy. They usually use combination therapies will be cancer or immune diseases. It's very hard in biology to modify a biological system with a single drug. So we came up with a concept of multispecific platforms, multispecific antibodies, multispecific vaccines and we put that in place, and we created a company in 2020. And then we quickly generated quite a bit of interest.

So the significant things that I can bring to you for today is, number one, we had a in licensing by Merck, one of our vaccines called the EBV vaccines, Epstein-Barr Virus. And we licensed the vaccine to Merck for $50 million upfront and milestones of about $870 million and royalties. And we were able to -- with the support of Merck financially to develop the vaccine all the way to Phase I at the beginning of Phase I, at which time Merck took that and developed the vaccine further at their cost and is Phase I is completed, and the major event this year is going to be whether or not this vaccine, which has the potential of being one of the most widespread cancer vaccine and also a vaccine against multiple sclerosis potentially will progress. And that's really a major event if the company Merck, and we don't control that goes from Phase I to Phase II because everybody knows in the vaccine trials, that's the moment where you really have confidence that the vaccine is performing according to plan.

In addition to that, we wanted to become a more clinical company. So we have 2 other products that have entered the clinics. One is MDX2001, which is a cancer solid tumor product, which has 2 targets on cancer, [indiscernible] and to target on T cells, so it's a T cell engager. And it's been going on through its Phase Ia. It's almost at the end of Phase Ia and we've had -- we treated 23 patients so far. And we think we have an effective dose and we're going to do a Phase Ib this year to try to focus on the tumors that respond best. And we have some evidence of that already, although our main goal is really safety and tolerability. We have entered another drug in the portfolio called MDX2004. It is a unique first-in-class never done before molecule. Why? Because I of the fundamental issues that you face in health care today is that many interventions lead to immunosuppression.

And if you look at cancer, if you look at patients who receive other drugs, there is a common link in fact that the immune system weakens. Patient becomes exhausted, unresponsive or with aging you have what we call [ immune centizens ]. And no surprise, you see that lots of infectious diseases, COVID, flu, RSV, others, pneumonias occur in older age and with age comes frailty. And so the idea we had was can we come up with I compound that can rev up and rejuvenate the immune system. And we think we have that in a trispecific antibody that we created [indiscernible] molecules that has 2 antibody binders and then 1 ligand. It's called CD3, CD28 4-1BB. And it's in the clinic already with about 4 patients done, so I can't comment very much, but as a signal development.

In addition, we're going to enter 2 more molecules in the development pathway. One is supported by the government by BARDA for COVID and also potentially flu. And we've got clearance from BARDA, and we're we've applied to the -- or applying to the FDA. And then the last one is MDX2003, which is a quality specific. It's the first quadri-specific against lymphoma and against leukemia and liquid cancers in general, right? In addition to that, we entered into a very unique relationship this year with Regeneron. And Regeneron, as you know, is a major innovator in antibody technology. And we've decided to collaborate with -- using their binders, which have been developed over the years and using our platform which is the only I that can really do more than bispecifics. We can do trispecifics, quadri-specifics or penta or hexaspecifics, and we decided to work on 4 programs together, and that has already started. And again, it's a nondilutive financing, and so that allows us to expand our portfolio at pretty much low risk, and it involves obesity and metabolism. It involves cancer, it involves immunology, right? Those are the areas with very specific targets that we've defined jointly, okay?

Last but not least, over 2 years ago, we realized the potential of in vivo CAR T cells, and we've developed a product a platform called in vivo CAR T, but the difference with our platforms that we can target it using multi-specific antibody, we can target it to any cell type. And on top of that, we can create multispecific chimeric antigen receptors. So the versatility and the technology we developed, which is really unique and they're free to operate really is attracting a lot of interest. In addition, our mainline businesses and Adam can tell you are doing well. our international pharmaceutical branch is doing well. Our RAYALDEE product is doing well. So we've balanced the balance sheet as well by retaining royalty, I mean, monetizing some royalty from NGENLA. And I'll really let Adam give you the total financial picture, but the punchline is we've really rebalanced the company to a company that had a lot of risk in the clinical diagnostic business to one that has rebalance that to breakeven and profitable essentially hopefully this year. Other revenues, a lot of non-diluting financing, [indiscernible] with Merck, with government, with Regeneron and now a portfolio that is essentially very rich in inflection points over the next year, 1.5 years.

Great. Well, thanks for that great overview. So maybe just focusing on the diagnostic piece of the business first, and then we can spend the latter half of our conversation on more of the pipeline. As we think about the lab testing core business, can you talk about just how we should think about projection? How confident are you in terms of reaching that breakeven profitability milestone? And what are some of the goalposts along the way that investors and also analysts should really hone in on?

Sure. So for the clinical lab business, we've spent the last couple of years restructuring that business, as Elias talked about. Taking out nonprofitable segments of the business, segments of the business that had a high cost of delivery and really focused and concentrated on the New York, New Jersey markets for that clinical lab business. In addition, the 4Kscore is sold nationally through -- into urology practices, which is a high-margin test and has a potential for high growth as well this year, delivered over 15% growth in testing. That test by itself does about $25 million to $30 million, and we think that's just scratching the surface for what is potentially possible for growth there. So it's one of the main accelerants for profitability as well as top line growth.

We guided for 2026 on a top line of about 3% to 5% of revenue growth off a base from 2025 of about $300 million of the business that remains. So it's still going to be a slow growth where our focus is not investing deeply into the commercial organization rather, we're going to continue to focus on operating efficiency and delivering profitability. It's been a few years since that business has generated profit. So that's where our key focus is. We feel very good about where we're at. We saw the fourth quarter continue to operate. We're still working through the financial close process, but we will have our update in a few weeks on that. Our guide is to deliver single-digit EBITDA on that business in 2026 with cash flow positive operations by the end of the year.

So just on the -- maybe just a little bit more color on 4Kscore adoption. What are you seeing on the ground? And maybe for those who don't fully know that the 4Kscore test, maybe just a background on that. And also, what is giving you a sense of, oh, this is trending in the right direction and this is something that could really be a growth lever for the testing business?

Sure. So the 4Kscore is a test that we developed a number of years ago that is -- was designed to assist urologists and physicians to identify patients that are at a high risk of having aggressive prostate cancer. So the PSA test is a great screening test, but it's not specific to identifying aggressive prostate cancer. So when you -- it's a simple blood test, you get a basically a score that takes in [indiscernible] plus markers plus some clinical information to use an algorithm to calculate the patient's risk. And it helps enrich essentially the urologist population for who should be biopsied. Because right now, there are still a lot of men that are being biopsy and rebiopsy that don't necessarily need to be because they've got either an indolent cancer or their PSA has been elevated for another reason.

One of the things that we did in 2025, as we work with the FDA, it is an FDA clear test, and we work with the FDA to remove the requirement for a digital rectal exam. That was a little bit of a challenge in the marketplace where physicians, particularly in non-urology physicians were a little bit limited in their desire to do a DRE in order to use the test because that was a required component of the algorithm. So we worked with FDA to show them that the algorithmic change does not get influenced significantly enough to change the score and the result. And therefore, we think the potential for prescribing into the broader physician marketplaces there as well.

Great. Well, let's turn to pipeline. But before we do that, any questions from the audience? 5 So let's switch gear into the pipeline. The Merck partnered assets. Where are you in the process? And I guess, can you give us any color on where the asset is and what is it really the next milestone for the program?

So I can tell you that the Phase I is complete. And the Phase I involved testing of the antigens that we generated, but also some adjuvants and there were 2 adjuvants that were tested. So it involved about 250 patients thereabout. And the data is being analyzed fully, but what we understand is that both adjuvants are performing. And then the immunogenicity of the fundamental antigen is excellent. So this is what a company should take into account, looking at the different populations, so positivity or negativity and see how the immunogenicity persists over time. And hopefully, that will drive their decisions to go into Phase II and how to go into Phase II, which I expect to happen in the first quarter, hopefully.

Do you have a sense of the criteria that your partner is laying the groundwork on, okay, what -- this is the things that I need to line up or things that I want to see in a Phase I before greenlighting Phase II. Is it regulatory? Is it what components are perhaps the most important things?

Initially, the components is safety, obviously, how much reactivity do you get and on injecting, what you inject is there -- I mean a negative response. So that's number one. And from what I gather, that's fine. The second is what we call level of immunogenicity. When you have a patient, given a vaccine, you see -- you want to see the immune response of the patient because that's what protects the patient. So that measure is an exceptionally important one and we have references because there were vaccines against EBV that were developed in the past. And so there was a 70%, 75% efficacy with a GSK vaccine. So you want to exceed that by a significant amount. Those are the criteria that you immediately want to know when you look at immunogenicity of a patient population.

Then you have the patients who have been exposed in the patients who have not been exposed. So you want to see how does the vaccine response or performs in both populations as a large company, you have a capital allocation strategy. You see, okay, I have a vaccine division. So that's in Merck's control. I can't tell you what those criteria are going to be for them at that time, given their strategy and requirement. The potential of the vaccine is as large as that of [ GARDASIL ] because remember, it's not just a monotonopliosis vaccine, but it's an anticancer vaccine because 200,000 patients develop cancer as a result of exposure to upside bar. And more importantly, what has really excited the field is the discovery that, in fact, [indiscernible] bar is probably the cause of multiple sclerosis. And because of the number of patients who develop multiple sclerosis, you can imagine the incentive it will be to do that. But that market analysis is something that needs to be done by them, not by us.

Are there any financial milestones are tied to the start of the Phase II? And how are you thinking about communicating to the street when they have to go [indiscernible]?

So there are significant milestones and as you know, we had an upfront of $50 million. And then when -- and then a complete financing of all the research between where we were where it needed to be for Phase I entry. At Phase I entry, we received $12.5 million. And that Phase II entry also, we will receive an amount I can't disclose, but you can imagine 12.5% [ to 50 ], so it's somewhere there.

