EXHIBIT 99.2
Published on September 16, 2024
Exhibit 99.2
OPKO HEALTH, INC.AND SUBSIDIARIES
SUMMARY OF UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
On March 27, 2024, OPKO Health Inc. (the “Company”), the Company’s indirect wholly owned subsidiary, BioReference Health, LLC (“BioReference”), and Laboratory Corporation of America Holdings, a Delaware corporation (“Labcorp”), entered into an Asset Purchase Agreement (the “Purchase Agreement”), pursuant to which BioReference and the Company agreed to sell and assign to Labcorp, and Labcorp agreed to purchase and assume from BioReference and the Company, certain assets and liabilities of BioReference’s laboratory testing businesses focused on clinical diagnostics and reproductive and women’s health across the United States, excluding New York and New Jersey, in exchange for approximately $237,500,000 in cash (the “BioReference Transaction”). On September 16, 2024, the parties to the Purchase Agreement consummated the BioReference Transaction, and the Company received approximately $237,500,000 in cash, subject to certain adjustments as set forth in the Purchase Agreement.
The following unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2024 and unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2023 are presented as if the BioReference Transaction and related events had occurred on January 1, 2023. The following unaudited pro forma condensed consolidated balance sheet as of June 30, 2024 is presented as if the BioReference Transaction and related events had occurred on June 30, 2024.
The unaudited consolidated pro forma financial statements have been derived from the Company’s historical financial statements prepared in accordance with U.S. generally accepted accounting principles (“US GAAP”) and are presented based on information currently available and certain assumptions that the Company’s management believes are reasonable. The accompanying pro forma financial statements reflect the impact of events directly attributable to the BioReference Transaction that are factually supportable and, for the purposes of the unaudited pro forma condensed consolidated statements of operations, expected to have a continuing impact on the Company. They are intended for informational purposes only and are not intended to represent the Company’s financial position or results of operations had the BioReference Transaction and related events occurred on the dates indicated or to project the Company’s financial performance for any future period. The unaudited pro forma consolidated financial statements and the accompanying notes should be read in conjunction with (i) the Company’s audited consolidated financial statements and accompanying notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC on March 1, 2024, and (ii) the Company’s unaudited consolidated financial statements and accompany notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, as filed with the SEC on August 7, 2024.
OPKO HEALTH, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2024
|
Pro-forma |
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|
Adjustments for |
Unaudited |
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|
(in thousands, except share and per share data) |
Historical (a) |
disposition |
Notes |
Pro-forma |
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|
ASSETS |
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|
Current assets: |
|||||||||||||
|
Cash and cash equivalents |
$ | 40,576 | 232,670 |
(e) |
$ | 273,246 | |||||||
|
Accounts receivable, net |
105,313 | - | 105,313 | ||||||||||
|
Inventories, net |
60,153 | - | 60,153 | ||||||||||
|
Prepaid expenses and other current assets |
32,288 | - | 32,288 | ||||||||||
|
Assets held for sale |
119,651 | (119,651 | ) |
(f) |
- | ||||||||
|
Total current assets |
357,981 | 113,019 | 471,000 | ||||||||||
|
Property, plant and equipment, and investment properties, net |
66,766 | - | 66,766 | ||||||||||
|
Intangible assets, net |
659,111 | (16 | ) | (f) | 659,095 | ||||||||
|
In-process research and development |
195,000 | - | 195,000 | ||||||||||
|
Goodwill |
530,106 | 1,975 | (f) | 532,081 | |||||||||
|
Investments, net |
101,489 | - | 101,489 | ||||||||||
|
Operating lease right-of-use assets |
61,622 | - | 61,622 | ||||||||||
|
Other assets |
7,796 | - | 7,796 | ||||||||||
|
Total assets |
$ | 1,979,871 | $ | 114,978 | $ | 2,094,849 | |||||||
|
LIABILITIES AND EQUITY |
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|
Current liabilities: |
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|
Accounts payable |
