10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014.

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number 001-33528

OPKO Health, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	75-2402409
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

4400 Biscayne Blvd.
Miami, FL 33137
(Address of Principal Executive Offices) (Zip Code)

(305) 575-4100
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ý  YES    ¨  NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    ý  YES    ¨  NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company”

(in Rule 12b-2 of the Exchange Act) (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):   ¨  YES    ý  NO

As of May 1, 2014, the registrant had 413,750,781 shares of common stock outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION			Page
Item 1.	Financial Statements
Condensed Consolidated Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013			6
Condensed Consolidated Statements of Operations for the three months ended March 31, 2014 and March 31, 2013 (unaudited)			7
Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2014 and March 31, 2013 (unaudited)			8
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and March 31, 2013 (unaudited)			9
Notes to Financial Statements (unaudited)			10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		43
Item 4.	Controls and Procedures		44
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings		46
Item 1A.	Risk Factors		46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		46
Item 3.	Defaults Upon Senior Securities		46
Item 4.	Mine Safety Disclosures		46
Item 5.	Other Information		46
Item 6.	Exhibits		47
Signatures			48
Exhibit Index			49
	EX-31.1	Section 302 Certification of CEO
	EX-31.2	Section 302 Certification of CFO
	EX-32.1	Section 906 Certification of CEO
	EX-32.2	Section 906 Certification of CFO
	EX-101.INS	XBRL Instance Document
	EX-101.SCH	XBRL Taxonomy Extension Schema Document
	EX-101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
	EX-101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
	EX-101.LAB	XBRL Taxonomy Extension Label Linkbase Document
	EX-101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

2

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements,” as that term is defined under the Private Securities Litigation Reform Act of 1995 (“PSLRA”), Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements about our expectations, beliefs or intentions regarding our product development efforts, business, financial condition, results of operations, strategies or prospects. You can identify forward-looking statements by the fact that these statements do not relate strictly to historical or current matters. Rather, forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties that could cause our actual results to differ materially from any future results expressed or implied by the forward-looking statements. Many factors could cause our actual activities or results to differ materially from the activities and results anticipated in forward-looking statements. These factors include those described below and in “Item 1A-Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2013, and described from time to time in our other reports filed with the Securities and Exchange Commission. Except as required by law, we do not undertake any obligation to update forward-looking statements. We intend that all forward-looking statements be subject to the safe-harbor provisions of the PSLRA. These forward-looking statements are only predictions and reflect our views as of the date they are made with respect to future events and financial performance.

Risks and uncertainties, the occurrence of which could adversely affect our business, include the following:

• We have a history of operating losses and we do not expect to become profitable in the near future.

• Our technologies are in an early stage of development and are unproven.

• Our business is substantially dependent on our ability to develop, launch and generate revenue from our pharmaceutical and diagnostic programs.

• Our research and development activities, or that of our investees, may not result in commercially viable products.

• The results of previous clinical trials may not be predictive of future results, and our current and planned clinical trials may not satisfy the requirements of the United States (“U.S.”) Food and Drug Administration (“FDA”) or other non-U.S. regulatory authorities.

• We may require substantial additional funding, which may not be available to us on acceptable terms, or at all.

• We may finance future cash needs primarily through public or private offerings, debt financings or strategic collaborations, which may dilute your stockholdings in the Company.

• If our competitors develop and market products that are more effective, safer or less expensive than our future product candidates, our commercial opportunities will be negatively impacted.

• The regulatory approval process is expensive, time consuming and uncertain and may prevent us or our collaboration partners from obtaining approvals for the commercialization of some or all of our product candidates.

• Failure to recruit and enroll patients for clinical trials may cause the development of our product candidates to be delayed.

• Even if we obtain regulatory approvals for our product candidates, the terms of approvals and ongoing regulation of our products may limit how we manufacture and market our product candidates, which could materially impair our ability to generate anticipated revenues.

• We may not meet regulatory quality standards applicable to our manufacturing and quality processes.

• Even if we receive regulatory approval to market our product candidates, the market may not be receptive to our products.

• The loss of Phillip Frost, M.D., our Chairman and Chief Executive Officer, could have a material adverse effect on our business and product development.

• If we fail to attract and retain key management and scientific personnel, we may be unable to successfully develop or commercialize our product candidates.

• In the event that we successfully evolve from a company primarily involved in development to a company also involved in commercialization, we may encounter difficulties in managing our growth and expanding our operations successfully.

3

• If we fail to acquire and develop other products or product candidates, at all or on commercially reasonable terms, we may be unable to diversify or grow our business.

• We have no experience manufacturing our pharmaceutical product candidates other than at one of our Israeli facilities, and at our Mexican, and Spanish facilities, and we have no experience in manufacturing our diagnostic product candidates.  We will therefore likely rely on third parties to manufacture and supply our pharmaceutical and diagnostics product candidates, and we would need to meet various standards to satisfy FDA regulations in order to manufacture on our own.    

• We currently have no pharmaceutical or diagnostic marketing, sales or distribution capabilities other than in Chile, Mexico, Spain, Brazil, and Uruguay for sales in those countries and our active pharmaceutical ingredients (“APIs”) business in Israel, and the sales force for our laboratory business based in Nashville, Tennessee. If we are unable to develop our sales and marketing and distribution capability on our own or through collaborations with marketing partners, we will not be successful in commercializing our pharmaceutical and diagnostic product candidates.

• Certain elements of our business are dependent on the success of ongoing and planned phase 3 clinical trials for Rayaldee^TM (CTAP101), Alpharen^TM (Fermagate Tablets), and hGH-CTP.

• Independent clinical investigators and contract research organizations that we engage to conduct our clinical trials may not be diligent, careful or timely.

• The success of our business is dependent on the actions of our collaborative partners.

• Our license agreement with TESARO, Inc. (“TESARO”) is important to our business. If TESARO does not successfully develop and commercialize rolapitant, our business could be adversely affected.

• If we are unable to obtain and enforce patent protection for our products, our business could be materially harmed.

• We do not have an exclusive arrangement in place with Dr. Tom Kodadek with respect to technology or intellectual property that may be material to our business.

• If we are unable to protect the confidentiality of our proprietary information and know-how, the value of our technology and products could be adversely affected.

• We rely heavily on licenses from third parties.

• We license patent rights to certain of our technology from third-party owners. If such owners do not properly maintain or enforce the patents underlying such licenses, our competitive position and business prospects will be harmed.

• Our commercial success depends significantly on our ability to operate without infringing the patents and other proprietary rights of third parties.

• Adverse results in material litigation matters or governmental inquiries could have a material adverse effect upon our business and financial condition.

• If our products have undesirable effects on patients, we could be subject to litigation or product liability claims that could impair our reputation and have a material adverse effect upon our business and financial condition.

• Medicare prescription drug coverage legislation and future legislative or regulatory reform of the health care system may adversely affect our ability to sell our products or provide our services profitably.

• Failure to obtain and maintain regulatory approval outside the U.S. will prevent us from marketing our product candidates abroad.

• We may not have the funding available to pursue acquisitions.

• Acquisitions may disrupt our business, distract our management, may not proceed as planned, and may also increase the risk of potential third party claims and litigation.

• We may encounter difficulties in integrating acquired businesses.

• Non-U.S. governments often impose strict price controls, which may adversely affect our future profitability.

• Political and economic instability in Europe and Latin America and political, economic, and military instability in Israel or neighboring countries could adversely impact our operations.

4

• We are subject to fluctuations in currency exchange rates in connection with our international businesses.

• We have a large amount of goodwill and other intangible assets as a result of acquisitions and a significant write-down of goodwill and/or other intangible assets would have a material adverse effect on our reported results of operations and net worth.

• Our business may become subject to legal, economic, political, regulatory and other risks associated with international operations.

• The market price of our Common Stock may fluctuate significantly.

• The conversion and redemption features of our January 2013 convertible senior notes due in 2033 are classified as embedded derivatives and may continue to result in volatility in our financial statements, including having a material impact on our result of operations and recorded derivative liability.

• We have reported a material weakness in our internal control over financing reporting which may cause investors and stockholders to lose confidence in our financial reporting.

• Directors, executive officers, principal stockholders and affiliated entities own a significant percentage of our capital stock, and they may make decisions that you may not consider to be in your best interests or in the best interests of our stockholders.

• Compliance with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

• If we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as they apply to us, or our internal controls over financial reporting are not effective, the reliability of our financial statements may be questioned and our Common Stock price may suffer.

• We may be unable to maintain our listing on the New York Stock Exchange (“NYSE”), which could cause our stock price to fall and decrease the liquidity of our Common Stock.

• Future issuances of Common Stock and hedging activities may depress the trading price of our Common Stock.

• Provisions in our charter documents and Delaware law could discourage an acquisition of us by a third party, even if the acquisition would be favorable to you.

• We do not intend to pay cash dividends on our Common Stock in the foreseeable future.

5

PART I. FINANCIAL INFORMATION

Unless the context otherwise requires, all references in this Quarterly Report on Form 10-Q to the “Company”, “OPKO”, “we”, “our”, “ours”, and “us” refer to OPKO Health, Inc., a Delaware corporation, including our wholly-owned subsidiaries.

Item 1. Financial Statements

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands except share and per share data)

	March 31, 2014(1)			December 31, 2013(1)
ASSETS
Current assets:
Cash and cash equivalents	$	156,396		$	185,798
Accounts receivable, net	19,664			19,767
Inventory, net	18,865			18,079
Prepaid expenses and other current assets	10,347			19,084
Total current assets	205,272			242,728
Property, plant, equipment, and investment properties, net	16,881			17,027
Intangible assets, net	71,921			74,533
In-process research and development	793,339			793,341
Goodwill	226,062			226,373
Investments, net	35,697			30,653
Other assets	6,520			6,861
Total assets	$	1,355,692		$	1,391,516
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	14,696		$	13,414
Accrued expenses	58,772			65,874
Current portion of lines of credit and notes payable	11,032			12,562
Total current liabilities	84,500			91,850
2033 Senior Notes, net of discount and estimated fair value of embedded derivatives	224,801			211,912
Other long-term liabilities, principally contingent consideration and deferred tax liabilities	215,142			214,775
Total long-term liabilities	439,943			426,687
Total liabilities	524,443			518,537
Equity:
Common Stock - $0.01 par value, 750,000,000 shares authorized; 415,346,120 and 414,818,195       shares issued at March 31, 2014 and December 31, 2013, respectively	4,154			4,148
Treasury Stock - 2,244,923 and 2,264,063 shares at March 31, 2014 and December 31, 2013, respectively	(7,300		)	(7,362		)
Additional paid-in capital	1,384,694			1,379,383
Accumulated other comprehensive income	1,399			3,418
Accumulated deficit	(547,727		)	(503,177		)
Total shareholders’ equity attributable to parent	835,220			876,410
Noncontrolling interests	(3,971		)	(3,431		)
Total shareholders’ equity	831,249			872,979
Total liabilities and equity	$	1,355,692		$	1,391,516

(1) As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

6

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)

	For the three months ended March 31,
	2014			2013
Revenues:
Products	$	19,828		$	15,527
Revenue from services	1,970			3,092
Revenue from transfer of intellectual property	476			12,757
Total revenues	22,274			31,376
Costs and expenses:
Costs of revenues	12,391			11,757
Selling, general and administrative	13,812			12,424
Research and development	20,994			9,910
Contingent consideration	2,610			1,344
Amortization of intangible assets	2,744			2,714
Total costs and expenses	52,551			38,149
Operating loss	(30,277		)	(6,773		)
Other income and (expense), net:
Interest income	40			59
Interest expense	(3,486		)	(2,897		)
Fair value changes of derivative instruments, net	(10,515		)	(23,549		)
Other income (expense), net	1,817			2,331
Other income and (expense), net	(12,144		)	(24,056		)
Loss before income taxes and investment losses	(42,421		)	(30,829		)
Income tax benefit (provision)	(614		)	(43		)
Loss before investment losses	(43,035		)	(30,872		)
Loss from investments in investees	(2,056		)	(3,890		)
Net loss	(45,091		)	(34,762		)
Less: Net loss attributable to noncontrolling interests	(540		)	(547		)
Net loss attributable to common shareholders before        preferred stock dividend	(44,551		)	(34,215		)
Preferred stock dividend	—			(420		)
Net loss attributable to common shareholders	$	(44,551	)	$	(34,635	)
Loss per share, basic and diluted:
Net loss per share	$	(0.11	)	$	(0.11	)
Weighted average number of common shares outstanding,         basic and diluted	412,909,809			312,932,561

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

7

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

	For the three months ended March 31,
	2014			2013
Net loss attributable to common shareholders	$	(44,551	)	$	(34,635	)
Other comprehensive income (loss), net of tax:
Change in foreign currency translation	(1,801		)	323
Available for sale investments:
Change in other unrealized gains, net	335			414
Less: reclassification adjustments for gains    included in net loss, net of tax	(553		)	—
Comprehensive loss	$	(46,570	)	$	(33,898	)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

