OPKO Health Q3 2024 Earnings Call Transcript

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Provided by Quartr
November 7, 2024

Key Takeaways

  • Opco sold BioReference Health’s clinical diagnostics and women’s health labs (excluding NY/NJ) to LabCorp for $237.5M, recorded a $121.5M gain and expects the remaining operations to reach breakeven by year-end and positive cash flow in 2025 through ~$25M of annualized cost savings.
  • In its MODEX biopharma segment, Opco initiated a Phase 1 trial of its tetra-specific antibody MDX-2001 and plans IND filings next year for MDX-2003 and MDX-2004, while securing an additional $51M (bringing total BARDA funding to $110M, with potential for $203M) to develop multivalent COVID-19 and influenza antibody programs.
  • Opco’s collaboration with Merck on a multivalent Epstein-Barr virus nanoparticle vaccine is set to enter the clinic soon, underpinned by a $50M upfront payment and up to $872.5M in milestones plus royalties.
  • Pfizer has launched the once-weekly pediatric growth hormone Engenla in priority markets and Opco retains eligibility for $100M in milestone payments, while its internally developed dual GLP-1/glucagon peptide shows promising animal data for both a once-weekly injectable and a once-daily oral formulation via Entera Bio’s NTAP technology.
  • Opco closed Q3 with net income of $24.9M versus a $84.5M loss a year ago, $400M+ in cash and a repurchase of ~10% of shares, and provided Q4 revenue guidance of $155–160M as it targets a >27% gross margin threshold and further buybacks to enhance shareholder value.
AI Generated. May Contain Errors.
Earnings Conference Call
OPKO Health Q3 2024
00:00 / 00:00

There are 10 speakers on the call.

Operator

Good day, and welcome to the OpcoHealth Third Quarter of 2024 Financial Results Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Yvonne Briggs.

Operator

Please go ahead.

Speaker 1

Thank you, operator, and good afternoon. This is Yvonne Briggs with Alliance Advisors Investor Relations. Thank you all for joining today's call to discuss Opco Health's financial results for the Q3 of 2024. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward looking and as such will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward looking statements include without limitation the various risks described in the company's SEC filings, including the annual report on Form 10 ks for the year ended December 31, 2023 and in subsequently filed SEC reports.

Speaker 1

This conference call contains time sensitive information that is accurate only as of the date of the live broadcast, November 7, 2024. Except as required by law, Opco undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances after the date of this call. Before we begin, let me review the format for today's call. Doctor. Philip Frost, Chairman and Chief Executive Officer, will open the call.

Speaker 1

Doctor. Elias Serhouni, Vice Chairman and President, will then provide an overview of BioReference Health as well as Opco's Pharmaceutical business. After that, Adam Logel, OpCo's CFO, will review the company's Q3 financial results and provide Q4 financial guidance and then we'll open up the call to questions. Now I'd like to turn the call over to Doctor. Frost.

Speaker 2

Good afternoon, and thank you for joining us today. We had a good Q3 with positive developments in both our Diagnostics and Pharmaceutical segments. Significant progress has been made to put BioReference on a clear path to profitability after selling certain assets to LabCorp. We continued the development of the MODEX technology product portfolio. Pfizer has successfully launched Engenla in all priority markets, and we continue to be enthusiastic about positive animal studies of our once weekly injectable dual GLP-one glucagon agonist program.

Speaker 2

Our collaboration with Entera Bio on an orally delivered once daily version of our oxintomodulin also shows great promise in animal studies. We bolstered our balance sheet with significant cash infusions to ensure adequate funding for our pharmaceutical pipeline and to return capital to our shareholders through a stock repurchase program. As we continue to execute our strategy, we expect these important catalysts to ultimately be reflected in a closer alignment of the value of our assets and our stock price. Our currently portfolio consists of a variety of segments that investors need to evaluate. We plan to operate these segments to drive value for OpCo with additional partnerships, business development initiatives and asset sales.

