OVERVIEW


You should read this discussion together with the unaudited Condensed
Consolidated Financial Statements, related notes, and other financial
information included elsewhere in this Quarterly Report on Form 10-Q together
with our audited consolidated financial statements, related notes, and other
information contained in our Annual Report on Form 10-K for the year ended
December 31, 2020 (the "Form 10-K"). The following discussion contains
assumptions, estimates and other forward-looking statements that involve a
number of risks and uncertainties, including those discussed under "Risk
Factors," in Part I, Item 1A of the Form 10-K and as described from time to time
in our other filings with the Securities and Exchange Commission. These risks
could cause our actual results to differ materially from those anticipated in
these forward-looking statements.
We are a diversified healthcare company that seeks to establish industry-leading
positions in large and rapidly growing medical markets. Our diagnostics business
includes BioReference Laboratories, Inc. ("BioReference"), one of the nation's
largest full service laboratories with a core genetic testing business and an
almost 300-person sales and marketing team to drive growth and leverage new
products, including the 4Kscore test. Our pharmaceutical business features
Rayaldee, a U.S. Food and Drug Administration ("FDA") approved treatment for
secondary hyperparathyroidism ("SHPT") in adults with stage 3 or 4 chronic
kidney disease ("CKD") and vitamin D insufficiency (launched in November 2016)
and a pipeline of products in various stages of development. Our leading product
in development is hGH-CTP (Somatrogon), a once-weekly human growth hormone for
which we have partnered with Pfizer, Inc. ("Pfizer"). Regulatory applications
for hGH-CTP (Somatrogon) approval have been submitted in the U.S., Europe and
Japan, among other territories. We are incorporated in Delaware, and our
principal executive offices are located in leased offices in Miami, Florida.
Through BioReference, we provide laboratory testing services, primarily to
customers in the larger metropolitan areas in New York, New Jersey, Florida,
Texas, Maryland, California, Pennsylvania, Delaware, Washington, DC, Illinois
and Massachusetts, as well as to customers in a number of other states. We offer
a comprehensive test menu of clinical diagnostics for blood, urine and tissue
analysis. This includes hematology, clinical chemistry, immunoassay,
infectious diseases, serology, hormones, and toxicology assays, as well as Pap
smear, anatomic pathology (biopsies) and other types of tissue analysis. We
market our laboratory testing services directly to physicians, geneticists,
hospitals, clinics, correctional and other health facilities.
We operate established pharmaceutical platforms in Ireland, Chile, Spain, and
Mexico, which are generating revenue and from which we expect to generate
positive cash flow and facilitate future market entry for our products currently
in development. In addition, we have a development and commercial supply
pharmaceutical company and a global supply chain operation and holding company
in Ireland. We own a specialty active pharmaceutical ingredients manufacturer in
Israel, which we expect will facilitate the development of our pipeline of
molecules and compounds for our proprietary molecular diagnostic and therapeutic
products.

RECENT DEVELOPMENTS

In February 2021, Pfizer and OPKO announced that the European Medicines Agency
has validated for review the Marketing Authorization Application for Somatrogon,
the long-acting recombinant human growth hormone that is intended to be
administered once-weekly for the treatment of pediatric patients with GHD. We
expect a decision from the European Commission in 2022.
In January 2021, we announced that the FDA has accepted for filing the initial
BLA for Somatrogon for the treatment of pediatric patients with GHD. The target
Prescription Drug User Fee Act ("PDUFA") action date for decision by the FDA is
in October 2021.
In January 2021 we announced the submission of a New Drug Application to the
Ministry of Health, Labour, and Welfare in Japan for Somatrogon for the
treatment of pediatric patients with GHD.