8

OPKO Health, Inc. and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	For the three months ended March 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(45,091	)	$	(34,762	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,564			3,429
Non-cash interest on 2033 Senior Notes	1,777			1,303
Amortization of deferred financing costs	177			145
Losses from investments in investees	2,056			3,890
Equity-based compensation – employees and non-employees	3,579			5,205
Provision for (recovery of) bad debts	(74		)	381
Provision for inventory obsolescence	337			939
Revenue from receipt of equity	(60		)	(12,540		)
Realized gain on sale of equity securities	(1,273		)	(2,347		)
Change in fair value of derivatives instruments	10,515			23,549
Change in fair value of contingent consideration	2,610			1,344
Deferred income tax benefit	—			98
Changes in assets and liabilities, net of the effects of acquisitions:
Accounts receivable	(557		)	(558		)
Inventory	(1,676		)	(1,439		)
Prepaid expenses and other current assets	1,145			(2,570		)
Other assets	1,429			71
Accounts payable	1,479			(103		)
Foreign currency measurement	(976		)	(340		)
Accrued expenses	(8,007		)	(440		)
Net cash used in operating activities	(29,046		)	(14,745		)
Cash flows from investing activities:
Investments in investees	(500		)	(2,500		)
Proceeds from sale of equity securities	1,297			2,528
Acquisition of businesses, net of cash	(200		)	78
Capital expenditures	(861		)	(755		)
Net cash provided by (used in) investing activities	(264		)	(649		)
Cash flows from financing activities:
Issuance of 2033 Senior Notes, net, including related parties	—			170,184
Payment of Series D dividends, including related parties	—			(3,015		)
Proceeds from the exercise of Common Stock options and warrants	1,639			995
Borrowings on lines of credit	4,250			8,428
Repayments of lines of credit	(5,985		)	(6,951		)
Net cash provided by financing activities	(96		)	169,641
Effect of exchange rate on cash and cash equivalents	4			(12		)
Net (decrease) increase in cash and cash equivalents	(29,402		)	154,235
Cash and cash equivalents at beginning of period	185,798			27,361
Cash and cash equivalents at end of period	$	156,396		$	181,596
SUPPLEMENTAL INFORMATION:
Interest paid	$	2,420		$	242
Income taxes paid (refunded), net	$	377		$	(118	)
RXi common stock received	$	—		$	12,500
Pharmsynthez common stock received	$	6,264		$	—
Non-cash financing:
Shares issued upon the conversion of:
Series D Preferred Stock	$	—		$	24,386
Common Stock options and warrants, net exercised	$	657		$	815
Issuance of Common Stock to acquire:
OPKO Renal	$	—		$	146,902
OPKO Brazil	$	—		$	436
Arama Uruguay	$	159		$	—

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

9

OPKO Health, Inc. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1 BUSINESS AND ORGANIZATION

We are a multi-national biopharmaceutical and diagnostics company that seeks to establish industry-leading positions in large and rapidly growing medical markets by leveraging our discovery, development and commercialization expertise and our novel and proprietary technologies. We are developing a range of solutions to diagnose, treat and prevent various conditions, including point-of-care tests, molecular diagnostics tests, laboratory developed tests, and proprietary pharmaceuticals and vaccines. We plan to commercialize these solutions on a global basis in large and high growth markets, including emerging markets.

We own established pharmaceutical platforms in Chile, Spain, Mexico, and Uruguay, which are generating revenue and which we expect to generate positive cash flow and facilitate future market entry for our products currently in development. In addition, we have also established pharmaceutical operations in Brazil. We own a specialty active pharmaceutical ingredients (“APIs”) 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. In the U.S., we own a laboratory certified under the Clinical Laboratory Improvement Amendments of 1988, as amended (“CLIA”), with a urologic focus that generates revenue and serves as the commercial platform for the U.S. launch of our next generation prostate cancer test to improve cancer risk stratification of patient candidates prior to prostate biopsy.

We are incorporated in Delaware and our principal executive offices are located in leased offices in Miami, Florida. We lease office and lab space in Jupiter and Miramar, Florida, and Nes Ziona, Israel, which is where our molecular diagnostics research and development, oligonucleotide research and development and carboxyl terminal peptide research and development operations are based, respectively. We lease office, manufacturing and warehouse space in Woburn, Massachusetts for our point-of-care diagnostics business, and in Nesher, Israel for our API business. We lease laboratory and office space in Nashville, Tennessee and Burlingame, California for our CLIA-certified laboratory business, and we lease office space in Bannockburn, Illinois, and Markham, Ontario for our pharmaceutical business directed to chronic kidney disease (“CKD”). Our Chilean and Uruguayan operations are located in leased offices and warehouse facilities in Santiago and Montevideo, respectively. Our Mexican operations are based in owned offices, an owned manufacturing facility and a leased warehouse facility in Guadalajara and in leased offices in Mexico City. Our Spanish operations are based in owned offices in Barcelona, in an owned manufacturing facility in Banyoles and a leased warehouse facility in Palol de Revardit. Our Brazilian operations are located in leased offices in Sao Paulo.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the Company’s results of operations, financial position and cash flows have been made. The results of operations and cash flows for the three months ended March 31, 2014, are not necessarily indicative of the results of operations and cash flows that may be reported for the remainder of 2014 or for future periods. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Principles of consolidation. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of OPKO Health, Inc. and of our wholly-owned subsidiaries and variable interest entities (“VIEs”) in which we are deemed to be the primary beneficiary. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents. Cash and cash equivalents include short-term, interest-bearing instruments with original maturities of 90 days or less at the date of purchase. We also consider all highly liquid investments with original maturities at the date of purchase of 90 days or less as cash equivalents. These investments include money markets, bank deposits, certificates of deposit and U.S. treasury securities.

10

Inventories. Inventories are valued at the lower of cost or market (net realizable value). Cost is determined by the first-in, first-out method. We consider such factors as the amount of inventory on hand, estimated time required to sell such inventories, remaining shelf-life, and current market conditions to determine whether inventories are stated at the lower of cost or market.

Goodwill and intangible assets. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired when accounted for by the purchase method of accounting and arose from our acquisitions of Pharma Genexx, S.A. (“OPKO Chile”), Pharmacos Exakta S.A. de C.V. (“Exakta-OPKO”), CURNA, Inc. (“CURNA”), Claros Diagnostics, Inc. (“OPKO Diagnostics”), FineTech Pharmaceuticals, Ltd. (“FineTech”), ALS Distribuidora Limitada (“ALS”), Farmadiet Group Holding, S.L. (“OPKO Spain”), Prost-Data, Inc. (“OPKO Lab”), Cytochroma Inc. (“OPKO Renal”), Silcon Comércio, Importacao E Exportacao de Produtos Farmaceuticos e Cosmeticos Ltda. (“OPKO Brazil”) and PROLOR Biotech, Inc. (“OPKO Biologics”). Goodwill, in-process research and development (“IPR&D”) and other intangible assets acquired in business combinations, licensing and other transactions at March 31, 2014 and December 31, 2013 were $1.1 billion and $1.1 billion, respectively.

Assets acquired and liabilities assumed in business combinations, licensing and other transactions are recognized at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. We determined the fair value of intangible assets, including IPR&D, using the “income method.”

Goodwill is tested at least annually for impairment, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives, ranging from 3 to 10 years, and review for impairment at least annually, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We use the straight-line method of amortization as there is no reliably determinable pattern in which the economic benefits of our intangible assets are consumed or otherwise used up. Amortization expense from continuing operations was $2.7 million at March 31, 2014 and 2013, respectively.

Fair value measurements. The carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term maturities of these instruments. Investments that are considered available for sale as of March 31, 2014 are carried at fair value.

Short-term investments, which we invest in from time to time, include bank deposits, corporate notes, U.S. treasury securities and U.S. government agency securities with original maturities of greater than 90 days and remaining maturities of less than one year. Long-term investments include corporate notes, U.S. treasury securities and U.S. government agency securities with maturities greater than one year.

In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts. Accordingly, the estimates of fair value presented herein may not be indicative of the amounts that could be realized in a current market exchange. Refer to Note 8.

Contingent consideration. Each period we revalue the contingent consideration obligations associated with certain acquisitions to their fair value and record increases in the fair value as contingent consideration expense and decreases in the fair value as contingent consideration income. Changes in contingent consideration result from changes in the assumptions regarding probabilities of successful achievement of related milestones, the estimated timing in which the milestones are achieved and the discount rate used to estimate the fair value of the liability. Contingent consideration may change significantly as our development programs progress, revenue estimates evolve and additional data is obtained, impacting our assumptions. The assumptions used in estimating fair value require significant judgment. The use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

Derivative financial instruments. We record derivative financial instruments on our Condensed Consolidated Balance Sheet at their fair value and recognize the changes in the fair value in our Condensed Consolidated Statement of Operations, when they occur, the only exception being derivatives that qualify as hedges. For the derivative instrument to qualify as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At March 31, 2014 and December 31, 2013, our forward contracts for inventory purchases did not meet the documentation requirements to be designated as hedges. Accordingly, we recognize all changes in the fair values of our derivatives instruments, net, in our Condensed Consolidated Statement of Operations. Refer to Note 9.

11

Revenue recognition. Generally, we recognize revenue from product sales when goods are shipped and title and risk of loss transfer to our customers. Our estimates for sales returns and allowances are based upon the historical patterns of product returns and allowances taken, matched against the sales from which they originated, and management’s evaluation of specific factors that may increase or decrease the risk of product returns.

Revenue for laboratory services is recognized on the accrual basis at the time test results are reported, which approximates when services are provided. Services are provided to certain patients covered by various third-party payer programs including various managed care organizations, as well as the Medicare and Medicaid programs. Billings for services under third-party payer programs are included in sales net of allowances for contractual discounts and allowances for differences between the amounts billed and estimated program payment amounts. Adjustments to the estimated payment amounts based on final settlement with the programs are recorded upon settlement as an adjustment to revenue. For the three months ended March 31, 2014 and 2013, revenue from services also includes $0.1 million and $0.2 million, respectively, of revenue related to our consulting agreement with Neovasc and to revenue related to molecular diagnostics collaboration agreements. We recognize this revenue on a straight-line basis over the contractual term of the agreements.

Revenue from transfer of intellectual property includes revenue related to the sale, license or transfer of intellectual property such as upfront license payments, license fees and milestone payments received through our license, collaboration and commercialization agreements. We analyze our multiple-element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting.

Non-refundable license fees for the out-license of our technology are recognized depending on the provisions of each agreement. We recognize non-refundable upfront license payments as revenue upon receipt if the license has standalone value and the fair value of our undelivered obligations, if any, can be determined. If the license is considered to have standalone value but the fair value of any of the undelivered items cannot be determined, the license payments are recognized as revenue over the period of our performance for such undelivered items or services. License fees with ongoing involvement or performance obligations are recorded as deferred revenue, included in Accrued expenses or Other long-term liabilities, when received and generally are recognized ratably over the period of such performance obligation only after both the license period has commenced and we have delivered the technology.

The assessment of our obligations and related performance periods requires significant management judgment. If an agreement contains research and development obligations, the relevant time period for the research and development phase is based on management estimates and could vary depending on the outcome of clinical trials and the regulatory approval process. Such changes could materially impact the revenue recognized, and as a result, management reviews the estimates related to the relevant time period of research and development on a quarterly basis. For the three months ended March 31, 2014, we recorded $0.5 million of revenue from the transfer of intellectual property. Refer to Note 5.

Revenue from milestone payments related to arrangements under which we have continuing performance obligations are recognized as Revenue from transfer of intellectual property upon achievement of the milestone only if all of the following conditions are met: the milestone payments are non-refundable; there was substantive uncertainty at the date of entering into the arrangement that the milestone would be achieved; the milestone is commensurate with either the vendor’s performance to achieve the milestone or the enhancement of the value of the delivered item by the vendor; the milestone relates solely to past performance; and the amount of the milestone is reasonable in relation to the effort expended or the risk associated with the achievement of the milestone. If any of these conditions are not met, the milestone payments are not considered to be substantive and are, therefore, deferred and recognized as Revenue from transfer of intellectual property over the term of the arrangement as we complete our performance obligations.

Total deferred revenue included in Accrued expenses and Other long-term liabilities was $8.6 million and $8.3 million at March 31, 2014 and December 31, 2013, respectively.

Allowance for doubtful accounts. We analyze accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts using the specific identification method. Our reported net loss is directly affected by our estimate of the collectability of accounts receivable. The amount of the allowance for doubtful accounts was $1.6 million and $1.9 million at March 31, 2014 and December 31, 2013, respectively.

