Opko Health Inc. (NYSE: OPK; TASE: OPK) today reported that it had received a letter from the US Food and Drug Administration (FDA) saying that as of now, its drug, Rayaldee, was not being approved because of problems in production by a third party. On the other hand, no safety or effectiveness problems with the drug were discovered.
Rayaldee is delayed release vitamin D designed for treatment of kidney patients. Lowered levels of vitamin D in these patients cause a variety of severe side effects. Adding ordinary vitamin D is insufficient, because the body senses a high level of the vitamin and adjusts accordingly. Rayaldee releases the vitamin gradually, which is less stimulating for the body's adjustment mechanism, while actual levels of the vitamin in the bloodstream are higher. Trials of the product conducted by the company showed that it achieves excellent results in treatment of kidney patients, but no comparison study with ordinary vitamin D has yet been conducted.
The product will also compete with an Amgen drug that attacks the side effects caused by lower levels of vitamin D. Amgen's drug is designed mainly for patients who are already undergoing dialysis, and Rayaldee will therefor initially attack the market of patients who do not yet need dialysis (and whom are currently treated with the vitamin itself). The expected cost of Rayaldee is $10,000, compared with tens of dollars for treatment with ordinary vitamin D.
Opko lost $30 million on $492 million in revenue in 2015, compared with a $172 million loss on revenue totaling $91 million in 2014. The changes in losses and revenue are mainly due to the acquisition of the Bioreference chain of laboratories, a share deal that reflected a value of $1.47 billion for the acquired company. This acquisition was designed primarily for marketing of Opko's new 4kscore test for intestinal cancer.
Opko itself now has a problem, because it has prepared a team of 25 sales personnel (projected to rise to 70) for beginning marketing of the drug. The global vitamin D market amounts to $12 billion annually, but Opko is aiming at a specific niche in that market. Most analysts expect record revenue of less than $1 billion for the product, while the company estimates the market at several billion dollars.
Opko's share price is down 7% on the TASE after falling 7.3% yesterday. The share price is down 8.76% on pre-market trading on Nasdaq.
Published by Globes [online], Israel business news - www.globes-online.com - on March 30, 2016
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