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What changed in OPKO HEALTH, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OPKO HEALTH, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+161 added−196 removedSource: 10-K (2025-03-03) vs 10-K (2024-03-01)

Top changes in OPKO HEALTH, INC.'s 2024 10-K

161 paragraphs added · 196 removed · 101 edited across 2 sections

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

93 edited+58 added−93 removed123 unchanged
Biggest changeThe total amount of expenditures is dependent on the actual number of patients enrolled and as such, the contracts do not specify the maximum amount we may owe. • Product license agreements effective during the lesser of 15 years or patent expiration whereby payments and amounts are determined by applying a royalty rate on uncapped future sales. • Contingent consideration that includes payments upon achievement of certain milestones including meeting development milestones such as the completion of successful clinical trials, NDA approvals by the FDA and revenue milestones upon the achievement of certain revenue targets all of which are anticipated to be paid within the next seven years and are payable in either shares of our Common Stock or cash, at our option, and that may aggregate up to $125.0 million. 68 Table of Contents CRITICAL ACCOUNTING POLICIES AND ESTIMATES Use of estimates.
Biggest changeThe total amount of expenditures is dependent on the actual number of patients enrolled and as such, the contracts do not specify the maximum amount we may owe. • Product license agreements effective during the lesser of 15 years or patent expiration whereby payments and amounts are determined by applying a royalty rate on uncapped future sales.
Cost of revenue for the the year ended December 31, 2023 increased by 13% to $99.5 million compared to the year ended December 31, 2022, which was driven by growing sales in our international operations due primarily to changes in product mix during the period and higher inventory costs compared to the prior period partially impacted by unfavorable foreign exchange fluctuations of $4.4 million.
Cost of revenue for the year ended December 31, 2023 increased by 13% to $99.5 million compared to the year ended December 31, 2022, which was driven by growing sales in our international operations due primarily to changes in product mix during the period and higher inventory costs compared to the prior period partially impacted by unfavorable foreign exchange fluctuations of $4.4 million.
Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities. 59 Table of Contents The following table summarizes the components of our research and development expenses: Research and Development Expenses For the years ended December 31, 2023 2022 External expenses: Manufacturing expense for biological products $ 14,687 $ 10,038 Phase 3 studies 4,414 9,611 Post-marketing studies 591 35 Earlier-stage programs 45,476 14,347 Research and development employee-related expenses 33,719 25,440 Other internal research and development expenses 4,894 2,951 Third-party grants and funding from collaboration agreements (16,774 ) (1,147 ) Total research and development expenses $ 87,007 $ 61,275 The increase in research and development expenses for the year ended December 31, 2023 was primarily due to research expenses at ModeX driven by growth in our early-stage programs, including a $12.5 million payment to Sanofi under the Sanofi In-License Agreement and an increase in employee-related expenses, partially offset by lower expenses related to Somatrogon (hGH-CTP) due to the closure of the open-label extension studies in countries in which Somatrogon (hGH-CTP) received marketing authorization.
Other internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities. 71 Table of Contents The following table summarizes the components of our research and development expenses: Research and Development Expenses For the years ended December 31, 2023 2022 External expenses: Manufacturing expense for biological products $ 14,687 $ 10,038 Phase 3 studies 4,414 9,611 Post-marketing studies 591 35 Earlier-stage programs 45,476 14,347 Research and development employee-related expenses 33,719 25,440 Other internal research and development expenses 4,894 2,951 Third-party grants and funding from collaboration agreements (16,774 ) (1,147 ) Total research and development expenses $ 87,007 $ 61,275 The increase in research and development expenses for the year ended December 31, 2023 was primarily due to research expenses at ModeX driven by growth in our early-stage programs, including a $12.5 million payment to Sanofi under the Sanofi In-License Agreement and an increase in employee-related expenses, partially offset by lower expenses related to Somatrogon (hGH-CTP) due to the closure of the open-label extension studies in countries in which Somatrogon (hGH-CTP) received marketing authorization.
There was no comparable transaction for the year ended December 31, 2023. 58 Table of Contents Pharmaceuticals For the years ended December 31, (In thousands) 2023 2022 Change % Change Revenues: Revenue from products $ 167,557 $ 142,845 $ 24,712 17 % Revenue from transfer of intellectual property and other 180,663 105,721 74,942 71 % Total revenues 348,220 248,566 99,654 40 % Costs and expenses: Cost of revenue 99,541 88,418 11,123 13 % Selling, general and administrative 55,687 49,232 6,455 13 % Research and development 87,007 61,275 25,732 42 % Contingent consideration (1,036 ) (1,312 ) 276 21 % Amortization of intangible assets 65,837 63,914 1,923 3 % Total costs and expenses 307,036 261,527 45,509 17 % Income (loss) from operations 41,184 (12,961 ) 54,145 418 % Revenue from products .
There was no comparable transaction for the year ended December 31, 2023. 70 Table of Contents Pharmaceuticals For the years ended December 31, (In thousands) 2023 2022 Change % Change Revenues: Revenue from products $ 167,557 $ 142,845 $ 24,712 17 % Revenue from transfer of intellectual property and other 180,663 105,721 74,942 71 % Total revenues 348,220 248,566 99,654 40 % Costs and expenses: Cost of revenue 99,541 88,418 11,123 13 % Selling, general and administrative 55,687 49,232 6,455 13 % Research and development 87,007 61,275 25,732 42 % Contingent consideration (1,036 ) (1,312 ) 276 21 % Amortization of intangible assets 65,837 63,914 1,923 3 % Total costs and expenses 307,036 261,527 45,509 17 % Income (loss) from operations 41,184 (12,961 ) 54,145 418 % Revenue from products .
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 consider the potential for retroactive adjustments when estimating variable consideration in the recognition of revenue in the period the related services are rendered.
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 consider the potential for retroactive adjustments when estimating variable consideration in the recognition of revenue for the period in which the related services are rendered.
Furthermore, as a result of our sale of GeneDx in April 2022, genomic test revenues decreased by $48.3 million for the year ended December 31, 2023. 57 Table of Contents 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 consider the potential for retroactive adjustments when estimating variable consideration in the recognition of revenue for the period in which the related services are rendered.
Furthermore, as a result of our sale of GeneDx in April 2022, genomic test revenues decreased by $48.3 million for the year ended December 31, 2023. 69 Table of Contents 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 consider the potential for retroactive adjustments when estimating variable consideration in the recognition of revenue for the period in which the related services are rendered.
