Multidisciplinary medical company Opko Health Inc. (NYSE: OPK; TASE: OPK; TASE: OPK) yesterday announced its intention to activate a shelf prospectus for a convertible senior notes issue of up to $200 million. Jefferies LLC investment bank, which is leading the offering, is entitled to invest up to $30 million in the issue.
Opko's share price was down 17% in today's trading on the TASE, following a similar plunge in pre-trading in the US yesterday following the announcement, pushing the company's market cap down to NIS 6.16 billion.
Opko will use the proceeds from the issue for its activity and to repay earlier debt. The company had $317 million in current liabilities, and had $43 million in cash at the end of the third quarter of 2018. Opko subsequently raised $92 million in a financing round led by an entity associated with CEO and controlling shareholder Dr. Phillip Frost. Opko also signed a $60 million line of credit with an entity associated with Frost.
Yesterday's announcement followed a tumultuous period for Opko, during which the company published three announcements (probably in order to make sure that its issue is held with all the relevant information being disclosed). Opko first reported a decision by Novitas Solutions, an important US insurance concern, not to grant insurance reimbursement for Opko's kScore4 product. Novitas asserted that Opko had not proved the importance of its test for decisions about treatment of prostate cancer.
Later that same day, Opko reported failure in a trial of its OPK-88004 product for preventing the absorption of male hormones in the prostate, while encouraging their absorption in the rest of the body, thereby reducing the risk of benign and malignant prostate tumors, improving muscle mass, and reducing body fat. The trial revealed failure in measuring the prostate with enough precision to produce significant results from the trial. Furthermore, safety problems at high dosages of the product were found. The current trial was discontinued, and Opko is considering other options for the product.
Opko finally reported positive news: approval of its new product - a PSA test for detecting high risk of prostate cancer with in a few minutes in a doctor's clinic, instead of a test in a central laboratory taking days or weeks.
These announcements resulted in a 3% drop in Opko's share price last Friday.
Published by Globes, Israel business news - en.globes.co.il - on February 5, 2019
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