So just turning to the ModeX platform. How do you think about this piece when it comes to, I guess, just strategically, right? You have partnerships -- now the most recent partnership is Regeneron. You have also have Merck layer on top. You also have a diagnostic piece that is -- that will reach breakeven. And I guess just the last piece is the clinical pipeline, right? You talk about balancing your portfolio in terms of not just risk, it's also just resources, right? So just kind of start there is how do you think about allocating resources? How do you think about prioritizing what you have to make sure that one of these assets are going to win?

That's a it's a great question. It's a question you ask yourself every day when you -- so number one, I think BARDA is funding $200 million of all of the antiviral programs, right? And they gave us the green light to go into Phase I now for the anti-COVID. We are presenting data to them for the entire flu antibody, flu A, flu B is a pen protection against flu. And we -- and they asked us to fund also the fundamental platform. And we've achieved really great results in terms of manufacturing, in terms of yield, so they're happy with that. So that portfolio is advancing nicely.

We also have a great interest in antibody against HIV. And so there's a strategic relationship. But there, we really decided that because of the risk in developing just your own antivirals, we didn't want to do it without the support BARDA. Then on the other one, the other assets, you understand that we're going to have 5 products in the clinic, okay? Four of them are fully developed by us and paid by us, right? Now when you get into the clinic, your preclinical research is sort of overextended, right? And so what we decided to do was to find strategic partners like Regeneron so that can basically recycle our research capabilities through a partnership.

Now in terms of going forward, we do have the in vivo CAR T, we want to continue to own fully. And so the big decision that you have is you say, okay, which assets you want to own fully and which ones you can partner to sustain the operation and sustain your research engine in your platform. And that's where we are. So we decided to keep 2001, 2003 and 2004 as fully owned assets. And obviously, the EBV is with Merck, and there will be candidates that we will develop this year through our research with Regeneron, which will become candidates to the portfolio, but then those will be shared assets. and played fully by Regeneron, I mean, all the cost is on the Regeneron side.

Now in terms of the milestones, as you know, it depends on progression. And the amount of milestones with Regeneron was about $1.2 billion. And the timing is going to be determined by whether or not the candidate advances at which time we'll own a milestone, and we'll be able to tell you through that, whether or not it's progressing, right?

Just turning to 2001. We're going to get more Phase I -- well, Phase I data this year. What do you think we should look for in terms of obviously, safety? But just in terms of efficacy, where do you think the bar is so that we can have a good sense of what the next look like?

Well, in cancer trials, when you do a cancer trial, you have to understand that you're not taking patients who just developed their cancer, their patients were fifth line where everything else failed, right? And so you want to see some responses in that patient population, which is pretty much helpless at the time and we are seeing that. So that's why it gives us courage to go forward.

Second is we have a molecule that can affect 14 different cancers depending on how much TROP2, how much CMAT, how many T cells are there. So that is the explorations we're going through now. Once you finish that phase, you know what dose you have, so far, there's no showstopper, no patient died or stopped medication for adverse events. And so we know that we are at a therapeutic dose with acceptable tolerability. Then the question is you maximize which cancer is it going to be the most responsive cancer to your therapy. And in this case, we think is going -- we've had good data maybe lung cancer, maybe liver tumors. We don't know. This is the Phase Ib. So you ask me, when do I know that you've progressed is when we go into Phase I this year. And we'll have to talk to the FDA about that.

I guess on the Phase I update, do you think we'll have a good sense or at least some rough sands of some level of dosing at optimal dose and also some sense of directionally, which indication that 2001 should fit in?

Right. You will. Well, look, we don't go into Phase Ib unless we see not only tolerability and safety, but also some signals of efficacy. But you can't really count on that because you're not -- with 23 patients dosed so far. And you can't have the statistics at that point to decide which tumor is the best. You need the second phase, the 1b to concentrate on the 1 or 2 tumors where your models and your data are telling you that these are the 2 most responsive tumors. That's what we're going to do.

Got it. Okay. How are you managing CRS as you escalate into the higher dose? Can you just talk about perhaps some of the tolerability profile that you've seen?

So it's really interesting. I mean the CRS is really managed at the clinical level by the oncologists who have that experience. And there are very typical protocols for doing that. This is not what it was 5 years ago when people didn't know. So we know how to do that when there is a CRS. The question really is how do you design your protocol to reduce the events of CRS and that's the experimentation that you do in the first phase. Why? Because if you have, let's say, your dose escalation, that gives you, okay, when do I see a CRS?

Second, what we know is like in these drugs in T cell engagers, whether it's CD38 cell, any step dosing is important. In or you don't give the maximum dose day 1. You give a lower dose, it's called a first step and then you wait and then you get the second step. And that creates tolerance. And what we see is that once you do that, you get actually better less CRS symptoms and much more manageable symptoms. And then in some cases, you use steroids as a way of reducing the impact of CRS. So that is pretty known in the field. I don't think we're inventing anything here. It's pretty recognized that if you use different doses of different -- I mean, the step dosing and then intervals, you manage the intervals, you find a real window where you can get efficacy at very acceptable tolerability.

So over time, the CRS profile as you start to figure out the dosing interval, the occurrence of the CRS should moderate?

That's exactly right. And that's what Phase Ib is going to help us with because we will know what the protocol is, what's the interval of injections is the dose, the steps, and that really helps a lot. And the management of CRS is pretty standard right now. It's not what it used to be.

Right. So maybe just turning to 2003. Maybe just give us a broad sense of how you come about the trispecific targets.

You mean 2004?

2004. And how soon can we get a sense of the clinical profile?

Right. So the idea there is the following, is that many, many patients experienced reduced immune system function, right? And so it's almost like heart failure. And when you have heart failure, you say, okay, what do I need to do to get the function back. It's the same concept here. I think Gary does, my colleague, that there is an immune system failure syndrome that you see, especially in patients who have cancer or in patients who have immunosuppression, patients who are aged patients. So you know that there's a large population of patients that experienced the equivalent of heart failure, but in immune failure, right?

And as you study the science, you realize that there are signals that are very, very key to maintaining the level of immune response that you need to be protected from cancer for pneumonias. What is it? I mean, often, when you have a cancer patient, you see the white count, the immune cells count go down at which time you need to stop through the trial, you can't really do anything. So we found that by combining the key 3 signals of immune function, one is CD3, which activates the T cells then CD28, which helps proliferate the T cell. And then 41BB, which really is the most potent factor to prolong the activity of the immune cell to prevent the exhaustion. So we found that from experimentation and from animal studies that when you do that and you use that through triple combination, you see an enormous increase in T cell circulation, B-cell circulation, stem cells and memory B cells. And that tells you that there is a complete sort of rejuvenation of the system. And that's why we're trying now in human patients, and we're observing very similar effects.

So that's -- the idea here is that, to me, when I was about doing the R&D at Sanofi always focused on what is a molecule that will support that pipeline. So it's a pipeline in the molecule like the Dupixent. When we did [indiscernible] and when I was at Sanofi, the reason I was excited about is there's 14 indications. Now if you list the indications for the drug that you're referring to, they are like almost 25. So we think that this is really a pipeline in the drug. And hopefully, it will be safe and tolerable.

So in some way, is that -- I guess when you think about some of the other modalities, do you think that the reset of the immune system in some of these autoimmune diseases, do you think that is a much stronger reset in comparison? I mean, it's going to be hard to show, but do you think that there's a fundamental thesis that suggest that?

About the reset?

Yes, about reset.

It's clearly the case because when you look at an immune system response, it resets itself. When you have an infection, it goes in and then resets itself, by when it overcomes the infection, it's successful. Otherwise you die from sepsis. So there is an actual reset phenomenon.

Now here, we're going to try to prove it in a very special population. One is the we're going to compare 2 populations in Phase I. One is the population of cancer patients who did not receive PD-1 or have had PD-1 in the past and patients who receive PD-1 but stop responding, right? And we're going to see how many of these patients recover their function. And I'm very optimistic that we're going to see, in fact, recovery of PD-1 efficacy. And we're going also to try the drug per se without any -- so we all know what the drug per se does to a patient who has reduced immune function was not seen PD-1s or anything. And then patients who are failed PD-1, right? They had PD-1, they did well and then they fall and then you want to rejuvenate at that point. So those are the 2 subpopulations. And the design of the trial is to give us that answer that you're asking for.

So do you think [indiscernible] does this -- do you think by itself, there could be that it will deliver efficacy? Or do you think that you want to have basically hit the on to reset than [indiscernible]? What is going to be?

Great questions, but here's the thing. You know that at your age not my viewers. But at our age, you're basically -- the incidence of cancer and pneumonia is very low, right? So you know that your immune system per se without any medication is defending you, right? So you know that there is an opportunity here to say I rejuvenate the immune system, and it will defend you against a whole series of mishaps, right? So that's the recovery, the fundamental function aspect of it.

Then you can also see that when you treated with certain drugs and in certain conditions, the system is exhausted. It fought and failed. It's failing the battle. It's failing the control of the disease. And that's when you come in and you give them an infusion of supportive measures so that they can recover from the exhaustion, if you will. So those are the 2 different things. So you can see the utilization in the case of you have pathology already, and it helps you overcome the pathology, not go into sepsis or into difficult phases and save the patient that way, get a better outcome, but it also can be used as a booster of immunity in patients who have a naturally deficient immunity against many, many diseases. I mean you can imagine -- and this is the dream for us is that it would be able to really save patients from a range of diseases. It's not like one vaccine protecting you from one thing at a time. But we know that all the individuals do not respond well to vaccines. We have to increase the dose. This would be essentially a magnifier of the immune events.

Maybe we haven't heard much from Adam. So maybe turning to more of a financial question before we wrap up with 1 or 2 pipeline question. Just on the software purchase side, I think you still have about 140 or so million to go. What's your time line to execute on the rest? At what point -- is there a plan to execute on the stock buyback?

Yes. So we -- the Board put that program in place and extended it earlier this in '25 when we did the second transaction that dispose of more of the BioReference assets. So right now, as we go through our capital allocation program, we think about how much capital gets deployed to returning shareholder capital through either the stock buyback program, convertible debt repurchases or otherwise and balancing that with our clinical development pipeline and the performance of our underlying businesses. So we'll continue to be active. We were active in the fourth quarter and continue to pursue that. Last year, we did put in over $100 million into returning capital to shareholders, and we'll give a guide on how much we're going to use in February this year.

