OPKO Health (OPK) to Develop EBV Vaccine With Latest Tie-Up
OPKO Health, Inc. OPK announced that its company, ModeX Therapeutics, Inc., has entered into an exclusive worldwide license and collaboration agreement with Merck (known as MSD outside the United States and Canada). The tie-up is aimed at developing ModeX’s preclinical nanoparticle vaccine candidate targeting Epstein-Barr virus (EBV), MDX-2201.
Per the agreement terms, OPKO Health will receive an upfront payment of $50 million and is eligible for milestone payments associated with progress in the development and commercialization of MDX-2201 as well as royalties on global sales.
The latest collaboration is expected to significantly boost OPKO Health’s Pharmaceutical business on a global scale.
Rationale Behind the Partnership
Per OPKO Health, EBV is the leading cause of infectious mononucleosis and is also associated with some specific types of cancer. Per management, the collaboration with Merck is expected to enable the development of a vaccine against EBV, a virus that takes a significant toll on human health globally. Hence, management believes that by targeting four proteins used by EBV to infect cells, the vaccine candidate represents the multitargeting approach developed by ModeX.
OPKO Health’s management also feels that the acquisition of ModeX (completed in May 2022) has enabled it to broaden its technology foundation and expand its product pipeline into new therapeutic areas.
Merck’s management expects to apply its experience and expertise to assess the potential of MDX-2201 to help protect against EBV infection and other potentially-related conditions.
Industry Prospects
Per a report by BCC Research, the global market for nanoparticles in biotechnology, drug development and drug delivery is expected to increase from $83.4 billion in 2020 to $123.6 billion by 2025 at a CAGR of 8.2%. Factors like increasing research and development activities in the nanoparticle analysis field, rising cases of infectious diseases and technological advancements are likely to drive the market.
Given the market potential, the latest collaboration seems to have been timed well.
Notable Development
Last month, OPKO Health reported its fourth-quarter 2022 results, where it saw continued sales of its NGENLA (somatrogon) by Pfizer Inc. in 15 countries, including Japan, Germany and the United Kingdom. OPKO Health also confirmed that Pfizer is currently expecting to launch in all priority ex-U.S. markets by the year’s end and is continuing to work with the FDA to obtain approval in the United States. Robust results from the Pharmaceuticals segment, with solid sales of RAYALDEE, were also recorded. The company’s continued strength in its women's health and oncology businesses also augurs well.
Price Performance
Shares of the company have lost 62.4% in the past year compared with the industry’s 13.8% decline and the S&P 500's 11% fall.
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Zacks Rank & Key Picks
Currently, OPKO Health carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Hologic, Inc. HOLX, Henry Schein, Inc. HSIC and Avanos Medical, Inc. AVNS.
Hologic, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.2%. HOLX’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 30.6%.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hologic has gained 10.3% against the industry’s 13.8% decline in the past year.
Henry Schein, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 8.1%. HSIC’s earnings surpassed estimates in three of the trailing four quarters and matched the same in the other, the average beat being 2.9%.
Henry Schein has lost 10.1% compared with the industry’s 7.9% decline over the past year.
Avanos, carrying a Zacks Rank #2 at present, has an estimated growth rate of 1.8% for 2023. AVNS’ earnings surpassed estimates in all the trailing four quarters, the average beat being 11%.
Avanos has lost 13.3% compared with the industry’s 13.8% decline over the past year.
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