Our financial statements are reported in USD; therefore, 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, 2023, 2022 and 2021, the most significant currency exchange rate exposures were to the Euro and Chilean Peso.
Our financial statements are reported in USD; therefore, 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, 2024, 2023 and 2022, the most significant currency exchange rate exposures were to the Chilean Peso and Euro.
We have periodically identified and reported overpayments, reimbursed payors for overpayments and taken appropriate corrective action. 70 Table of Contents Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are also considered variable consideration and are included in the determination of the estimated transaction price for providing services.
We have periodically identified and reported overpayments, reimbursed payors for overpayments and taken appropriate corrective action. 79 Table of Contents Settlements with third-party payors for retroactive adjustments due to audits, reviews or investigations are also considered variable consideration and are included in the determination of the estimated transaction price for providing services.
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. 71 Table of Contents Development and Regulatory Milestone Payments: Depending on facts and circumstances, we may conclude that it is appropriate to include the milestone in the estimated transaction price or that it is appropriate to fully constrain the milestone.
We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. 80 Table of Contents Development and Regulatory Milestone Payments: Depending on facts and circumstances, we may conclude that it is appropriate to include the milestone in the estimated transaction price or that it is appropriate to fully constrain the milestone.
Pursuant to the Affiliate Note Purchase Agreement, the Company issued and sold the Affiliate Notes to the Affiliate Purchasers in exchange for $55.0 million aggregate principal amount of the Company’s existing 5% Convertible Promissory Notes, together with approximately $16.1 million of accrued but unpaid interest thereon, held by the Affiliate Purchasers.
Pursuant to the Affiliate Note Purchase Agreement, the Company issued and sold the 2029 Convertible Affiliate Notes to the Affiliate Purchasers in exchange for $55.0 million aggregate principal amount of the Company’s existing 5% Convertible Promissory Notes (the "2023 Convertible Notes"), together with approximately $16.1 million of accrued but unpaid interest thereon, held by the Affiliate Purchasers.
Actual cash flows attributed to the project are likely to be different than those assumed since projections are subjected to multiple factors including trial results and regulatory matters which could materially change the ultimate commercial success of the asset as well as significantly alter the costs to develop the respective asset into commercially viable products. • Tax rates – The expected future income is tax effected using a market participant tax rate.
Actual cash flows attributed to the project are likely to be different than those assumed since projections are subjected to multiple factors including trial results and regulatory matters which could materially change the ultimate commercial success of the asset as well as significantly alter the costs to develop the respective asset into commercially viable products. 77 Table of Contents • Tax rates – The expected future income is tax effected using a market participant tax rate.
For The Years Ended December 31, 2023 and 2022 Our consolidated loss from operations for the years ended December 31, 2023 and 2022 was as follows: For the years ended December 31, (In thousands) 2023 2022 Change % Change Revenues: Revenue from services $ 515,275 $ 755,630 $ (240,355 ) (32 )% Revenue from products 167,557 142,845 24,712 17 % Revenue from transfer of intellectual property and other 180,663 105,721 74,942 71 % Total revenues 863,495 1,004,196 (140,701 ) (14 )% Costs and expenses: Cost of revenue 545,368 715,977 (170,609 ) (24 )% Selling, general and administrative 300,559 372,672 (72,113 ) (19 )% Research and development 89,593 73,887 15,706 21 % Contingent consideration (1,036 ) (1,312 ) 276 21 % Amortization of intangible assets 86,032 87,784 (1,752 ) (2 )% Gain on sale of assets - (18,559 ) 18,559 100 % Total costs and expenses 1,020,515 1,230,449 (209,934 ) (17 )% Loss from operations (157,020 ) (226,253 ) 69,233 31 % Diagnostics For the years ended December 31, (In thousands) 2023 2022 Change % Change Revenues Revenue from services $ 515,275 $ 755,630 $ (240,355 ) (32 )% Total revenues 515,275 755,630 (240,355 ) (32 )% Costs and expenses: Cost of revenue 445,827 627,559 (181,732 ) (29 )% Selling, general and administrative 202,341 284,388 (82,047 ) (29 )% Research and development 2,508 12,024 (9,516 ) (79 )% Amortization of intangible assets 20,195 23,870 (3,675 ) (15 )% Gain on sale of assets - (18,559 ) 18,559 100 % Total costs and expenses 670,871 929,282 (258,411 ) (28 )% Loss from operations (155,596 ) (173,652 ) 18,056 10 % Revenue .
For The Years Ended December 31, 2023 and 2022 Our consolidated income (loss) from operations for the years ended December 31, 2023 and 2022 is as follows: For the years ended December 31, (In thousands) 2023 2022 Change % Change Revenues: Revenue from services $ 515,275 $ 755,630 $ (240,355 ) (32 )% Revenue from products 167,557 142,845 24,712 17 % Revenue from transfer of intellectual property and other 180,663 105,721 74,942 71 % Total revenues 863,495 1,004,196 (140,701 ) (14 )% Costs and expenses: Cost of revenue 545,368 715,977 (170,609 ) (24 )% Selling, general and administrative 300,559 372,672 (72,113 ) (19 )% Research and development 89,593 73,887 15,706 21 % Contingent consideration (1,036 ) (1,312 ) 276 21 % Amortization of intangible assets 86,032 87,784 (1,752 ) (2 )% Gain on sale of assets — (18,559 ) 18,559 100 % Total costs and expenses 1,020,516 1,230,449 (209,933 ) (17 )% Loss from operations (157,021 ) (226,253 ) 69,232 (31 )% Diagnostics For the years ended December 31, (In thousands) 2023 2022 Change % Change Revenues Revenue from services $ 515,275 $ 755,630 (240,355 ) (32 )% Total revenues 515,275 755,630 (240,355 ) (32 )% Costs and expenses: Cost of revenue 445,827 627,559 (181,732 ) (29 )% Selling, general and administrative 202,341 284,388 (82,047 ) (29 )% Research and development 2,508 12,024 (9,516 ) (79 )% Amortization of intangible assets 20,195 23,870 (3,675 ) (15 )% Gain on sale of assets — (18,559 ) 18,559 100 % Total costs and expenses 670,871 929,282 (258,411 ) (28 )% Loss from operations (155,596 ) (173,652 ) 18,056 10 % Revenue .
Billings for services are included in revenue net of allowances for contractual discounts, allowances for differences between the amounts billed and estimated program payment amounts, and implicit price concessions provided to uninsured patients which are all elements of variable consideration. The following are descriptions of our payors for laboratory services: Healthcare Insurers.