Just on the Regeneron partnership, it's still fairly early stage, but any color you can give us on potential milestones? What could we expect in the near term in terms of preclinical evidence that can give us a sense of what the next step looks like?

It's very simple. I mean, we have worked on the common research plan and the contribution of their part is basically the sequence, the DNA sequence of the antibodies that have been already in humans and already effective. So we know that. And then our job is to mount these sort of weapons on our platform and combine them in maybe quadri-specific penta-specific, whatever it takes to be able to attack the disease in a way that shows great results.

Now in -- as I said at the beginning, our idea is always to combine things like the trispecific and so on. Why? Because to affect the disease process, you're going to need multiple points of intervention. So in this case, that's the dream, a joint dream. They thought that our product platform can do much better than what they have, we thought their antibodies can do much better than what we have. So we're coming together. And we're attacking very complex problem in metabolism and metabolism, I would say, #1 obesity and things like this where we have ideas about combination of therapies, which as you know, even you see it today. There's not a lot of -- you look at [indiscernible], they have a triagonist, they attack 3 things at the same time.

And so we will do that. And then how would you know? You will know when we declare a candidate, and we're working very hard to try to declare candidates, meaning that they have developability, you can manufacture them. We have a lot of assays to look at the efficacy in vitro and in vivo animals. So we know exactly the road map to get to a candidate. And I hope that by the end of the year, beginning of early next year, we will have candidates and milestones paid, which we have to disclose.

Well, great. Thank you so much for your time today. And it's been wonderful to have you. Thank you.

Thank you.

Good afternoon, and welcome to the OPKO Health Third Quarter 2025 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would like to now turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, operator, and 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 third quarter of 2025.

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, are subject to risks and uncertainties that could materially affect the company's results. Those forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2024, and subsequently filed SEC reports.

Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, today, October 29, 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.

Regarding the format of today's call, Dr. Phillip Frost, Chairman and Chief Executive Officer, will provide opening remarks. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference Health and OPKO's Therapeutics segment. After that, Adam Logal, OPKO's CFO, will review the company's third quarter financial results and discuss OPKO's financial outlook, and then we'll open the call to questions.

Now I'd like to turn the call over to Dr. Frost.

Good evening and thank you for joining us today. During the third quarter, OPKO Health continued to execute well against our strategic priorities. We completed the sale of BioReference Health's oncology division and related testing services. This transaction is a significant milestone designed to streamline our lab business and ensure profitable growth. The sale provided $192.5 million at the closing and $32.5 million in the performance-based earn-out. BioReference is now focused on our core clinical testing operations in the New York, New Jersey region and driving adoption of our 4Kscore test nationwide.

We're devoting a portion of the sale proceeds to our stock repurchase program, reinforcing our commitment to increasing shareholder value. So far, during 2025, we repurchased $25.1 million worth of stock. As of September 30, we had $126 million remaining under this program.

On the pharmaceutical side, we are advancing our pipeline of innovative therapeutics with 4 candidates now in the clinic and several more in the pre-IND stage. We're pleased to have significant partnerships to provide nondilutive funding to support the development process for several of these programs.

This morning, we announced a research collaboration and license agreement with Regeneron, a leader and innovator in antibody-based therapies. This program will leverage ModeX's MSTAR platform with Regeneron's proprietary binders to discover and develop multispecific antibodies that allow us to explore several indications of mutual interest.

Currently, ModeX has 3 programs in Phase I clinical trials. Our most recent candidate, MDX2004, a multispecific immune rejuvenator, entered the clinic last month. Our most advanced immuno-oncology medicine, MDX2001 is a T cell engager enhancer directed at 2 tumor antigens, CMet and Trop2 found on a variety of solid tumors. An abstract on this program was presented at the recent ESMO meeting in Berlin, Germany. It has advanced to its fifth cycle of escalation, which is approximately tenfold higher than the initial starting dose with acceptable safety and tolerability. Based on the outcome of these studies, we anticipate further Phase Ib expansion cohorts for next year.

Our EBV vaccine being developed in partnership with Merck has advanced for immunogenicity, safety and tolerability evaluation in Phase I human trials. Enrollment in this ongoing trial is progressing well, and the data will inform the Phase II trial design. Our next immuno-oncology candidate, MDX2003, a tetraspecific T cell engager expander that targets B-cell leukemia and lymphoma. We expect this compound to enter the clinic early next year after appropriate regulatory review.

Finally, MDX2301 is our bispecific tetravalent antibody designed to prevent and treat COVID infections. Funded by BARDA, we expect Phase I safety and immunogenicity studies to begin early next year. The ModeX multispecific COVID antibody neutralizes all known strains of the virus, including the most recent variants. It is designed to confer broad protection against evolving outbreaks, particularly for subjects with underlying immune impairment such as cancer patients, diabetics and the elderly, thus having great medical value potentially and global health impact. Our collaboration with BARDA continues to advance the development of broadly protective multispecific antibodies for both COVID and influenza viruses.

We're progressing our development of OPK-88006 for the treatment of MASH and obesity for both subcutaneous and oral administration. We have partnered with Entera Bio for the development of the oral formulation. The subcutaneous program is expected to enter the clinic in early 2026 with the oral formulation to follow later that year. Our international operations, including OPKO Health Iberoamerica and EirGen Pharma continue to provide steady sales growth and meaningful cash flow to assist in funding our R&D efforts.

Overall, we remain highly committed to maximizing shareholder value. Through strategic actions such as the sale of select BioReference assets, the execution of our share repurchase program, the advancement of the ModeX portfolio of products in clinical trials and a new ModeX R&D alliance, we are focusing our operations to provide growth opportunities while returning capital to investors. We are confident in our strategic direction, our team and our ability to deliver on our milestones.

With that overview, I'll turn the call over to Elias. Elias?

Thank you, Phil, and good afternoon, everyone. As Phil mentioned, in mid-September, we closed the sale of BioReference Health oncology assets to Labcorp. BioReference now operates as a streamlined clinical laboratory focused on its core testing services in the New York, New Jersey region and correctional facilities nationwide. In addition, its 4Kscore test franchise for prostate cancer risk assessment is poised for growth with the recent FDA label expansion, allowing use of the test without the requirement of a digital rectal exam, which opens a significant new market of primary care physicians who currently perform over 90% of PSA screening tests that rarely performed digital rectal exams.

Excluding the assets sold to LabCorp, BioReference testing volume increased by approximately 5.3% in the third quarter compared with the year ago period. Our approach is to increase profitability by focusing on and expanding existing customer segments, optimizing our test menu to increase our operating margins and implementing additional operational efficiencies where possible. We're also strengthening our market position by forging novel relationships with additional ACOs, IPAs, FQHCs, regional health system and specialty health care companies. In addition, we have begun pursuing new revenue streams to bolster growth such as direct-to-consumer lab testing companies, employer-based testing and early phase clinical trials.

The 4Kscore test volume increased more than 20% in the third quarter versus the comparable year ago period. As for our sustained efforts to drive operational efficiency, the BioReference employee headcount now stands just over 1,500 people, and this represents a 25% reduction from January. As a result of improved margins realized by these expense reduction efforts and strategic divestitures, BioReference is now well positioned for sustained growth and profitability going forward.

Now, turning to our Therapeutics segment. We were delighted to enter into a license and collaboration agreement with Regeneron. Under this collaboration, we will apply our MSTAR platform with Regeneron's proprietary binders to develop medicines capable of targeting multiple biological pathways in a single molecule that will include disease indications of mutual interest to Regeneron and ModeX Therapeutics. Now, Regeneron will be responsible for funding the entire development process and all commercialization efforts.

As part of the agreement, we will receive milestone payments for research expenses, development, clinical, regulatory and commercial achievements for each program, which taken together could total over $1 billion if multiple programs successfully advance. In addition, we'll be entitled to receive tiered royalties up to the low double digits on global net sales. We're particularly excited to be working with Regeneron given its leadership and experience in antibody therapeutics. I myself and some of the ModeX teams have already worked with Regeneron's R&D group in the past, and we look forward to reconnecting and expanding the scope of our collective efforts.

Now, moving to the most advanced clinical study. Our collaboration with Merck on the Phase I Epstein-Barr Virus vaccine trial is progressing according to plan and preliminary safety, tolerability and immunogenicity data are becoming available. Over the coming months, this data will guide Merck's decision on the design and execution of Phase II studies. We have several programs in our immuno-oncology and immunology portfolio that are advancing in development.

Our lead product is MDX2001, a first-in-class tetraspecific T cell engager as described by Phil, with 2 cancer targets, CMet and Trop2 and 2 T cell engagers, CD3 and CD28. It has progressed to its fifth dose level, which is 10x the starting dose in a Phase I clinical trial. We are noting acceptable safety data at this level. After enrollment of the highest possible dose cohort, we will focus on assessing signals of efficacy in select tumors in an expansion cohort. We're also pleased to present a poster on our progress with MDX2001 at ESMO 2025.

MDX2004 now is a new first-in-class multispecific immune rejuvenator that has the potential to treat a variety of oncology and immunology indications. MDX2004 stimulates T cells to proliferate through 3 signaling pathways to achieve optimal activation and proliferation. Of note, it is a first-in-class multispecific antibody directed to CD3/CD28 and  4-1BB that stimulates T stem cells to undergo self-renewal and give rise to mature T cells, and that is the reason for its designation as an immune rejuvenator.

We announced this week that Phase I studies on this new medicine have begun. The first patient has been administered drug at the starting dose in Australia. And this trial marks clearly another significant milestone for our technology platform. And next week, we'll make a presentation on MDX2004 at the Society for Immunotherapy of Cancer Conference or SITC. MDX2003, a tetraspecific CD3/CD28 T cell engager for lymphoma and leukemia targeting both CD19 and CD20 is in the pre-IND stage, and we expect this program to enter the clinic early next year.