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RESULTS OF OPERATIONS
Impact of COVID-19
As the disease caused by SARS-CoV-2, a novel strain of coronavirus, COVID-19
continues to spread and severely impact the U.S. economy and economies of other
countries around the world, we are committed to being a part of the coordinated
public and private sector response to this unprecedented challenge. In response
to the COVID-19 pandemic, BioReference is providing COVID-19 solutions,
including diagnostic molecular testing and serology antibody testing, to meet
the testing needs of its numerous customer verticals, including physicians,
health systems, long-term care facilities, governments, schools, employers,
professional sports teams and entertainment venues, as wells as the general
public through relationships with retail pharmacy chains.
Revenue from services for the three months ended March 31, 2021 increased by
$336.1 million as compared to 2020 due to COVID-19 testing volumes; however we
are unable to predict how long the demand will continue for our COVID-19 related
testing, or whether pricing and reimbursement policies for testing will sustain,
and accordingly, the sustainability of our COVID-19 testing volumes is
uncertain. Additionally, beginning in March 2020, BioReference experienced a
decline in testing volumes due to the COVID-19 pandemic; however as stay at home
orders and other restrictions have been lifted, we have seen our routine
clinical and genomic testing volumes trending towards normalization with prior
periods. Should stay at home orders or other restrictions be reenacted, we could
see our routine testing levels decline. Excluding COVID-19 test volumes, for the
three months ended March 31, 2021, genomic test volume increased 10.3% and
routine clinical test volume declined 6.8% as compared to volumes for the three
months ended March 31, 2020. Additionally, sales of Rayaldee have not increased
in accordance with its expected growth trajectory as a result of challenges in
onboarding new patients due to the COVID-19 pandemic. Federal, state and local
governmental policies and initiatives designed to reduce the transmission of
COVID-19 have resulted in, among other things, a significant reduction in
physician office visits, the cancellation of elective medical procedures,
customers closing or severely curtailing their operations (voluntarily or in
response to government orders), and the adoption of work-from-home or
shelter-in-place policies. We also continue to see a substantial need for
COVID-19 testing by our existing clients and expect new clients as infections
for the virus continue.
In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid,
Relief, and Economic Security (CARES) Act was signed into law. The CARES Act
provides numerous tax provisions and other stimulus measures, including
temporary changes regarding the prior and future utilization of net operating
losses, temporary changes to the prior and future limitations on interest
deductions, temporary suspension of certain payment requirements for the
employer portion of Social Security taxes, technical corrections from prior tax
legislation for tax depreciation of certain qualified improvement property, and
the creation of certain payroll tax credits associated with the retention of
employees.
We have received, or expect to receive a number of benefits under the CARES Act
including, but not limited to:
•During the second quarter of 2020, we received approximately $14 million under
The Centers for Medicare & Medicaid Services (CMS) Accelerated and Advance
Payment Program, which provides accelerated payments to Medicare
providers/suppliers working to provide treatment to patients and combat the
COVID-19 pandemic, and the amounts advanced are loans which will be offset
against future claims and must be repaid in 2021. These loans are initially
recorded as contract liabilities included in Accrued expenses and are recognized
in Revenue from services when earned. As of March 31, 2021, no amount of the
accelerated payments were recognized in revenue;
•We were eligible to defer depositing the employer's share of Social Security
taxes for payments due from March 27, 2020 through December 31, 2020,
interest-free and penalty-free;
•We received approximately $16.2 million during 2020 from the funds that were
distributed to healthcare providers for related expenses or lost revenues that
are attributable to the COVID-19 pandemic;
•U.S. Department of Health and Human Services (HHS), will provide claims
reimbursement to healthcare providers generally at Medicare rates for testing
uninsured patients; and
•Clinical laboratories are provided a one-year reprieve from the reporting
requirements under the Protecting Access to Medicare Act ("PAMA") as well as a
one-year delay of reimbursement rate reductions for clinical laboratory services
provided under Medicare that were scheduled to take place in 2021.
Since the pandemic began in the U.S., we have invested, and expect to continue
to invest, in testing capabilities and infrastructure to meet demand for our
molecular and antibody testing for COVID-19.
Three vaccines for COVID-19 have received approval or emergency authorization
and have had increasingly widespread acceptance. However, we believe that, based
on our experience with the pandemic, the high medical need for efficient and

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widespread testing for COVID-19 will extend beyond the current phase of the
pandemic. Our belief is supported by the unprecedented healthcare and economic
impact of the pandemic thus far, the uneven and incomplete rollout of vaccines
and the fact that significant portions of the U.S. population may never be
vaccinated, and the continued likelihood of surges of COVID-19 including from
new strains of SARS-CoV-2 with uncertain susceptibility to the current vaccines.
We believe that these factors have greatly magnified the need for more effective
therapeutics, with properties targeted to the disease processes caused by
serious viral infections.

FOR THE THREE MONTHS ENDED MARCH 31, 2021 AND 2020 Our consolidated income (loss) from operations for the three months ended March 31, 2021 and 2020 is as follows:


                                           For the three months ended
                                                   March 31,
(In thousands)                                 2021          2020              Change               % Change
Revenues:
Revenue from services                      $  506,951    $ 170,839          $ 336,112                       197  %
Revenue from products                          33,945       31,074              2,871                         9  %
Revenue from transfer of intellectual
property and other                              4,269        9,553             (5,284)                      (55) %
Total revenues                                545,165      211,466            333,699                       158  %
Costs and expenses:
Cost of revenue                               363,507      140,258            223,249                       159  %
Selling, general and administrative           112,286       76,132             36,154                        47  %
Research and development                       19,315       21,760             (2,445)                      (11) %
Contingent Consideration                         (957)        (860)               (97)                       11  %
Amortization of intangible assets              12,577       14,938             (2,361)                      (16) %