Billings for services are included in revenue net of allowances for contractual discounts, allowances for differences between the amounts billed and estimated program payment amounts, and implicit price concessions provided to uninsured patients which are all elements of variable consideration. 78 Table of Contents The following are descriptions of our payors for laboratory services: Healthcare Insurers.
Holders may convert their notes at their option prior to the close of business on the business day immediately preceding September 15, 2028 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2024 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day; (2) during the five consecutive business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price (as defined herein) per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the applicable conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events.
Holders may convert their 2029 Convertible Notes at their option prior to the close of business on the business day immediately preceding September 15, 2028 only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on March 31, 2024 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the applicable conversion price on each applicable trading day; (2) during the five consecutive business day period after any ten consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our Common Stock and the applicable conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events specified in the indenture governing the 2029 Convertible Notes.
For the years ended December 31, 2023, 2022 and 2021, we recognized $31.0 million, $27.2 million and $27.0 million in net product revenue from sales of Rayaldee . Taxes collected from customers related to revenues from services and revenues from products are excluded from revenues. Revenue from intellectual property.
For the years ended December 31, 2024, 2023 and 2022, we recognized $29.0 million, $31.0 million and $27.2 million in net product revenue from sales of Rayaldee . Taxes collected from customers related to revenues from services and revenues from products are excluded from revenues. Revenue from intellectual property.
The following table provides information as of December 31, 2023, with respect to the amounts and timing of our known contractual obligation payments due by period.
The following table provides information as of December 31, 2024, with respect to the amounts and timing of our known contractual obligation payments due by period.
Under the terms of the Merck Agreement, we received an initial payment of $50.0 million and are also eligible to receive up to an additional $872.5 million upon the achievement of certain commercial and development milestones under several indications.
Under the terms of the Merck Agreement, we received an initial payment of $50.0 million and are also eligible to receive up to an additional $860.0 million upon the achievement of certain commercial and development milestones under several indications.
ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. In November 2023, the FASB issued ASU No 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07“).
ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. Recently adopted accounting standards In November 2023, the FASB issued ASU No 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”).
The allowance for credit losses was $2.0 million and $4.2 million at December 31, 2023 and 2022, respectively. The credit loss expense for the years ended December 31, 2023, 2022 and 2021 was $0.3 million, $0.3 million and $0.4 million, respectively. Accounts receivable as of December 31, 2023 included $0.6 million of government contract revenue earned under the BARDA contract.
The allowance for credit losses was $1.3 million and $2.0 million at December 31, 2024 and 2023, respectively. The credit loss expense for the years ended December 31, 2024, 2023 and 2022 was $0.1 million, $0.3 million and $0.3 million, respectively. Accounts receivable as of December 31, 2024 included $3.6 million of government contract revenue earned under the BARDA contract.
For the year ended December 31, 2023, and 2022, negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $19.2 million and $21.5 million, respectively, were recognized.
For the year ended December 31, 2024, and 2023, negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $1.5 million and $19.2 million, respectively, were recognized.
As of December 31, 2023 and 2022, we have liabilities of approximately $3.1 million and $1.8 million within Accrued expenses and Other long-term liabilities related to reimbursements for payor overpayments. Revenue from products. We recognize revenue from product sales when a customer obtains control of promised goods or services.
As of December 31, 2024 and 2023, we have liabilities of approximately $2.0 million and $3.1 million within Accrued expenses and Other long-term liabilities related to reimbursements for payor overpayments. Revenue from products. We recognize revenue from product sales when a customer obtains control of promised goods or services.
Actual results could differ significantly from these estimates. Goodwill and intangible assets. Goodwill, IPR&D and other intangible assets acquired in business combinations, licensing and other transactions was $1.5 billion and $1.6 billion at December 31, 2023 and 2022, respectively.
Actual results could differ significantly from these estimates. Goodwill and intangible assets. Goodwill, IPR&D and other intangible assets acquired in business combinations, licensing and other transactions was $1.3 billion and $1.5 billion at December 31, 2024 and 2023, respectively.
For the year ended December 31, 2023, the tax rate differed from the U.S. federal statutory rate of 21% primarily due to the relative mix in earnings and losses in the U.S. versus foreign tax jurisdictions, and operating results in tax jurisdictions which do not result in a tax benefit.
For the year ended December 31, 2023, the tax rate differed from the U.S. federal statutory rate of 21% primarily due to the relative mix in earnings and losses in the U.S. versus foreign tax jurisdictions, the impact of the payments under the Merck Agreement, and operating results in tax jurisdictions which do not result in a tax benefit.
In January 2024, we completed a private offering of $230.0 million aggregate principal amount of our 3.75% Convertible Senior Notes due 2029 (the “144A Notes”) in accordance with the terms of the note purchase agreement (the “144A Note Purchase Agreement”) entered into by and between by the Company and J.P. Morgan Securities LLC (the “Initial Purchaser”).
In January 2024, we completed a private offering of $230.0 million aggregate principal amount of our 3.75% Convertible Senior Notes due 2029 (the “2029 Convertible 144A Notes”) in accordance with the terms of the note purchase agreement (the “144A Note Purchase Agreement”) entered into by and between the Company and J.P. Morgan Securities LLC (the "Initial Purchaser").
ASU 2023-07 enhances disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations.
ASU 2023-07 enhances disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its CODM uses to assess segment performance and to make decisions about resource allocations.
Goodwill was $598.3 million and $595.9 million at December 31, 2023 and 2022, respectively. Estimating the fair value of a reporting unit for goodwill impairment is highly sensitive to changes in projections and assumptions and changes in assumptions could potentially lead to impairment.
Goodwill was $529.3 million and $598.3 million at December 31, 2024 and 2023, respectively. Estimating the fair value of a reporting unit for goodwill impairment is highly sensitive to changes in projections and assumptions and changes in assumptions could potentially lead to impairment.
Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were $34.6 million and $39.9 million at December 31, 2023 and 2022, respectively. We are subject to foreign currency transaction risk for fluctuations in exchange rates during the period of time between the consummation and cash settlement of transactions.
Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were $52.7 million and $34.6 million at December 31, 2024 and 2023, 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.
Our future cash requirements, and the timing of those requirements, will depend on a number of factors, including the approval and success of our products and products in development, particularly our long acting Somatrogon (hGH-CTP) for which we have received approval in over 50 markets, including the United States, Europe, Japan, Australia and Canada, the commercial success of Rayaldee , BioReference’s financial performance, possible acquisitions and dispositions, the continued progress of research and development of our product candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing, our success in developing markets for our product candidates and results of government investigations, payor claims, and legal proceedings that may arise, including, without limitation class action and derivative litigation to which we are subject, and our ability to obtain insurance coverage for such claims.