Equity-based compensation. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in the Condensed Consolidated Statement of Operations over the period during which an employee is required to provide service in exchange for the award. We record excess tax benefits, realized from the exercise of stock options as a financing cash inflow rather than as a reduction of taxes paid in cash flow from operations. Equity-based compensation arrangements to non-employees are recorded at their fair value on the measurement date. The measurement of equity-based compensation is subject to periodic adjustment as the underlying

12

equity instruments vest. During the three months ended March 31, 2014 and 2013, we recorded $3.6 million and $5.2 million, respectively, of equity-based compensation expense.

Research and development expenses.Research and development expenses include external and internal expenses, partially offset by third-party grants and fundings 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. Research and development employee-related expenses include salaries, benefits and stock-based compensation expense. Other unallocated internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities. We expense these costs in the period in which they are incurred. We estimate our liabilities for research and development expenses in order to match the recognition of expenses to the period in which the actual services are received. As such, accrued liabilities related to third party research and development activities are recognized based upon our estimate of services received and degree of completion of the services in accordance with the specific third party contract.

Segment reporting. Our chief operating decision-maker (“CODM”) is comprised of our executive management with the oversight of our Board of Directors. Our CODM reviews our operating results and operating plans and makes resource allocation decisions on a Company-wide or aggregate basis. We currently manage our operations in two reportable segments, pharmaceuticals and diagnostics. The pharmaceutical segment consists of two operating segments, our (i) pharmaceutical research and development segment which is focused on the research and development of pharmaceutical products, and vaccines, and (ii) the pharmaceutical operations we acquired in Chile, Mexico, Israel, Spain, Uruguay and Brazil. The diagnostics segment consists of two operating segments, our (i) pathology operations we acquired through the acquisition of OPKO Lab and (ii) point-of-care and molecular diagnostics operations. There are no inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no inter-segment allocation of interest expense and income taxes.

Variable interest entities. The consolidation of variable interest entities (“VIE”) is required when an enterprise has a controlling financial interest. A controlling financial interest in a VIE will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE. Refer to Note 5.

Investments. We have made strategic investments in development stage and emerging companies. We record these investments as equity method investments or investments available for sale based on our percentage of ownership and whether we have significant influence over the operations of the investees. For investments classified under the equity method of accounting, we record our proportionate share of their losses in Losses from investments in investees in our Condensed Consolidated Statement of Operations. Refer to Note 5. For investments classified as available for sale, we record changes in their fair value as unrealized gain or loss in Other comprehensive loss based on their closing price per share at the end of each reporting period. Refer to Note 5.

Recent accounting pronouncements. In July 2013, the FASB issued an Accounting Standards Update (“ASU”), ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 is intended to eliminate inconsistent practices regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from the disallowance of a tax position. ASU 2013-11 is effective for our fiscal year beginning January 1, 2014 and subsequent interim periods. The adoption of ASU 2013-11 does not have a material effect on our Condensed Consolidated Financial Statements.

13

NOTE 3 LOSS PER SHARE

Basic loss per share is computed by dividing our net loss by the weighted average number of shares outstanding during the period. Diluted loss per share is computed by dividing our net loss increased by dividends on preferred stock by the weighted average number of shares outstanding and the impact of all dilutive potential common shares, primarily stock options. The dilutive impact of stock options and warrants is determined by applying the “treasury stock” method. In the periods in which their effect would be anti-dilutive, no effect has been given to outstanding options, warrants or convertible Preferred Stock in the diluted computation. Potentially dilutive shares issuable pursuant to the 2033 Senior Notes (defined in Note 6) were not included in the computation of net loss per share for the three months ended March 31, 2014, because their inclusion would be anti-dilutive.

Also, a total of 29,874,112 and 30,119,145 potential shares of Common Stock have been excluded from the calculation of diluted net loss per share for the three months ended March 31, 2014 and 2013, respectively, because their inclusion would be anti-dilutive.

During the three months ended March 31, 2014, 602,665 Common Stock options and Common Stock warrants to purchase shares of our Common Stock were exercised, resulting in the issuance of 527,926 shares of Common Stock. Of the 602,665 Common Stock options and Common Stock warrants exercised, 74,739 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the warrant agreements.

14

NOTE 4 COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

(In thousands)	March 31, 2014			December 31, 2013
Accounts receivable, net
Accounts receivable	$	21,230		$	21,652
Less: allowance for doubtful accounts	(1,566		)	(1,885		)
	$	19,664		$	19,767
Inventories, net
Finished products	$	12,880		$	13,374
Work in-process	1,112			1,350
Raw materials	5,355			4,132
Less: inventory reserve	(482		)	(777		)
	$	18,865		$	18,079
Prepaid expenses and other current assets
Prepaid supplies	$	1,919		$	945
Prepaid insurance	902			892
Pharmsynthez notes receivable	—			6,151
Other receivables	605			1,985
Taxes recoverable	1,266			3,458
Other	5,655			5,653
	$	10,347		$	19,084
Intangible assets, net:
Technologies	$	53,020		$	51,660
Customer relationships	22,525			22,725
Product registrations	9,731			9,692
Tradenames	3,621			3,669
Covenants not to compete	8,670			8,671
Other	1,173			2,519
Less:  accumulated amortization	(26,819		)	(24,403		)
	$	71,921		$	74,533
Accrued expenses:
Taxes payable	$	124		$	702
Deferred revenue	8,112			7,639
Clinical trials	4,710			3,342
Professional fees	1,108			402
Employee benefits	5,451			4,399
Deferred acquisition payments, net of discount	840			5,465
Contingent consideration	25,722			28,047
Other	12,705			15,878
	$	58,772		$	65,874

15

(In thousands)	March 31, 2014		December 31, 2013
Other long-term liabilities:
Contingent consideration – OPKO Renal	$	36,127	$	34,401
Contingent consideration – OPKO Spain	248		504
Contingent consideration – OPKO Diagnostics	8,593		8,340
Contingent consideration – CURNA	326		316
Mortgages and other debts payable	3,101		3,270
Deferred tax liabilities	166,068		166,435
Other, including deferred revenue	679		1,509
	$	215,142	$	214,775

All of the intangible assets and goodwill acquired relate to our acquisitions of OPKO Chile, including the intangible assets and goodwill related to the ALS acquisition, Exakta-OPKO, CURNA, OPKO Diagnostics, FineTech, OPKO Spain, OPKO Lab, OPKO Renal and OPKO Biologics. The pharmaceutical, nutraceutical and veterinary products from ALS and OPKO Spain do not require ongoing product renewals. We do not anticipate capitalizing the cost of product registration renewals, rather we expect to expense these costs, as incurred. Our goodwill is not tax deductible for income tax purposes in the U.S., Chile, Canada, Mexico, Spain, or Israel.

At March 31, 2014, the changes in value of the intangible assets and goodwill are primarily due to foreign currency fluctuations between the Chilean and Mexican pesos, the Euro and the Shekel against the U.S. dollar.

The following table summarizes the changes in Goodwill during the three months ended March 31, 2014.

	2014
(In thousands)	Balance at January 1		Acquisitions		Foreign exchange, other			Balance at March 31
Pharmaceuticals
CURNA	$	4,827	$	—	$	—		$	4,827
Exakta-OPKO	113		—		—			113
OPKO Chile	6,102		—		(294		)	5,808
OPKO Spain	9,075		—		(9		)	9,066
FineTech	11,698		—		—			11,698
SciVac	1,740		—		(8		)	1,732
OPKO Renal	2,069		—		—			2,069
OPKO Biologics	139,784		—		—			139,784
Diagnostics
Claros	17,977		—		—			17,977
OPKO Lab	32,988		—		—			32,988
	$	226,373	$	—	$	(311	)	$	226,062

16

NOTE 5 ACQUISITIONS, INVESTMENTS AND LICENSES

OPKO Biologics acquisition

In August 2013, we acquired OPKO Biologics (formerly PROLOR) pursuant to an agreement and plan of merger dated April 23, 2013 (the “Merger Agreement”) in an all-stock transaction. OPKO Biologics is an Israeli-based biopharmaceutical company focused on developing and commercializing longer-acting proprietary versions of already approved therapeutic proteins.

Under the terms of the Merger Agreement, holders of PROLOR common stock received 0.9951 shares of our Common Stock for each share of PROLOR common stock. At closing, we delivered 63,670,805 shares of our Common Stock valued at $540.6 million based on the closing price per share of our Common Stock as reported by the NYSE on the closing date of the acquisition, or $8.49 per share. In addition, each outstanding option and warrant to purchase shares of PROLOR common stock that was outstanding and unexercised immediately prior to the closing date, whether vested or not vested, was converted into 7,889,265 options and warrants to purchase OPKO Common Stock at a fair value of $46.1 million.

Until completion of the acquisition, Dr. Phillip Frost, our Chairman and Chief Executive Officer, was PROLOR’s Chairman of the Board and owned greater than 5% of its stock. Dr. Jane H. Hsiao, our Vice Chairman and Chief Technology Officer, and Mr. Steven Rubin, our Executive Vice President, Administration, were both directors of PROLOR and owned less than 5% of its stock.

OPKO Renal acquisition

In March 2013, we acquired OPKO Renal (formerly Cytochroma, Inc.), whose lead products, both in Phase 3 development, are Rayaldee^TM (CTAP101), a vitamin D prohormone to treat secondary hyperparathyroidism in patients with stage 3 or 4 CKD and vitamin D insufficiency, and Alpharen^TM (Fermagate Tablets), a non-absorbed phosphate binder to treat hyperphosphatemia in dialysis patients (the “OPKO Renal Acquisition”).

In connection with the OPKO Renal Acquisition, we delivered 20,517,030 of shares of our Common Stock valued at $146.9 million based on the closing price per share of our Common Stock as reported by the NYSE on the actual closing date of the acquisition, or $7.16 per share. The number of shares issued was based on the volume-weighted average price per share of our Common Stock as reported on the NYSE for the 10 trading days immediately preceding the date of the purchase agreement for the OPKO Renal Acquisition, or $4.87 per share.

In addition, the OPKO Renal Acquisition requires payments of up to an additional $190.0 million in cash or additional shares of our Common Stock, at our election, upon the achievement of certain milestones relating to development and annual revenue. As a result, we recorded $47.7 million as contingent consideration at acquisition. We evaluate the contingent consideration on an ongoing basis and the changes in the fair value are recognized in earnings until the milestones are achieved. Refer to Note 8.

The following table summarizes the purchase price allocation and the fair value of the net assets acquired and liabilities assumed in the acquisitions of OPKO Renal and OPKO Biologics at the dates of acquisition. The purchase price allocation for OPKO Biologics is subject to change while contingencies that existed on the acquisition date are resolved:

(In thousands)	OPKO Renal			OPKO Biologics
Current assets (1)	$	1,224		$	21,500
Intangible assets:
In-process research and development	191,530			590,200
Patents	210			—
Total intangible assets	191,740			590,200
Goodwill	2,411			139,784
Property, plant and equipment	306			1,057
Other assets	—			371
Accounts payable and accrued expenses	(1,069		)	(9,866		)
Deferred tax liability	—			(156,403		)
Total purchase price	$	194,612		$	586,643

(1)Current assets include cash of $0.4 million and $20.5 million related to the OPKO Renal and OPKO Biologics acquisitions, respectively.

17

Goodwill from the acquisition of OPKO Biologics principally relates to the deferred tax liability generated as a result of this being a stock transaction and the assembled workforce. Goodwill from the acquisition of OPKO Renal principally relates to the assembled workforce. Goodwill is not tax deductible for income tax purposes.

Pro forma disclosure for acquisitions

The following table includes the pro forma results for the three months ended March 31, 2013 of the combined companies as though the acquisition of OPKO Renal and OPKO Biologics had been completed as of the beginning of the period presented.

	March 31,
(In thousands)	2013
Revenues	$	31,376
Loss from continuing operations	—
Net loss	(41,379		)
Net loss attributable to common shareholders	(41,252		)
Basic and diluted loss from continued operations per share	0.11
Basic and diluted loss per share	$	(0.11	)

The unaudited pro forma financial information is presented for information purposes only. The unaudited pro forma financial information may not necessarily reflect our future results of operations or what the results of operations would have been had we owned and operated each company as of the beginning of the period presented.

