Opko Health (OPK) Stock: Gaining On RAYALDEE Agreement

Opko Health Inc. (NYSE: OPK)

Opko Health is having an incredible day in the market today, and for good reason. The company announced a key collaboration and licensing agreement that will likely lead to big long-run gains. Today, we’ll talk about the agreement, how the market reacted to the news, and what we can expect to see from OPK moving forward.

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OPK Enters Strategic Agreement

Earlier this morning, it was announced that Opko Health has entered into a collaboration and license agreement for the development and commercialization of RAYALDEE with Vifor Fresenius Medical Care Renal Pharma (VFMCRP). The agreement will cover areas including Europe, Canada, Mexico, Australia, South Korea and other international markets for the treatment of secondary hyperparathyroidism in patients with chronic kidney disease and vitamin D insufficiency. According to the agreement, OPK and VFMCRP will also work together on the development and commercialization of RAYALDEE as a treatment for SHPT in dialysis patients. On top of the commercialization and development collaboration, Opko Health has also given VFMCRP the ability to acquire rights to the US market for the use of RAYALDEE for the treatment of dialysis patients.

According to the terms of the agreement, OPK will be receiving an upfront payment of $50 million. On top of the upfront payment, VFMCRP also agreed to an additional $52 million in regulatory and launch milestones as well as $180 million in sales-based milestones. Finally, VFMCRP has agreed to pay OPK additional commercial milestones as well as double-digit royalties. In a statement Phillip Frost, M.D., CEO and Chairman at OPK, had the following to offer:

Following up on those statements, the CEO of VFMCRP, Stefan Schulze, had the following to offer:

Managing bone and mineral disorders in CKD patients remains a challenge for physicians despite the treatment options already available to them. The clinical data for RAYALDEE show promising safety and efficacy and we strongly believe that once approved, RAYALDEE will become a cornerstone therapy to better address this key co-morbidity and improve the well-being of chronic kidney disease patients.”

How The Market Reacted To The News

As investors, we know that the news moves the market, and in this particular case, the news surrounding Opko Health is overwhelmingly positive. Not only is the company going to bring in $50 million now, there are hundreds of millions of dollars waiting on the company in milestone payments and possibly more in royalties. All in all, investors are happy. As a result, we’re seeing strong gains on the stock at the moment. Currently (10:21), OPK is trading at $10.18 per share after a gain of $0.45 per share or 4.62% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from Opko Health. With RAYALDEE, the company has not only proven its ability create a treatment that does well in the open market, but has proven the desire to expand upon that product and create more offerings. With a strong product, strong pipeline, and strong team, I’m expecting to see further positivity out of OPK moving forward.

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What Do You Think?

Where do you think OPK is headed moving forward and why? Let us know your opinions in the comments below!

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