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3 Predictions for Opko Health Inc. in 2016

Image Source: Opko Health,

"Prediction is very difficult, especially if it's about the future."

While that sounds like something Yogi Berra might have said, the quote actually comes from renowned physicist Niels Bohr. And Bohr was right -- predicting is a tough business. That's particularly true when it comes to prognosticating what might happen with biotech stocks like Opko Health (NYSE:OPK).

Opko has experienced a tumultuous 2015. The stock more than doubled by mid-year, then lost nearly all of those gains by October. Shares are now up around 30% year-to-date. What will 2016 have in store for the biotech? Here are three predictions.

1.Bio-Reference buyout benefits
Opko completed its buyout of Bio-Reference Laboratories in August, which has resulted in good news already. The company announced a surprise profit in November thanks largely to a $93 million tax benefit stemming from the acquisition. While this was a one-time benefit, I think Opko will continue to reap rewards from the Bio-Reference buyout in 2016.

Opko's shares fell in the aftermath of the announcement of its Bio-Reference acquisition back in June. My view is that these early worries from investors underestimated the long-term opportunity for Opko as a result of the buyout.

In the past, Opko primarily targeted urologists in promoting its 4Kscore prostate cancer genetic test. Access to Bio-Reference Laboratories' significantly larger sales team allows Opko to go after primary care physicians and internists -- who order 93% of PSA tests in the U.S. With inclusion of 4Kscore in national guidelines for early detection of...


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