Investments

The total assets, liabilities, and net losses of our equity method investees for three months ended March 31, 2014 were $119.1 million, $41.2 million, and $12.5 million, respectively. The following table reflects our maximum exposure, accounting method, ownership interest and underlying equity in net assets of each of our unconsolidated investments as of March 31, 2014:

(Dollars in thousands, except per share prices) Investee name	Year invested	Accounting method	Ownership at March 31, 2014		Investment			Underlying equity in net assets		Closing share price at March 31, 2014 for investments available for sale
Neovasc	2011	Equity method	6	%	3,798			1,558
Fabrus	2010	VIE, equity method	12	%	750			(362	)
RXi	2013	Equity method	17	%	15,000			1,841
Pharmasynthez	2013	Equity method	17	%	11,300			6,405
Zebra	2013	VIE, equity method	19	%	2,000			840
Cocrystal	2009	Equity method	16	%	5,476			20
Neovasc options	2011	Investment available for sale	N/A		925					CA	$	4.10
ChromaDex	2012	Investment available for sale	1	%	1,320						$	1.83
ARNO	2013	Investment available for sale	5	%	2,000						$	2.22
Cocrystal 10 yr warrants	2014	Investment available for sale	N/A		500
Plus unrealized gains on investments, options and warrants, net					13,120
Less accumulated losses in investees					(20,492		)
Total carrying value of equity method investees and investments, available for sale					$	35,697

Cocrystal Pharma, Inc.

We previously made investments in Biozone Pharmaceuticals, Inc. (“Biozone”) and Cocrystal Discovery, Inc. (“Cocrystal”). Effective January 2, 2014, Biozone and Cocrystal completed a merger transaction pursuant to which Cocrystal was the surviving entity, and the name of the issuer was changed to Cocrystal Pharma, Inc. (“CPI”). In connection with the transaction, CPI issued to Cocrystal’s former security holders 1,000,000 shares of the CPI’s Series B Convertible Preferred Stock (“Series B”). The Series B shares: (i) automatically convert into shares of the CPI’s common stock at a rate of 205.08308640 shares for each share of Series B at such time that CPI has sufficient authorized capital, (ii) are entitled to vote on all matters submitted to shareholders of CPI and vote on an as converted basis and (iii) have a nominal liquidation preference. The merger was being treated as a reverse merger and recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of the former Biozone’s operations were disposed of immediately

18

prior to the consummation of the merger as reported on a Form 8-K filed on January 8, 2014. Cocrystal is treated as the accounting acquirer as its shareholders control CPI after the Merger.

We have determined that we and our related parties can significantly influence the success of CPI through our board representation and voting power. Accordingly, as we and our related parties have the ability to exercise significant influence over CPI’s operations, we account for our investment in CPI under the equity method.

ARNO

In October 2013, we made an investment in ARNO Therapeutics, Inc. (“ARNO”), a clinical stage company focused on the development of oncology drugs. We invested $2.0 million and received 833,333 ARNO common shares, one year warrants to purchase 833,333 ARNO common shares for $2.40 a share and five year warrants to purchase an additional 833,333 ARNO common shares for $4.00 a share. Our investment was part of a private placement by ARNO. Other investors participating in the private financing included certain related parties. Refer to Note 10. We have determined that our ownership, along with that of our related parties, does not provide us with significant influence over the operations of ARNO and as a result, we account for ARNO as an investment, available for sale, and we record changes in the fair value of ARNO as an unrealized gain or loss in Other comprehensive loss each reporting period. We recorded the warrants on the date of the grant at their estimated fair value of $3.6 million using the Black-Scholes-Merton Model. We record changes in fair value of ARNO warrants in Other income (expense), net in our Condensed Consolidated Statement of Operations.

Neovasc

In 2011, we made an investment in Neovasc, a medical technology company based in Vancouver, Canada. We invested $2.0 million and received two million Neovasc common shares, and two-year warrants to purchase an additional one million shares for $1.25 a share. During the year ended December 31, 2013 we exercised the warrants and paid $1.2 million. We accounted for the warrants as an investment, available for sale and recorded the warrants at fair value on the date of acquisition. We recorded the changes in the fair value of the warrants in Fair value changes of derivatives instruments, net in our Condensed Consolidated Statements of Operations. We have determined that our related parties can significantly influence the success of Neovasc through our board representation and voting power. Accordingly, as we and our related parties have the ability to exercise significant influence over Neovasc’s operations, we account for our investment in Neovasc under the equity method.

2013 licensing agreements

An element of our growth strategy is to leverage our proprietary technology through a combination of internal development, acquisition, and external partnerships to maximize the commercial opportunities for our portfolio of proprietary pharmaceutical and diagnostic products and as such during 2013, we have entered into licensing agreements with Pharmsynthez and RXi.

Pharmsynthez transactions

In April 2013, we entered into a series of concurrent transactions with Pharmsynthez, a Russian pharmaceutical company traded on the Moscow Stock Exchange. The transactions consisted of:

•We delivered approximately $9.6 million to Pharmsynthez.

•Pharmsynthez issued to us approximately 13.6 million of its common shares.

•Pharmsynthez agreed, at its option, to issue approximately 12.0 million common shares to us or to pay us RussianRubles (“RUR”) 265.0 million ($8.1 million) on or before December 31, 2013 (the “Pharmsynthez Note Receivable”). In January 2014, Pharmsynthez delivered to us approximately 12.0 million shares of its common stock in satisfaction of the Pharmsynthez Notes Receivable.

• We had a right to purchase additional shares in Pharmsynthez at a fixed price if Pharmsynthez pays us in cash rather than delivering to us the 12.0 million Pharmsynthez common shares (the “Purchase Option”), however in connection with the settlement of the Pharmsynthez Note Receivable in January 2014, this right terminated. 

• We granted rights to certain technologies in the Russian Federation, Ukraine, Belorussia, Azerbaidjan and Kazakhstan (the “Territories”) to Pharmsynthez. 

•We will receive from Pharmsynthez royalty on net sales of products incorporating the technologies in the Territories, as well as a percentage of any sublicense income from third parties for the technologies in the Territories.

•Pharmsynthez paid us $9.5 million under the various collaboration and funding agreements for the development of the technologies (the “Collaboration Payments”).

19

We recorded the shares received in Pharmsynthez as an equity method investment.  We initially recorded the Pharmsynthez Note Receivable, and the Purchase Option, as financial instruments and elected the fair value option for subsequent measurement. Changes in the fair value of the receivable from Pharmsynthez for its common stock or RUR, with the embedded derivative, and the Purchase Option are recorded in Fair value changes of derivative instruments, net in our Condensed Consolidated Statements of Operations. Upon settlement in January 2014, we recorded the additional shares at fair value as an equity method investment.

We have accounted for the license and development activities as a multi-element arrangement, and allocated the total arrangement consideration based on the relative selling prices of the elements. We will record the allocated consideration for development activities as an offset to Research and development expenses over the three-year term of the Collaboration Payments.  We will record revenue in connection with the grant of rights to the technologies proportionately as the payments are received. 

During the three months ended March 31, 2014, we received $1.4 million related to the Collaboration Payments of which we recorded $0.5 million in Revenue from transfer of intellectual property and $0.4 million as an offset to Research and development expenses.

RXi transactions

In March 2013, we completed the sale to RXi Pharmaceuticals, Inc. (“RXi”) of substantially all of our assets in the field of RNA interference (the “RNAi Assets”) (collectively, the “Asset Purchase Agreement”). As consideration for the RNAi Assets, at the closing of the Asset Purchase Agreement, RXi issued to us 50 million shares of its common stock (the “APA Shares”).

Pursuant to the Asset Purchase Agreement, RXi will be required to pay us up to $50.0 million in milestone payments upon the successful development and commercialization of each drug developed by RXi, certain of its affiliates or any of its or their licensees or sublicensees utilizing patents included within the RNAi Assets (each, a “Qualified Drug”). In addition, RXi will also be required to pay us royalties equal to: (a) a mid single-digit percentage of “Net Sales” (as defined in the Asset Purchase Agreement) with respect to each Qualified Drug sold for an ophthalmologic use during the applicable “Royalty Period” (as defined in the Asset Purchase Agreement); and (b) a low single-digit percentage of net sales with respect to each Qualified Drug sold for a non-ophthalmologic use during the applicable royalty period.

In addition to the Asset Purchase Agreement, we purchased 17,241,380 shares of RXi, for $2.5 million, as part of a $16.4 million financing for RXi, which included other related parties. We have determined that our ownership, along with that of our related parties, provides us the ability to exercise significant influence over RXi operations and as such we have accounted for our investment in RXi under the equity method.

Investments in variable interest entities

We have determined that we hold variable interests in Fabrus, Inc. (“Fabrus”), SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, and Zebra Biologics, Inc. (“Zebra”). We made this determination as a result of our assessment that they do not have sufficient resources to carry out their principal activities without additional financial support.

In October 2013, we acquired 840,000 shares of Zebra Series A-2 Preferred Stock for $2.0 million. In connection with the transactions, Dr. Frost also gifted to OPKO 900,000 shares of Zebra restricted common stock which he had received as a founding member of Zebra. Zebra is a privately held biotechnology company focused on the discovery and development of biosuperior antibody therapeutics and complex drugs. After the closing on October 29, 2013, OPKO owns 23.5% of the Series A-2 Preferred stock issued and outstanding of Zebra. Dr. Richard Lerner, M.D., a member of our Board of Directors, is a founder of Zebra and, along with Dr. Frost, serves as a member of Zebra’s Board of Directors.

In order to determine the primary beneficiary of Zebra, we evaluated our investment and our related parties’ investment, as well as our investment combined with the related party group’s investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Zebra. We determined that we do not have the power to direct the activities that most significantly impact Zebra’s economic performance. Based on the capital structure, governing documents and overall business operations of Zebra, we determined that, while a VIE, we do not have the power to direct the activities that most significantly impact Zebra’s economic performance. We did determine, however, that we can significantly influence the success of Zebra through our board representation and voting power. Accordingly, as we have the ability to exercise significant influence over Zebra’s operations, we account for our investment in Zebra under the equity method.

In order to determine the primary beneficiary of Fabrus, we evaluated our investment and our related parties’ investment, as well as our investment combined with the related party group’s investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Fabrus. We determined that power to direct the activities that most significantly impact Fabrus’ economic performance is conveyed through the board of directors of Fabrus as no entity

20

is able to appoint the Fabrus governing body that oversees its executive management team. Based on the capital structure, governing documents and overall business operations of Fabrus, we determined that, while a VIE, no single entity has the power to direct the activities that most significantly impact Fabrus’ economic performance. We did determine, however, that our related parties can significantly influence the success of Fabrus through our board representation and voting power. Accordingly, as we and our related parties have the ability to exercise significant influence over Fabrus’ operations, we account for our investment in Fabrus under the equity method.

Consolidated variable interest entities

In June 2012, we entered into a share and debt purchase agreement whereby in exchange for $0.7 million we acquired shares representing a 50% stock ownership in SciVac from FDS Pharma LLP (“FDS”). SciVac is a privately-held Israeli company that produces a third-generation hepatitis B-vaccine. From November 2012 until March 31, 2014, we loaned to SciVac a combined $2.5 million for working capital purposes. We have determined that we hold variable interests in SciVac based on our assessment that SciVac does not have sufficient resources to carry out its principal activities without financial support. In order to determine the fair market value of our investment in SciVac, we have utilized a business enterprise valuation approach.

In order to determine the primary beneficiary of SciVac, we evaluated our investment to identify if we had the power to direct the activities that most significantly impact the economic performance of SciVac. We have determined that the power to direct the activities that most significantly impact the economic performance of SciVac is conveyed through SciVac’s board of directors. SciVac’s board of directors appoint and oversee SciVac’s management team who carry out the activities that most significantly impact the economic performance of SciVac. As part of the share and debt purchase agreement, SciVac’s board of directors is constituted by 5 members, of which 3 members will be appointed by us, representing 60% of SciVac’s board. Based on this analysis, we determined that we have the power to direct the activities of SciVac and as such we are the primary beneficiary. As a result of this conclusion, we have consolidated the results of operations and financial position of SciVac and recorded a reduction of equity for the portion of SciVac we do not own.

The following table represents the consolidated assets and non-recourse liabilities related to SciVac as of March 31, 2014 and December 31, 2013. These assets are owned by, and these liabilities are obligations of, SciVac, not us.

(In thousands)	March 31, 2014		December 31, 2013
Assets
Current assets:
Cash and cash equivalents	$	123	$	2
Accounts receivable, net	103		283
Inventories, net	1,704		1,696
Prepaid expenses and other current assets	337		218
Total current assets	2,267		2,199
Property, plant and equipment, net	1,441		1,374
Intangible assets, net	1,073		1,111
Goodwill	1,732		1,821
Other assets	268		261
Total assets	$	6,781	6,766
Liabilities
Current liabilities:
Accounts payable	$	1,223	$	1,136
Accrued expenses	7,800		6,498
Notes payable	2,101		1,537
Total current liabilities	11,124		9,171
Other long-term liabilities	266		1,240
Total liabilities	$	11,390	$	10,411

21

NOTE 6 DEBT

In January 2013, we entered into note purchase agreements (the “2033 Senior Notes”) with qualified institutional buyers and accredited investors (collectively the “Purchaser”) in a private placement in reliance on exemptions from registration under the Securities Act of 1933, (the “Securities Act”). The Purchasers of the 2033 Senior Notes include Frost Gamma Investments Trust, a trust affiliated with Dr. Frost, and Hsu Gamma Investment, L.P., an entity affiliated with Dr. Hsiao. The 2033 Senior Notes were issued on January 30, 2013. The 2033 Senior Notes, which total $175.0 million, bear interest at the rate of 3.00% per year, payable semiannually on February 1 and August 1 of each year, beginning August 1, 2013. The 2033 Senior Notes will mature on February 1, 2033, unless earlier repurchased, redeemed or converted. Upon a fundamental change as defined in the instruments governing the 2033 Senior Notes, subject to certain exceptions, the holders may require us to repurchase all or any portion of their 2033 Senior Notes for cash at a repurchase price equal to 100% of the principal amount of the 2033 Senior Notes being repurchased, plus any accrued and unpaid interest to but not including the fundamental change repurchase date.