Our future cash requirements, and the timing of those requirements, will depend on a number of factors, including the approval and success of our products and products in development, particularly our long acting Somatrogon (hGH-CTP) for which we have received approval in over 50 markets, including the United States, Europe, Japan, Australia and Canada, the commercial success of Rayaldee , BioReference’s financial performance, possible acquisitions and dispositions, the continued progress of research and development of our product candidates, the timing and outcome of clinical trials and regulatory approvals, the costs involved in preparing, filing, prosecuting, maintaining, defending, and enforcing patent claims and other intellectual property rights, the status of competitive products, the availability of financing, our success in developing markets for our product candidates and results of government investigations, payor claims, existing legal proceedings and those that may arise in the future.
At December 31, 2023 and 2022, receivable balances (net of explicit and implicit price concessions) from Medicare and Medicaid were 6.7% and 14.2%, respectively, of our consolidated Accounts receivable, net. The portion of our accounts receivable due from individual patients comprises the largest portion of credit risk.
At December 31, 2024 and 2023, receivable balances (net of explicit and implicit price concessions) from Medicare and Medicaid were 4.8% and 6.7%, respectively, of our consolidated Accounts receivable, net. The portion of our accounts receivable due from individual patients comprises the largest portion of credit risk.
The increase is driven by having higher average cash and investment balances as a result of the cash received related to our sale of GeneDx, as well as higher interest rates. Interest expense . Interest expense for the years ended December 31, 2023 and 2022 was $13.5 million and $12.1 million, respectively.
Interest income for the years ended December 31, 2023 and 2022 was $4.0 million and $2.0 million, respectively. The increase is driven by having higher average cash and investment balances as a result of the cash received related to our sale of GeneDx, as well as higher interest rates. Interest expense .
The Company effected such repurchases for cash, using $146.3 million of the net proceeds from the offering of the 144A Notes. 65 Table of Contents Additionally, the Company issued and sold approximately $71.1 million aggregate principal amount of its 3.75% Convertible Senior Notes due 2029 (the “Affiliate Notes” and, together with the 144A Notes, the “Notes”) pursuant to the terms of a note purchase agreement entered into on January 4, 2024 (the “Affiliate Note Purchase Agreement”) by and among the Company and certain investors including, Frost Gamma Investments Trust, a trust controlled by Phillip Frost, M.D., the Company’s Chairman and Chief Executive Officer, and Jane H.
We effected such repurchases for cash, using $146.3 million of the net proceeds from the offering of the 2029 Convertible 144A Notes, following which only $170 thousand aggregate principal amount of the 2025 Notes remained outstanding. 74 Table of Contents Additionally, we issued and sold approximately $71.1 million aggregate principal amount of our 3.75% Convertible Senior Notes due 2029 (the “2029 Convertible Affiliate Notes” and, together with the 2029 Convertible 144A Notes, the “ 2029 Convertible Notes”) pursuant to the terms of a note purchase agreement entered into on January 4, 2024 (the “Affiliate Note Purchase Agreement”) by and among the Company and certain investors including, Frost Gamma Investments Trust, a trust controlled by Phillip Frost, M.D., the Company’s Chairman and Chief Executive Officer, and Jane H.
Loss from investments in investees was $0.4 million and $0.6 million for the years ended December 31, 2022 and 2021, respectively. LIQUIDITY AND CAPITAL RESOURCES At December 31, 2023, we had cash and cash equivalents of approximately $95.9 million.
Loss from investments in investees was $0.1 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively. LIQUIDITY AND CAPITAL RESOURCES At December 31, 2024, we had cash, cash equivalents and restricted cash of approximately $445.6 million.
At December 31, 2023 and 2022, receivables due from patients represented approximately 2.0% and 2.9%, respectively, of our consolidated accounts receivable, net.
At December 31, 2024 and 2023, receivables due from patients represented approximately 1.7% and 2.0%, respectively, of our consolidated accounts receivable, net.
We have historically not generated sustained positive cash flow sufficient to offset our operating and other expenses, and our primary sources of cash have been from the public and private placement of equity, the issuance of the 2023 Convertible Notes, the 2025 Convertible Notes, and credit facilities available to us.
We have historically not generated sustained positive cash flow sufficient to offset our operating and other expenses, and our primary sources of cash have been from the public and private placement of equity and debt, as well as credit facilities available to us.
Also, contemporaneously with the pricing of the 144A Notes, the Company entered into separate, privately negotiated transactions with certain holders of the Company’s outstanding 4.50% Convertible Senior Notes due 2025 to repurchase, on the closing date, approximately $144.4 million aggregate principal amount of such notes.
Contemporaneously with the pricing of the 2029 Convertible 144A Notes, we entered into separate, privately negotiated transactions with certain holders of the outstanding 2025 Notes to repurchase, on the closing date, approximately $144.4 million aggregate principal amount of such notes.
Net intangible assets other than goodwill were $0.9 billion and $1.0 billion at December 31, 2023 and 2022, respectively, including IPR&D of $195.0 million at December 31, 2023 and 2022. Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products and IPR&D.
Net intangible assets other than goodwill were $811.6 million and $935.3 million at December 31, 2024 and 2023, respectively, including IPR&D of $195.0 million at December 31, 2024 and 2023. Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products and IPR&D.
Revenue from transfer of intellectual property and other for the year ended December 31, 2021 represents grants received under the CARES Act totaling $16.2 million. Cost of revenue . Cost of revenue for the year ended December 31, 2022 decreased $474.6 million compared to the year ended December 31, 2021.
Revenue from transfer of intellectual property and other for the year ended December 31, 2022 represents grants received under the CARES Act totaling $16.2 million. Cost of revenue . Cost of revenue for the year ended December 31, 2023 decreased $181.7 million, a decrease of 29% compared to the year ended December 31, 2022.
The increase in operating loss for our unallocated corporate operations for the year ended December 31, 2023 was primarily due to an increase in employee-related and professional expenses, partially offset by a decrease in legal expenses. Other Interest income . Interest income for the years ended December 31, 2023 and 2022 was $4.0 million and $2.0 million, respectively.
The increase in operating loss for our unallocated corporate operations for the year ended December 31, 2023 was primarily due to an increase in employee-related and professional expenses, partially offset by a decrease in legal expenses. 72 Table of Contents Other Interest income .