Total costs and expenses                      506,728      252,228            254,500                       101  %
Income (loss) from operations                  38,437      (40,762)            79,199                      (194) %


Diagnostics
                                           For the three months ended
                                                   March 31,
(In thousands)                                 2021          2020              Change               % Change
Revenues
Revenue from services                      $  506,951    $ 170,839          $ 336,112                       197  %

Total revenues                                506,951      170,839            336,112                       197  %
Costs and expenses:
Cost of revenue                               339,428      122,906            216,522                       176  %
Selling, general and administrative            89,317       52,724             36,593                        69  %
Research and development                        3,631        3,393                238                         7  %
Contingent Consideration                            -           33                (33)                     (100) %
Amortization of intangible assets               7,561        9,916             (2,355)                      (24) %

Total costs and expenses                      439,937      188,972            250,965                       133  %
Income (loss) from operations                  67,014      (18,133)            85,147                      (470) %



Revenue. Revenue from services for the three months ended March 31, 2021
increased by approximately $336.1 million compared to the three months ended
March 31, 2020, due to the positive impacts of COVID-19 testing volumes.
BioReference performed 4.1 million diagnostic molecular tests for COVID-19 and
0.2 million serology antibody tests during the three months ended March 31,
2021, which represented 67% of total volume for that period. In comparison, the
three months ended March 31, 2020 included 0.1 million molecular tests for
COVID-19.

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BioReference also recognized an increase in revenue for the three months ended
March 31, 2021 compared to the three months ended March 31, 2020 due to an
improvement in clinical test reimbursement and an increase in genomic test
volume of $23.1 million and $3.3 million, respectively. This was partially
offset by the negative impacts of a reduction in clinical test volume and a
reduction of genomic test reimbursement of $9.0 million and $12.3 million,
respectively.
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. For the three months ended March 31, 2021, positive revenue
adjustments due to changes in estimates of implicit price concessions for
performance obligations satisfied in prior periods of $28.0 million were
recognized, and for the three months ended March 31, 2020, revenue reductions of
$8.9 million were recognized due to changes in estimates of implicit price
concessions for performance obligations satisfied in prior periods. Revenue
adjustments for the three months ended March 31, 2021 were primarily due to an
improvement in COVID-19 test reimbursement estimates.
The composition of Revenue from services by payor for the three months ended
March 31, 2021 and 2020 was as follows:
                             Three months ended March 31,
(In thousands)                   2021                   2020
Healthcare insurers   $       164,829                $  99,081
Government payers              73,658                   26,930
Client payers                 262,907                   39,132
Patients                        5,557                    5,696
Total                 $       506,951                $ 170,839


Client payers include cities, states and companies for which BioReference
provides COVID-19 testing services.
Cost of revenue. Cost of revenue for the three months ended March 31, 2021
increased $216.5 million compared to the three months ended March 31, 2020. Cost
of revenue increased primarily due to labor and material costs for COVID-19
testing and the significant volume of tests performed during the three months
ended March 31, 2021. Cost of revenue also increased due to an increase in
genomic test volume during the three months ended March 31, 2021, which was
partially offset by a reduction in clinical test volume.
Selling, general and administrative expenses. Selling, general and
administrative (SG&A) expenses for the three months ended March 31, 2021 and
2020 were $89.3 million and $52.7 million, respectively. Selling, general and
administrative expenses in our diagnostics segment increased primarily due to
higher variable billing and compensation costs from an increase in volume and
collections during the three months ended March 31, 2021, and in marketing costs
and other administrative costs directly associated with COVID-19 testing
volumes. As a percentage of net revenue, SG&A for the diagnostic segment
decreased to 18% from 31% for the three months ended March 31, 2021 and 2020,
respectively, as a result of per requisition efficiencies and expense management
during this recent period of rapid volume growth.
Research and development expenses. The following table summarizes the components
of our research and development expenses:
Research and Development Expenses                                  Three months ended March 31,
                                                                    2021                   2020
External expenses:
PMA studies                                                   $           31          $         54
Research and development employee-related expenses                     2,194                 2,210
Other internal research and development expenses                       1,406                 1,129
Total research and development expenses                       $

3,631 $ 3,393




The increase in research and development expenses for the three months ended
March 31, 2021 resulted primarily from an increased research and development
expenses related to the development of clinical and genomics testing services.
Contingent consideration. Contingent consideration for the three months ended
March 31, 2021 and 2020 was $0.0 thousand and $33.0 thousand of expense,
respectively. Contingent consideration for the three months ended March 31, 2020

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was attributable to changes in assumptions regarding the timing of achievement
of future milestones for OPKO Diagnostics, and potential amounts payable to
former stockholders of OPKO Diagnostics in connection therewith, pursuant to our
acquisition agreement in October 2011.
Amortization of intangible assets. Amortization of intangible assets was $7.6
million and $9.9 million, respectively, for the three months ended March 31,
2021 and 2020. Amortization expense reflects the amortization of acquired
intangible assets with defined useful lives.