The following table sets forth information related to the 2033 Senior Notes which is included our Condensed Consolidated Balance Sheets:

(In thousands)	Embedded conversion option		2033 Senior Notes		Discount			Total
Balance at December 31, 2013	$	101,087	$	158,064	$	(47,239	)	$	211,912
Amortization of debt discount	—		—		1,777			1,777
Change in fair value of embedded derivative	11,112		—		—			11,112
Balance at March 31, 2014	$	112,199	$	158,064	$	(45,462	)	$	224,801

The 2033 Senior Notes will be convertible at any time on or after November 1, 2032, through the second scheduled trading day immediately preceding the maturity date, at the option of the holders. Additionally, holders may convert their 2033 Senior Notes prior to the close of business on the scheduled trading day immediately preceding November 1, 2032, under the following circumstances: (1) conversion based upon satisfaction of the trading price condition relating to the 2033 Senior Notes; (2) conversion based on the Common Stock price; (3) conversion based upon the occurrence of specified corporate events; or (4) if we call the 2033 Senior Notes for redemption. The 2033 Senior Notes will be convertible into cash, shares of our Common Stock, or a combination of cash and shares of Common Stock, at our election unless we have made an irrevocable election of net share settlement. The initial conversion rate for the 2033 Senior Notes will be 141.4827 shares of Common Stock per $1,000 principal amount of 2033 Senior Notes (equivalent to an initial conversion price of approximately $7.07 per share of Common Stock), and will be subject to adjustment upon the occurrence of certain events. In addition, we will, in certain circumstances, increase the conversion rate for holders who convert their 2033 Senior Notes in connection with a make-whole fundamental change (as defined in the Indenture) and holders who convert upon the occurrence of certain specific events prior to February 1, 2017 (other than in connection with a make-whole fundamental change).

We may not redeem the 2033 Senior Notes prior to February 1, 2017. On or after February 1, 2017 and before February 1, 2019, we may redeem for cash any or all of the 2033 Senior Notes but only if the last reported sale price of our Common Stock exceeds 130% of the applicable conversion price for at least 20 trading days during the 30 consecutive trading day period ending on the trading day immediately prior to the date on which we deliver the redemption notice. The redemption price will equal 100% of the principal amount of the 2033 Senior Notes to be redeemed, plus any accrued and unpaid interest to but not including the redemption date. On or after February 1, 2019, we may redeem for cash any or all of the 2033 Senior Notes at a redemption price of 100% of the principal amount of the 2033 Senior Notes to be redeemed, plus any accrued and unpaid interest up to but not including the redemption date.

The terms of the 2033 Senior Notes, include, among others: (i) rights to convert into shares of our Common Stock, including upon a fundamental change; and (ii) a coupon make-whole payment in the event of a conversion by the holders of the 2033 Senior Notes on or after February 1, 2017 but prior to February 1, 2019. We have determined that these specific terms are considered to be embedded derivatives. As a result, embedded derivatives are required to be separated from the host contract, the 2033 Senior Notes, and carried at fair value when: (a) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract; and (b) a separate, stand-alone instrument with the same terms would qualify as a derivative instrument. We have concluded that the embedded derivatives within the 2033 Senior Notes meet these criteria and, as such, must be valued separate and apart from the 2033 Senior Notes and recorded at fair value each reporting period.

22

For accounting and financial reporting purposes, we combine these embedded derivatives and value them together as one unit of accounting. At each reporting period, we record these embedded derivatives at fair value which is included as a component of the 2033 Senior Notes on our Condensed Consolidated Balance Sheets.

We used a binomial lattice model in order to estimate the fair value of the embedded derivative in the 2033 Senior Notes. A binomial lattice model generates two probable outcomes — one up and another down —arising at each point in time, starting from the date of valuation until the maturity date. A lattice was initially used to determine if the 2033 Senior Notes would be converted, called or held at each decision point. Within the lattice model, the following assumptions are made: (i) the 2033 Senior Notes will be converted early if the conversion value is greater than the holding value; or (ii) the 2033 Senior Notes will be called if the holding value is greater than both (a) the redemption price (as defined in the Indenture) and (b) the conversion value plus the coupon make-whole payment at the time. If the 2033 Senior Notes are called, then the holder will maximize their value by finding the optimal decision between (1) redeeming at the redemption price and (2) converting the 2033 Senior Notes.

Using this lattice model, we valued the embedded derivatives using the “with-and-without method,” where the value of the 2033 Senior Notes including the embedded derivatives is defined as the “with,” and the value of the 2033 Senior Notes excluding the embedded derivatives is defined as the “without.” This method estimates the value of the embedded derivatives by looking at the difference in the values between the 2033 Senior Notes with the embedded derivatives and the value of the 2033 Senior Notes without the embedded derivatives.

The lattice model requires the following inputs: (i) price of our Common Stock; (ii) Conversion Rate (as defined in the Indenture); (iii) Conversion Price (as defined in the Indenture); (iv) maturity date; (v) risk-free interest rate; (vi) estimated stock volatility; and (vii) estimated credit spread for the Company.

The following table sets forth the inputs to the lattice model used to value the embedded derivative:

	March 31, 2014	Issuance Date
Stock price	$9.32	$6.20
Conversion Rate	141.4827	141.4827
Conversion Price	$7.07	$7.07
Maturity date	February 1, 2033	February 1, 2033
Risk-free interest rate	1.66%	1.12%
Estimated stock volatility	50%	40%
Estimated credit spread	823 basis points	944 basis points

The following table sets forth the fair value of the 2033 Senior Notes with and without the embedded derivatives, and the fair value of the embedded derivatives as of the issuance date and March 31, 2014. At March 31, 2014 and at issuance date the principal amount of the 2033 Senior Notes was $158.1 million and $175.0 million, respectively:

(In thousands)	March 31, 2014		Issuance Date
Fair value of 2033 Senior Notes:
With the embedded derivatives	$	230,362	$	175,000
Without the embedded derivatives	$	118,163	$	115,796
Estimated fair value of the embedded derivatives	$	112,199	$	59,204

Changes in certain inputs into the lattice model can have a significant impact on changes in the estimated fair value of the embedded derivatives. For example, a decrease in our estimated credit spread results in an increase in the estimated value of the embedded derivatives. Conversely, a decrease in the price of our Common Stock results in a decrease in the estimated fair value of the embedded derivatives. From the date the 2033 Senior Notes were issued through March 31, 2014, we observed an increase in the market price of our Common Stock which primarily resulted in a $11.1 million increase in the estimated fair value of our embedded derivatives recorded in Fair value changes of derivative instruments, net in our Condensed Consolidated Statements of Operations.

23

We have entered into line of credit agreements with twelve financial institutions in Chile and Spain. These lines of credit are used primarily as a source of working capital for inventory purchases.

The following table summarizes the amounts outstanding under the Chilean and Spanish lines of credit:

(Dollars in thousands)			Balance Outstanding
Lender	Interest rate on borrowings at March 31, 2014	Credit line capacity	March 31, 2014	December 31, 2013
Itau Bank	5.00%	$3,000	$1,628	$1,999
Bank of Chile	6.40%	2,250	1,534	2,079
BICE Bank	5.00%	1,700	1,315	516
Corp Banca	—%	—	—	(47)
BBVA Bank	5.00%	2,000	998	523
Penta Bank	8.20%	1,000	907	946
Security Bank	7.26%	1,300	907	1,075
BCI	—%	—	—	198
Estado Bank	5.44%	2,000	858	1,772
Sabadell Bank	4.50%	206	—	—
Bilbao Vizcaya Bank	4.72%	344	—	—
Banco Popular	6.09%	275	—	—
Deutsche Bank	4.00%	206	—	—
Santander Bank	4.50%	275	—	—
Total		$14,556	$8,147	$9,061

At March 31, 2014 and December 31, 2013, the weighted average interest rate on our lines of credit was approximately 5.9% and 7.7%, respectively.

At March 31, 2014 and December 31, 2013, we had mortgage notes and other debt related to OPKO Spain as follows:

(In thousands)	March 31, 2014		December 31, 2013
Current portion of notes payable	$	631	$	1,964
Other long-term liabilities	3,101		3,270
Total mortgage notes and other debt	$	3,732	$	5,234

The mortgages and other debts mature at various dates ranging from 2015 through 2024 bearing variable interest rates from 2.7% up to 6.3%. The weighted average interest rate on the mortgage notes and other debt at March 31, 2014 and December 31, 2013, was 3.4% and 3.9%, respectively. The mortgages are secured by our office space in Barcelona.

24

NOTE 7 ACCUMULATED OTHER COMPREHENSIVE INCOME

For the three months ended March 31, 2014, changes in Accumulated other comprehensive income, net of tax, were as follows:

(In thousands)	Foreign currency			Unrealized gains in Accumulated OCI			Total
Balance at December 31, 2013	$	1,371		$	2,047		$	3,418
Other comprehensive income before reclassifications, net of tax (1)	(1,801		)	335			(1,466		)
Amounts reclassified from accumulated other comprehensive income, net of tax (1)	—			(553		)	(553		)
Net other comprehensive income	(1,801		)	(218		)	(2,019		)
Balance at March 31, 2014	$	(430	)	$	1,829		$	1,399

(1) Effective tax rate of 38.47%.

Amounts reclassified from Accumulated other comprehensive income for the three months ended March 31, 2014 related to $1.3 million realized gain on the sales of certain of our investments available for sale. Of the $1.3 million gain on the sales of our investments available for sale, a $0.9 million gain was reclassified from unrealized gains in Accumulated other comprehensive income to Other income (expense), net for the three months ended March 31, 2014.

NOTE 8 FAIR VALUE MEASUREMENTS

We record fair values at an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

A summary of our investments as of March 31, 2014, classified as available for sale and carried at fair value, is as follows:

	As of March 31, 2014
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI			Gain/(Loss) in Accumulated Deficit		Fair value
Common stock investments, available for sale	$	3,320	$	2,035	$	(150	)	$	—	$	5,205
Common stock options/warrants	1,425		1,610		—			3,762		6,797
Total assets	$	4,745	$	3,645	$	(150	)	$	3,762	$	12,002

A summary of our investments as of December 31, 2013, classified as available for sale and carried at fair value is as follows:

	As of December 31, 2013
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI		Gain/(Loss) in Accumulated Deficit		Fair value
Common stock investments, available for sale	$	3,376	$	2,698	$	—	$	—	$	6,074
Common stock options/warrants	925		1,041		—		4,022		5,988
Total assets	$	4,301	$	3,739	$	—	$	4,022	$	12,062

Any future fluctuation in fair value related to these instruments that is judged to be temporary, including any recoveries of previous write-downs, will be recorded in Accumulated other comprehensive income or loss. If we determine that any future valuation adjustment was other-than-temporary, we will record a loss during the period such determination is made.

25

As of March 31, 2014, we have money market funds that qualify as cash equivalents, forward contracts for inventory purchases (Refer to Note 9) and contingent consideration related to the acquisitions of CURNA, OPKO Diagnostics, FineTech, OPKO Spain, and OPKO Renal that are required to be measured at fair value on a recurring basis. In addition, in connection with our investment and our consulting agreement with Neovasc, we record the related Neovasc options at fair value as well as the derivative instruments related to our transactions with Pharmsynthez.