Amortization expense was $86.0 million, $87.8 million and $50.3 million for the years ended December 31, 2023, 2022 and 2021, respectively. 69 Table of Contents Revenue recognition . We generate revenues from services, products and intellectual property as follows: Revenue from services.
Amortization expense was $82.6 million, $86.0 million and $87.8 million for the years ended December 31, 2024, 2023 and 2022, respectively. Revenue recognition . We generate revenues from services, products and intellectual property as follows: Revenue from services.
Cost of revenue . Cost of revenue for the year ended December 31, 2023 decreased $181.7 million, a decrease of 29% compared to the year ended December 31, 2022.
Cost of revenue for the year ended December 31, 2024 decreased $43.7 million, a decrease of 10% compared to the year ended December 31, 2023.
At December 31, 2023, we had 52 open foreign exchange forward contracts relating to inventory purchases on letters of credit with various notional amounts maturing monthly through January 2024 with a notional value totaling approximately $2.9 million.
At December 31, 2024, we held no open foreign exchange forward contracts. At December 31, 2023, we held 52 open foreign exchange forward contracts related to inventory purchases on letters of credit. These contracts matured monthly through January 2024 with a total notional value of approximately $2.9 million.
For the year ended December 31, 2023, revenue from transfer of intellectual property and other included $50.0 million from Merck in consideration for the rights granted to Merck under the Merck Agreement, $7.0 million from VFMCRP triggered by the German price approval for Rayaldee and $2.5 million from Nicoya due to Nicoya’s submission of the investigational new drug application to China's Center for Drug Evaluation.
In 2023, revenue also included $50.0 million from Merck in consideration for the rights granted to Merck under the Merck Agreement, $7.0 million from VFMCRP triggered by the German price approval for Rayaldee , $2.5 million from Nicoya due to Nicoya's submission of the investigational new drug application to China's Center for Drug Evaluation, $2.4 million from contract manufacturers' commercial milestones and $1.2 million from the BARDA Contract.
We believe that the cash and cash equivalents on hand at December 31, 2023 and the amounts available to be borrowed under our lines of credit are sufficient to meet our anticipated cash requirements for operations and debt service beyond the next 12 months.
We believe that cash, cash equivalents and restricted cash on hand at December 31, 2024 are sufficient to meet our anticipated cash requirements for operations and debt service beyond the next 12 months.
The Company received net proceeds from the issuance of the 144A Notes of approximately $222.0 million, after deducting fees and estimated offering expenses payable by the Company.
We received approximately $220.0 million of net proceeds from the issuance of the 2029 Convertible 144A Notes, after deducting fees and estimated offering expenses.
The adoption of ASU 2020-06 at January 1, 2022 resulted in an increase of the 2025 Convertible notes of $21.6 million, a reduction of the Accumulated deficit of $17.5 million and a reduction of Additional paid-in capital of $39.1 million. 74 Table of Contents
This resulted in an increase of $21.6 million to the 2025 Convertible Notes, a reduction of $17.5 million to the Accumulated deficit, and a reduction of $39.1 million to Additional paid-in capital. 83 Table of Contents
The conversion rate for the 144A Notes will be subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest.
The conversion rate for the 2029 Convertible Notes is subject to adjustment upon the occurrence of certain events, but will not be adjusted for any accrued and unpaid interest. We may not redeem the 2029 Convertible Notes prior to the maturity date.
Contingent consideration for the years ended December 31, 2022 and 2021, was primarily attributable to changes in assumptions regarding the timing of achievement of future milestones for OPKO Renal, and potential amounts payable to former stockholders of OPKO Renal in connection therewith, pursuant to our acquisition agreement in March 2013. Amortization of intangible assets .
Contingent consideration for the year ended December 31, 2023 reflected a reversal of expense of $1.0 million. This was primarily attributable to changes in assumptions regarding the timing of achievement of future milestones for OPKO Renal, and potential amounts payable to former stockholders of OPKO Renal in connection therewith, pursuant to our acquisition agreement in March 2013.
Revenue from transfer of intellectual property for the year ended December 31, 2022 reflects $85.0 million of regulatory milestone payments from Pfizer due from the commencement of sales from NGENLA (Somatrogon) in Europe and Japan, as well as royalty payments and gross profit share for both NGENLA (Somatrogon) and Pfizer’s Genotropin® (somatropin), $3.0 million related to a sales milestone pursuant to the VFMCRP Agreement, and $2.5 million from Nicoya tied to the first anniversary of the effective date of the Nicoya Agreement.
For the year ended December 31, 2022, revenue from the transfer of intellectual property included $98.7 million from Pfizer, inclusive of an $85.0 million regulatory milestone payment based on the commencement of sales of NGENLA (Somatrogon) in Europe and Japan and $4.4 million from gross profit share and royalty payments for both NGENLA (Somatrogon) and Pfizer's Genotropin® (Somatropin), $3.0 million related to a sales milestone pursuant to the VFMCRP Agreement and $2.5 million from Nicoya tied to the first anniversary of the effective date of that agreement. 81 Table of Contents Concentration of credit risk and allowance for doubtful accounts .
We are also eligible to receive tiered, double digit royalty payments at rates in the low double digits on net product sales within the Nicoya Territory and in the Nicoya Field. Under the terms of the CAMP4 Agreement, we received an initial upfront payment of $1.5 million.
We are also eligible to receive tiered, double digit royalty payments at rates in the low double digits on net product sales within the Nicoya Territory and in the Nicoya Field.
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.
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.
For the year ended December 31, 2023, we recorded $6.7 million of income as a result of GeneDx Holdings achieving specific revenue target milestones for the fiscal year ended December 31, 2022.
For the year ended December 31, 2023, we recorded $6.7 million of income as a result of GeneDx Holdings achieving specific revenue target milestones for the fiscal year ended December 31, 2022. Foreign currency gains of $1.2 million and losses of $1.8 million were the majority of other expenses for the years ended December 31, 2023 and 2022, respectively.
At December 31, 2023, the combined goodwill of our diagnotics segment and our Ireland reporting unit was $367.3 million. No impairment charges were recognized for the years ended December 31, 2023, 2022, or 2021.
At December 31, 2024, the goodwill of our diagnostics segment totaled $219.7 million and the goodwill of our Ireland reporting unit totaled $79.4 million. No impairment charges were recognized for the years ended December 31, 2024, 2023, or 2022.
Revenue adjustments for the year ended December 31, 2023 were primarily due to the composition of patient pay mix and for the year ended December 31, 2022 were primarily due to lower COVID-19 test reimbursement estimates.