Pharmaceuticals
                                           For the three months ended
                                                    March 31,
(In thousands)                                  2021          2020              Change               % Change
Revenues:

Revenue from products                      $    33,945    $  31,074          $   2,871                         9  %
Revenue from transfer of intellectual
property and other                               4,269        9,553             (5,284)                      (55) %
Total revenues                                  38,214       40,627             (2,413)                       (6) %
Costs and expenses:
Cost of revenue                                 24,089       17,411              6,678                        38  %
Selling, general and administrative             13,406       14,663             (1,257)                       (9) %
Research and development                        15,817       18,550             (2,733)                      (15) %
Contingent Consideration                          (957)        (893)               (64)                        7  %
Amortization of intangible assets                5,016        5,022                 (6)                        -  %

Total costs and expenses                        57,371       54,753              2,618                         5  %
Loss from operations                           (19,157)     (14,126)            (5,031)                       36  %



Revenue. The increase in revenue from products for the three months ended March
31, 2021 compared to the three months ended March 31, 2020 was primarily
attributable to an increase in sales at most of our international operating
companies. Revenue from sales of Rayaldee for the three months ended March 31,
2021 and 2020 was $5.8 million and $9.9 million, respectively. Sales of Rayaldee
have been negatively impacted by physician offices restricting product sales
representatives from making sales calls. Revenue from transfer of intellectual
property for the three months ended March 31, 2021 and 2020 principally
reflected $2.8 million and $8.7 million, respectively, of revenue related to the
Pfizer Transaction.
Cost of revenue. Cost of revenue for the three months ended March 31, 2021
increased $6.7 million compared to the three months ended March 31, 2020. Cost
of product revenue increased primarily due to an increase in sales our
international operating companies and a $2.7 million inventory reserve
recognized for Rayaldee inventory for the three months ended March 31, 2021.
Selling, general and administrative expenses. Selling, general and
administrative expenses for the three months ended March 31, 2021 and 2020 were
$13.4 million and $14.7 million, respectively. The decrease in selling, general
and administrative expenses was primarily due to decreased sales and marketing
expenses for Rayaldee. Selling, general and administrative expenses for the
pharmaceutical segment for the three months ended March 31, 2021 and 2020
included equity-based compensation expense of $0.3 million and $0.6 million,
respectively.
Research and development expenses. Research and development expenses for the
three months ended March 31, 2021 and 2020 were $15.8 million and $18.6 million,
respectively. 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. 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. Internal expenses include employee-related expenses such as
salaries, benefits and equity-based compensation expense. Other internal
research and development expenses are incurred to support overall research and
development activities and include expenses related to general overhead and
facilities.

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The following table summarizes the components of our research and development
expenses:
Research and Development Expenses                                  Three

months ended March 31,


                                                                    2021                    2020
External expenses:
Manufacturing expense for biological products                $         1,567          $       3,037
Phase III studies                                                      2,351                  3,042
Post-marketing studies                                                     5                    840
Earlier-stage programs                                                 5,193                  3,604
Research and development employee-related expenses                     5,328                  6,382
Other internal research and development expenses                       1,383                  1,645
Third-party grants and funding from collaboration agreements             (10)                     -
Total research and development expenses                      $

15,817 $ 18,550




The decrease in research and development expenses for the three months ended
March 31, 2021 was primarily due to a decrease in research and development
expenses related to Somatrogon, a once-weekly human growth hormone injection for
which we have partnered with Pfizer and successfully completed a phase 3 study
in August 2019. Ongoing expenses on the Somatrogon program support open label
extension studies that will continue until market launch of Somatrogon in
certain countries, as well as the preparation of applications for marketing
approvals. Research and development expenses for the pharmaceutical segment for
the three months ended March 31, 2021 and 2020 included equity-based
compensation expense of $0.4 million and $0.6 million, respectively.
Contingent consideration. Contingent consideration for the three months ended
March 31, 2021 and 2020 was $1.0 million and $0.9 million reversal of expense,
respectively. Contingent consideration for the three months ended March 31, 2021
and 2020 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. Amortization of intangible assets was $5.0
million and $5.0 million, respectively, for the three months ended March 31,
2021 and 2020. Amortization expense reflects the amortization of acquired
intangible assets with defined useful lives. Our indefinite lived IPR&D assets
will not be amortized until the underlying development programs are completed.
Upon obtaining regulatory approval by the U.S. FDA, the IPR&D assets will be
accounted for as a finite-lived intangible asset and amortized on a
straight-line basis over its estimated useful life.
Corporate
                                             For the three months ended
                                                     March 31,
(In thousands)                                  2021            2020               Change                % Change