Speaker 2

We're confident in our business and strategy and we'll consider expansion of our share buyback program as appropriate. OpCo is structured around 5 key businesses. By reference, MODEX, our growth hormone franchise with Pfizer, our global healthcare business and our pipeline assets. We have the ability to explore partnerships and sales or business development activities with each in order to build value, unlock value and return capital to OpCo. We've seen some evidence of this so far in 2024, and we hope to continue the process in 2025.

Speaker 2

We look forward to keeping you apprised of our progress. With that introduction, I'll turn the call over to Elias.

Speaker 3

Well, thank you, Phil, and good afternoon, everyone. As Phil mentioned, OpCo completed the sale of BioReference Health's Laboratory Testing businesses focused on clinical diagnostics and women's health nationwide, but excluding operations in New York and New Jersey, which we retain. The sale was for $237,500,000 BioReference Health will continue to offer specialty oncology and urology diagnostic services nationwide as well as maintain a comprehensive menu of core services in New York and New Jersey. This will allow us to streamline our overall infrastructure and reduce operating costs to better position the division for sustained growth and profitability. The assets we sold had annual revenue of about $100,000,000 Now net sales from the remaining operations continuing at BioReference Health exceeded $400,000,000 in 2023 as an indication.

Speaker 3

Our high specialty, high value testing segments continue to perform well with oncology testing volume in the Q3 of this year was up 6.8% compared to the Q3 of 2023. And this reflects both the depth and innovation of our testing portfolio and expanded collaborations with large cancer centers and health systems. Additionally, in Q3, BioReference received New York State approval for Onco HRD testing for homologous recombination deficiency in breast, ovarian, prostate and pancreatic cancers where PARP inhibitors like Lynparza from AstraZeneca for example are a unique therapeutic option. These tests are necessary to guide the patient for the best therapy. And so this makes BioReference one of the few labs to offer a full comprehensive tumor sequencing menu with our OncoCyte advanced next gen sequencing testing, germline testing with OncoRisk and now an HRD option in OncoHRD for patients with these common cancers.

Speaker 3

And this combined offering provides patients and clinicians with the most comprehensive view of a patient's cancer subtype and the therapeutic options to be considered by their treating physicians. As for our urology segment, the full K SCOR test, which is an FDA approved blood biomarker test indicated for use in men aged 45 and above with elevated PSAs or at risk of prostate cancer and require prostate biopsy for confirmation. Year to date, the 4 ks score test delivered a strong growth of 16% over the same period in 2023. The 4 ks score test provides an individual's probability score of finding aggressive prostate cancer defined as a Gleason score equal or greater than 7 prior to a biopsy decision. And a recent publication in the European Association of Urology Journal regarding a review of 49 clinical studies concluded that among 8 different liquid biomarker tests for prostate cancer assessment, the highest diagnostic performance and ratio is the 4 case core test.

Speaker 3

In the last decade, several European countries have initiated population based prostate cancer screening trials to evaluate whether a screening algorithm that included both PSA and biomarker tests can reduce over diagnosis of prostate cancer. And the 4 ks score test has been included in several of these mass screening trials and demonstrated the value of the 4 ks score test. The 4 ks tested stratifying men with elevated PSA and the high probability of prostate cancer. Now switching gears to our pharmaceutical segments, our Monnex Therapeutics programs are progressing nicely. Our tetra specific antibody MDX-two thousand and one initiated a Phase 1 trial and is currently dosing patients.