$ | 82,242 | $ | - | $ | 82,242 | |||||||
|
Accrued expenses |
94,516 | 8 |
(g) |
94,524 | |||||||||
|
Current maturities of operating leases |
11,624 | - | 11,624 | ||||||||||
|
Liabilities associated with assets held for sale |
8,872 | (8,872 | ) |
(f) |
- | ||||||||
|
Current portion of convertible notes |
170 | - | 170 | ||||||||||
|
Current portion of lines of credit and notes payable |
22,129 | - | 22,129 | ||||||||||
|
Total current liabilities |
219,553 | (8,864 | ) | 210,689 | |||||||||
|
Operating lease liabilities |
49,624 | - | 49,624 | ||||||||||
|
Long term portion of convertible notes |
175,942 | - | 175,942 | ||||||||||
|
Deferred tax liabilities |
119,120 | 1,270 |
(g) |
120,390 | |||||||||
|
Other long-term liabilities, principally contract liabilities, |
- | ||||||||||||
|
contingent consideration and lines of credit |
20,315 | - | 20,315 | ||||||||||
|
Total long-term liabilities |
365,001 | 1,270 | 366,271 | ||||||||||
|
Total liabilities |
584,554 | (7,594 | ) | 576,960 | |||||||||
|
Equity: |
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|
Common Stock - $0.01 par value, 1,250,000,000 shares |
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|
authorized; 727,176,232 shares issued at June 30, 2024 |
7,273 | - | 7,273 | ||||||||||
|
Treasury Stock - 29,800,177 shares at June 30, 2024 |
(1,791 | ) | - | (1,791 | ) | ||||||||
|
Additional paid-in capital |
3,540,414 | - | 3,540,414 | ||||||||||
|
Accumulated other comprehensive income (loss) |
(46,652 | ) | - | (46,652 | ) | ||||||||
|
Accumulated deficit |
(2,103,927 | ) | 122,571 |
(h) |
(1,981,356 | ) | |||||||
|
Total shareholders' equity |
1,395,317 | 122,571 | 1,517,888 | ||||||||||
|
Total liabilities and equity |
$ | 1,979,871 | $ | 114,978 | $ | 2,094,849 | |||||||
OPKO HEALTH, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2024
|
Six months ended June 30, 2024 |
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|
(in thousands, except share and per share data) |
Historical (a) |
Pro-forma Adjustments for disposition |
Notes |
Unaudited Pro-forma |
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|
Revenues: |
|||||||||||||
|
Revenue from services |
$ | 256,286 | $ | (52,438 | ) |
(b) |
$ | 203,848 | |||||
|
Revenue from products |
78,532 | - | 78,532 | ||||||||||
|
Revenue from transfer of intellectual property and other |
21,054 | - | 21,054 | ||||||||||
|
Total revenues |
355,872 | (52,438 | ) | 303,434 | |||||||||
|
Costs and expenses: |
|||||||||||||
|
Cost of service revenue |
216,952 | (47,929 | ) |
(b) |
169,023 | ||||||||
|
Cost of product revenue |
45,199 | - | 45,199 | ||||||||||
|
Selling, general and administrative |
138,988 | (19,098 | ) |
(b) |
119,890 | ||||||||
|
Research and development |
46,020 | - | 46,020 | ||||||||||
|
Amortization of intangible assets |
41,856 | (2,055 | ) |
(b) |
39,801 | ||||||||
|
Total costs and expenses |
489,015 | (69,082 | ) | 419,933 | |||||||||
|
Operating loss (income) |
(133,143 | ) | 16,644 | (116,499 | ) | ||||||||
|
Other income and (expense), net: |
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|
Interest income |
1,204 | - | 1,204 | ||||||||||
|
Interest expense |
(15,865 | ) | - | (15,865 | ) | ||||||||
|
Fair value changes of derivative instruments, net |
(26,160 | ) | - | (26,160 | ) | ||||||||
|
Other income, net |
80,197 | - | 80,197 | ||||||||||
|
Other income, net |
39,376 | - | 39,376 | ||||||||||
|
Loss (income) before income taxes and investment losses |
(93,767 | ) | 16,644 | (77,123 | ) | ||||||||
|
Income tax benefit (provision) |
1,629 | (801 | ) |
(d) |
828 | ||||||||
|
Loss (income) before investment losses |
(92,138 | ) | 15,843 | (76,295 | ) | ||||||||
|
Loss from investments in investees |
(3 | ) | - | (3 | ) | ||||||||
|
Net loss (income) |
$ | (92,141 | ) | $ | 15,843 | $ | (76,298 | ) | |||||
|
Loss per share, basic and diluted: |
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|
Net loss per share |
$ | (0.13 | ) | $ | (0.11 | ) | |||||||
|
Weighted average number of common shares outstanding, |
|||||||||||||
|
basic and diluted |
702,036,148 | 702,036,148 | |||||||||||
OPKO HEALTH, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2023
|
Year ended December 31, 2023 |
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|
(in thousands, except share and per share data) |
Historical (a) |
Pro-forma Adjustments for disposition |
Notes |
Unaudited Pro-forma |
|||||||||
|
Revenues: |
|||||||||||||
|
Revenue from services |
$ | 515,275 | $ | (119,275 | ) |
(b) |
$ | 396,000 | |||||
|
Revenue from products |
167,557 | - | 167,557 | ||||||||||
|