Costs and expenses:
Cost of revenue                            $        (10)   $       (59)         $       49                       (83) %
Selling, general and administrative               9,563          8,745                 818                         9  %
Research and development                           (133)          (183)                 50                       (27) %
Total costs and expenses                          9,420          8,503                 917                        11  %
Loss from operations                             (9,420)        (8,503)               (917)                       11  %



Operating loss for our unallocated corporate operations for the three months
ended March 31, 2021 and 2020 was $9.4 million and $8.5 million, respectively,
and principally reflects general and administrative expenses incurred in
connection with our corporate operations. The increase in operating loss for the
three months ended March 31, 2021 was primarily attributable to an increase in
insurance costs incurred for the three months ended March 31, 2021, compared to
the three months ended March 31, 2020.

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Other
Interest income. Interest income for the three months ended March 31, 2021 and
2020 was not significant as our cash investment strategy emphasizes the security
of the principal invested and fulfillment of liquidity needs.
Interest expense. Interest expense for the three months ended March 31, 2021 and
2020 was $5.4 million and $5.5 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 its
credit facility.
Fair value changes of derivative instruments, net. Fair value changes of
derivative instruments, net for the three months ended March 31, 2021 and 2020,
was $0.4 million of expense and $0.6 million of income, respectively. Derivative
income (expense) for the three months ended March 31, 2021 and 2020, was
principally related to the change in fair value on foreign currency forward
exchange contracts at OPKO Chile.
Other income (expense), net. Other income (expense), net for the three months
ended March 31, 2021 and 2020, was $0.9 million and $12.3 million of expense,
respectively. Other expense for the three months ended March 31, 2021 primarily
consisted of foreign currency transaction losses recognized during the period.
Other expense for the three months ended March 31, 2020 primarily consisted of
net unrealized losses recognized during the period on Eloxx and VBI.
Income tax provision. Our income tax provision for the three months ended March
31, 2021 and 2020 was $0.6 million and $1.2 million, respectively, and reflects
quarterly results using our expected effective tax rate.  For the three months
ended March 31, 2021, 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 certain discrete tax events and
operating results in tax jurisdictions which do not result in a tax benefit.
Loss from investments in investees. We have made investments in certain early
stage companies that we perceive to have valuable proprietary technology and
significant potential to create value for us as a shareholder or member. We
account for these investments under the equity method of accounting, resulting
in the recording of our proportionate share of their losses until our share of
their loss exceeds our investment. Until the investees' technologies are
commercialized, if ever, we anticipate they will report net losses. Loss from
investments in investees was $43 thousand and $134 thousand for the three months
ended March 31, 2021 and 2020, respectively.


