OPKO Pledges Royalty Assets for $125 Million at 11.5%
Distressed
Company Background
OPKO Health is a Miami-based multinational biopharmaceutical and diagnostics company with two main business lines: a pharmaceutical segment centered on royalties, partnerships, and international commercial operations, and a diagnostics segment running BioReference Health's clinical laboratory network in New York and New Jersey. With an approximate market capitalization of $1 billion, the company sits in a period of deliberate repositioning after shedding its higher-volume oncology testing business.
In September 2025, OPKO completed the sale of BioReference's oncology and related clinical assets to Laboratory Corporation of America for $192.5 million at closing, with up to $32.5 million in contingent consideration. The divestiture removed roughly $70 million in annual revenue from the diagnostics segment while significantly cutting costs. Total 2025 revenues fell to $606.9 million from $713.1 million in 2024. The company has been drawing down cash since the transaction closed, with the balance dropping from $431.9 million at December 31, 2024 to $369.1 million at December 31, 2025 and then to $300.8 million at June 30, 2026, even as the company actively repurchases shares.
The pharmaceutical side is anchored by several partnership revenue streams — principally a gross profit share on Pfizer's NGENLA (lonapegsomatropin), Eli Lilly royalties from mazdutide sales in China by Innovent Biologics, and a BARDA contract — alongside a growing ModeX oncology antibody pipeline and commercial product sales through Spanish and Mexican operations. Operating losses have been persistent: the company recorded a $51.0 million operating loss in Q1 2026 and a $7.0 million loss in Q2 2026, the latter aided by an $18.1 million earnout receipt from Labcorp.
What Was Disclosed
On August 13, 2026, OPKO amended its Note Purchase Agreement — originally dated July 17, 2024, with HCR Injection SPV, LLC as agent — to issue an additional $125 million in senior secured notes. The notes mature on July 17, 2044 and bear interest at the 3-month SOFR rate, subject to a 4.0% per annum floor, plus 7.5% per annum, the same rate as the notes issued under the original agreement. That floor effectively sets a minimum all-in rate of 11.5%. Interest is payable quarterly.