Our financial assets and liabilities measured at fair value on a recurring basis are as follows:

	Fair value measurements as of March 31, 2014
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Money market funds	$	132,343	$	—	$	—	$	132,343
Certificates of deposit	—		816		—		816
Common stock investments, available for sale	5,205		—		—		5,205
Common stock options/warrants	—		6,797		—		6,797
Forward contracts	—		1		—		1
Total assets	$	137,548	$	7,614	$	—	$	145,162
Liabilities:
Embedded conversion option	$	—	$	—	$	112,199	$	112,199
Deferred acquisition payments, net of discount	—		—		840		840
Contingent consideration:
CURNA	—		—		583		583
OPKO Diagnostics	—		—		14,193		14,193
OPKO Renal	—		—		54,819		54,819
OPKO Spain	—		—		1,421		1,421
Total liabilities	$	—	$	—	$	184,055	$	184,055

26

	Fair value measurements as of December 31, 2013
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Money market funds	$	168,418	$	—	$	—	$	168,418
Certificates of deposit	—		827		—		827
Pharmsynthez Notes Receivable & Purchase Option	—		6,151		—		6,151
Common stock investments, available for sale	6,074		—		—		6,074
Common stock options/warrants	—		5,988		—		5,988
Forward contracts	—		49		—		49
Total assets	$	174,492	$	13,015	$	—	$	187,507
Liabilities:
Embedded conversion option	—		—		101,087		101,087
Deferred acquisition payments, net of discount	—		—		5,465		5,465
Contingent consideration:
CURNA	—		—		573		573
OPKO Diagnostics	—		—		13,776		13,776
FineTech	—		—		3,124		3,124
OPKO Renal	—		—		53,092		53,092
OPKO Spain	—		—		1,043		1,043
Total liabilities	$	—	$	—	$	178,160	$	178,160

The carrying amount and estimated fair value of our long-term debt, as well as the applicable fair value hierarchy tiers, are contained in the table below. The fair value of the 2033 Senior Notes is determined using a binomial lattice approach in order to estimate the fair value of the embedded derivative in the 2033 Senior Notes. Refer to Note 6.

	March 31, 2014
(In thousands)	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3
2033 Senior Notes	$	112,602	$	118,163	$	—	$	—	$	118,163

As of March 31, 2014 and December 31, 2013, the carrying value of our other assets and liabilities approximates their fair value due to their short-term nature.

The following tables reconcile the beginning and ending balances of our Level 3 assets and liabilities as of March 31, 2014 and December 31, 2013:

	March 31, 2014
(In thousands)	Contingent consideration			Deferred acquisition payments, net of discount			Embedded conversion option
Balance at December 31, 2013	$	71,620		$	5,484		$	101,087
Additions	—			—			—
Total losses (gains) for the period:
Included in results of operations	2,610			—			11,112
Payments	(3,214		)	(4,644		)	—
Balance at March 31, 2014	$	71,016		$	840		$	112,199

27

	December 31, 2013
(In thousands)	BZNE Note and conversion feature			Contingent consideration			Deferred acquisition payments, net of discount			Embedded conversion option
Balance at December 31, 2012	$	2,040		$	20,056		$	10,103		$	—
Additions	—			47,710			—			59,204
Total losses (gains) for the period:
Included in results of operations	—			6,947			829			43,082
Foreign currency impact	—			31			—			—
Conversion	(2,040		)	—			—			(1,199		)
Payments	—			(3,124		)	(5,448		)	—
Balance at December 31, 2013	$	—		$	71,620		$	5,484		$	101,087

The estimated fair values of our financial instruments have been determined by using available market information and what we believe to be appropriate valuation methodologies. We use the following methods and assumptions in estimating fair value:

Contingent consideration – We estimate the fair value of the contingent consideration utilizing a discounted cash flow model for the expected payments based on estimated timing and expected revenues. We use several discount rates depending on each type of contingent consideration related to FineTech, OPKO Diagnostics, CURNA, OPKO Spain and OPKO Renal transactions. The discount rates used range from 6% to 27% and were based on the weighted average cost of capital for those businesses. If the discount rates were to increase by 1%, on each transaction, the contingent consideration would decrease by $1.7 million. If estimated future sales were to decrease by 10%, the contingent consideration related to CURNA, FineTech and OPKO Renal would decrease by $0.5 million. As of March 31, 2014, of the $71.0 million of contingent consideration, $25.7 million is recorded in Accrued expenses and $45.3 million is recorded in Other long-term liabilities. As of December 31, 2013, of the $71.6 million of contingent consideration, $28.0 million is recorded in Accrued expenses and $43.6 million is recorded in Other long-term liabilities.

Deferred payments – We estimate the fair value of the deferred payments utilizing a discounted cash flow model for the expected payments.

Embedded conversion option – We estimate the fair value of the embedded conversion option related to the 2033 Senior Notes using a binomial lattice model. Refer to Note 6 for detail description of the binomial lattice model and the fair value assumptions used.

28

NOTE 9 DERIVATIVE CONTRACTS

The following table summarizes the fair values and the presentation of our derivative financial instruments in the Condensed Consolidated Balance Sheets:

(In thousands)	Balance Sheet Component	March 31, 2014		December 31, 2013
Derivative financial instruments:
Common stock options/warrants	Investment, net	$	6,797	$	5,988
Embedded conversion option	2033 Senior Notes, net of discount and estimated fair value of embedded derivatives	$	112,199	$	101,087
Forward contracts (1)	Current portion of lines of credit and notes payable	$	2,436	$	1,585

⁽¹⁾  The loss on forward contracts is recorded in Accrued expenses. The gain on the forward contracts is recorded in Prepaid expenses and other current assets.

We enter into foreign currency forward exchange contracts to cover the risk of exposure to exchange rate differences arising from inventory purchases on letters of credit. Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.

To qualify the derivative instrument as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At March 31, 2014 and December 31, 2013, our derivative financial instruments do not meet the documentation requirements to be designated as hedges. Accordingly, we recognize the changes in Fair value of derivative instruments, net in our Condensed Consolidated Statements of Operations. The following table summarizes the (losses) and gains recorded during the three months ended March 31, 2014 and 2013:

	Three months ended March 31,
(In thousands)	2014			2013
Derivative gain (loss):
Common stock options/warrants	$	596		$	1,260
2033 Senior Notes	(11,112		)	(24,788		)
Forward contracts	1			(21		)
Total	$	(10,515	)	$	(23,549	)

29

The outstanding forward contracts at March 31, 2014 and December 31, 2013, have been recorded at fair value, and their maturity details are as follows:

(In thousands) Days until maturity	Contract value		Fair value at  March 31, 2014		Effect on income (loss)
0 to 30	$	285	$	294	$	9
31 to 60	952		957		5
61 to 90	121		120		(1		)
91 to 120	921		911		(10		)
121 to 180	156		154		(2		)
Total	$	2,435	$	2,436	$	1

(In thousands) Days until maturity	Contract value		Fair value at  December 31, 2013		Effect on income (loss)
0 to 30	$	472	$	489	$	17
31 to 60	562		579		18
61 to 90	503		517		14
91 to 120	—		—		—
121 to 180	—		—		—
More than 180	—		—		—
Total	$	1,537	$	1,585	$	49

NOTE 10 RELATED PARTY TRANSACTIONS

In October, 2013, we paid the $170,000 filing fee to the Federal Trade Commission (the “FTC”) in connection with filings made by us and Dr. Hsiao, our Vice Chairman of the Board and Chief Technical Officer, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).

In October 2013, we entered into an agreement with ARNO pursuant to which we invested $2.0 million as part of an approximate $30 million financing. In exchange for our investment, we received 833,333 shares of ARNO common stock, one-year warrants to purchase 833,333 shares of ARNO common stock, for $2.40 a share and five-year warrants to purchase an additional 833,333 shares of ARNO common stock for $4.00 a share. Other investors participating in the private financing included Frost Gamma Investments Trust, a trust affiliated with Dr. Frost (the “Gamma Trust”), Hsu Gamma Investment, L.P., an entity affiliated with Dr. Hsiao (the “Hsu Gamma”), and other members of our board of directors and management. In connection with the transaction, ARNO agreed that for so long as we continue to hold at least 3% of the total number of outstanding shares of ARNO’s common stock on a fully-diluted basis, we will have the right to appoint a non-voting observer to attend all meetings of ARNO’s board of directors and we shall have a right of first negotiation that provides us with exclusive rights to negotiate with ARNO for a 45-day period regarding any potential strategic transactions that ARNO’s board of directors elects to pursue.

In October 2013, we made an investment in Zebra pursuant to which we acquired 840,000 shares of Zebra’s Series A-2 Preferred stock for $2.0 million. Zebra is a privately held biotechnology company focused on the discovery and development of biosuperior antibody therapeutics and complex drugs. Zebra’s patented platform is an advanced version of a core technology developed at The Scripps Research Institute (“TSRI”) by Dr. Lerner (the “TSRI Technology”). Zebra acquired the license to the TSRI Technology from a third party who had licensed such rights from TSRI. In connection with its acquisition of rights to the TSRI Technology, Zebra agreed to make certain research funding payments to Dr. Lerner’s laboratory at TSRI to further support development of the TSRI Technology. Dr. Lerner also participated in the Series A-2 Preferred Stock financing on the same financial terms as the Company. Each of Drs. Frost and Lerner serve as members of the board of directors and scientific consultants to Zebra. After the closing, we own 23.5% of the Series A-2 Preferred stock issued and outstanding by Zebra. Each of Drs. Frost and Lerner received 900,000 restricted shares of Zebra common stock in connection with their roles as founders and scientific consultants to Zebra. Dr. Frost gifted his 900,000 shares of Zebra restricted common stock to OPKO.

Effective May 1, 2013, we entered into an agreement with Dr. Hsiao pursuant to which we have the right to utilize approximately 5,000 square feet of laboratory space in Taiwan, inclusive of any and all utility costs, taxes and building maintenance fees. In addition, Dr. Hsiao provides certain other services to us relating to government grant work in Taiwan, as well as the coordination of work flow between the our U.S. and Taiwanese operations. The term of the agreement is for five years and obligates us to pay Dr. Hsiao approximately $60,000 annually.  

30

In August 2013, we acquired OPKO Biologics (formerly PROLOR) pursuant to an Agreement and Plan of Merger dated as of April 23, 2013 in an all-stock transaction.  Until completion of the acquisition, Dr. Frost was PROLOR’s Chairman of the Board and a greater than 5% stockholder of PROLOR. Dr. Hsiao and Mr. Rubin were also directors and less than 5% stockholders of PROLOR. 

In January 2013, we sold $175.0 million aggregate principal amount of 2033 Senior Notes in a private placement in reliance on exemptions from registration under the Securities Act. The Purchasers of the 2033 Senior Notes include The Gamma Trust and Hsu Gamma. The 2033 Senior Notes were issued on January 30, 2013.

In December 2012, we entered into a five-year lease agreement with AVI Properties, LLC (“AVI”), an entity affiliated with Dr. Jonathan Oppenheimer, who previously served as OPKO Lab’s Chief Executive Officer and currently serves as Strategic Director. The lease is for approximately 44,000 square feet of laboratory and office space in Nashville, Tennessee, where OPKO Lab is based. The lease provides for payments of approximately $18 thousand per month in the first year, increasing annually if the consumer price index exceeds 5%, plus applicable sales tax. In addition to the rent, we pay a portion of operating expenses, property taxes and parking.

During the three months ended March 31, 2014 and the year ended December 31, 2013, FineTech recorded revenue of $0.1 million and $0.3 million, respectively, for the sale of APIs to Teva Pharmaceutical Industries, Limited (“Teva”). Dr. Frost serves as the Chairman of the Board of Directors of Teva.

In February 2012, we entered into a cooperative research funding and option agreement with TSRI to support research for the development of novel oligomeric compounds relating to our molecular diagnostics technology (the “Research Agreement”). Pursuant to the Research Agreement, we agreed to provide funding of approximately $0.9 million annually over a five year period. In conjunction with entering into the Research Agreement, we also entered into a license agreement with TSRI for technology relating to libraries of peptide tertiary amides. In addition, we entered into a second license with TSRI for technology relating to highly selective inhibitors of c-Jun-N-Terminal Kinases that may be useful for the treatment of various diseases, including Parkinson’s disease. We also entered into a research funding and option agreement to provide funding of approximately $0.2 million annually over three years to support further development of the technology. Dr. Frost served as a Trustee for TSRI until November 2012 and Dr. Lerner, a member of our Board of Directors, served as its President until December 2011.

In February 2012, we made a $1.0 million investment in ChromaDex. Other investors participating in the private financing included the Gamma Trust, Hsu Gamma, and Dr. Lerner. Following our investment, we own 1.5% of ChromaDex, the Gamma Trust owns approximately 16% of ChromaDex; Hsu Gamma owns approximately 1%; and certain of our directors own less than 1% of ChromaDex.

In February 2012, we purchased from Biozone, now known as CPI, $1.7 million of 10% secured convertible promissory notes (the “Biozone Notes”), convertible into Biozone common stock at a price equal to $0.20 per common share, which Biozone Notes are due and payable on February 24, 2014 and ten year warrants to purchase 8.5 million shares of Biozone common stock at an exercise price of $0.40 per share.

In December 2013, we converted the Biozone Notes into approximately 10 million shares of Biozone common stock. In July 2012, we exercised the Biozone Warrants utilizing the net exercise feature and received approximately 7,700,000 shares of Biozone common stock. We also entered into a license agreement pursuant to which we acquired a world-wide license for the development and commercialization of products utilizing Biozone’s proprietary drug delivery technology, including a technology called QuSomes, exclusively for OPKO in the field of ophthalmology and non-exclusive for all other therapeutic fields, subject in each case to certain excluded products.