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LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2021, we had cash and cash equivalents of approximately $89.5
million. Cash provided by operations of $26.0 million for the three months ended
March 31, 2021 principally reflects cash generated by our diagnostics segment
due to the positive impact of COVID-19 testing volumes, which was partially
offset by general and administrative expenses related to our corporate
operations and research and development activities. Cash used in investing
activities for the three months ended March 31, 2021 primarily reflects capital
expenditures of $9.2 million, which was partially offset by proceeds from the
sale of equity securities of $8.1 million. Cash used in financing activities of
$7.2 million primarily reflects net repayments on our lines of credit. 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 2033 Senior Notes,
2023 Convertible Notes and 2025 Notes and credit facilities available to us.
However, as a result of the significant increase in testing volumes resulting
from the COVID-19 pandemic, and if our routine clinical and genomic testing
volumes continue to trend towards normalization with prior periods, we
anticipate generating positive cash flow from operations. We are unable to
predict how long the demand will continue for our COVID-19 related testing,
whether pricing and reimbursement policies for testing will sustain, or whether
further restrictions will be placed on elective procedures or if stay at home
orders will be reinstated and accordingly, the sustainability of the cash flow
is uncertain.
On February 25, 2020, we entered into a credit agreement with an affiliate of
Dr. Frost, pursuant to which the lender committed to provide us with an
unsecured line of credit in the amount of $100 million. Borrowings under this
line of credit bear interest at a rate of 11% per annum and may be repaid and
reborrowed at any time. The credit agreement includes various customary remedies
for the lender following an event of default, including the acceleration of
repayment of outstanding amounts under line of credit. The line of credit
matures on February 25, 2025. As of March 31, 2021, no funds were borrowed under
this line of credit.
In February 2019, we issued $200.0 million aggregate principal amount of the
2025 Notes in an underwritten public offering. The 2025 Notes bear interest at a
rate of 4.50% per year, payable semiannually in arrears on February 15 and
August 15 of each year. The notes mature on February 15, 2025, unless earlier
repurchased, redeemed or converted.
Holders may convert their 2025 Notes into shares of Common Stock at their option
at any time prior to the close of business on the business day immediately
preceding November 15, 2024 only under the following circumstances: (1) during
any calendar quarter commencing after the calendar quarter ended on March 31,
2019 (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 a period of 30 consecutive trading days ending on the last trading day of
the immediately preceding calendar quarter is greater than or equal to 130% of
the conversion price on each applicable trading day; (2) during the five
business day period after any five consecutive trading day period (the
"measurement period") in which the trading price per $1,000 principal amount of
2025 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
conversion rate on each such trading day; (3) if we call any or all of the 2025
Notes for redemption, at any time prior to the close of business on the
scheduled trading day immediately preceding the redemption date; or (4) upon the
occurrence of specified corporate events set forth in the indenture governing
the 2025 Notes. On or after November 15, 2024, until the close of business on
the business day immediately preceding the maturity date, holders of the 2025
Notes may convert their notes at any time, regardless of the foregoing
conditions. Upon conversion, we will pay or deliver, as the case may be, cash,
shares of our Common Stock, or a combination of cash and shares of our Common
Stock, at our election.
The current conversion rate for the 2025 Notes is 236.7424 shares of Common
Stock per $1,000 principal amount of 2025 Notes (equivalent to a conversion
price of approximately $4.22 per share of Common Stock). The conversion rate for
the 2025 Notes is subject to adjustment in certain events but will not be
adjusted for any accrued and unpaid interest.
As of March 31, 2021, the total commitments under our Credit Agreement (as
defined below) with CB and our lines of credit with financial institutions in
Chile and Spain were $95.5 million, of which $16.1 million was drawn as of
March 31, 2021. At March 31, 2021, the weighted average interest rate on these
lines of credit was approximately 5.5%. 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 three months ended March
31, 2021 was $16.1 million. We intend to continue to draw under 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.
In November 2015, BioReference and certain of its subsidiaries entered into a
credit agreement with CB, as lender and administrative agent, as amended from
time to time (the "Credit Agreement"). The Credit Agreement provides for a $75.0
million secured revolving credit facility and includes a $20.0 million
sub-facility for swingline loans and a $20.0 million sub-facility for the
issuance of letters of credit. The Credit Agreement matures on November 5, 2021
and is guaranteed by all of BioReference's domestic subsidiaries. The Credit
Agreement is also secured by substantially all assets of BioReference and its
domestic subsidiaries, as well as a non-recourse pledge by us of our equity
interest in BioReference. Availability under the