Speaker 3

This open label trial at 4 sites is expected to enroll 45 patients with a variety of solid tumors, including lung, breast, prostate and pancreatic cancers. The Phase 1a portion of the study is primarily designed to evaluate the safety and immunogenicity of ascending doses of MDX-two thousand and one and to establish a biologically active dose in humans. Our other immuno oncology programs, MDX-two thousand and three, our tetra specific antibody for liquid tumors and autoimmune indications, as well as MDX-two thousand and four, our immune modulator multispecific antibody are progressing to INDs and expected to enter the clinic next year. Of note, last month, we were awarded $51,000,000 of additional funding under our existing BARDA contract to develop COVID multi specific antibodies and to initiate an influenza program leveraging our mSTAR antibody platform. Approximately $35,000,000 of these $51,000,000 in additional funding was earmarked for the development of the 2nd model multi specific antibody to SARS CoV-two from preclinical through Phase 1 trials, as well as preclinical work on the gene based expression of multi specific antibodies to SARS CoV-two, including mRNA as well as DNA vectors.

Speaker 3

In addition, BARDA activated funding totaling $16,000,000 from our current contract to begin development of influenza multi specific antibodies with potential gene and protein delivery modalities. So collectively, this non diluted funding brings the total committed support from BARDA actually at 110,000,000 dollars with a potential for a total of $203,000,000 in total if all options and milestones are executed. This additional funding, if granted, will be used to accelerate the COVID program, the flu program and target other biodefense struts as well as develop a platform with gene based delivery methods for use against future pandemics. In addition, our collaboration with Merck for Epstein Barr virus multivalent nanoparticle vaccine is on track to enter the clinic soon. Preclinical work is being performed by MODX in collaboration with Merck and has been funded by Merck.

Speaker 3

After Phase 1 human studies begin, Merck will assume all development activities through to commercialization. I'd like to recall that we received an upfront payment of $50,000,000 and are eligible for milestone payments associated with progress in the development and commercialization of MDX-two thousand two hundred and one or the EBV virus vaccine. And these milestones add up to about $872,500,000 as well as royalties on global sales. Now Pfizer's launch of our pediatric long acting growth hormone drug, Agenva, continues to gain share as patients shift from the daily product to this more convenient once weekly drug. Now, OpCo is also entitled to an additional $100,000,000 in potential milestone payments related to additional pediatric and adult indications and that is unaffected by the note purchase agreement with Healthcare Royalty Partners.

Speaker 3

Now, something very interesting has happened and that is that we have continued to advance the development of our long acting oxymptomodulin analog in both subcutaneous and oral formulations. As you know, oxymptomodulin analog are the basis of the peptides that are being used today for diabetic patients as well as for weight loss. Now, the polyethylene glycol PEG linked key peptide, which we have studied and progressed to Phase 2 clinical trials, as we reviewed the data, we essentially suspended the trials after the completion, did not proceed because of dose limiting formulation. But the same key peptide was then redesigned as an isolated compound and has been confirmed in in vitro assays and animal disease models to be a strong candidate for once weekly subcutaneous administration. And so in collaboration with Entera Bio, we recently announced results from our ongoing collaborative research combining our novel AC related compound and Enter Entera's proprietary NTAP technology to see if we could deliver our compound orally.

Speaker 3

And the program is focused on developing the very first oral dual agonist GLP-one glucagon peptide. And this could be a potential once daily treatment for patients with obesity, metabolic disorders, including NASH. The in vivo studies in rodent and pig models show that a single oral dose administration resulted in a desirable PK profile and bioavailability that would support a once daily oral treatment regimen. In parallel, we're going to continue to develop our injectable once a week formulation and trials for the GLP-one glucagon peptide we have recently generated. We look forward to presenting these findings at an upcoming clinical conference.

Speaker 3

So, in summary, we are encouraged by the progress made in both our diagnostic and biopharmaceutical business segments. We're pleased that our internal innovation has attracted significant partnerships to date, while our balance sheet has been bolstered to adequately fund our operations in our growing pipeline of 1st in class products. And so, we remain confident in our business strategy and our ability and capacity to drive progress. With that, I'll now turn the call over to Adam Logell to discuss our Q3 financial results. Adam?

