OPKO HEALTH, INC. (OPK)

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

OVERVIEW

You should read this discussion together with the unaudited Condensed Consolidated Financial Statements, related notes, and other financial information included elsewhere in this Quarterly Report on Form 10-Q together with our audited consolidated financial statements, related notes, and other information contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “Form 10-K”). The following discussion contains assumptions, estimates and other forward-looking statements that involve a number of risks and uncertainties, including those discussed under “Risk Factors,” in Part I, Item 1A of the Form 10-K and as described from time to time in our other filings with the Securities and Exchange Commission. These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements.

We are a diversified healthcare company that seeks to establish industry-leading positions in large and rapidly growing medical markets. Our pharmaceutical business features NGENLA® (somatrogon-ghla), also referred to as Somatrogon (hGH-CTP), a once-weekly human growth hormone injection. We have partnered with Pfizer Inc. (“Pfizer”) for further development and commercialization of Somatrogon (hGH-CTP). Regulatory approvals for Somatrogon (hGH-CTP) for the treatment of children and adolescents, as young as three years of age, with growth disturbance due to insufficient secretion of growth hormone, have been secured in more than 50 markets worldwide, including in the United States, European Union Member States, Japan, Canada, and Australia under the brand name NGENLA®.

Through our pharmaceutical business, we also manufacture and sell Rayaldee, a U.S. Food and Drug Administration (“FDA”) approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency. Rayaldee has secured marketing authorizations in 11 European countries, and we are advancing its commercialization in mainland China through our strategic partner.

Our subsidiary, ModeX Therapeutics, Inc. (“ModeX”), is a biotechnology company focused on developing innovative multi-specific immune therapies for cancer and infectious disease candidates. ModeX has a robust early-stage pipeline with assets in key areas of immuno-oncology and infectious diseases, and we intend to further expand our pharmaceutical product pipeline through ModeX’s portfolio of development candidates.

We operate established, revenue-generating pharmaceutical platforms internationally, with our principal operations located in Spain, Ireland, Chile, and Mexico. These key platforms contribute to positive cash flow and may facilitate future market entry for our products currently in development. Our Irish subsidiary, EirGen Pharma Ltd. (“EirGen”), specializes in the development and commercial supply of high-potency oral solid dose pharmaceutical products and exports to more than 60 countries. Research and development activities are primarily conducted in facilities located in Weston, Massachusetts; Waterford, Ireland; Kiryat Gat, Israel; and Barcelona, Spain.

Our diagnostics business, BioReference Health, LLC (“BioReference”), is a highly specialized laboratory in the United States. Following the strategic divestitures of certain of its assets to Labcorp in 2024 and 2025, BioReference focuses on its core clinical and women’s health testing operations in the New York and New Jersey regions and its national specialty urology franchise, including our proprietary 4Kscore® prostate cancer test. We market our laboratory testing services directly to physicians, geneticists, hospitals, clinics, correctional and other health facilities.

RECENT DEVELOPMENTS

Nicoya Amendment

On April 30, 2026, EirGen entered into a second amendment to its license agreement with NICOYA Macau Limited ("Nicoya") relating to the development and commercialization of Rayaldee® in Greater China. Under the amended agreement, the parties expanded the scope of the licensed field and revised certain commercial terms. As partial consideration for the reduction in future royalty rates, EirGen received a 15% equity interest in Nicoya Therapeutics Cayman, Nicoya's parent company. We believe the transaction enhances our long-term participation in the potential value of the Rayaldee franchise in Greater China while maintaining our strategic relationship with Nicoya as it progresses toward broader commercialization in the region.

Completion of the Oncology Transaction

In September 2025, we completed the sale of BioReference’s oncology diagnostics business and related clinical testing services to Labcorp for $192.5 million in cash (the “Oncology Transaction”). As a result of this divestiture, our results of operations for the three and six months ended June 30, 2026 are not directly comparable to the prior year periods, which included the operations of the divested assets. Under the purchase agreement in respect of the Oncology Transaction, we had been entitled

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to receive up to $32.5 million of performance based earnout consideration, and, during the second quarter of 2026, we received $18.4 million in cash, representing the total earnout amount earned and payable under such purchase agreement. No further earnout consideration is expected to be received.

Stock Repurchase Program

On April 4, 2025, the Company announced that its Board of Directors authorized an increase of $100.0 million to the Company’s existing Common Stock repurchase program, originally established on July 18, 2024, increasing the program’s aggregate capacity to $200.0 million. As previously reported in the Company’s Form 10‑K, the Company had repurchased 60,383,629 shares of Common Stock for an aggregate cost of approximately $87.2 million as of December 31, 2025. During the six months ended June 30, 2026, the Company repurchased an additional 9,835,105 shares of Common Stock at an average price of $1.39 per share, for an aggregate cost of approximately $13.2 million. Of these repurchased shares, 9,310,105 were retired prior to June 30, 2026, and 525,000 were retired in July 2026. As of June 30, 2026, the total cost of repurchases under the program was approximately $105.3 million.