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Credit Agreement is based on a borrowing base composed of eligible accounts
receivables of BioReference and certain of its subsidiaries, as specified
therein. As of March 31, 2021, $64.7 million remained available for borrowing
under the Credit Agreement.
In February 2018, in a transaction exempt from registration under the Securities
Act, we issued the 2023 Convertible Notes in the aggregate principal amount of
$55.0 million maturing in February 2023. Each holder of a 2023 Convertible Note
has the option, from time to time, to convert all or any portion of the
outstanding principal balance of such 2023 Convertible Note, together with
accrued and unpaid interest thereon, into shares of our Common Stock, par value
$0.01 per share, at a conversion price of $5.00 per share of Common Stock. We
may redeem all or any part of the then issued and outstanding 2023 Convertible
Notes, together with accrued and unpaid interest thereon upon no fewer than 30
days, and no more than 60 days, notice to the holders. The 2023 Convertible
Notes contain customary events of default and representations and warranties of
OPKO.
On October 12, 2017, EirGen, our wholly-owned subsidiary, and JT entered into
the JT Agreement granting JT the exclusive rights for the development and
commercialization of Rayaldee in Japan. The license grant to JT covers the
therapeutic and preventative use of Rayaldee for (i) SHPT in non-dialysis and
dialysis patients with CKD, (ii) rickets, and (iii) osteomalacia, as well as
such additional indications as may be added to the scope of the license subject
to the terms of the JT Agreement. In connection with the transaction, OPKO
received an initial upfront payment of $6 million, and OPKO received another $6
million upon the initiation of OPKO's phase 2 study for Rayaldee in dialysis
patients in the U.S. in September 2018. OPKO is also eligible to receive up to
an additional aggregate amount of $31 million upon the achievement of certain
regulatory and development milestones by JT for Rayaldee in the JT Territory,
and $75 million upon the achievement of certain sales based milestones by JT in
the JT Territory. OPKO will also receive tiered, double digit royalty payments
at rates ranging from low double digits to mid-teens on sales of Rayaldee within
the JT Territory. JT will, at its sole cost and expense, be responsible for
performing all development activities necessary to obtain all regulatory
approvals for Rayaldee in Japan and for all commercial activities pertaining to
Rayaldee in Japan.
In May 2016, EirGen, our wholly-owned subsidiary, partnered with VFMCRP through
the VFMCRP Agreement for the development and commercialization of Rayaldee in
the VFMCRP Territory. The license to VFMCRP potentially covers all therapeutic
and prophylactic uses of the product in human patients, provided that initially
the license is for the use of the product for the treatment or prevention of
SHPT related to patients with CKD and vitamin D insufficiency/deficiency
("VFMCRP Initial Indication"). Effective May 5, 2020, we entered into the VFMCRP
Amendment, pursuant to which the parties agreed to exclude Mexico, South Korea,
the Middle East and all of the countries of Africa from the VFMCRP Territory. In
addition, the parties agreed to certain amendments to the milestone structure
and to reduce minimum royalties payable.
We have received non-refundable and non-creditable payments of $55 million to
date and are eligible to receive up to an additional $227 million pursuant to
the terms of the VFMCRP Amendment upon the achievement of certain regulatory and
sales-based milestones tied to sales and reimbursement levels. In addition, we
are eligible to receive tiered royalties on sales of the product at percentage
rates that range from the mid-teens to the mid-twenties or a minimum royalty,
whichever is greater, upon commencement of sales of the product.
As part of the arrangement, the companies will share responsibility for the
conduct of trials specified within an agreed-upon development plan, with each
company leading certain activities within the plan. For the initial development
plan, the companies have agreed to certain cost sharing arrangements. VFMCRP
will be responsible for all other development costs that VFMCRP considers
necessary to develop the product for the VFMCRP Initial Indication in the VFMCRP
Territory except as otherwise provided in the VFMCRP Agreement. EirGen also
granted to VFMCRP an option to acquire an exclusive license to use, import,
offer for sale, sell, distribute and commercialize the product in the U.S. for
treatment of SHPT in dialysis patients with stage 5 CKD and vitamin D
insufficiency (the "Dialysis Indication"). Upon exercise of the Option, VFMCRP
will reimburse EirGen for all of the development costs incurred by EirGen with
respect to the product for the Dialysis Indication in the U.S. VFMCRP would also
pay EirGen up to an additional aggregate amount of $555 million upon the
achievement of certain milestones and would be obligated to pay royalties on
sales of the product at percentage rates that range from the mid-teens to the
mid-twenties or a minimum royalty, whichever is greater, upon commencement of
sales of the product.
In June 2020, we announced that the Japan phase 3 clinical trial met its primary
and secondary objectives, and demonstrated that the efficacy and safety of
Somatrogon administered weekly was comparable to GENOTROPIN® for injection
administered once-daily as measured by annual height velocity after 12 months of
treatment in treatment-naïve Japanese pre-pubertal children with GHD. In October
2019, we and Pfizer announced that the global phase 3 trial evaluating
Somatrogon (hGH-CTP) dosed once-weekly in prepubertal children with GHD met its
primary endpoint of non-inferiority to daily Genotropin® (somatropin) for
injection, as measured by annual height velocity at 12 months.
In 2014, Pfizer and OPKO entered into a worldwide agreement for the development
and commercialization of our long-