Speaker 4

Thank you, Elias. As Phil and Elias have discussed, the Q3 of 2024 was transformational for our business and our balance sheet. We ended September with over $400,000,000 in cash and cash equivalents, which don't include $23,700,000 held in escrow related to our LabCorp transaction or restricted stock of $20,000,000 We repurchased and retired 14,900,000 shares of our common stock for $23,800,000 through September 30. And through yesterday, we repurchased and retired a total of 24,000,000 shares for $37,300,000 under our $100,000,000 share repurchase program. This does not include the 55,000,000 shares that we repurchased earlier this year, bringing our total repurchases year to date to 79,000,000 shares or approximately 10% of shares outstanding as of January 1.

Speaker 4

Further, we closed our asset based lending facility with JPMorgan with the cash inflows from our LabCorp and Healthcare royalty transactions. We have a significant cash balance and will be disciplined in what we invest in, including our highest priority R and D programs. We will also continue to fund our opportunistic equity and convertible note repurchases as a demonstration of our commitment to enhancing shareholder value. With that, let's review our financial results for the Q3. Starting with our Diagnostics segment, revenue was $121,300,000 for the Q3 of 2024 compared with $131,700,000 for the 2023 period.

Speaker 4

This decrease was primarily the result of lower testing volumes, including the impact of the LabCorp transaction that occurred mid quarter during the quarter as well as 2 hurricanes impacting the Southeast. During the Q3 of 2024, costs and expenses totaled $184,200,000 compared with $160,800,000 for the comparable quarter of 2023. Importantly, costs and expenses included approximately $30,000,000 of non recurring costs and expenses for severance, facility closure costs and contractual volume shortfalls, all incurred as expected as we realign our business to ensure sustainable growth and profitability after the LabCorp transaction closing. During the Q3 of 2024, we also recorded a gain of $121,500,000 on the transaction with LabCorp, which resulted in operating income of $58,500,000 compared to an operating loss of $29,100,000 for the 2023 quarter. Depreciation and amortization expense for the Diagnostics segment was $6,100,000 $8,400,000 for the 2024 2023 periods, respectively.

Speaker 4

As we have discussed on previous calls, the LATCORP transaction was a major step for us to return to profitability and the restructuring activities this transaction allowed and we initiated this quarter put us in a strong position to have the business operating at a breakeven run rate by the end of this year and operating cash flow positive and profitability in 2025. Moving to our Pharmaceutical segment. Revenue was $52,400,000 for the Q3 of 2024 compared with $46,900,000 for the comparable period of 2023. Revenue from products, including our international pharmaceutical businesses, was $39,100,000 compared to $40,700,000 for the comparable period of 2023. Despite the challenging foreign currency environment, the profitability profile of this business continues to improve above our expectations.

Speaker 4

Product revenue includes revenue from RAYALDEE of $5,800,000 which was lower than 2023's $7,300,000 reflecting an increase in the cost of our co pay assistance programs and a slight decrease in the number of bottles shipped. Revenue from the transfer of IP was $13,200,000 the Q3 of 2024 compared to $6,200,000 for the 2023 quarter. Our gross profit share from Pfizer was $7,400,000 during the Q3 of 2024 compared to $4,900,000 for the 2023 period. In addition, the Q3 of 2024 includes $5,500,000 in R and D funding related to our BARDA agreement. Costs and expenses for our Pharmaceutical segment were $84,600,000 for the Q3 of 2024 compared to $72,300,000 for the 2023 period.

Speaker 4

Research and development expenses were $28,200,000 compared to $18,900,000 a year ago. R and D expense increased as a result of our activities for our MODEX development programs, including the recently commenced Phase 1 clinical trial for our first immuno oncology program as well as our BARDA supportive activities. The resulting operating loss for the quarter ended September 30, 2024 was $32,200,000 compared to an operating loss of $25,400,000 for the Q3 of 2023. Depreciation and amortization expense for the quarter increased slightly to $18,000,000 from $17,800,000 for the 2023 quarter. Turning to our consolidated financial results.