On January 2, 2014, Biozone sold substantially all of its operating assets, including its QuSomes technology, to MusclePharm Corporation (OTCQB: MSLP), an international, award-winning sports nutrition company (“Musclepharm”)

in exchange for 1.2 million shares of Musclepharm’s common stock.  Effective January 3, 2014, Biozone completed a merger with Cocrystal, another entity in which we have an equity investment. In connection with the merger, Biozone issued to Cocrystal’s security holders 1,000,000 shares of Biozone Series B Convertible Preferred Stock (“Series B”). The Series B shares: (i) automatically convert into shares of Biozone’s common stock at a rate of 205.08308640 shares for each share of Series B at such time that Biozone has sufficient authorized capital, (ii) are entitled to vote on all matters submitted to shareholders of Biozone and vote on an as converted basis and (iii) have a nominal liquidation preference. Effective January 16, 2014, we invested an additional $0.5 million in the company as part of a $2.75 million private placement and received 1 million shares of common stock and 1 million10-year warrants exercisable at $0.50 per share.

31

In August 2011, we made an investment in Neovasc. Dr. Frost and other members of our management are shareholders of Neovasc. Prior to the investment, Dr. Frost beneficially owned approximately 36% of Neovasc, Dr. Hsiao owned approximately 6%, and Mr. Rubin owned less than 1%. Dr. Hsiao and Mr. Rubin also serve on the board of directors of Neovasc.

In November 2010, we made an investment in Fabrus. In exchange for the investment, we acquired approximately 13% of Fabrus on a fully diluted basis. Our investment was part of a $2.1 million financing for Fabrus. Other investors participating in the financing include the Gamma Trust and Hsu Gamma. In connection with the financing, Drs. Frost and Hsiao joined the Fabrus Board of Managers. Dr. Lerner owns approximately 5% of Fabrus. Mr. Vaughn Smider, Founder and CEO of Fabrus, is an Assistant Professor at TSRI. Dr. Frost served as a Trustee for TSRI until November 2012, and Dr. Lerner served as President of TSRI until December 2011. In October 2013, we made loans totaling $0.1 million to Fabrus, which loans are due and payable in January, 2014 and accrue interest as a rate of 7% per annum. No payments have been made to date.

In June 2010, we entered into a cooperative research and development agreement with Academia Sinica, Taipei, Taiwan (“Academia Sinica”), for pre-clinical work for a compound against various forms of cancer. Dr. Alice Yu, a member of our Board of Directors, previously served as a Distinguished Research Fellow and Associate Director at the Genomics Research Center, Academia Sinica (“Genomics Research Center”). In connection with the Academia Sinica Agreement, we are required to pay Academia Sinica approximately $0.2 million over the term of the agreement.

Effective in September 2009, we entered into an agreement pursuant to which we invested $2.5 million in Cocrystal (now CPI) in exchange for 1,701,723 shares of Cocrystal’s Convertible Series A Preferred Stock. A group of investors, led by the Frost Group LLC, which is an entity controlled by Dr. Frost, Dr. Hsiao and Mr. Rubin, (the “Cocrystal Investors”), previously invested $5.0 million in Cocrystal, and agreed to invest an additional $5.0 million payable in two equal installments in September 2009 and March 2010. As a result of an amendment to the Cocrystal Investors’ agreements dated June 9, 2009, we, rather than the Cocrystal Investors, made the first installment investment ($2.5 million) on September 21, 2009. As discussed above, effective January 2014, Cocrystal completed a merger with Biozone and is now known as Cocrystal Pharma, Inc.

In June 2009, we entered into a stock purchase agreement with Sorrento, pursuant to which we invested $2.3 million in Sorrento Therapeutics, Inc. (“Sorrento”). In exchange for the investment, we acquired approximately one-third of the outstanding common shares of Sorrento and received a fully-paid, exclusive license to the Sorrento antibody library for the discovery and development of therapeutic antibodies in the field of ophthalmology. On September 21, 2009, Sorrento entered into a merger transaction with Quikbyte Software, Inc. (“Quikbyte”). Prior to the merger transaction, certain investors, including Dr. Frost and other members of our management group, made an investment in Quikbyte. Dr. Lerner serves as a consultant and scientific advisory board member to Sorrento and owns less than one percent of its shares. In December 2013, we completed the sale of our stake in Sorrento and recorded a gain on the sale of $17.2 million and other income of $2.7 million related to an early termination fee under a license agreement with Sorrento.

In November 2007, we entered into an office lease with Frost Real Estate Holdings, LLC (“Frost Holdings”), an entity affiliated with Dr. Frost. The lease was for approximately 8,300 square feet of space in an office building in Miami, Florida, where our principal executive offices are located. The lease provided for payments of approximately $18 thousand per month in the first year increasing annually to $24 thousand per month in the fifth year, plus applicable sales tax. The rent was inclusive of operating expenses, property taxes and parking. The rent for the first year was reduced to reflect a $30 thousand credit for the costs of tenant improvements. In August 2012, we entered into a six-month extension on the same terms as the 2007 expiring lease and in February 2013, we agreed to extend the lease on a month-to-month basis. Effective January 1, 2014, we entered into a new lease agreement with Frost Holdings for approximately 11,000 square feet of space. The lease provides for payments of approximately $30 thousand per month in the first year increasing annually to $34 thousand per month in the fifth year, plus applicable sales tax. As in the original lease, the rent is inclusive of operating expenses, property taxes and parking. The rent will be reduced by $155,200 for the cost of tenant improvements, of which approximately $68 thousand will be credited against rent payments over a period of 12 months.

We reimburse Dr. Frost for Company-related use by Dr. Frost and our other executives of an airplane owned by a company that is beneficially owned by Dr. Frost. We reimburse Dr. Frost in an amount equal to the cost of a first class airline ticket between the travel cities for each executive, including Dr. Frost, traveling on the airplane for Company-related business. We do not reimburse Dr. Frost for personal use of the airplane by Dr. Frost or any other executive; nor do we pay for any other fixed or variable operating costs of the airplane. We reimbursed Dr. Frost approximately $13 thousand and $13 thousand for Company-related travel by Dr. Frost and other OPKO executives during the three months ended March 31, 2014 and 2013.

32

NOTE 11 COMMITMENTS AND CONTINGENCIES

In connection with our acquisitions of CURNA, OPKO Diagnostics, OPKO Spain, and OPKO Renal, we agreed to pay future consideration to the sellers upon the achievement of certain events. As a result, as of March 31, 2014 , we recorded $71.0 million as contingent consideration, with $25.7 million recorded within Accrued expenses and $45.3 million recorded within Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. Refer to Note 4.

On April 29, 2013, we were named in a putative class action filed in the Eighth Judicial District Court in and for Clark County, Nevada against PROLOR (now known as OPKO Biologics), the members of the PROLOR Board of Directors, individually (including Drs. Frost and Hsiao and Steven Rubin), and the Company. From May 1, 2013 through May 6, 2013, we were named in an additional five putative class actions suits filed in the Eighth Judicial District Court in and for Clark County, Nevada against the same defendants. On July 17, 2013, these suits were consolidated, for all purposes, into an amended class action complaint. The lawsuit is brought by purported holders of PROLOR’s common stock, both individually and on behalf of a putative class of PROLOR’s stockholders, asserting claims that PROLOR’s Board of Directors breached its fiduciary duties in connection with the merger by purportedly failing to maximize stockholder value, that PROLOR and its Board of Directors failed to disclose material information to PROLOR’s stockholders, and that the Company aided and abetted the alleged breaches of fiduciary duty. The lawsuit seeks monetary damages, including increased consideration to PROLOR’s stockholders, equitable relief, including, among other things, rescission of the Merger Agreement along with rescissionary damages, and an award of all costs, including reasonable attorneys’ fees. On May 5, 2014, the court issued an order dismissing all claims as to all defendants without prejudice.

In July 2012, OPKO Lab received a letter from AdvanceMed Corporation (“AdvanceMed”) regarding a post-payment review conducted by AdvanceMed (the “Post-Payment Review Letter”). The Post-Payment Review Letter originated with a post payment review audit by AdvanceMed of 183 claims submitted by OPKO Lab to the Medicare program. OPKO Lab believes that its billing practices were appropriate and it is following the appeal process set forth by Medicare. OPKO Lab received a partially favorable determination, which reduced the amount of the alleged overpayment, and it continues to appeal the remaining alleged overpayments. No assurances can be given about the outcome of the appeal.

We are a party to other litigation in the ordinary course of business. We do not believe that any such litigation will have a material adverse effect on our business, financial condition, or results of operations.

We expect to incur substantial losses as we continue the development of our product candidates, continue our other research and development activities, and establish a sales and marketing infrastructure in anticipation of the commercialization of our diagnostic and pharmaceutical product candidates. We currently have limited commercialization capabilities, and it is possible that we may never successfully commercialize any of our diagnostic and pharmaceutical product candidates. We do not currently generate revenue from any of our diagnostic and pharmaceutical product candidates. Our research and development activities are budgeted to expand over a period of time and will require further resources if we are to be successful. As a result, we believe that our operating losses are likely to be substantial over the next several years. We may need to obtain additional funds to further develop our research and development programs, and there can be no assurance that additional capital will be available to us on acceptable terms, or at all.

33

NOTE 12 SEGMENTS

We currently manage our operations in two reportable segments, pharmaceuticals and diagnostics. The pharmaceuticals segment consists of two operating segments, our (i) pharmaceutical research and development segment which is focused on the research and development of pharmaceutical products, and vaccines, and (ii) the pharmaceutical operations we acquired in Chile, Mexico, Israel, Spain, Brazil, and Uruguay. The diagnostics segment consists of two operating segments, our (i) pathology operations we acquired through the acquisition of OPKO Lab and (ii) point-of-care and molecular diagnostics operations. There are no inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no inter-segment allocation of interest expense and income taxes.

Information regarding our operations and assets for our operating segments and the unallocated corporate operations as well as geographic information are as follows:

	For the three months ended March 31,
(In thousands)	2014			2013
Product revenues:
Pharmaceuticals	$	19,828		$	15,527
Diagnostics	—			—
Corporate	—			—
	$	19,828		$	15,527
Revenue from services:
Pharmaceuticals	$	—		$	—
Diagnostics	1,910			3,052
Corporate	60			40
	$	1,970		$	3,092
Revenue from transfer of intellectual property:
Pharmaceuticals	$	285		$	12,500
Diagnostics	191			257
Corporate	—			—
	$	476		$	12,757
Operating (loss) income:
Pharmaceuticals	$	(16,573	)	$	8,483
Diagnostics	(7,078		)	(9,634		)
Corporate	(6,137		)	(5,025		)
Less: Operating loss attributable to noncontrolling interests	(489		)	(597		)
	$	(30,277	)	$	(6,773	)
Depreciation and amortization:
Pharmaceuticals	$	1,849		$	1,695
Diagnostics	1,691			1,689
Corporate	24			45
	$	3,564		$	3,429
Revenues:
United States	$	2,446		$	15,849
Chile	7,285			7,741
Spain	6,150			4,324
Israel	4,546			2,572
Mexico	1,831			890
Uruguay	16			—
	$	22,274		$	31,376

34

(In thousands)	March 31, 2014		December 31, 2013
Assets:
Pharmaceuticals	$	1,067,848	$	1,065,033
Diagnostics	113,515		116,944
Corporate	174,329		209,539
	$	1,355,692	$	1,391,516
Goodwill:
Pharmaceuticals	$	175,097	$	175,408
Diagnostics	50,965		50,965
Corporate	—		—
	$	226,062	$	226,373

During the three months ended March 31, 2014 and 2013, no customer represented more than 10% of our total revenue. As of March 31, 2014 and December 31, 2013, no customer represented more than 10% of our accounts receivable balance.

NOTE 13 SUBSEQUENT EVENTS

We have reviewed all subsequent events and transactions that occurred after the date of our March 31, 2014 condensed consolidated balance sheet date, through the time of filing this Quarterly Report on Form 10-Q.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

OVERVIEW

You should read this discussion together with the Condensed Consolidated Financial Statements, related Notes, and other financial information included elsewhere in this report and in our Annual Report on Form 10-K for the year ended December 31, 2013 (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 II, Item 1A of our Form 10-K for the year ended December 31, 2013. These risks could cause our actual results to differ materially from those anticipated in these forward-looking statements.

We are a multi-national biopharmaceutical and diagnostics company that seeks to establish industry-leading positions in large and rapidly growing medical markets by leveraging our discovery, development and commercialization expertise and our novel and proprietary technologies. We are developing a range of solutions to diagnose, treat and prevent various conditions, including point-of-care tests, LDTs, molecular diagnostics tests, and proprietary pharmaceuticals and vaccines. We plan to commercialize these solutions on a global basis in large and high growth markets, including emerging markets.

