OPKO to sell most labs to Labcorp for $722M; antitrust review pending

OPKO calls itself a multinational biopharmaceutical and diagnostics company. Its drug side sells products such as Rayaldee, a vitamin D drug, and shares profit with Pfizer on the growth hormone NGENLA.¹ Its diagnostics side is BioReference, a chain of labs that run clinical and pathology tests for doctors and patients.² In 2025 the whole company had $606.9 million of revenue and an operating loss of $117.4 million, a figure that includes a $101.6 million gain on the 2025 cancer-testing sale to Labcorp; without it the loss was about $219 million.³ It used $178.5 million of cash in operations that year.⁴

This is OPKO's third lab sale to Labcorp. In 2024 it sold other BioReference lab assets to Labcorp for $237.5 million in cash, and on September 15, 2025 it sold the cancer-testing business for $192.5 million, of which $19.2 million went into escrow.¹ That business brought in $50.8 million of revenue in the first half of 2025, about $100 million a year at that pace; with the $18.4 million earnout OPKO later received, Labcorp paid about $210.9 million, roughly 2.1 times that revenue.² What remained focused on clinical and women's health testing in New York and New Jersey. That core business kept shrinking because OPKO dropped some high-priced, low-margin tests and test volumes dipped. Core lab revenue was $68.2 million in the second quarter of 2026, down from $69.3 million a year earlier.³

The 4Kscore test is an approved blood test that helps predict aggressive prostate cancer before a biopsy. Its revenue grew more than 13% in 2025, but it brought in $6.3 million in the second quarter of 2026, down from $6.9 million.¹ Health insurers pay for most of the lab work: $50.0 million of the $74.5 million of service revenue in the second quarter.² Medicare lab-fee cuts under a federal pricing law are frozen through December 31, 2026 and are scheduled to resume on January 1, 2027, capped at 15% a year.³

Since July 14, 2022 OPKO and BioReference have worked under a five-year corporate integrity agreement with the health department's inspector general, a set of compliance promises made to settle past problems. The company is also still answering government demands, subpoenas and payer audits about its labs.

At June 30, OPKO had $314.4 million of cash, including restricted cash, and $349.1 million of debt on its books.¹ June cash does not yet include proceeds of the $125 million of mazdutide notes issued in August or the $19.7 million escrow from the 2025 Labcorp sale that was scheduled for release on September 15, 2026; OPKO has not reported net proceeds or confirmed receipt.² The largest debt is $250 million of royalty notes due 2044, secured by its Pfizer royalties, that pay a benchmark short-term rate (with a 4% floor) plus 7.5%.³ The August notes are secured by its royalties on mazdutide, a drug sold in China by Innovent, with total payments capped at 1.5 times the amount funded.⁴

It also owes $121.4 million of 3.75% convertible notes due 2029, which rank behind its secured debt. Insiders and major holders own about 49.61% of the voting shares.¹ In its October 2, 2026 filing, OPKO said the notes can be converted through December 31, 2026, because the stock closed above $1.495 on at least 20 of 30 trading days last quarter. Each $1,000 note turns into 869.5652 shares plus extra shares for early conversion, and OPKO chose to pay in stock.² In our price file, which starts in mid-September, OPK closed as high as $1.725 on September 22 and as low as $1.32 on October 13, the day before the deal was signed.³

Labcorp is buying BioReference's clinical, women's health, urology and corrections testing businesses, more than 80 patient service centers, and the 4Kscore test with its federal approvals and customer accounts.¹ OPKO keeps its cash, the bills owed for tests run before closing, and every business it owns other than the one sold.² The contract says the assets are not substantially all of OPKO's assets, and no OPKO shareholder vote is needed.³

OPKO also keeps the old risks. Malpractice claims and health-law violations from before closing, including those tied to 4Kscore, stay with OPKO, as do its debts and all severance for lab workers.¹ Labcorp takes on only business liabilities that first arise on or after closing.²