Speaker 4

For the Q3 of 2024, we reported net income of $24,900,000 or $0.03 per diluted share compared with a net loss of $84,500,000 or $0.11 per share for the 2023 period. Net income for the Q3 of 2024 included a non cash unrealized gain on our investment of GNDX of $45,900,000 compared to a non cash unrealized loss of $8,300,000 for the 2023 period. As we look ahead, we are providing financial guidance with the following assumptions. For our Pharmaceutical segment, we expect Pfizer to continue to grow sales of Ingenla and realize the benefits of the expanded gross margin due to the scale up of its manufacturing processes. We assume a stable foreign currency exchange rate for our ex U.

Speaker 4

S. Pharmaceutical businesses. And R and D expenses for the Q4 of 2024 will reflect higher activities related to our MODEX programs, including CMC efforts and progress with our BARDA agreements. For our Diagnostics segment, we are continuing our multi year, multi phase program to improve profitability. This program is focused on operational efficiencies and the reduction of fixed infrastructure cost and is expected to deliver annualized savings of approximately $25,000,000 by the end of 2024, some of which we began realizing in the Q3 and will continue throughout the Q4.

Speaker 4

We expect an additional $14,000,000 of non recurring costs in the 4th quarter, primarily including severance of facility closure costs to be paid out through 2028. In addition, we have taken action and are seeing the benefits from our revenue cycle management programs, including implementing price increases that were effective in the Q3 for certain testing modalities, including our oncology offerings. These actions are expected to result in an overall increase in annual revenue of approximately $8,000,000 to $10,000,000 for the full year of 2025. We have established gross margin threshold and targets for our remaining business to be above 27% and expect positive cash flow for the full year 2025 and have established an additional cost initiative targeting an additional $20,000,000 of annualized cost savings. We look forward to providing further details and guidance during our Q4 call.

Speaker 4

As a result, we expect the following for the Q4 of 2024. Total revenues between $155,000,000 $160,000,000 with revenue from services between $95,000,000 $98,000,000 revenue from product sales between $41,000,000 $44,000,000 and other revenue between $13,000,000 $18,000,000 inclusive of the Pfizer gross profit share estimates between $8,000,000 $10,000,000 as well as BARDA revenue of $5,000,000 to $8,000,000 We expect 4th quarter costs and expenses to be between $200,000,000 $210,000,000 excluding the non recurring expenses related to our restructuring of BioReference. R and D is expected to be between $28,000,000 $34,000,000 depending on the timing of certain activities for MODEX programs, with $5,000,000 to $8,000,000 being offset by BARDA funding. We finally expect depreciation and amortization expense to be between $22,000,000 $23,000,000 That concludes our prepared remarks, and thank you all for your attention. Operator, let's open the call for questions.

Operator

Our first question comes from Maury Raycroft of Jefferies. Go ahead

Speaker 5

please. Hi, congrats on the progress and thank you for taking my questions. Maybe starting off, just wondering what the next steps are for the oxycodmodulin analog 8,8006 Now that you have the preclinical data for the subcutaneous form and the oral form as well, does Entera plan to advance this into a Phase I study in 2025? And also you said you will advance the subcu form in parallel with the oral drug. Is this just for getting PK data or for keeping options open?

Speaker 5

Maybe talk more about the strategy between the oral and the subcu version?

Speaker 3

That's a good question, Maury. Thank you. So yes, we're going to continue the development in parallel of the oral with Ancara Bio as a collaborator and using the technology. We have early results that say 2 things. 1, it's feasible and 2, it's comparable to other peptides on the market in oral forms.

Speaker 3

And so we can be competitive there. In terms of the injectable form, just have to advance the preclinical work. We've done a lot of work on this molecule before even reaching a Phase 2 with a different composition of matter. We think this one is much, much better because it allows you to do once a week injection and lower doses. So based on our experience, what we need to understand here is that this co agonist of GLP-one leucoban is different from most of the other peptides that are on the market today.