We continue to work with BARDA on our COVID and influenza programs. The main focus of these programs is to advance multispecific antibody protein candidates that provide broad and potent coverage against all known circulating strains in Phase I clinical trials. Our work to develop the COVID multispecific antibody is focused on the unmet need in patients with underlying immune impairment, as Phil mentioned, such as patients with cancer, diabetes or the elderly, who respond poorly to vaccination and are highly susceptible to severe complications or death from COVID infection, and we anticipate commencing Phase I studies early next year. In addition, we are advancing our pre-IND influenza program against both flu A and flu B to achieve universal protection and we'll seek additional funding to accelerate its clinical development. Through the close of the third quarter, we have received $22 million in non-dilutive funding from BARDA for these 2 programs.

We are also continuing our development efforts with respect to OPK-88006, which is a novel long-acting GLP-1 glucagon receptor dual agonist to treat MASH and obesity. We're developing a subcutaneous formulation and in collaboration with Entera Bio, we're also developing an oral formulation. At the ENDO conference in July, we presented favorable pharmacologic and pharmacokinetic in vivo animal data, demonstrating excellent bioavailability for the oral tablet formulation. We're in the pre-IND stage with both of these programs and anticipate entering the clinic next year.

We're also working with Entera Bio on an oral GLP-2 tablet for short bowel syndrome. Recent positive pharmacokinetic data from preclinical animal models indicate an extended half-life and robust oral bioavailability, which results -- these results were presented in September at ESPEN or the European Society for Clinical Nutrition and Metabolism Congress. This program has the potential to transform the treatment paradigm for patients with short bowel syndrome who currently rely on daily injections.

Our international pharmaceutical operations continue to provide operating cash flows and despite foreign currency pressures have executed their growth plans in local currencies. Rayaldee has offset the volume declines resulting from the Inflation Reduction Act through the realization of a higher net realized price and achieved year-over-year revenue growth.

So in conclusion, we're really pleased with OPKO's strategic direction with BioReference poised for profitability and growth as well as the advancement of our pharmaceutical programs and partnerships into clinical trials.

So now, let me turn the call over to Adam to discuss our financial results. Adam?

Thank you, Elias. We ended the third quarter with over $428 million in cash, cash equivalents and restricted cash, more than sufficient to fund our ongoing operations and development plans. Capital allocation remains on track within our plans. Our strong cash position allowed us to repurchase 11.1 million shares during the third quarter of 2025. And for the full year, we have repurchased nearly 25 million shares for approximately $33.5 million.

We have $126 million remaining authorized under our buyback program and expect to continue to make additional common stock repurchases throughout the end of the year. We have deployed nearly $100 million so far this year in convertible note repurchases and conversions and common stock repurchases and over $215 million since the start of 2024, demonstrating our commitment to strengthening our balance sheet and returning capital to our shareholders.

Let us turn to our financial performance, starting with our Diagnostics business. Revenue for Q3 2025 was $95.2 million, including $19.5 million from the oncology assets recently sold to Labcorp. This compares to $121.3 million in Q3 2024, with the decline primarily due to revenue attributable to the Labcorp transactions that closed in September 2024 and 2025.

Revenue in our continuing business has delivered strong growth, highlighted by an increase in 4Kscore volumes and resulting revenues of nearly 20%. Total costs and expenses were $115.2 million, down from $184.2 million last year. This includes $25.2 million related to the oncology assets that we sold and approximately $4.2 million in expected nonrecurring costs for severance during the 2025 quarter.

Costs and expenses were partially offset by the gains recorded related to our transactions with Labcorp with $101.6 million in gains recorded in 2025 and $121.5 million recorded in the 2024 quarter. As a result, our diagnostic operating income improved to $81.6 million compared to $58.5 million in the third quarter of 2024. Depreciation and amortization expense came in at $4.7 million, down from $6.1 million in 2024.

Importantly, the actions we've taken throughout the year are expected to deliver over $25 million in annualized cost savings, and we remain on track to achieve breakeven operating results in Q4 2025 and are well positioned as we head into 2026 for sustained and growing profitability.

Turning to our Pharmaceutical business. Revenue was $56.4 million, up 8% or $4.1 million from 2024's $52.4 million. Product revenue was $37.7 million, down slightly from 2024's $39.1 million, reflecting lower sales in Chile as well as foreign currency headwinds within our Latin American businesses. These sales were partially offset by increased revenue from Rayaldee. Rayaldee contributed $7.5 million during Q3 2025, a 29% increase from 2024's $5.8 million, primarily reflecting lower government rebates during the 2025 period, which more than offset an approximately 20% decline in volumes.

IP transfer revenue rose to $18.7 million, up from $13.2 million, which includes our Pfizer profit share payments of $8.8 million, reflecting a 25% increase from 2024's $7 million. We remain optimistic about the efforts Pfizer has made and we expect them to make throughout the remainder of 2025 and into 2026 on the effectiveness of their global commercialization program. In addition, BARDA funding increased to $8.2 million from $5.5 million, reflecting expanded activity for our infectious disease antibody programs.

Costs and expenses were $80.6 million, down from $84.6 million, driven by cost containment activities throughout our Iberoamerica and Rayaldee commercial organizations, partially offset by increased R&D investment. R&D for 2025 totaled $29.6 million, up slightly from $28.2 million for the 2024 quarter, primarily due to our ModeX development activities. As a result, our pharmaceutical operating loss was $24.2 million, a 25% improvement compared to last year's operating loss of $32.2 million. Depreciation and amortization expense was $18 million in both periods.

For our consolidated financial results, consolidated operating income of $48.1 million improved from 2024's $14.2 million as a result of the improved results at BioReference. Both periods benefit from gains from the disposition of assets, resulting in net income in Q3 2025 of $21.6 million or $0.03 per basic and diluted share compared to $24.9 million or $0.04 per basic share and $0.03 per diluted share in Q3 2024. You will recall the 2024 period benefited from gains on certain underlying investments.

Looking forward, we're continuing to execute our multi-phase plan to drive profitability within our Diagnostics segment by reducing the fixed infrastructure cost and improving operating efficiency. Following the oncology transaction closing in September, the remaining BioReference business has a clear path to cash flow positive and profitable growth, excluding any nonrecurring or noncash items.

We are resetting the Q4 outlook for 2025 to reflect the disposition of the oncology business. As a result, we expect total revenue to be between $135 million to $140 million, with revenue from services of $70 million to $75 million, revenue from products of $40 million to $45 million and other revenue of $25 million to $30 million, including our Pfizer profit share of $10 million to $12 million and revenue from BARDA of $7 million to $9 million.

Total costs and expenses are expected to be between $175 million and $180 million, excluding any nonrecurring or restructuring costs. Research and development expense is expected to be between $30 million and $35 million, offset partially by the BARDA revenue. And depreciation and amortization expense is expected to be approximately $24 million.

As we look forward to 2026, we're providing some high-level guidance, which will more fully detail early in 2026. We expect BioReference to be profitable and to grow revenue in the low single-digit percentages. We expect to see our in-line pharmaceutical businesses, including Rayaldee  to grow in the mid-single-digit percentages and to improve its operating income by approximately low -- by low double-digit percentages. We expect NGENLA profit share payments to increase to approximately $32 million to $35 million. Finally, we plan to invest up to $100 million in our R&D programs, net of any partnering reimbursement as we expect to have up to 6 Phase I programs enrolling patients during 2026.

This concludes our prepared remarks. Operator, let's open the call for some questions.

[Operator Instructions] Our first question comes from Maury Raycroft of Jefferies.

Congrats on the progress. I had one for MDX2001. Wondering if you could say how many patients you've dosed at the fifth dose level? And will you proceed to dose level 6 with the program? And is there anything more you can share on the safety profile and potentially whether you're seeing any efficacy signals at this point as well?

Well, we've -- I'll let Gary answer that question. Gary, would you like to give those details?

Sure.

Gary Nabel is on the line.

Gary Nabel, I'm the CEO of ModeX. We're in our fifth patient at the fifth dose level. And again, when the suitable observation period has been complete, then we'd go on to the next. In terms of signals, I think at this point, it would be probably not wise to comment on efficacy because any responses that you see with this small number of patients are anecdotal. And I think that really the time to take a look at efficacy would be, as Elias and Phil were mentioned, when we go to the expansion cohorts in Phase Ib. We're just as interested as you are and can't wait to get those results, but I'm afraid we just have to follow the process, and we'll certainly share any news as soon as it becomes available.

Just to be clear, Maury, Gary is mentioning 5 patients at the current dose level, but the total number of patients is higher, obviously, that we've exposed. And obviously, we're interested in continuing, which based on all the data we have.

Got it. Yes. It’s okay.

Total numbers are close to 30 or so, but yes, 5 in this cohort, as Elias mentioned.

Okay. And you will go to dose level 6 as well?

We would expect.

Okay. Okay. That's helpful. And I had a quick question on the 4Kscore. For that label expansion and the 20% growth that you mentioned, is the growth directly related to the expansion? And how should we think about the importance of this product as a contributor going forward?

Yes, that's a good question, Maury. No, it's not. The growth is really based on the former label. The label was really changed this quarter. And obviously, what it does is it really expands the market to the primary care doctors. In the past, the urologists would have to order the test because they had to determine whether they need to do biopsy or MRI.

Now, because you don't require the digital rectal exam anymore, which we've proven with the data that we have accumulated, Dr. [ Jane Hsiao ] was telling the FDA that it didn't add anything much to the accuracy of the test. And so that was a point that the PCPs, the primary care doctors kept asking us, we would like to have the test perform after we do our PSAs. And that is the expansion market that we're talking about. But we're just at the beginning of doing that. And as you know, the 4Kscore franchise is a national one. So it takes time to get going with that. But it's doing well on its own with the old label, and we hope it will grow significantly with the new label.

Yes, Maury, just to put a little bit of an explanation point on that. Through June, I think we were up either 12% or 14%. And we saw the acceleration picking up before that label change came through. So we are certainly excited about that. And obviously, we are working with payers to ensure we align volume potential with the payer policies as it relates to the DRE.

Got it. Okay. That's helpful. And is this something you could provide more granularity on going forward just with helping us better track the progress there.