The $722 million does not all arrive at once. Ten percent, or $72.2 million, goes into escrow to back OPKO's promises about the business and is released about 12 months after closing, minus open claims.¹ The price also moves with revenue. OPKO sends Labcorp revenue schedules every month, and the closing figure is compared with a benchmark tied to the three months ended August 31, 2026.² Inside a middle band there is no change. Just below it, the price falls by half the percentage revenue shortfall times the price, and below the lowest threshold it drops by 10% of the price plus a further amount.³ Above an upper threshold the price can rise, up to a cap. If the two sides cannot agree on closing revenue, Labcorp sets it in its good faith discretion. The thresholds and the benchmark dollar figure are blacked out in the public filing.⁴

For general broken promises about the business, claims must pass 1% of the price, or $7.22 million, and OPKO's exposure is capped at 10%, or $72.2 million.¹ That cap does not apply to fraud or to the old liabilities and other businesses OPKO keeps, and OPKO itself guarantees BioReference's obligations.²

The extra $150 million is harder to collect than it sounds. OPKO gets 15% of Labcorp's net cash receipts from 4Kscore above a blacked-out yearly threshold, for up to ten years, until payments reach $150 million.¹ The test brought in $12.7 million in the first half of 2026. Even with no threshold, 15% of that pace is only about $3.8 million a year.² Labcorp may change or drop the test, and the contract says no payment is guaranteed. If Labcorp stops offering it, OPKO can buy back the test's physical assets at book value.³

Closing needs the federal antitrust waiting period to end, other listed government approvals, clearance under state health-care deal notice laws, and transfer of at least 80% of the patient service center leases.¹ Filings are due within ten days of the October 14 signing, and Labcorp leads the antitrust strategy. Labcorp does not have to sell or hold separate any business to win clearance.² There is no financing condition, and Labcorp says it has the cash or credit lines to pay. The inspector general has already agreed that Labcorp will not be bound by OPKO's integrity agreement.³

Either side can end the deal if it has not closed by April 14, 2027, unless both agree to extend.¹ If it fails over antitrust or other government approvals, Labcorp pays OPKO $28.88 million, about 4% of the price, and that fee is OPKO's sole remedy. Until then OPKO may not shop the business to other buyers.²

Against OPKO's size, the deal is large. The $722 million equals about 71% of the $1.02 billion market value at the October 14 close, about $0.97 for each of the 746.3 million shares outstanding in July, and about 2.3 times June cash.¹ Labcorp pays about 2.9 times its own forecast of first-year revenue, before any 4Kscore earnout. Measured against OPKO's own lab revenue of $74.5 million in the second quarter (about $298 million a year), it is about 2.4 times, if most of that business is sold.² For the cancer-testing unit a year earlier, Labcorp paid about 2.1 times trailing revenue, counting the $18.4 million earnout OPKO received.³

The market liked it. OPK closed at $1.61 on October 15, up 17.9% from $1.365, while the S&P 500 fund rose 0.3%. Labcorp's own stock rose about 2.4%, to $325.025 at 3:59 p.m.¹ At $1.61, OPKO's market value is about $1.20 billion, so the cash price alone is about 60% of it.²

OPKO's recent results lean on one-time items. Its second-quarter net loss shrank to $8.4 million, but revenue included $29.4 million of non-cash value from Nicoya shares it received, and lab costs were offset by the $18.1 million earnout.¹ Without the earnout, the lab segment's $4.8 million operating profit would have been a loss of about $13.3 million.²

OPKO becomes mostly a drug company that still loses money: its drug segment lost $29.7 million in the first quarter and made $0.8 million in the second only because of $29.4 million of non-cash Nicoya share revenue.¹ Without that non-cash revenue the second quarter would have been a loss of about $28.6 million, so the drug business OPKO keeps loses roughly $29 million a quarter before corporate costs.² The company as a whole used $62.8 million in operations in the first half, lab included.³ OPKO's own third-quarter guidance shows revenue of $131 million to $142 million against costs of $180 million to $190 million.⁴