Tariffs and Trading Relationships

The U.S. trade environment has seen significant regulatory shifts following a February 2026 U.S. Supreme Court ruling that invalidated several previous tariff actions. In response, the U.S. government has transitioned to a new tariff framework, which includes a presidential proclamation issued in April 2026 regarding patented pharmaceutical products. This new framework currently provides for a 15% tariff rate on qualifying imports from the European Union, where our principal international pharmaceutical manufacturing platforms are located.

These new measures did not have a material impact on our results of operations for the six months ended June 30, 2026. We are continuing to monitor the implementation of these trade policies and evaluate their potential effect on our global supply chain and future financial results.

RESULTS OF OPERATIONS

Foreign Currency Exchange Rates

Approximately 33.3% of our revenue for the six months ended June 30, 2026, was denominated in currencies other than the U.S. Dollar (USD). This compares to 24.5% for the same period in 2025. Our financial statements are reported in USD; therefore, fluctuations in exchange rates affect the translation of foreign-denominated revenue and expenses. During the six months ended June 30, 2026 and the year ended December 31, 2025, our most significant currency exchange rate exposures were to the Chilean Peso and Euro. Gross accumulated currency translation adjustments, recorded as a separate component of shareholders’ equity, totaled $25.0 million and $17.6 million at June 30, 2026 and December 31, 2025, respectively.

We are subject to foreign currency transaction risk due to fluctuations in exchange rates between the time a transaction is initiated and settled. To mitigate this risk, we use foreign currency forward contracts. These contracts fix an exchange rate, allowing us to offset potential losses (or gains) caused by exchange rate changes at the settlement date. As of June 30, 2026, we held $6.8 million in open foreign exchange forward contracts related to inventory purchases on letters of credit, compared to $13.6 million in open contracts as of December 31, 2025.

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FOR THE THREE MONTHS ENDED JUNE 30, 2026 AND 2025

Our consolidated income from operations for the three months ended June 30, 2026 and 2025 was as follows:

Diagnostics

Revenue. Revenue from services for the three months ended June 30, 2026 decreased by approximately $26.6 million, a decrease of 26.3% compared to the same period in 2025. This decline was primarily attributable to a $24.9 million reduction in revenue resulting from the completion of the Oncology Transaction in September 2025. The remaining $1.7 million decreased primarily due to test mix changes as we continued to see the impact of shifting certain unprofitable but higher priced esoteric testing to our strategic partners.

Estimated collection amounts are subject to the complexities and ambiguities of billing, reimbursement regulations and claims processing, as well as considerations unique to Medicare and Medicaid programs, and require us to c

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended, (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), about our expectations, beliefs, or intentions regarding our product development efforts, business, financial condition, results of operations, strategies and prospects. You can identify forward-looking statements by the fact that these statements do not relate to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results and otherwise reflect our views related thereto only as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those contained in “Item 1A — Risk Factors” of this Annual Report on Form 10-K. We do not undertake any obligation to update forward-looking statements except as required by applicable law. We intend that all forward-looking statements be subject to the safe harbor provisions of PSLRA.

OVERVIEW

We are a diversified healthcare company that seeks to establish industry-leading positions in large and rapidly growing medical markets. Our pharmaceutical business features Somatrogon (hGH-CTP), a once-weekly human growth hormone injection. We have partnered with Pfizer Inc. (“Pfizer”) for further development and commercialization of Somatrogon (hGH-CTP). Regulatory approvals for Somatrogon (hGH-CTP) for the treatment of children and adolescents, as young as three years of age, with growth disturbance due to insufficient secretion of growth hormone, have been secured in more than 50 markets worldwide, including in the United States, European Union Member States, Japan, Canada, and Australia under the brand name NGENLA®. Also, through our pharmaceutical business, we manufacture and sell Rayaldee, an FDA approved treatment for secondary hyperparathyroidism (“SHPT”) in adults with stage 3 or 4 chronic kidney disease (“CKD”) and vitamin D insufficiency.

Our subsidiary, ModeX Therapeutics, Inc. (“ModeX”), is a biotechnology company focused on developing innovative multi-specific immune therapies for cancer and infectious disease candidates. ModeX has a robust early-stage pipeline with assets in key areas of immuno-oncology and infectious diseases, and we intend to further expand our pharmaceutical product pipeline through ModeX’s portfolio of development candidates.

Our diagnostics business, BioReference Health, LLC (“BioReference”), is a highly specialized laboratory in the United States, with a sales and marketing team focused on growth and new product integration, including the 4Kscore® test which is designed to assesses a patient's probability for prostate cancer. BioReference® offers a broad spectrum of diagnostic testing services for urology (4Kscore), and corrections nationwide, setting new standards with its industry-leading turnaround times. BioReference also provides comprehensive clinical and women’s health testing in New York and New Jersey. Our test offerings are backed by a team of board-certified medical professionals and driven by the latest healthcare guidelines and standards. We market our laboratory testing services directly to physicians, geneticists, hospitals, clinics, correctional and other health facilities. As described below, we sold certain BioReference assets to Laboratory Corporation of America Holdings (“Labcorp”) in 2024 and 2025.

