Bullish Signals Show It’s Time To Buy Opko Health (OPK)

Opko Health Inc. (NYSE:OPK)’s other treatment, Rolapitant, for nausea and vomiting is licensed to another company, Tesoro. Approval of Rolapitant by the FDA could net OPK $121 million in payments from Tesoro and future royalties on sales of the drug. OPK also has a vitamin D deficiency drug named Rayaldee pending approval that will be part of the $12 billion market for vitamin D treatments. In addition to BRLI’s network, the purchase of the company by OPK adds an existing business with strong financial and returns. BRLI has little debt with a debt-to-equity ratio of only 21%, and returns on both capital and equity have exceeded 15% throughout its history. Revenue growth has been strong at BRLI as well averaging about 15% for the past couple of years. So although OPK has many of its own products on the horizon and will utilize BRLI as a platform to market and sell them, BRLI was already a stellar business and will help OPK turn to profitability.

Even in the face of the high short interest, it seems like a good idea to invest in OPK as insiders, especially the company’s chairman and CEO, have been acquiring shares in great numbers. The purchases likely signify that approvals of its treatments are likely and that adoption of its current diagnostic test are meeting or exceeding expectations. Company insiders have the greatest foresight into the future success of OPK and as it stands right now it seems OPK has a bright future. The BRLI acquisition will be a catalyst for the company to capitalize on its treatments and diagnostic tests, derive profits from them, and drive its stock price higher as a result.

Disclosure: None