Revenue from transfer of intellectual property |
180,663 | - | 180,663 | ||||||||||
|
Total revenues |
863,495 | (119,275 | ) | 744,220 | |||||||||
|
Costs and expenses: |
|||||||||||||
|
Cost of service revenue |
445,830 | (112,611 | ) |
(b) |
333,219 | ||||||||
|
Cost of product revenue |
99,538 | - | 99,538 | ||||||||||
|
Selling, general and administrative |
300,559 | (47,444 | ) |
(b) |
253,115 | ||||||||
|
Research and development |
89,593 | - | 89,593 | ||||||||||
|
Contingent consideration |
(1,036 | ) | - | (1,036 | ) | ||||||||
|
Amortization of intangible assets |
86,032 | (4,110 | ) |
(b) |
81,924 | ||||||||
|
Gain on sale of assets |
- | (105,655 | ) |
(c) |
(105,655 | ) | |||||||
|
Total costs and expenses |
1,020,516 | (267,820 | ) | 750,696 | |||||||||
|
Operating (loss) income |
(157,021 | ) | 150,545 | (6,476 | ) | ||||||||
|
Other income and (expense), net: |
|||||||||||||
|
Interest income |
3,983 | - | 3,983 | ||||||||||
|
Interest expense |
(13,506 | ) | - | (13,506 | ) | ||||||||
|
Fair value changes of derivative instruments, net |
(781 | ) | - | (781 | ) | ||||||||
|
Other expense, net |
(16,994 | ) | - | (16,994 | ) | ||||||||
|
Other expense, net |
(27,298 | ) | - | (27,298 | ) | ||||||||
|
(Loss) income before income taxes and investment losses |
(184,319 | ) | 150,545 | (33,774 | ) | ||||||||
|
Income tax (loss) benefit |
(4,437 | ) | 8,190 |
(d) |
3,753 | ||||||||
|
Loss (income) before investment losses |
(188,756 | ) | 158,735 | (30,021 | ) | ||||||||
|
Loss from investments in investees |
(107 | ) | - | (107 | ) | ||||||||
|
Net (loss) income |
$ | (188,863 | ) | $ | 158,735 | $ | (30,128 | ) | |||||
|
Loss per share, basic and diluted: |
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|
Net loss per share |
$ | (0.25 | ) | $ | (0.04 | ) | |||||||
|
Weighted average number of common shares outstanding, |
|||||||||||||
|
basic and diluted |
751,765,915 | 751,765,915 | |||||||||||
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The Company’s historical consolidated financial statements have been adjusted in the unaudited pro forma condensed consolidated financial statements to present events that are (i) directly attributable to the BioReference Transaction of assets, and (ii) are factually supportable. The unaudited pro forma condensed consolidated statements of operations do not reflect the estimated gain on the BioReference Transaction.
NOTE 2. Pro Forma Adjustments
The following adjustments have been reflected in the unaudited pro forma condensed consolidated financial statement:
|
(a) |
Reflects the Company’s historical US GAAP consolidated financial statements, as reported, before pro forma adjustments related to the BioReference Transaction. As of and for the six months ended June 30, 2024 and the year ended December 31, 2023, Bio Reference’s operating results were reported as part of the Company’s Diagnostic Segment. | |
|
(b) |
Reflects the elimination of revenues, cost of goods sold, expenses and amortization of intangible assets from the BioReference Transaction. | |
|
(c) |
Reflects the estimated gain on sale of assets of $105.7 million arising from the BioReference Transaction as if the BioReference Transaction and related events had occurred on January 1, 2023, the first day of fiscal year 2023. | |
|
(d) |
Reflects the estimated income tax effect of the BioReference Transaction. The tax effect of the BioReference Transaction was calculated using the historical statutory rates in effect for the periods presented. |
|
(e) |
Reflects estimated net cash proceeds from the BioReference Transaction of $232.7 million, representing the gross sale price of $237.5 million minus certain purchase price adjustments and estimated transaction costs. | |
|
(f) |
Represents the assets and liabilities conveyed to Labcorp in the BioReference Transaction. | |
|
(g) |
Reflects tax impacts of the BioReference Transaction. | |
|
(h) |
Reflects the effect on accumulated deficit related to the estimated gain on sale and related tax impacts attributable to the BioReference Transaction as if the BioReference Transaction and related events had occurred on June 30, 2024. The actual amount of the gain on sale will be based on the balances as of the closing date of the BioReference Transaction and may differ materially from the pro forma gain on sale amount presented herein. |
|
Estimated proceeds, net of transaction costs. |
$ | 232,670 | ||
|
Assets held for sale |
(117,692 | ) | ||
|
Liabilities of associated with assets held for sale |
8,872 | |||
|
Tax impacts |
(1,278 | ) | ||
|
Gain on sale |
$ | 122,571 |