The cash need is real but not urgent. Adding $4.8 million of first-half equipment spending to that operating cash use gives about $67.6 million.¹ Management says its June cash covers operations and debt service for more than 12 months.² Because OPKO's operating earnings are negative, debt measured against EBITDA (earnings before interest, taxes, depreciation and amortization) means nothing here. Second-quarter interest expense of $11.4 million came on top of a $7.0 million operating loss, and the royalty notes limit new debt, liens and asset sales.³

The convertible notes matter more now. At $1.61, each $1,000 note converts into stock worth about $1,400.¹ If all $121.4 million converts at the base rate, OPKO issues roughly 14% more shares than it had in July, plus any early-conversion extras, but it no longer owes that debt.² OPKO also had 45.9 million stock options at an average exercise price of $3.19 at the end of 2025, most above today's price, but 9.9 million granted in 2025 at $1.33 are in the money, and 14.5 million restricted stock units were unvested; it has no preferred stock.³ If OPKO were wound down, creditors would be paid before shareholders, and the convertible notes rank behind the secured royalty notes.⁴

Management's case is that a smaller OPKO is worth more. Chief Executive Phillip Frost says the deal lets OPKO streamline and focus on its drug business, and he calls it a catalyst to unlock value; those are his goals and views, not results.¹ OPKO still had about $94.7 million left under its share buyback at June 30, and that program can be changed or stopped at any time.²

The bull case is simple. OPKO is trading a lab arm that lost money before one-time gains for $722 million in cash from a buyer with no financing condition.¹ Even after the $72.2 million escrow, the closing cash is about 2.1 times OPKO's June cash balance, before costs and taxes.²

The bear case, strongest point first. Antitrust review could drag on or block the deal, and a $28.88 million fee would not replace $722 million.¹ The business sold likely accounts for most of OPKO's lab revenue (Labcorp's forecast alone equals about 83% of OPKO's services guidance). OPKO's whole lab arm brought in $74.5 million in the second quarter, about $298 million a year at that pace, and the filings do not say how much of it stays with OPKO.² Its third-quarter guidance has costs topping revenue by $38 million to $59 million, and the price can also fall if lab revenue slips before closing.³ OPKO keeps old legal risks, including open government demands about its labs, and a $246 million Israeli tax assessment against a subsidiary still awaits judgment. The 4Kscore earnout may pay little.⁴ Its convertible notes could turn into at least 105.5 million shares, plus extra early-conversion shares, while retiring $121.4 million of debt.⁵

The dates to watch: antitrust filings within ten days of signing, Labcorp's third-quarter results on October 28, 2026, the end of the current conversion window on December 31, 2026, Medicare lab-fee cuts resuming January 1, 2027, and the April 14, 2027 outside date.¹ Our view that the deal adds value would be wrong if regulators open a long second review, if lab revenue falls enough to cut the price, or if the cash is spent without slowing OPKO's burn.²

Neither the 8-K nor the joint release says whether the cash will go to buybacks, debt repayment, research or a payout to shareholders.

The filings give no estimate of the gain on the sale or the tax owed on it. At the end of 2025 OPKO had $61.5 million of federal operating loss carryforwards, subject to a Section 382 limit, that could shelter part of a gain.

OPKO keeps every business other than the one sold, but no filing says what lab revenue, staff or shared costs remain at BioReference after closing.

No expected closing date is given beyond the April 14, 2027 outside date, and we do not know whether regulators will ask for more information.

We do not know how many convertible notes holders have turned into stock since the October 2, 2026 notice, or how many extra early-conversion shares they would get.

Labcorp saw a detailed profit-and-loss statement for the business as of August 31, 2026, but it is not public, so the price cannot be measured against the unit's own profit.

The royalty notes limit asset sales, but the filings do not say whether the noteholders had to approve this sale.