Yes, for sure.

Our next question comes from Yi Chen of H.C. Wainwright.

My first question is, could you give us some more color on the Regeneron collaboration, whether the program is exclusively focused on oncology or it could be some candidates in other therapeutic sectors? And also, can you comment on how many total programs are currently ongoing?

Let me start and then I'll give it over to you. So there's nothing exclusive on the field, oncology or immunology. We've really agreed to work on 4 programs, which may have more than one product, obviously, but 4 specific programs for specific indications, which cover metabolism, oncology as well as immunology. And with that, I'll turn it over to Gary to give you more specifications on how exactly the collaboration is going to work forward.

Yes. Thanks, Elias. As Elias mentioned, one of the reasons we're excited about this collaboration is that it will allow us to work in areas that we haven't worked on in the past, and they would include the areas of metabolism and more activity in the area of immunology as well as some selected oncology opportunities. As you know, Regeneron has a very deep library of human antibodies that are monoclonals. We have the capacity to put those together into the formats that allow us to make multispecifics.

So together, we can do things that neither of us can do alone. And that's always the mark of a good collaboration. As Elias pointed out and as in our press release, there are 4 targets to start with, but the agreement is written in a way where that can be expanded should we find something of interest. So a lot of work to do to explore the initial candidates, but we're very excited to work with them because of their deep expertise in the antibody area and their success in bringing products to patients in the past.

Got it. And could you tell us whether the milestone payments include both preclinical as well as clinical milestones? And also, could you give us a rough estimate as to the time frame to -- for the first milestone? Is this something we can reasonably expect to occur in 2026?

The answer is yes and yes. So we have preclinical milestones and then post Phase I milestones if Regeneron takes it over. Regeneron will reimburse us for all the preclinical studies and costs, and then there will be milestones for progression within that all the way to Phase I. And then after that, they take it and there will be the typical milestones, development, approval and commercial following that.

Our next question comes from Kevin DeGeeter of Ladenburg Thalmann.

Maybe 2 for me. The first one is on MDX2001. Can you walk us through your current thinking on how you're thinking looking at patient selection for the Phase Ib expansion cohorts? Are there specific tumor types that makes sense based on how you think about the profile of this molecule?

Yes. Well, based on what we've done so far, we obviously read out the safety and tolerability in different types of tumors and then we narrow it down. But I'll let Gary be more specific on that. Gary?

Yes. I would say there are criteria that we apply in the first part of Phase I, where you're just trying to explore and confirm safety, we're pretty agnostic to the tumor types. Once we've maximized the dose and we're seeing -- and once we see biologic activity in our patients, what we then do is we look at the tumor types where we see the highest levels of CMet and Trop2 and also the tumor types that are -- have shown, I'd say, the property of being more immunogenic that they are more likely to respond to immune therapies.

We will ultimately explore the harder targets as well, but we'd like to establish efficacy where we have a better chance of succeeding first. High on our list are tumors like lung cancer, like non-small cell lung cancer is very high on our list. And then depending on availability of patients, tumors like renal cell carcinoma and perhaps some of the PD-1 failures in melanoma. But after that, any tumor type, and there are 13 different tumor types that express CMet and Trop2, we essentially will go down that list. And at some point, we may do what we call an expanded basket trial as well where we look for signals of regression. But the first expansion cohorts will be based on levels of expression and expected response to immune therapy in humans.

That's very helpful. And then as my follow-up question. Adam, with regard to the guidance of getting the diagnostic service business to profitability, how do you -- what's sort of the baked-in assumption with regard to the sustainable gross margin of the -- your remaining diagnostic services assets?

Yes. So gross margins, we expect Q4 to be in the mid-20s. And then with the main reason being in the mid-20s and that the high 20s is just the challenges around the holiday season in December. In the first half of next year, we would expect that number to get into the high 20s to low 30s.

Our next question comes from Ted Tenthoff of Piper Sandler.

Congrats on all the progress, including the new Regeneron deal. It really feels to me like ModeX just as the gift that keeps giving. Is there other updates that maybe could be happening on the partner front in infectious diseases beyond obviously, the great EBV deal with Merck?

I'll let Gary respond. Gary, can you respond?

Yes. Well, needless to say, we do -- as you point out, we do have other infectious disease targets that we're working on is besides COVID. We're very encouraged by the early data with flu, with the caveat being that, that's all preclinical at this point. But with BARDA, we're hoping to move those products into Phase I as well. We also have a program for HIV and have discussions with the various major players, the pharmas involved in HIV, particularly now looking at opportunities to either improve treatments or eventually to try to affect cure in some patients with some of our immune therapies.

And then the last thing I should point out is that our new molecule, MDX2004 that just started in the clinic this week as an immune rejuvenator has potential for treating a variety of different viral infections and nonviral infections, a rejuvenator of the immune system. So after we establish the safety, which is the goal of the first studies, we'll be exploring that as well.

So we continue to update partners or potential partners on our progress. And at the appropriate time, we'd be delighted to work together with the relevant experts in the field.

That's really helpful. And I'm so glad you brought up MDX2004. What are other indications where it might make sense to develop this unique multi-specific?

Well, there are a number. One that comes to mind is hepatitis B. We know, for example, that hepatitis B, a certain percentage of cases will clear with time if the immune response is strong enough. And so again, after safety is addressed, that would be one area that we would want to explore further, and there are a variety of ways to do that. Even for chronic diseases, even where there's chronic infection, for example, in diabetics, where the immune system is really not functioning correctly, there's some potential value to providing a boost to the immune system to protect against everyday pathogens and perhaps even to enhance vaccine elicited responses. HIV -- chronic HIV is another example. So we do think for MDX2004, in addition to the immuno-oncology applications, that's an aspect that we would be very interested in doing further studies.

And sorry to keep asking, but each of your answers prompts another question. Could you envision a day where you combine MDX2004 with some multispecific cancer assets?

Yes, it's a great question. And the answer is yes. We could imagine using combinations of that sort. And it doesn't need to be limited to just the ModeX immunotherapies. You could imagine doing combinations with PD-1s, with CAR T cells. So there is a range of potential, obviously, early days. We need to get some experimental data for it, but there are a number of indications that I think would be worthy of further consideration.

Our next question comes from Yale Jen of Laidlaw & Co.

Just a few here. The first one is in terms of the EBV virus vaccine data, first Phase I data, do you anticipate to report that data in near term? Or you think that Merck may not report that data just to go ahead for the Phase II?

Yes, yes, you should, you should because you're on the coordinating committee.

Yes. Thanks, Elias, and thank you for the question. We're in very close contact with Merck. Merck is obviously responsible for executing the trials, but we work together closely and look at the data and discuss what is the best way forward. The decision about when and where to report will, of course, be Merck's. It is something we've discussed, and I think they understand that there is an obligation to present data that's part of the NIH guidelines on doing clinical studies in humans.

So I think that -- and as you know, Merck is very science and data-driven. So I would expect that at the right time, which I think is when the data is complete and we can understand what it means, I would be surprised if they didn't report it. And I -- how that relates to the start of Phase II, I can't say at this point. My guess is that it would be somewhere within a time frame where they've made their decision and would be progressing the study. But they're very science-driven and I think, responsible in their clinical development.

And maybe a follow-up on that is that would either Merck or you guys will at least inform the public that the program we are heading to or starting Phase II study?

When the decision is made for sure, yes. I think that will be shared. And for those Phase II studies, as you can imagine, for EBV, you have a select population that you're going to be studying. You have -- you're looking for subjects who are EBV negative, and that's actually a minority of our population. And you're also looking for patients who are highly susceptible to the effects of infection and particularly to infectious mono. So I think that you would almost have to make the trial known to those people. I think many of them will be early college aged students who will be at risk of acquiring infectious mono when they start school and they're exposed to EBV through their classmates. So I think very much so it would be something that would be out in the public domain once it starts.

Okay. Great. That's very helpful. Maybe the last question here is that you guys mentioned that you have a program which is targeting CD19 and CD20 together. Now the question is that at least in many tumors -- cancers that the CD19 and CD20 seems very much overlap in terms of their time of expression in the cells progresses. So what was the rationale in terms of design this product with highly sort of overlapping expression period. Just curious about that.

Yes. I'll just try -- go ahead, Gary. Go ahead.

No, go ahead, Elias.

I just wanted to -- no, I just want to correct something. It's not always overlapping. Actually, we know that in cases of lymphoma and leukemia, sometimes what you see the CD19 disappears and then there is a clonal expansion of CD20. Or if you do CD20 only, you can see CD20 going down and then a clonal expansion of CD19. That's the idea of having 2 targets because then you prevent or delay the appearance of resistant variants. Correct me if I'm wrong, Gary, but I thought that was clear that we're not addressing tumors that have both CD19 and CD20. Obviously, some will have that. But the population that resist therapy often has the emergence of a clonal CD20 or a clonal CD19 that then recurs that makes the disease recurrent. Gary, go ahead, if I missed anything.

Yes. No, no, I think you said it. I think another way to state it is that when many lymphomas arise, you're correct that there is both CD19 and CD20 on those lymphomas. But what we're seeing increasingly is that after treatment and in some cases, with glofitamab as a T cell engager or with CAR T cells, which often will target CD19, sometimes CD20. Once you start selecting against those tumors, you then promote the outgrowth of variants that now are downregulating the first antigen, in many cases, CD19, and they become resistant to the therapy.

So the idea would be that at the start, this dual targeted antibody would allow us to treat the escape mutants from those other therapies. Now should it prove to be effective, and we think there's a good chance it could, if it works, then it could allow you to move up in the treatment line that you would actually use that earlier so that you wouldn't give the tumors a chance to develop -- to down modulate and to escape. So this is a way of -- in the long run, we hope of preventing tumor escape and to provide better upfront coverage.

There's already some data in the CAR T cell world that some of the dual-targeted CAR T cells say, against CD19 and CD20 do better than CD19 alone. Our approach now does this with an engager-like molecule, which is a lot easier to administer to patients. And so we think it's worth advancing this for more -- so it would be available for more patients.