Revenue adjustments for the year ended December 31, 2024 were primarily due to the composition of patient pay mix and for the year ended December 31, 2023 were primarily due to lower reimbursements from Medicare payors.
Our income tax benefit (provision) for the years ended December 31, 2022 and 2021 was $63.5 million and $(15.5) million, respectively, and reflects results using our expected effective tax rate.
Income tax benefit (provision) . Our income tax benefit (provision) for the years ended December 31, 2023 and 2022 was ($4.4 million) provision and $63.5 million benefit, respectively.
We also own FineTech, a specialty API manufacturer in Israel. 56 Table of Contents RESULTS OF OPERATIONS Foreign Currency Exchange Rates For the years ended December 31, 2023, 2022, and 2021, approximately 29.6%, 21.6%, and 7.4% of revenue, respectively, was denominated in currencies other than the U.S. Dollar (USD).
RESULTS OF OPERATIONS Foreign Currency Exchange Rates For the years ended December 31, 2024, 2023, and 2022, approximately 23.1%, 29.6%, and 21.6% of revenue, respectively, was denominated in currencies other than the U.S. Dollar (USD).
At December 31, 2023, the weighted average interest rate on these lines of credit was approximately 7.52%. These lines of credit are short-term and are used primarily as a source of working capital. The highest aggregate principal balance at any time outstanding during the year ended December 31, 2023, was $29.7 million.
These lines of credit are short-term and are used primarily as a source of working capital. The highest aggregate principal balance at any time outstanding during the year ended December 31, 2024, was $23.6 million. We intend to continue to draw on these lines of credit as needed.
In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ ASU 2023-09 “), which modifies the rules on income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state and foreign).
Inventory obsolescence expense for the years ended December 31, 2024, 2023 and 2022 was $2.1 million, $8.1 million and $4.1 million, respectively. 82 Table of Contents RECENT ACCOUNTING PRONOUNCEMENTS Accounting standards yet to be adopted In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state and foreign).
As part of the research plan, they will use a third-party contract development and manufacturing organization to carry out such activities unless otherwise agreed. Development costs incurred by ModeX in furtherance of these development activities will be reimbursed by Merck.
This plan includes the creation of a joint steering committee, and the potential use of third-party contract development and manufacturing organization carry out such activities unless otherwise agreed. Merck will reimburse ModeX for development costs incurred as part of this research plan.
Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients. Insured patients (including amounts for coinsurance and deductible responsibilities) are billed based on fees negotiated with healthcare insurers. Collection of billings from patients is subject to credit risk and ability of the patients to pay.
Insured patients (including amounts for coinsurance and deductible responsibilities) are billed based on fees negotiated with healthcare insurers. Collection of billings from patients is subject to credit risk and ability of the patients to pay. Revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with our policies and implicit price concessions.
On March 8, 2023, ModeX, the Company (with respect to certain sections), and Merck entered into the Merck Agreement pursuant to which Merck obtained a license to certain patent rights and know-how in connection with the development of ModeX’s preclinical nanoparticle vaccine candidate targeting the Epstein-Barr Virus.
This achievement triggered a $12.5 million cash milestone payment from Merck to ModeX under the Merck Agreement, pursuant to which Merck obtained a license to certain patent rights and know-how in connection with the development of ModeX’s preclinical nanoparticle vaccine candidate targeting the Epstein-Barr Virus.
Client payors include physicians, hospitals, employers, and other institutions for which services are performed on a wholesale basis, and are billed and recognized as revenue based on negotiated fee schedules. Client payors also include cities, states and companies for which BioReference provides COVID-19 testing services. Patients.
Client payors include physicians, hospitals, employers, and other institutions for which services are performed on a wholesale basis, and are billed and recognized as revenue based on negotiated fee schedules. Patients. Uninsured patients are billed based on established patient fee schedules or fees negotiated with physicians on behalf of their patients.
We intend to continue to draw on these lines of credit as needed. There is no assurance that these lines of credit or other funding sources will be available to us on acceptable terms, or at all, in the future.
There is no assurance that these lines of credit or other funding sources will be available to us on acceptable terms, or at all, in the future. Separately, on September 16, 2024, BioReference fully repaid its obligations and terminated the BioReference Credit Agreement.
Fair value changes of derivative instruments, net for the years ended December 31, 2022 and 2021, was $649 thousand and $846 thousand of reversal of expense, respectively, which were principally related to the change in fair value on foreign currency forward exchange contracts at OPKO Chile. Other income (expense), net .
Derivative expense for the years ended December 31, 2024 and 2023 was principally related to the change in fair value of the 2029 Convertible Notes and of foreign currency forward exchange contracts at OPKO Chile. Other income (expense), net . Other income (expense), net for the years ended December 31, 2024 and 2023, was $206.9 million and ($17.0 million), respectively.
Revenues consist of amounts billed net of discounts provided to uninsured patients in accordance with our policies and implicit price concessions. Implicit price concessions represent differences between amounts billed and the estimated consideration that we expect to receive from patients, which considers historical collection experience and other factors including current market conditions.
Implicit price concessions represent differences between amounts billed and the estimated consideration that we expect to receive from patients, which considers historical collection experience and other factors including current market conditions. Adjustments to the estimated allowances, based on actual receipts from the patients, are recorded upon settlement.
In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equty (Subtopic 815-40).” ASU 2020-06 simplifies the accounting for convertible instruments by reducing the number of accounting models for convertible debt instruments and convertible preferred stock.
In August 2020, the FASB issued ASU No. 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40).” This standard simplified the accounting for convertible instruments. We adopted ASU 2020-06 on January 1, 2022, using the modified retrospective approach.
Regulatory applications 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 approved in more than 50 markets worldwide, including the United States, European Union Member States, Japan, Canada, and Australia under the brand name NGENLA®.
(“Pfizer”) for the development and commercialization of Somatrogon (hGH-CTP). Regulatory approvals for Somatrogon (hGH-CTP) for the treatment of growth hormone deficiency in children and adolescents have been secured in more than 50 markets, including the United States, European Union (“EU”) Member States, Japan, Canada, and Australia, where it is marketed under the brand name NGENLA®.
For the years ended December 31, 2023, 2022 and 2021, we recorded $180.7 million, $105.7 million and $25.8 million of revenue from the transfer of intellectual property and other, respectively.
Revenue from the transfer of intellectual property and other, which includes milestone payments, royalties, and other collaboration revenues, totaled $77.4 million, $180.7 million, and $105.7 million for the years ended December 31, 2024, 2023, and 2022, respectively.