Speaker 3

There is one from Boehringer Ingelheim that is comparable in at least composition of the peptides. And so we need to advance that to the point where we can make a decision as to whether or not we have what we need to go to Phase 1. So we're in the preclinical phase. It has attracted interest. We're talking to other parties that may have an interest in partnering with us and the work is ongoing, Maury.

Speaker 3

So I can't make any more statements in that, but we're active in it. We're actively pursuing it.

Speaker 5

Got it. Understood. Okay. And then, for the MDx 1 study that's ongoing, do you anticipate you could report a data update from that first half twenty twenty five? And I know this is an early study, but can you talk about expectations for what you could show in initial data and how this will influence next steps and continued investment in the program?

Speaker 3

So just so you know, there are 2 phases. The first one is basically escalation of the dose to a range where we think there will be an efficacy. So we have 6 doses that FDA allowed us to do. Those are done one patient at a time and you have to wait a month to see if there is no side effect. Once that's done, we'll go to cohorts where we have 3 patients at a time in different cancers And then we will be able to see if we have a response at this time.

Speaker 3

Now for the first six, it probably will take another 6 months to get a read about whether or not we have a good safety profile, it's tolerable and also finding out if we don't have antibody drug antibodies, anti drug antibodies. So think of it in 2 ways. 1st is the first feasibility toxicology phase, which we'll be reading out in the first half of twenty twenty five, more like towards the end of the first half. The second one is a much longer phase where we want to test real doses that we believe are going to be effective in a basket trial of about 40 patients. And again, that will take a while to read probably towards the middle of 'twenty six, we hope.

Operator

Our next question comes from Jeff Cohen of Ladenburg Thalmann and Company. Go ahead

Speaker 6

please. Hi, thank you for taking our questions. This is Destiny on for Jeff. I wanted to start with the 2,201 asset. You said you're moving it towards the clinic and at that point I know that Mark is going to take over for the associated costs.

Speaker 6

So I'm wondering who is making that decision since you're both kind of jointly progressing this forward?

Speaker 3

Right. We have a joint program basically. We've Merck is the sponsor. So Merck will make the decision. We obviously have participated all the way through this phase here to the entry into the clinic.

Speaker 3

But that decision is their decision, not our decision. But they have everything they need at this point to actually make that decision.

Speaker 6

Okay. So there's nothing outstanding that really is stopping them from moving forward? It's more of a them thing. Am I understanding correctly?

Speaker 3

Yes, you are. There's nothing in front of us that's an obstacle at this point, except them making a decision.

Speaker 6

Okay, perfect. And I want to quickly touch on bio reference. Congratulations on having that closed. I'm wondering if your profitability comments are kind of contingent on the investment that you have to make. I guess, in other words, do you need to invest more into this business in order to reach those profitability goals?

Speaker 6

Or as it currently stands, trimming some more of the fat will be sufficient?

Speaker 3

Adam, do you want to answer that?

Speaker 4

Sure. So Destiny, the costs that we're incurring, those nonrecurring costs are the key for us to be able to get the business profitable. There's not significant investments that we need to make back into the business. There's not an expansion of the sales force or new product offerings or anything like that. It is simply just now that we've closed the transaction with LabCorp giving us the ability to reduce our infrastructure size and an existing footprint to get us to those profitability numbers.

Speaker 4

So we're I'll call it weeks away from that point.

Speaker 6

Got it. Okay. Awesome.

Speaker 3

Remember that we closed multiple laboratories and facilities from California all the way to Florida as part of the process. So we think we can definitely improve profitability by focusing also in the New York, New Jersey area, where we have the majority of our resources. And I think focusing there, we believe, will provide both efficiencies, because we have right sized the lab for that market, but also opportunities for growth.