Let me add one point that may escape a lot of folks. Our [ quadri-specific ] does not need to engage both CD19 and CD20 to be active. If it engages CD19 alone, it will be effective. If it engages CD20 alone, it will be effective. It doesn't have to be simultaneous. And that's really an important concept because what you see early on, you have a dominant clone, dominant CD19, 90% of the cells are CD19 positive. And then you may have a much lower proportion of CD20s. It doesn't matter because our antibody will attack the CD19, they will regress and then the CD20 will emerge. And then at that point, you attack the CD20 or if they're both equivalently present, then both of them may be engaged and attacked at the same time. You see what I'm saying. We don't depend on having both the CD19 and the CD20 engaged for the therapy to be effective. I think that's an important basic concept.

Okay. Great. That's a very clear explanation. I really appreciate that.

By the way, it's the same for MDX2001. You don't have to engage both CMet and Trop2 to make it happen, but it does help in controlling the heterogeneity of the disease, depending on how many CMet or Trop2 receptors you have. The same is true for CD19 and CD20.

Our next question comes from Michael Petusky of Barrington Research.

Adam, I just want to clarify something real quick. The $4.2 million in severance, that's in addition to the $25.2 million of expenses -- costs and expenses associated with the assets that are being sold. Is that correct?

That's right.

All right. Great. And then I guess one of the earlier callers sort of alluded to increased granularity. I'm going to actually give it a shot and ask for it now. Would you guys be willing to share sort of year-to-date revs through 9 months of 4Kscore or third quarter revenue associated with the test?

So we haven't separately disclosed it yet, Mike, but we certainly are -- we'll take it back and we'll start to provide more clarity there.

Okay. Could I ask in terms of the -- and I really super appreciate the '26 high-level guide. In terms of the low single-digit growth that you guys expect in the lab business, what are you assuming around volume growth and pricing? I mean, I don't know, is pricing sort of a neutral, a bad guy? Can you just sort of talk about what you expect in terms of volume growth and pricing for '26?

Yes. Thanks for the question on that one. So we would expect volume growth to be in the low single-digit numbers. We're assuming stable pricing. I think as we see more success with some of the conversations around 4Kscore, we see potential upside for overall reimbursement, which would drive up total ASPs. But beyond that change, ASPs would be pretty consistent with what we've seen this year.

Okay. And then just last one and sticking with the ‘26 high-level guide. The Pfizer profit share guide that you gave, to me, feels a little lighter than I would have guessed. Can you just talk about what's going on there in terms of conversion to weekly and just any other sort of data points you can share around that relationship and that effort to get that business going?

Yes. So the overall market, I think, is converting slower than what we thought and I think what many in the industry thought. There's not many daily patients today that are converting as quickly as what we expected to see in the original models. So that phenomenon is going to continue. I think even though there's 3 players out there with us and 2 competitors, we think the market is -- should start to pick up steam, but it just -- it hasn't.

We think Pfizer has been done well from a global perspective. We think based on the data we look at from Symphony and IMS, we think that data shows that Pfizer has about 1/3 of the overall long-acting market. So they're competing globally quite well. They've got a bunch of efforts to increase share in each one of the territories they've got the product in, and we think they're going to be successful. We've talked a little bit about the expansion trials that will increase the number of indications that it will have access to, and we know they're pursuing those and hope to get approval for those in a few years' time.

We've taken a 10% to 15% increase over current year forecast for the profit share. Certainly, we'd love to see it come in better than that, but I think that's consistent with what we saw this quarter, in the last couple of quarters where we think we'll be at, at this time. Hopefully, that helps.

Great. It really does. Let me just sneak one last one in. Just around -- and this should be a quick answer, I think. 4Kscore, I think you said the test volumes were up 20% in the quarter. Would revenue be up approximately 20%? Or would that be lagging that 20% figure?

It's similar, both the same.

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

Well, I want to thank everyone for your participation and good questions, and we look forward to continuing the conversation 3 months from now. Thank you.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.

Good day, and welcome to the OPKO Health Second Quarter 2025 Financial Results Conference Call. [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, and 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 second quarter of 2025.

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, are subject to risks and uncertainties that could materially affect the company's results.

These forward-looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2024, and subsequently filed SEC reports.

Furthermore, this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, July 31, 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 BioReference Health as well as OPKO's Pharmaceutical business. After that, Adam Logal, OPKO's Chief Financial Officer, will review the company's second quarter financial results and discuss OPKO's financial outlook, and then we'll open the call to questions.

Now, I'd like to turn the call over to Dr. Frost.

Good afternoon, and thank you for joining us. Today, we will report on the continued progress of OPKO Health's strategic initiatives and business performance. We have streamlined BioReference Health's operations as we prepare to close the sale of its oncology and related clinical testing business to Labcorp. This transaction monetizes certain assets while sharpening BioReference's focus on its core testing business and improving its financial profile. This is our second transaction with Labcorp to unlock value and accelerate BioReference's path to profitability.

On the pharmaceutical side, we continue to advance our innovative therapeutic pipeline. ModeX has 2 programs in Phase I clinical trials with 3 more expected to enter the clinic late this year and early 2026. A significant catalyst for our pipeline is the Phase I data from our EBV vaccine partnered with Merck that will guide decisions regarding Phase II testing.

We're pleased with the progress of our collaboration with Entera Bio to develop an oral tablet formulation of OPK-88006, our GLP-1/glucagon agonist for the treatment of obesity and MASH. Oral administration of this drug candidate has demonstrated encouraging results in animal models with in vivo data presented at the ENDO Annual Meeting in mid-July.

OPKO is independently developing OPK-88006 for subcutaneous administration with in vivo data having been presented at the American Diabetes Association 85th Scientific Sessions in June. We are also collaborating with Entera Bio on a second program to develop an oral form of our GLP-2 candidate for short bowel syndrome.

Our Latin American business and our Irish contract pharmaceutical development and manufacturing unit continued to perform well with increasing revenue and expanding margins even while facing foreign currency headwinds. We've taken several strategic steps to improve our balance sheet and have sufficient capital to allocate to our R&D efforts, which are partially funded by strategic partners and non-dilutive sources.

In addition, we have a $200 million common stock repurchase program in place with $141.5 million remaining capacity as of June 30. As you've noted, we're committed to maximizing shareholder value through the strategic deployment of capital, additional partnerships, business development initiatives and asset sales. We're confident that this strategy will continue to add value in the second half of 2025 and beyond.

With that overview, I'll turn the call over to Elias.

Thank you, Phil, and good afternoon, everyone. Let's start with an update on BioReference Health, our Diagnostics segment. We continue to restructure and right-size this business toward the goal of reaching and sustaining profitability. You will recall that in March, we announced an agreement with Labcorp to sell our oncology assets for $225 million with $192.5 million payable at closing and an earn-out of up to $32.5 million based on performance. And the earn-out will be measured 6 months post close and is based on the number of specified client accounts that are retained.

We expect this transaction to close near the end of the third quarter of this year. With the pending sale of BioReference Oncology and related clinical testing assets to Labcorp, we expect the remaining business to show improving margins through the balance of the year and beyond.

Post transaction, BioReference will maintain its core clinical testing operations in New York and New Jersey, and will continue to offer urology diagnostic services, highlighting our proprietary 4Kscore test for prostate cancer risk assessment as well as its clinical services business with correctional facilities on a nationwide basis. The revenue of these operations represented approximately $300 million in 2024.

Now reflecting our efforts to drive operational efficiencies, BioReference's financial results continue to improve. As I mentioned in our last call, the latest reduction in force and footprint consolidation provided annualized cost savings of approximately $19 million, our headcount stands now at approximately 1,900 for the second quarter. After the close of the oncology transaction, we expect our headcount to decrease to between 1,450 and 1,500 by the fourth quarter.

Now, to further grow the business, we have focused our efforts on optimizing our test menu and establishing strategic relationships in market to increase testing volumes. By focusing on the local New York and New Jersey physician markets, we have really strengthened our position with those who'd serve this patient base. And this includes ACOs, IPAs, FQHCs, regional health systems and specialty health care companies.

And in addition, the combination of our menu size and operational agility as a more focused company is instrumental in capitalizing on new revenue streams such as direct-to-consumer, employer-based testing and early phase clinical trials.

We are also pleased to announce that on July 25, the FDA granted approval of a supplemental application for the 4Kscore test. And this approval specifically enables the performance of the 4Kscore test even when digital rectal examination information is not available. The 4Kscore test is indicated for the assessment of the likelihood of aggressive prostate cancer in men 45 years or older and reported to have age-specific elevated or abnormal screening PSA results.

In the U.S., over 90% of PSA screening tests are performed by primary care providers who will now be potential users of the 4Kscore test. Excluding the pending and closed assets sales, BioReference's testing volume grew by 1.4% in the second quarter of 2025 compared with the year ago period.

As for our urology segment, the 4Kscore test continued to perform well with year-over-year increase in test volume of approximately 12%. Now, the aforementioned FDA approval of our supplemental application for the 4Kscore test should provide further opportunities for growth, we believe.

Now, let's turn to a discussion of our therapeutics segment, starting with ModeX. The Phase I Epstein-Barr virus vaccine trial by our Merck collaborators is progressing as planned. This trial will evaluate up to 200 healthy adults for safety and tolerability and is comprised of 2 parts with a different adjuvant for each. We're currently waiting for the analysis of the Phase I results that will guide Merck's decisions on progression to Phase II trials.

Several products are advancing in our immuno-oncology and immunology portfolio. The most advanced is our first-in-class MDX2001 CMet-Trop2/CD3-CD28 tetraspecific T cell engager antibody that has progressed to its fifth dose level in the Phase I clinical trial. We expect to enroll the highest dose level by the end of the year, after which we will focus on assessing signals of efficacy in select tumors known to express high levels of Trop2 or CMet at biologically active doses. And thereafter, we will focus on the tumors that appear most responsive.

Now, 2 additional programs are expected to enter the clinic late this year or early next year, including our MDX2003 tetraspecific T cell engager antibody for lymphoma and leukemia and the MDX2004, an immune rejuvenator for multiple oncology and immunology indications. Our immunology portfolio is focused on the use of multi-specific antibodies for immune-impaired patients, including those with cancer, chronic diseases and the elderly.