Amortization of intangible assets was $63.9 million and $19.7 million, respectively, for the years ended December 31, 2022 and 2021. Amortization expense reflects the amortization of acquired intangible assets with defined useful lives.
We recorded no contingent consideration for the year ended December 31, 2024. 67 Table of Contents Amortization of intangible assets . Amortization of intangible assets was $65.7 million and $65.8 million, respectively, for the years ended December 31, 2024 and 2023. Amortization expense reflects the amortization of acquired intangible assets with defined useful lives.
For the year ended December 31, 2022, negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods of $21.5 million were recognized, primarily due to lower COVID-19 test reimbursement estimates.
For the years ended December 31, 2024 and 2023, we recorded $1.5 million and $19.2 million, respectively, of negative revenue adjustments due to changes in estimates of implicit price concessions for performance obligations satisfied in prior periods mainly due to the composition of patient payer mix.
Pursuant to the BARDA Contract, we will receive $59.0 million over a five-year period through February 2028 for the development, manufacturing, and execution of a Phase 1 clinical trial for a next-generation MSTAR multispecific antibody with broad neutralizing activity against known variants of SARS-CoV-2.
In September 2024, ModeX entered into the BARDA Amendments which increased funding by $26.9 million, for the ongoing development, manufacturing, and execution of a Phase 1 clinical trial for a next-generation MSTAR multispecific antibody with broad neutralizing activity against known variants of SARS-CoV-2.
Cash used in operations of $28.2 million for year ended December 31, 2023 principally reflects milestone payments of $90.0 million, $7.0 million and $2.5 million from Pfizer, VFMCRP and Nicoya, respectively, which were offset by general and administrative expenses related to our corporate operations and research and development expenses.
Cash used in operations of $183.5 million for year ended December 31, 2024 principally reflects general and administrative expenses related to our corporate operations, research and development activities and sales and marketing activities related to our pharmaceutical and diagnostic business.
Foreign currency gains of $1.2 million and losses of $1.8 million were the majority of other expenses for the years ended December 31, 2023 and 2022, respectively. 60 Table of Contents Income tax benefit (provision) . Our income tax benefit (provision) for the years ended December 31, 2023 and 2022 was ($4.4 million) provision and $63.5 million benefit, respectively.
Income tax benefit (provision) . Our income tax benefit (provision) for the years ended December 31, 2024 and 2023 was ($42.8 million) and ($4.4 million), respectively.
For the years ended December 31, 2023, and 2022, revenue from transfer of intellectual property and other principally reflects $90.0 million from Pfizer triggered by the FDA approval of NGENLA (Somatrogon), and in 2022, a $85.0 million regulatory milestone payments based on the commencement of sales from NGENLA (Somatrogon) in Europe and Japan, as well as gross profit share and royalty payments for both NGENLA (Somatrogon) and Pfizer’s Genotropin® (Somatropin) of $22.6 million and $4.4 million, respectively, for the years ended December 31, 2023, and 2022.
For the year ended December 31, 2024, we recorded $77.4 million in revenue from the transfer of intellectual property and other. Revenue for the year ended December 31, 2024 principally reflects $30.0 million from Pfizer, which includes $28.3 million from gross profit share and royalty payments for both NGENLA (somatrogon) and Pfizer's Genotropin® (somatropin).
Research and development expenses include external and internal expenses, partially offset by third-party grants and funding arising from collaboration agreements. External expenses include clinical and non-clinical activities performed by contract research organizations, lab services, purchases of drug and diagnostic product materials and manufacturing development costs.
External expenses include clinical and non-clinical activities performed by contract research organizations, lab services, purchases of drug and diagnostic product materials and manufacturing development costs. We track external research and development expenses by individual program for phase 3 clinical trials for drug approval and premarket approval for diagnostics tests, if any.
Interest expense was principally related to interest incurred on the 2025 Notes, the 2023 Convertible Notes, the 2033 Senior Notes (in each case as defined in Note 7. Debt to our audited consolidated financial statements contained in this Annual Report on Form 10-K), and BioReference’s outstanding debt under the Credit Agreement. Fair value changes of derivative instruments, net .
Interest expense for the years ended December 31, 2023 and 2022 was $13.5 million and $12.1 million, respectively. Interest expense was principally related to interest incurred on the 2025 Notes, the 2023 Convertible Notes, the 2033 Senior Notes, and BioReference’s outstanding debt under the BioReference Credit Agreement. Fair value changes of derivative instruments, net .
For the year ended December 31, 2022, the tax rate differed from the U.S. federal statutory rate of 21% primarily due to a $22.5 million discrete benefit resulting from reduced tax rates applicable to foreign deferred tax liabilities, the impact from the IPR&D tax basis difference on deferred attribute realization as a result of the acquisition of ModeX, as well as the relative mix of earnings and losses in the U.S. versus foreign tax jurisdictions, and operating results in tax jurisdictions which do not result in a tax benefit compared to year ended December 31, 2021.
For the year ended December 31, 2024, the tax rate differed from the U.S. federal statutory rate of 21% primarily due to the relative mix in earnings and losses in the U.S. versus foreign tax jurisdictions, impact related to the BioReference Transaction, the impact of the payments under Merck Agreement, the impact of sales of the GeneDx investment, and operating results in tax jurisdictions which do not result in a tax benefit. 68 Table of Contents Loss from investments in investees .
Corporate For the years ended December 31, (In thousands) 2022 2021 Change % Change Costs and expenses: Cost of revenue $ — $ (40 ) $ 40 100 % Selling, general and administrative 39,052 61,849 (22,797 ) (37 )% Research and development 588 (1,543 ) 2,131 138 % Total costs and expenses 39,640 60,266 (20,626 ) (34 )% Loss from operations $ (39,640 ) $ (60,266 ) $ 20,626 34 % Operating loss for our unallocated corporate operations for the years ended December 31, 2022 and 2021 was $39.6 million and $60.3 million, respectively, and principally reflects general and administrative expenses incurred in connection with our corporate operations.
Corporate For the years ended December 31, (In thousands) 2024 2023 Change % Change Costs and expenses: Selling, general and administrative $ 41,028 $ 42,531 $ (1,503 ) (4 )% Research and development 117 78 39 50 % Total costs and expenses 41,145 42,609 (1,464 ) (3 )% Loss from operations $ (41,145 ) $ (42,609 ) $ 1,464 3 % Operating loss for our unallocated corporate operations for the years ended December 31, 2024 and 2023 was $41.4 million and $42.6 million, respectively, and principally reflect general and administrative expenses incurred in connection with our corporate operations.
