Opko Health Inc (OPK)

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Analyst Michael Petusky: Bio-Reference Acquisition Tranforms OPKO into a Company with Meaningful Operations, Skepticism “way overdone”

POpko Health Has Crashed 55% In Three Months; Time To Buy? ( http://www.benzinga.com/analyst-ratings/analyst-color/15/09/5869248/opko-health-has-crashed-55-in-three-months-time-to-buy )
Monica Gerson ( http://www.benzinga.com/users/monica-gerson ) , Benzinga Staff Writer
September 28, 2015 10:44am

* Opko Health Inc. OPK ?3.25% shares are down 40 percent year-to-date, despite touching a high of $19 on June 2.

* Barrington Research’s Michael Petusky maintained an Outperform rating on the company, while reducing the price target from $20 to $19.

* Company specific issues and a weak pharmaceutical space are responsible for the decline in the company shares, Petusky said.

Analyst Michael Petusky mentioned that the 55 percent decline in Opko Health’s shares over the last three months was on account of investor skepticism over company specific issues, like the recently completed acquisition of Bio-Reference Laboratories Inc NASDAQBRLI.

Other factors that have impacted the company’s shares include concerns surrounding the “the future of the company’s 4Kscore test for prostate disease, a perceived delay in the commercialization timetable of the company’s long-lasting human growth hormone products (adult and pediatric indications), and questions about Rayaldee’s upside,” Petusky added.

The analyst believes that the acquisition of Bio-Reference Laboratories has provided Opko with profitable revenue of $1 billion, besides transforming it from a development stage entity into a company with meaningful operations. Although Opko needs to prove the rationale for this transaction, the skepticism surrounding it is “way overdone,” Petusky stated.

The 4K Score test, if successful, could eliminate the need for biopsies besides offering significant commercial promise and boost Opko’s performance.

The adult version of Opko’s long acting hGH product is expected to be launched in late 2017 or early 2018, with the commercialization of the pediatric version expected in 2020 and not earlier as perceived by the markets.