Our most advanced product aims to address the unmet need in such patients with high risk for COVID complications, and we anticipate that Phase I studies will begin early next year. And this work, as you remember, is funded by BARDA, which is also supporting the advancement of multi-specific antibodies to prevent influenza currently at the pre-IND stage. And we continue to work collaboratively with BARDA which contributed non-dilutive funding of $59 million last year and an additional $51 million so far this year to advance these programs.

Now, as mentioned by Dr. Frost, moving to OPK-88006, our novel long-acting GLP-1 receptor, glucagon receptor dual agonist, we presented a poster on preclinical data at the American Diabetes Association 85th Scientific Session in June and the therapeutic benefits of OPK-88006 on quantitative, biological hallmarks of MASH in mouse models were superior to semaglutide and survodutide, suggesting that OPK-88006 could be a promising GLP-1/glucagon receptor, dual agonist for the treatment of obesity and MASH.

We are encouraged by these results and OPK-88006's therapeutic potential. As Phil mentioned, our collaboration with Entera Bio continues to advance as we're in the pre-IND stage with an oral version of OPK-88006. The oral program combines our proprietary long-acting oxyntomodulin analog and Entera's proprietary N-Tab technology. At the recent ENDO meeting in San Francisco, we presented new pharmacologic and pharmacokinetic in vivo data for oral OPK-88006 showing excellent bioavailability.

In addition, we're working with Entera Bio on another program for short bowel syndrome, which represents a significant unmet need. Short bowel syndrome patients have a reduced ability to absorb nutrients and fluids and are at risk of malnutrition, unintended weight loss and additional symptoms due to the loss of essential vitamins and minerals. The European Society for Clinical Nutrition and Metabolism Congress, or ESPEN, accepted our abstract regarding the PK/PD of our oral GLP-2 tablet for the treatment of short bowel syndrome, and this presentation will take place in September in Prague.

Finally, our Latin American Pharmaceutical division and Rayaldee continued to perform to plan with sustained revenues and margins, and Adam will provide you also an update on NGENLA. So in summary, we're pleased with our progress in advancing our first-in-class therapeutic multi-specific antibodies for oncology and immunology indications as well as our multi-vaccine candidate that are progressing in clinical development at Merck and our metabolic disease program with our OPK-88006 GLP-1 GLP-1/glucagon antagonist in both oral and injectable forms for obesity and MASH as well as an oral GLP-2 agonist for short bowel syndrome. We're confident that the restructuring efforts we're undertaking will position BioReference to be more efficient and profitable following the completion of the second asset sale.

Now, let me turn the call over to Adam to discuss our financial results. Adam?

Thank you, Elias. Let's begin with our Diagnostics business. Revenue for the second quarter of 2025 was $101.1 million, including $24.9 million from the oncology assets being sold. This compares with $129.4 million in Q2 2024 with the decline primarily due to the Labcorp transaction that closed in September of 2024.

Revenue in our non-oncology business continues to see steady growth, highlighted by an increase in 4Kscore volumes of nearly 12%, which Elias mentioned, and has been accelerating throughout the year.

Total costs and expenses were $119.3 million, down from $156 million last year. This includes $29.4 million related to the oncology assets and approximately $2 million in expected onetime costs for severance during the 2025 quarter. As a result, our Diagnostic operating loss improved to $18.2 million compared to $26.6 million in Q2 2024. Depreciation and amortization expense came in at $4.9 million, down from $6.3 million in 2024.

Importantly, as Elias mentioned, the actions we've taken throughout the first half of this year and those planned as we close the oncology transaction, are expected to deliver over $25 million in annualized cost savings, and we remain on track to achieve cash flow breakeven and positive cash from operations in 2025.

Turning to our Pharmaceutical business. Revenue was $55.7 million, up $2.9 million from 2024's $52.8 million. Product revenue was $40.7 million, up slightly from 2024's $40.5 million, reflecting an increase in our Spanish and Mexican businesses, partially offset by foreign exchange headwinds in Chile.

Rayaldee contributed $7.2 million in both the 2025 and 2024 periods with improved margins during 2025 due to the lower government rebates. IP transfer revenue rose to $15 million, up from $12.3 million, which includes our Pfizer profit share of $6.1 million compared to $6.3 million for 2024. While the first half of 2025 gross profit share has been slower than we anticipated, we are optimistic about the efforts Pfizer has made and expect to make throughout the remainder of 2025 on the global commercialization efforts of the program.

Globally, the adoption of the long-acting form of hGH has been slower than we and the broader market has anticipated. However, we continue to see trends of accelerated transition to the once-weekly formulation. Based on the available market data, NGENLA holds about 1/3 of the global long-acting market.

And as the market continues to move to the once-weekly dosing, we believe Pfizer will continue to grow its portion of the total market. In addition, BARDA funding increased to $6.5 million from $5 million, reflecting the expanded program activity for our infectious disease antibody programs.

Costs and expenses were $84.4 million, up from $77.6 million, driven by increased R&D investments. R&D totaled $29.8 million, up from $23.7 million, primarily due to the ModeX development programs, including our BARDA supported programs.

As Elias mentioned, we are making progress within our clinical development program and with spending on our ongoing Phase I trial as well as expenses to support an additional 5 IND filings within the next 12 months for our GLP-1 glucagon, oncology, immunology and infectious disease programs. As a result, our pharmaceutical operating loss was $28.7 million compared to $24.8 million last year. Depreciation and amortization expense was $18.1 million, slightly more than 2024's $17.9 million.

For our consolidated results, consolidated operating loss improved slightly during 2025 to $60 million compared to $61.7 million as a result of the improved results at BioReference, partially offset by the increased investments in our pharmaceutical research and development programs.

As you'll recall, we completed our convertible note exchange on April 1, 2025. As a result, we recorded approximately $92 million of expense during the second quarter of 2025, while our 2024 net loss benefited from an increase in the value of one of our investments, which resulted in a gain of $60 million during 2024. As a result, our net loss for Q2 '25 was $148.4 million or $0.19 per share compared to $10.3 million or $0.01 per share in Q2 2024.

As we think about our balance sheet and capital allocation, we ended the quarter with approximately $285 million in cash, cash equivalents and restricted cash. We remain focused on optimizing our capital structure while maintaining our investments into our innovative R&D programs.

As I mentioned, we completed the convertible note exchange earlier this quarter using approximately $65 million in cash and issuing 121 million shares, eliminating over $159 million in principal debt, which meaningfully improved our overall debt position. Under our expanded share repurchase authorization, as Phil mentioned, we repurchased approximately 13.6 million shares during Q2 '25 and have approximately $142 million remaining authorized, which represents more than 13% of our current share count at recent trading ranges.

Cash used in operations during Q2 increased from our normal levels due to certain working capital adjustments, including a negotiated lease exit for one of our BioReference facilities as well as income taxes paid on our transactions that closed in 2024. We also invested approximately $8 million into Entera Bio related to our oral GLP-1 program. Looking forward, we expect to close our second Labcorp transaction later this year, which will bring in $192.5 million at closing with potential proceeds of up to $225 million.

As we move to our outlook, we continue to execute our multiphase plan to drive profitability in our Diagnostics business by reducing the fixed infrastructure costs and improving our operational efficiency. Following the oncology transaction, the remaining BioReference business is expected to reach cash flow positive and profitability during 2025. This will exclude nonrecurring and noncash items, and we have not adjusted our outlook for the closing of the oncology transaction, but we'll do so once the closing date is certain.

For the full year 2025 outlook, we expect total revenue to be between $640 million and $660 million; revenue from services of $405 million to $425 million, including $95 million to $105 million from our oncology assets; revenue from products of $160 million to $170 million and other revenue of $65 million to $75 million, including our Pfizer profit share of $28 million to $35 million, support from BARDA of $30 million to $35 million.

Total costs and expenses are expected to be between $835 million and $865 million, excluding $15 million to $20 million of onetime restructuring costs for our Diagnostics business. This includes $125 million to $135 million in expenses related to our oncology assets. It includes $120 million to $130 million of research and development spending, which will be partially offset by $30 million to $35 million in BARDA funding.

We expect depreciation and amortization expense to be approximately $90 million, and we also anticipate a $100 million gain on the oncology transaction, which will reduce operating expenses and increase operating income in the quarter which we close.

With that, I'd like to open up the call for questions. Operator?

[Operator Instructions] Our first question comes from Maury Raycroft with Jefferies.

This is James on for Maury. Congrats on the update. Given that new prescriptions and total prescriptions for NGENLA were up in 2Q, do you expect that the $6.1 million in NGENLA/Genotropin profit share in 2Q was due to lower gross-to-net from co-pay assistance in 1Q carrying over to 2Q? And have you received any insights from Pfizer on 2Q sales? Or do you plan to follow up with them for clarification? And I have a follow-up.

James, thanks for the questions. And we definitely saw an improvement in the U.S. market as it relates to the prescription trends that you identified. We continue to see some of the international markets that are in the early days of launches continuing to work through some of the higher cost inventory that's set out there. So, we expect the remainder of the year to pick back up to the traditional levels but we saw strength broadly across all of the geographic markets for NGENLA. So, we're pretty optimistic of where that's headed.

Got it. And then a follow-up is, how is EBITDA margin for the Diagnostics business tracking in 2Q versus 1Q? And how are you setting expectations for EBITDA profitability in 3Q and 4Q? And kind of going along with that, this approval with the supplemental application for the 4Kscore test. Can you talk about implications for growth in 4Kscore test sales in the coming quarters?

Yes. So, let me pull the EBITDA question apart. So, when we think about the Diagnostics segment, we're continuing to see quarter-over-quarter improvements in a lot of the steps we've taken to drive costs down are bearing fruit. If you were to look at the $18.2 million operating loss that resulted in Q2, consider the $2 million of nonrecurring expenses in there, you start to see that $4.5 million comes from the oncology business that is set to close later this year and depreciation and amortization expense of $4.9 million. It gets you to about a $6 million or a couple of million dollar a month loss in that segment.