The following table summarizes the components of our research and development expenses: Research and Development Expenses For the years ended December 31, 2022 2021 External expenses: Research and development employee-related expenses $ 8,691 $ 13,266 Other internal research and development expenses 3,333 5,386 Total research and development expenses $ 12,024 $ 18,652 The decrease in research and development expenses for the year ended December 31, 2022 primarily related to the development of more efficient clinical testing services at BioReference and as a result of the sale of GeneDx.
The following table summarizes the components of our research and development expenses: Research and Development Expenses For the years ended December 31, 2024 2023 External expenses: Research and development employee-related expenses $ 1,333 $ 1,729 Other internal research and development expenses 742 779 Total research and development expenses $ 2,075 $ 2,508 The decrease in research and development expenses for the year ended December 31, 2024 was primarily due to a decrease in employee-related expenses as a result of the continued cost-reduction initiatives implemented at BioReference and the BioReference Transaction.
As of December 31, 2023, $12.7 million remained available for borrowing under the Credit Agreement. 67 Table of Contents In connection with our agreements with Merck, Pfizer, VFMCRP, Nicoya and CAMP4, we are eligible to receive various milestone payments and royalty considerations.
BioReference paid approximately $9.7 million to settle its obligations, incurring no prepayment premium or penalty. 75 Table of Contents In connection with our agreements with Merck, Pfizer, VFMCRP, and Nicoya, we are eligible to receive various milestone payments and royalty considerations.
The purchase price per share of the Common Stock repurchased in such transactions equaled the closing sale price of the Common Stock on January 4, 2024, which was $0.9067 per share.
We used approximately $50.0 million of the net proceeds to repurchase shares of our Common Stock from purchasers of the 2029 Convertible 144A Notes in privately negotiated transactions at a purchase price equal to the closing sale price per share of Common Stock on January 4, 2024, which was $0.9067.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+2 added−2 removed11 unchanged
Biggest changeThe primary objective of our investment activities is to preserve principal while at the same time maximizing yield without significantly increasing risk. To achieve this objective, we may invest our excess cash in debt instruments of the U.S.
Biggest changeSee Note 7 to the audited consolidated financial statements contained in this Annual Report on Form 10-K. The primary objective of our investment activities is to preserve the principal while at the same time maximizing yield without significantly increasing risk. To achieve this objective, we may invest our excess cash in debt instruments of the U.S.
For information on such open foreign exchange forward contracts for the years ended December 31, 2023 and 2022 see “Management’s Discussion and Analysis—Results of Operations— Foreign Currency Exchange Rates.” We do not engage in trading market risk sensitive instruments or purchasing hedging instruments or “other than trading” instruments that are likely to expose us to significant market risk, whether interest rate, foreign currency exchange, commodity price, or equity price risk.
For information on such open foreign exchange forward contracts for the years ended December 31, 2024 and 2023 see “Management’s Discussion and Analysis—Results of Operations— Foreign Currency Exchange Rates.” We do not engage in trading market risk sensitive instruments or purchasing hedging instruments or “other than trading” instruments that are likely to expose us to significant market risk, whether interest rate, foreign currency exchange, commodity price, or equity price risk.
Our financial statements are reported in USD and, accordingly, fluctuations in exchange rates will 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, 2023 and 2022, the most significant currency exchange rate exposures were to the Euro and Chilean Peso.
Our financial statements are reported in USD and, accordingly, fluctuations in exchange rates will 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, 2024 and 2023, the most significant currency exchange rate exposures were to the Chilean Peso and Euro.
To minimize the exposure due to adverse shifts in interest rates, we maintain investments at an average maturity of generally less than three months. 75 Table of Contents
To minimize the exposure due to adverse shifts in interest rates, we maintain investments at an average maturity of generally less than three months. 84 Table of Contents
We currently do not hedge interest rate exposure. Because of the short-term maturities of our investments, we do not believe that a change in market interest rates would have a significant negative impact on the value of our investment portfolio except for reduced interest income. At December 31, 2023, we had cash and cash equivalents of $95.9 million.
We currently do not hedge interest rate exposure. Because of the short-term maturities of our investments, we do not believe that a change in market interest rates would have a significant negative impact on the value of our investment portfolio except for reduced interest income. At December 31, 2024, we had cash, cash equivalents and restricted cash of $445.6 million.
For the years ended December 31, 2023, 2022, and 2021, approximately 29.6%, 21.6%, and 7.4% of revenue was denominated in currencies other than the U.S. Dollar (USD).
For the years ended December 31, 2024, 2023, and 2022, approximately 23.1%, 29.6%, and 21.6% of revenue was denominated in currencies other than the U.S. Dollar (USD).
Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were $34.6 million and $39.9 million at December 31, 2023 and 2022, respectively.
Gross accumulated currency translation adjustments recorded as a separate component of shareholders’ equity were $52.7 million and $34.6 million at December 31, 2024 and 2023, respectively.
The weighted average interest rate related to our cash and cash equivalents for the year ended December 31, 2023 was approximately 3.5%. As of December 31, 2023, the principal outstanding balances under BioReference’s Credit Agreement with CB and our Chilean and Spanish lines of credit was $25.3 million in the aggregate at a weighted average interest rate of approximately 7.52%.
The weighted average interest rate related to our cash, cash equivalents and restricted cash for the year ended December 31, 2024 was approximately 3.4%. As of December 31, 2024, the principal outstanding balances under our Chilean and Spanish lines of credit was $13.5 million in the aggregate at a weighted average interest rate of approximately 5.52%.
Removed
For the years ended December 31, 2023 and 2022, fluctuations in exchange rates exposed us to additional foreign currency transaction risk, and we entered into a greater number of foreign exchange forward contracts than in the prior year.
Added
As of December 31, 2024, the principal outstanding balance under our 2044 Notes, which accrue interest at the 3-month SOFR, was $250.0 million at a weighted average interest rate of approximately 12.98%.
Removed
Our outstanding convertible senior and senior notes have fixed rates of interest; therefore, we are not exposed to interest rate rish on those instruments. See Note 7 and Note 22 to the audited consolidated financial statements contained in this Annual Report on Form 10-K.
Added
Based on our outstanding balances at December 31, 2024, if our applicable interest rates on our variable rate debt increase by 1%, then our debt service on an annual basis would increase by approximately $2.5 million. Our other outstanding convertible senior notes have fixed rates of interest; therefore, we are not exposed to interest rate risk on those instruments.

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