We operate several established, revenue-generating pharmaceutical platforms internationally, with our principal operations located in Spain, Ireland, Chile, and Mexico. These key platforms contribute to positive cash flow and facilitate future market entry for our products currently in development. Beyond these platforms, our operations include a development and commercial supply pharmaceutical company, as well as a global supply chain operation.

Our management team possesses extensive industry experience in development, regulatory affairs, and commercialization. Their industry relationships support the identification and pursuit of commercial opportunities. Research and development activities are primarily conducted in facilities located in Weston, Massachusetts, Waterford, Ireland, Kiryat Gat, Israel, and Barcelona, Spain.

On September 15, 2025, we consummated the sale of certain assets of BioReference to Labcorp (the “Oncology Transaction”), pursuant to an agreement entered into on March 10, 2025 (the “Labcorp Oncology Purchase Agreement”). Labcorp acquired BioReference's oncology diagnostics business and related clinical testing services assets, which were part of our diagnostics segment. Upon closing, Labcorp paid an aggregate of $192.5 million in cash consideration, of which $19.2 million was deposited in escrow. The escrow is to be released to us on the 12-month anniversary of the closing date, net of any outstanding or liquidated indemnity claims. The Company may also receive up to $32.5 million in performance-based cash contingent consideration in accordance with the terms of a post-closing earnout based upon revenue generated by certain customer accounts. We recognized a gain of $101.6 million from the Oncology Transaction for the year ended December 31,

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2025.

On September 16, 2024, we consummated the sale of certain assets of BioReference to Labcorp pursuant to an agreement entered into on March 27, 2024 (the “Labcorp Asset Purchase Agreement”). Labcorp acquired select assets of BioReference (the “BioReference Transaction”), which were part of our diagnostics segment and included BioReference's laboratory testing businesses focused on clinical diagnostics, reproductive health, and women's health across the United States, excluding BioReference's New York and New Jersey operations. Upon closing, Labcorp paid us aggregate consideration of $237.5 million, in cash, net of $23.75 million deposited in escrow. We received $24.6 million of escrow funds, including accrued interest. We recognized a gain of $121.5 million from the BioReference Transaction for the year ended December 31, 2024.

RECENT DEVELOPMENTS

Entera Collaboration Agreements

On February 4, 2026, we and our wholly owned subsidiary, OPKO Biologics, entered into an amendment to our 2025 collaboration and license agreement with Entera Bio Ltd. (“Entera”) to expand the partnership to include the development of a first-in-class oral long-acting parathyroid hormone (LA-PTH) analog for the treatment of hypoparathyroidism. This program combines the Company's proprietary long-acting PTH variants with Entera's proprietary N-Tab® oral peptide delivery technology to create a once-daily tablet intended to replace daily or weekly injections.

Under the terms of the expanded agreement, the Company and Entera will each hold a 50% pro-rata ownership interest in the LA-PTH hypoparathyroidism program and will each be responsible for 50% of the associated development costs. The companies expect to file an investigational new drug (IND) application with the FDA for the LA-PTH program in late 2026.

This expansion builds upon the existing collaboration between the parties, which includes the development of an oral oxyntomodulin (OXM) dual GLP-1/glucagon analog for metabolic and fibrotic disorders and an oral GLP-2 tablet for the treatment of short bowel syndrome. For the oral OXM program, the Company and Entera maintain a 60% and 40% ownership structure, respectively, with development costs shared on a pro-rata basis. Initial Phase 1 clinical data for the injectable formulation of OXM is expected in late 2026, with an IND filing for the oral tablet formulation to follow thereafter.

RESULTS OF OPERATIONS

Foreign Currency Exchange Rates

For the years ended December 31, 2025, 2024, and 2023, approximately 28.0%, 23.1%, and 29.6% of revenue, respectively, was denominated in currencies other than the U.S. Dollar (USD). Our financial statements are reported in USD and, accordingly, fluctuations in exchange rates affect the translation of revenues and expenses denominated in foreign currencies into USD for purposes of reporting our consolidated financial results. During the years ended December 31, 2025, 2024 and 2023, the most significant currency exchange rate exposures were to the Chilean Peso and Euro. Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were $17.6 million and $52.7 million at December 31, 2025 and 2024, respectively.

We are subject to foreign currency translation risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of transactions. We limit foreign currency transaction risk through hedge transactions with foreign currency forward contracts. Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date. As of December 31, 2025, we held $13.6 million in open foreign exchange forward contracts related to inventory purchases on letters of credit, compared to zero open contracts as of December 31, 2024.

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For The Years Ended December 31, 2025 and 2024

Our consolidated loss from operations for the years ended December 31, 2025 and 2024 was as follows:

Diagnostics

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