A lot of the costs, as Elias mentioned, are expected to come out when we close the oncology transaction in a couple of months' time and get our headcount even further down. We've been pretty judicious about making sure we maintain that business with the infrastructure at BioReference that's required to get through the closing. But once the closing occurs, we'll be able to bring the overall cost structure down as we planned. We feel we're on track to deliver those cost savings and to get to that cash flow positive basis this year, both from an EBITDA and a cash position.

As it relates to 4Kscores, so we've seen really good upward growth on the test this year so far. We mentioned it's about 12% up. I think July, that really have started to accelerate, and that is before we have the FDA label change and really opens up the market for us to think about primary care docs being able to order the test. So, we think the upside is meaningful.

And as I mentioned, being at 12% and meaningfully higher in July, we think, again, that the opportunity is pretty important. That test has a strong margin profile with a relatively small sales force calling on docs today.

Our next question comes from Edward Tenthoff with Piper Sandler.

So, my questions have to do with the obesity efforts. And specifically with an increasingly crowded landscape, how do you envision oxyntomodulin differentiating either as an injectable or with the oral formulation of its partner with Entera?

Yes. Thanks for the question. I mean, fundamentally, we think there is a differentiation because what we found out actually, and we studied the molecule that we created that not only is it effective in obesity, but glucagon increases the metabolism. But more importantly, glucagon has an effect downstream of glucagon on FGF21, which rises with our molecule. FGF21 is known actually to be anti-fibrosis or correct fibrosis as we know from other molecules that have been developed around FGF21. So, we believe, based on the results we have and then the preclinical data that show really a very good profile for the drug. Number one, we believe that it will have merits for MASH patients combined with obesity and diabetes. So, we will have to look at that.

The second advantage, obviously, is that with Entera, we can create an oral form of the molecule. And frankly, that is something that in the information that we have from physicians is welcome because they like to stabilize the patient and convert them into oral forms to maintain the weight loss and maintain the effect over time without having to continue with the injectables.

So, those are the 2 aspects. It has a biological aspect that we believe will be very valuable in MASH. And then it has a -- not just the convenience, but really a stabilization aspect of the regimen that you have to keep patients on to maintain the obesity reduction and the metabolic improvements that you hope to achieve.

That's very helpful. And then when it comes to actually proving that out in the Phase I study, are there endpoints you're envisioning or different patient populations? Or how do you think you can actually tease that out in the clinical trials?

All right. So that's a great question. So, our plan is to really go into patients who have biomarker evidence of MASH and are obese, okay? And really go into that Phase I data on that population of patients that will eventually be of interest if we get both safety and some signal of efficacy with biomarkers. We're not going to do a biopsy study. We don't want to do that until we have good evidence that both the dose and the effect are really differentiating, okay?

So that's the idea. And we're basically focused on patients who have, for example, liver stiffness, liver fat and evidence that they are not only obese, but they have a fatty liver that could lead to fibrosis eventually and liver failure. So, those are the patients we're going to focus on in Phase I with a cost that is quite reasonable. But then, obviously, these developments are quite expensive. We're not going to pursue that all on our own, and we have a lot of interest coming our way about potential collaborations once we achieve the data that we need to have to really create the value of the asset forward.

Our next question comes from Yale Jen with Laidlaw & Company.

I just want to follow up what Ed just mentioned earlier. What do you -- what's your estimate of the size in terms of patients both have obesity as well as MASH? And would that be the specific sort of indication you're going to explore in the Phase I study when you presumably start later this year or early next year?

Yes. The answer is -- great question. The answer is, yes, we're focused on that population. We're going to try to focus on the patients that have biomarkers that indicate that they're in what we call F2, F3, F4 MASH -- degrees of MASH, stages of MASH. And those are the patients we're going to focus on.

We're going to look for -- in Phase I for safety signals and dosing ranges, and we're not really looking for definitive efficacy, but we will look for biomarker trends that will help us. Now, in terms of total number of patients, it's hard to me to tell you the number but -- the exact number, but we're thinking between 100 and 170 patients to do the full Phase I.

Okay. Great. That's very helpful. Maybe one follow-up question here, which is, in terms of the collaboration you have with [Technical Difficulty] you have both 88006 and also you have a compound addressing short bowel syndrome. I'd just like to know a little bit -- get a little bit more color in terms of what's the difference between these 2 compounds and specifically for the short bowel syndrome compound that we probably not have too much ideas about.

Right. So, the GLP-1 glucagon receptor [ co-agonist ] is completely different than the GLP-2, right? GLP-2 is a separate molecule. and not at all in -- physiologically, not at all comparable to the GLP-1. I mean, although they have closed names, but they're not. And so, the GLP-2 has a huge function in actually intestinal absorption regulation. And that's why it's really something that a lot of people want to develop for people who have short bowel syndrome, malnutrition in tandem with that.

So, it's an unmet need that has not been served very well. People get infusions of parenteral nutrition, infusion of food supplements and so on. And it's not as good as effective, and that's why the program was developed to address that unmet need, which is a completely separate population, completely different than the obesity MASH population we are trying to address with the GLP-1 glucagon.

And now our collaboration with Entera is obviously adding an option, which is an oral version, which we find to be quite attractive to offer a spectrum of approaches from injectable to oral and vice versa.

Maybe to squeeze one more in here, which is when you anticipate this program to enter clinical study? Would that be next year?

Yes. I think so. Yes. And when exactly? I don't know. It depends on FDA, it depends on regulatory. But yes, I mean, definitely next year.

Our next question comes from Yi Chen with H.C. Wainwright & Company.

My question is related to the long-acting GLP-1 receptor glucagon receptor dual agonist. So today, many patients taking GLP-1 drugs, they discontinue treatment due to GI side effects and also the current GLP-1 drug cause lean muscle mass loss as well as fat loss, which is a big problem for elderly patients. So, does your dual agonist has the potential to improve either of these 2 aspects of the current GLP-1 drugs on the market today?

I hope that on GI side effects, we will be able to titrate properly, and that's an open question. I can't tell you it will or will not. I think when you look at the data of others who have GLP-1 glucagon molecules, you might have the hope that, that will be the case. But every molecule is different. Ours is really, on a preclinical basis, has a very good profile.

Now in terms of lean muscle mass, I don't think there will be a major difference. There may be one because glucagon is enhancing metabolism. But I don't think anybody knows the answer exactly. Some trials by Boehringer Ingelheim and others seem to show a little bit better profile, but I really wouldn't stick my neck out here and say we will definitely have better profiles on both of these counts. But I hope that we will because of the difference in metabolic action.

Our next question comes from Michael Petusky with the Barrington Research.

Adam, I was writing as fast as I could, but not as quick as you were talking. What was the -- I don't think it's in the release. What was the BARDA revenue in the quarter? Was it $5.6 million, did you say?

Yes. So, BARDA revenue in the quarter, let me make sure I get it right. It was $6.5 million, yes, for the quarter.

[ $5-even ] or $5.6 million?

$6.5 million.

Sorry, $6.5 million. Okay. And the guide for revenue for BARDA for the year?

Sure. So, it was $30 million to $35 million for the year.

Okay. And then I guess, as you sort of think about the go forward after the oncology deal closes, does your assumption of sort of cash flow breakeven, et cetera, does that require a higher revenue run rate than sort of the, let's call it, $300 million annualized that will be left post the close? Or like essentially, does that top line have to grow in order to sort of achieve or can it sort of roughly stay around this level?

Yes. So, we've got plans for the revenue to grow, but achieving cash flow breakeven and being positive is not dependent on us achieving our growth plan.

And then I just want to, I guess, obviously, you've got cash on the balance sheet. You'll have more cash on the balance sheet presumably in the next 90 days or so. Could you guys just talk about capital allocation priorities for -- in terms of that balance sheet cash?

Yes. So, I'll start us off, Mike, and let Elias and others weigh in. As we kind of laid out early this year, we think about cash really for dollar-for-dollar of what we're spending or investing in the operations and R&D programs for us to be investing back into the balance sheet. And that's been pretty close to where we've been this year for the first half. I think we -- when we did the debt exchange in April, that accelerated the use of cash for our balance sheet strengthening a little bit faster than probably what we planned in January.

But I'd say this year, we expected to use a little over $100 million in investing in R&D. We remain on track with that as it relates to how much cash we've put in our stock buyback program as well as the convertible debt exchanges, we're in the -- approaching $80 million so far this year and would expect to continue to buy back shares as opportunities exist.

And as we think forward, it's probably not going to continue at that same accelerated pace on the capital side. We'll also be mindful of how we are able to partner any of our R&D programs to continue to try to find non-dilutive sources of cash to fund those programs and accelerate those like we did with our relationships with BARDA. So hopefully, that helps.

It does. Can I just ask maybe just a slight clarifying question. The stock obviously is, in my opinion, hasn't reacted much to sort of some of the improvements that you guys are making. It seems like you're on the path to making, particularly in the lab business. And I'm just curious, does that create, I guess, any extra urgency in terms of sort of completing the common share repurchase?

Yes. I mean I think the Board has authorized us to go up to that $200 million. So, we have about $142 million or $141.5 million left to deploy. And I don't think we will be shy about using it as the balance sheet allows.

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

Thank you. Thank you all for your good questions and for participating in general. I'll close by observing that many of the things that we have talked about at previous meetings have really come to fruition. We have emphasized in the past the use of our assets in such a way that will be beneficial for the company and the shareholders. And the disposition of the 2 parts of BioReference so far are good examples of that. And the remaining part is certainly becoming a more valuable asset, which we're very happy about.

So far as the expenditures are concerned, which are major for us, they're largely for R&D, and we consider those, as Adam mentioned, investments. And we consider them to be interesting and good investments in the sense that the -- many of the projects are quite novel. They're on the high-risk side, I would say. And so, we can't guarantee anything. But we also believe that the potential returns for these projects are significant. And it's for that reason that we feel good about what we're doing. So,

I'll leave you with those thoughts. And again, thank you once again and look forward to being with you again a quarter from now.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.