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acting Somatrogon for the treatment of GHD in adults and children, as well as
for the treatment of growth failure in children born small for gestational age.
In May 2020, we entered into a Restated Agreement with Pfizer which was
effective as of January 1, 2020, pursuant to which the parties agreed to share
all costs for Manufacturing Activities, as defined in the Restated Agreement,
for developing a licensed product for the three indications included in the
Restated Agreement. Under the terms of the agreements with Pfizer, we received
non-refundable and non-creditable upfront payments of $295 million in 2015 and
are eligible to receive up to an additional $275 million upon the achievement of
certain regulatory milestones. Pfizer received the exclusive license to
commercialize Somatrogon worldwide. In addition, we are eligible to receive
initial tiered royalty payments associated with the commercialization of
Somatrogon for Adult GHD with percentage rates ranging from the high teens to
mid-twenties. Upon the launch of Somatrogon for Pediatric GHD in certain major
markets, the royalties will transition to regional, tiered gross profit sharing
for both Somatrogon and Pfizer's Genotropin®. During the first quarter of 2021,
regulatory submissions in the major global markets for Somatrogan have been
accepted including, the U.S., European Medicines Agency, and Ministry of Health,
Labour, and Welfare in Japan for Somatrogon for the treatment of pediatric
patients with GHD.
In connection with our acquisitions of CURNA, OPKO Diagnostics and OPKO Renal,
we agreed to pay future consideration to the sellers upon the achievement of
certain events, including up to an additional $19.1 million in shares of our
Common Stock to the former stockholders of OPKO Diagnostics upon and subject to
the achievement of certain milestones; and up to an additional $125.0 million in
either shares of our Common Stock or cash, at our option subject to the
achievement of certain milestones, to the former shareholders of OPKO Renal.
We believe that the cash and cash equivalents on hand at March 31, 2021, cash
from operations 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 based this estimate on
assumptions that may prove to be wrong or are subject to change, and we may be
required to use our available cash resources sooner than we currently expect. If
we acquire additional assets or companies, accelerate our product development
programs or initiate additional clinical trials, we will need additional funds.
Our future cash requirements, and the timing of those requirements, will depend
on a number of factors, including the impact of the COVID-19 pandemic on our
business, the approval and success of our products in development, particularly
our long acting Somatrogon for which we have submitted for approval in the U.S.,
Europe and Japan, the commercial success of Rayaldee, including the launch of
Rayaldee by Vifor expected in 2022, BioReference's financial performance,
possible acquisitions, 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. We have
historically not generated sustained positive cash flow and if we are not able
to secure additional funding when needed, we may have to delay, reduce the scope
of, or eliminate one or more of our clinical trials or research and development
programs or possible acquisitions or reduce our marketing or sales efforts or
cease operations.
Additionally, the rapid development and fluidity of the COVID-19 pandemic makes
it very difficult to predict its ultimate impact on our business, results of
operations and liquidity. The pandemic presents a significant uncertainty that
could materially and adversely affect our results of operations, financial
condition and cash flows, including a negative impact on non-COVID-related
diagnostics testing services provided by BioReference in our diagnostics
segment, notwithstanding that our results of operations have been positively
impacted by our provision of COVID-19 testing services. Further, deteriorating
economic conditions globally have resulted in a challenging capital raising
environment, which could materially limit our access to capital, whether through
the issuance and sale of our common stock, debt securities or otherwise, as well
as through bank facilities and lines of credit. Events resulting from the
effects of COVID-19 could negatively impact our ability to comply with certain
covenants in the Credit Agreement or require that we pursue alternative
financing. We can provide no assurance that any such alternative financing, if
required, could be obtained on acceptable terms or at all. The combination of
potential disruptions to our business resulting from COVID-19 together with and
volatile credit and capital markets could adversely impact our future liquidity,
which could have an adverse effect on our business and results of operations. We
will continue to monitor and assess the impact COVID-19 may have on our business
and financial results.

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The following table provides information as of March 31, 2021, with respect to
the amounts and timing of our known contractual obligation payments due by
period.
                                       Remaining
Contractual obligations            nine months ending
(In thousands)                     December 31, 2021            2022              2023              2024              2025             Thereafter            Total
Open purchase orders              $         301,015          $    517          $      -          $     -          $       -          $         -          $ 301,532
Operating leases                              7,435            10,067             6,785            4,786              2,981               10,645             42,699
Finance leases                                1,769             1,464               890              560                110                    -              4,793
2033 Senior Notes, 2025 and
2023 Convertible Notes                            -                 -            58,050                -            158,278                    -            216,328

Mortgages and other debts
payable                                         956               772               571              478                  -                   90              2,867
Lines of credit                              16,093                 -                 -                -                  -                    -             16,093

Interest commitments                            254               284            13,948              260             34,633                    -             49,379
Total                             $         327,522          $ 13,104          $ 80,244          $ 6,084          $ 196,002          $    10,735          $ 633,691


The preceding table does not include information where the amounts of the
obligations are not currently determinable, including the following:
•Contractual obligations in connection with clinical trials, which span over two
years, and that depend on patient enrollment. The 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 $144.1 million.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES
There were no material changes to our critical accounting policies and estimates
described in our Annual Report on Form 10-K for the fiscal year ended December
31, 2020, that have a material impact on our Condensed Consolidated Financial
Statements and related notes.
RECENT ACCOUNTING PRONOUNCEMENTS
Pending accounting pronouncements.
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)." ASU 2020-06 will simplify the accounting
for convertible instruments by reducing the number of accounting models for
convertible debt instruments and convertible preferred stock. The ASU is
effective for public entities for fiscal years beginning after December 15,
2021, with early adoption permitted. We are currently evaluating the impact of
this new guidance on our Condensed Consolidated Financial Statements.

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