Speaker 6

Okay. Got it. I think that does it for me. You addressed everything else in your prepared remarks. I'll jump back in queue.

Speaker 6

Thank you.

Operator

The next question comes from Yi Chen of H. C. Wainwright and Company. Go ahead,

Speaker 7

please. Thank you for taking my questions. So could you comment for OPK88006, the dual agonist peptide, do you I mean, how much outperformance in terms of efficacy do you expect it to show compared to existing marketed GLP 1 drugs on the market? And also between weekly subcu version and also daily oral version, which one do you think could potentially have better market adoption and the reasons for that? Thank you.

Speaker 3

Thank you for the question. So when you look at the market, the way it has evolved, I think it really depends on three factors. 1 is obviously the composition of the peptide as compared to semaglutide or the tritirsepatide or the Boehringer Ingelheim compounds and they all have differences. And both of the oral forms and the injectable forms will have a place, we think, simply because there is no other oral, there is only one oral semaglutide. And I think you will have actually phases of the therapy of these patients where oral forms will be necessary.

Speaker 3

Once you've done once you've gone through maybe an injectable form, control the weight, then to sustain that over time, it might be better to go to an oral form. But that will all depend on the clinical performance of the molecules in terms of side effects and weight loss and the necessary observation that you have to make. If you notice, we said that this peptide, this co agonist may have a better role for patients who have liver disease, NASH, steatohepatitis. And then the idea here is to really provide a continuum of care for the patients who will benefit from a glucagon addition. Remember GLP-one receptors don't exist in the liver, but glucagon receptors do.

Speaker 3

So you'll have, we hope, a biological action that will be differentiated from the other ones and there will be a class of patients, especially those who have evidence of liver malfunction that would be more appropriate for these new peptides. This is all speculation. We'll have to prove it. We're doing that.

Speaker 7

In terms of safety, do you think it could potentially

Speaker 3

have a better safety

Speaker 7

profile compared to the semaglutide or semaglutide or tirzepatide? I

Speaker 3

mean, definitely, the oral forms certainly will have that ability because you're giving the oral daily dose. And we know that these side effects that we see in those who have vomiting, diarrhea are related to what we call the maximum rise of the peptide in the blood. And so, because you're giving an oral form, which is much less than what you give every week in terms of the dose received by the patient, you would think that the oral form would be less prone to give you side effects, so deleterious side effects. Now the other one, I would not be able to speculate because there is no evidence one way or the other that will be added more or less than what is in the market today once a week injectable.

Speaker 7

Okay. Thank you.

Operator

The next question comes from Edward Tenthoff of Piper Sandler. Go ahead please.

Speaker 8

Great. Thank you for taking my question and congrats on all the progress, all these moving parts to strengthen the balance sheet and finance the company going forward. My questions really had to do with some MODEX cancer efforts. And I'm wondering what we should be expecting in terms of data releases next year. Would this be more likely at a medical meeting?

Speaker 8

Is this something you'll update kind of as you get things interesting? And what should we really be expecting in terms of escalation and then ultimately guidance with respect to expansion cohorts where you might develop the asset things?

Speaker 3

Yes. Thanks. We want to obviously inform as we have data coming out. The first is that the mid-twenty 25 when we will have the first readouts in the humans of the performance of this platform in terms of its ability to be tolerated, any side effects or antibody anti drug antibodies, okay. So that's the first data, because at the end of the day, we have to really show that this platform is well tolerated in cancer patients.

Speaker 3

Then comes the second phase for MDX-two zero one, which is the one that is in the clinic of do we see efficacy and in what tumor. So that will be basically middle of 'twenty six, I would think. And then at that time, depending on what the results are, we will probably go into a pivotal trial to basically get MDX-two zero one approved hopefully. So that's one. The second is you have 2 other molecules, which are really nearing INDs and then that you will hear about.

Speaker 3

But clearly, we will present medical data on MDX-two zero one before everything else. The 3rd sort of news is that we have parties that are interested in our platform to collaborate with us and that might be a news that we will definitely share if that happens. So those are the 3 things that you will see in oncology. Emerging programs, you won't have any specific information except targets and the fact that they're in the clinic, in emerging technologies that others want to collaborate with us on. And then MDX-two zero one clinical data coming up over the next 18 months.

Speaker 8

That's helpful. And just a maybe quick follow-up. Obviously, this is going to be somewhat data dependent and dependent on the cancers where you see activity and sort of what standard of care is. But do you ultimately envision combining your asset with other standard of care agents, whether that be chemotherapy, other IO or other targeted agents? Or will that just really depend

Speaker 3

on what we see from

Speaker 8

the data? Thanks so much.

Speaker 3

Absolutely. You understand it. I mean, it's clear. Your question shows that number 1, we have to show effect as a monotherapy, right? Once we do and in what cancer, under what subtype and what conditions, then the combination will be a self evident step.

Speaker 3

As you know, in cancer development, we tend to essentially enter the development in Phase 1 and Phase 2 with patients who've already gone through other forms of therapies and failed. And once we show that we have an effect even on those patients, then we go forward from let's say, 4th line to 3rd line to second line. And as you go up to 1st line, you tend to combine with other therapies. Absolutely. Yes.

Speaker 3

So your question is absolutely on target. And that would be the natural evolution of the development phase of a molecule like MDX-two thousand and one.

Speaker 8

Makes a lot of sense. Look forward to seeing you guys soon.

Speaker 3

Thank you. Take care.

Operator

The next question comes from Michael Petusky of Barrington Research. Go ahead please.

Speaker 9

Hi. Good morning. So Adam, in terms of your assumptions around bio reference for '25, what are the top line expectations sort of flat, modest growth, modest decline? Like what are you thinking in terms of what it's going to take in terms of top line performance to get you to positive cash flow in that business?

Speaker 4

Hey, Mike. Thanks for the question. So the short answer is, we're going to give you good guidance in Q4 when we go through our full year guide. But the shorter answer here is we don't expect a big meaningful growth to achieve those numbers.

Speaker 9

Okay, great. And then in terms of RAYALDEE, obviously, this situation that really has never lived up to the initial hopes. And I'm just curious, what would it take to get this to a $50,000,000 product? I mean, is it more investment in additional trials? Is it more investment in sales?

Speaker 9

I mean what is there a pathway to $50,000,000 in annual revenue for RAYALDEE over the next few years? Thanks.

Speaker 2

I'll take it. This is Phil. We're working on several initiatives there and there is a lot of interest in new data that we recently put together indicating that the lowering of PTH in patients with CKD and whom it's elevated for a certain period of time at a certain level will delay the onset of or slow the progression of the chronic kidney disease and delay the requirement for dialysis. So having said that, that is really a mouthful. If that turns out to be holds up, if that data holds up and we're hopeful that it will, the data looks good.

Speaker 2

The thought leaders are buying into it and we're about to present this as part of a new marketing program. So we'll see what happens.

Speaker 9

Okay. All right. Very good. Thank you. Actually, Adam, one more, if I could.

Speaker 9

One more quick one for Adam. The share repurchase, is it likely that you guys when this initial authorization, I mean, will there be another official authorization or we get something like what sort of the future of the share repurchase of the common stock? Thanks.

Speaker 4

Yes. So we've used about a third of what the Board authorized earlier this year. And to the extent, we have capital allocation to a program and we don't have enough under the program, we'll announce an expanded program. Phil alluded to that in his comments. So I'd say that's you'll hear about it through another announcement when we get there.

Speaker 9

All right. Very good. Thanks, guys.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Doctor. Frost for any closing remarks.

Speaker 2

Well, thank you for participating and for your excellent questions. We look forward to meeting with you again in a few months, and hopefully, we'll have an even more interesting story to tell at that point.

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