We own established pharmaceutical platforms in Spain, Chile, Mexico, and Uruguay 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. We also have established pharmaceutical operations in Brazil. We operate a specialty active pharmaceutical ingredients (“APIs”) 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. In the U.S., we own a laboratory certified under the Clinical Laboratory Improvement Amendments of 1988, as amended (“CLIA”), with a urologic focus that generates revenue and serves as the commercial platform for the U.S. launch of our next generation prostate cancer test to improve cancer risk stratification of patient candidates for prostate biopsy.

35

RECENT DEVELOPMENTS

On January 8, 2014, we completed the acquisition of Laboratorio Arama de Uruguay Limitada (“Arama Uruguay”), a privately-owned company located in Montevideo, Uruguay. Arama Uruguay will expand our presence in Latin America and complement the business activities of our operations in Chile and Mexico, as well as permit commercialization of OPKO’s products currently commercialized and those in development.

In March 2014, we began selling the 4Kscore^TM Test through our CLIA-accredited laboratory in Nashville, TN. The laboratory-developed test is designed to enhance the prostate biopsy decision making process that, in the United States, leads to approximately 1 million biopsies being performed annually, with 80% of the results indicating no cancer or a low-grade cancer. We believe the 4Kscore^TM Test will help to reduce unnecessary prostate biopsies by providing information on the risk (probability) of having high-grade prostate cancer. The test was developed by OPKO Lab and tested in collaboration with 26 urology centers across the United States from October 2013 to March 2014. Results showed that the 4Kscore Test^TM was highly accurate for predicting the presence of high-grade cancer (Gleason score 7 or higher) prior to prostate biopsy. The full data from the blinded, prospective U.S. clinical validation study will be presented at the AUA Annual Meeting in Orlando, FL on May 18th at Plenary Session.

On April 17, 2014, we entered into an agreement to acquire Inspiro Medical Ltd. (“Inspiro”), an Israeli medical device company developing a new platform to deliver small molecule drugs such as corticosteroids and beta agonists or larger molecules to treat respiratory diseases. Inspiro’s Inspiromatic™ is a “smart” easy-to-use dry powder inhaler with several advantages over existing devices. We anticipate that this innovative device will play a valuable role in the improvement of therapy for asthma, chronic obstructive pulmonary disease, cystic fibrosis and other respiratory diseases.

RESULTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2014 AND 2013

Revenues. Revenues for the three months ended March 31, 2014, were $22.3 million, compared to $31.4 million for the three months ended March 31, 2013. The decrease in revenue principally reflects a non-recurring, non–cash revenue related to the transfer of technology under the RXi Asset Purchase Agreement of $12.5 million in the first quarter of 2013. Partially offsetting the non-cash revenue decrease was increased product revenue from FineTech Pharmaceutical, Ltd. (“FineTech”), our Israeli API business, of $1.9 million during the three months ended March 31, 2014. In addition, product revenue from our Spanish and Mexican operations increased by $1.8 million and $1.1 million, respectively, during the three months ended March 31, 2014, primarily due to increased sales by Farmadiet (“OPKO Spain”) throughout Europe and an increase in government tenders in Mexico. Revenue related to OPKO Lab decreased $1.1 million during the three months ended March 31, 2014, compared to the three months ended March 31, 2013, primarily related to decreased reimbursement rates and specimen volume.

Costs of revenue. Costs of revenue for the three months ended March 31, 2014, were $12.4 million, compared to $11.8 million for the three months ended March 31, 2013. Costs of revenue for the three months ended March 31, 2014 increased principally due to costs of revenue recorded by OPKO Spain, Exakta-OPKO, and FineTech of $0.6 million, $0.5 million, and $0.1 million, respectively, partially offset by decreases in the cost of revenue at OPKO Lab due to lower specimen volume.

Selling, general and administrative expenses. Selling, general and administrative expenses for the three months ended March 31, 2014 were $13.8 million, compared to $12.4 million for the three months ended March 31, 2013. The increase in selling, general and administrative expenses for the three months ended March 31, 2014 was as a result of businesses acquired in August 2013 and January 2014, respectively, specifically PROLOR Biotech (“OPKO Biologics”) and Arama Uruguay, which resulted in a $0.5 million increase in selling, general and administrative expenses. Excluding the selling, general and administrative expenses of OPKO Biologics and Arama Uruguay, selling, general and administrative expenses increased by $1.0 million during the three months ended March 31, 2014, principally as a result of increased personnel expenses and professional fees associated with our increased operations. Selling, general and administrative expenses during the three months ended March 31, 2014 and the three months ended March 31, 2013, include equity-based compensation expense of $2.0 million and $1.3 million, respectively.

Research and development expenses. Research and development expenses for the three months ended March 31, 2014 and three months ended March 31, 2013, were $21.0 million and $9.9 million, respectively. Research and development costs 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/or premarket approvals (“PMA”) for diagnostics tests, if any. Research and development employee-related expenses include salaries, benefits and stock-based

36

compensation expense. Other unallocated internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities.

The following table summarizes the components of our research and development expenses:

	For the three months ended March 31,
	2014			2013
External expenses:
Phase 3 clinical trials	$	3,047		$	794
Earlier-stage programs	7,175			13
Research and development employee-related expenses	5,839			6,434
Other unallocated internal research and development expenses	5,437			3,056
Third-party grants and funding from collaboration agreements	(504		)	(387		)
Total research and development expenses	$	20,994		$	9,910

The increase in research and development expenses during the three months ended March 31, 2014, as compared to the three months ended March 31, 2013, principally resulted from an increase of $13.3 million related to research and development expenses incurred by Cytochroma (“OPKO Renal”) and OPKO Biologics, including $3.0 million related to the external costs of ongoing phase 3 clinical trials for Rayaldee^TM (CTAP101)andhGH-CTP. During the three months ended March 31, 2014 and three months ended March 31, 2013, we recorded, as an offset to research and development expenses, $0.6 million and $0.2 million, respectively, related to research and development grants received from our collaboration and funding agreements. Research and development expenses for the three months ended March 31, 2014 and three months ended March 31, 2013 include equity-based compensation expense of $1.6 million and $3.9 million, respectively.

Contingent consideration. Contingent consideration expenses for the three months ended March 31, 2014 and three months ended March 31, 2013, were $2.6 million and $1.3 million, respectively. The increase in contingent consideration expense resulted from changes in the fair value of the contingent consideration liabilities due to the time value of money and the impact of changes in the underlying assumptions, if any, during the period. The contingent consideration liabilities relate to potential amounts payable to former stockholders of CURNA, Inc. (“CURNA”), Claros Diagnostics Inc. (“OPKO Diagnostics”), FineTech, OPKO Spain and OPKO Renal pursuant to our acquisition agreements in January 2011, October 2011, December 2011, August 2012 and March 2013, respectively.

Amortization of intangible assets. Amortization of intangible assets was $2.7 million for the three months ended March 31, 2014 and 2013. Amortization expense reflects the amortization of acquired intangible assets with defined useful lives. The acquisitions of OPKO Renal and OPKO Biologics resulted in principally acquiring in-process research and development which will not amortize until the underlying development programs are completed at which time they will be amortized over the technologies estimated useful life.

Other income and (expense), net. Other income and (expense), net for the three months ended March 31, 2014 and 2013 was $(12.1) million and $(24.1) million, respectively. During the three months ended March 31, 2014, we recorded a $11.1 million non-cash other expense related to the changes in the fair value of the embedded derivatives in the 2033 Senior Notes, and $0.6 million other income related to changes in the fair value of our common stock investments available for sale. Other income and (expense), net, for the three months ended March 31, 2014, also included $3.5 million of interest expense principally related to interest incurred on the 2033 Senior Notes and by the amortization of related deferred financing costs. For the three months ended March 31, 2013, we recorded a $24.8 million non-cash charge related to the increase in the fair value of the embedded derivatives in the 2033 Senior Notes principally due to an increase in the market value of our Common Stock during the 2013 period, partially offset by a gain of $2.3 million on the sale of certain of our investments available for sale and other income of $1.3 million related to changes in the fair value of the warrants and options received in connection with our investment in Neovasc. 

Loss from investments in investees. We have made investments in other early stage companies that we perceive to have valuable proprietary technology and significant potential to create value for us as a shareholder. We account for eight of 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 continue to report a net loss. Loss from investments in investees was $2.1 million and $3.9 million for the three months ended March 31, 2014 and 2013, respectively. The decrease in loss from investments in investees is primarily due to the result of the 2013 period including certain non-recurring research and development expenses at our investees.

37

Income taxes. Our income tax provision reflects the projected income tax payable in Israel, Chile, Spain, Mexico and Canada. We have recorded a full valuation allowance against our deferred tax assets in the U.S.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2014, we had cash and cash equivalents of approximately $156.4 million. Cash used in operations during 2014 principally reflects expenses related to selling, general and administrative activities related to our corporate operations, research and development activities and our operations at OPKO Lab, OPKO Biologics, SciVac, Exakta-OPKO and OPKO Brazil, partially offset by cash provided from our operations at FineTech, OPKO Chile and OPKO Spain. Cash provided by investing activities includes the disposition of investments available for sale partially offset by net cash used in business combinations of $0.2 million, capital expenditures of $0.9 million and investments in investees of $0.5 million. Cash provided by financing activities primarily reflects $1.6 million received from Common Stock option and Common Stock warrant exercises. Since our inception, we have not generated gross margins sufficient to offset our operating and other expenses and our primary source of cash has been from the public and private placement of stock and credit facilities available to us.

On April 17, 2014, we entered into a stock purchase agreement to acquire Inspiro, an Israeli medical device company developing a new platform to deliver small molecule drugs such as corticosteroids and beta agonists and larger molecules to treat respiratory diseases. In connection with the transaction, we agreed to pay an aggregate of $10.0 million, of which $1.0 million will be paid in cash and $9.0 million will be paid in shares of the Company’s Common Stock based on the average closing sales price per share of the Company’s Common Stock as reported by the NYSE for the ten trading days immediately preceding the execution date of the purchase agreement, or $9.00 per share.

In April 2013, we invested $9.6 million in exchange for approximately 13.6 million shares of Pharmsynthez common stock. Concurrent with our investment, Pharmsynthez also agreed, at its option, to issue approximately 12.0 million shares of its common stock or pay us Russian Rubles (“RUR”) 265.0 million ($8.1 million) on or before December 31, 2013. We had a right to purchase additional shares in Pharmsynthez at a fixed price if Pharmsynthez paid us in RUR rather than the 12.0 million shares of Pharmsynthez common stock. Pharmsynthez delivered approximately 12.0 million shares of its common stock to us in January 2014.

In January 2013, we issued $175.0 million of the 2033 Senior Notes. The 2033 Senior Notes were sold in a private placement in reliance on exemptions from registration under the Securities Act. A $4.5 million discount was granted to the placement agent and an additional $0.4 million in deferred charges were recorded for professional fees related to the issuance. Net cash proceeds from the offering totaled $170.2 million. Interest on the 2033 Senior Notes is payable semiannually on February 1 and August 1, beginning August 1, 2013. Holders of the 2033 Senior Notes may require us to repurchase the 2033 Senior Notes for 100% of their principal amount, plus accrued and unpaid interest, on February 1, 2019, February 1, 2023 and February 1, 2028, or following the occurrence of a fundamental change as defined in the indenture governing the 2033 Senior Notes. On August 30, 2013, one of the conversion rights in the 2033 Senior Notes was triggered. Holders of the 2033 Senior Notes converted $16.9 million principal amount into 2,396,145 shares of our Common Stock at a rate of 141.4827 shares of Common Stock per $1,000 principal amount of 2033 Senior Notes.

In August 2012, we entered into a stock purchase agreement pursuant to which we acquired all of the outstanding stock of OPKO Spain (previously Farmadiet Group Holding, S.L.), a Spanish company engaged in the development, manufacture, marketing, and sale of pharmaceutical, nutraceutical, and veterinary products in Europe (the “OPKO Spain Transaction”). In connection with the OPKO Spain Transaction, we agreed to pay an aggregate purchase price of €13.5 million (approximately $16.0 million), of which (i) 50% ($8.4 million) was paid in cash at closing, and (ii) 50% (the “Deferred Payments”) were paid, at our option, in cash or shares of our Common Stock as follows: (x) 25% to be paid on the first anniversary of the closing date; and (y) 25% to be paid 18 months after the closing date. In the event we elected to pay the Deferred Payments in shares of our Common Stock, the number of shares issuable shall be calculated using the average closing price per share of our Common Stock as reported on the NYSE for the 10 trading days immediately preceding the applicable payment date. On August 2, 2013, we issued 585,703 shares of our Common Stock, in accordance with the first Deferred Payment. The number of shares issued was based on the average closing price per share of our Common Stock as reported on the NYSE for the 10 trading days up to and including August 1, 2013, or $7.61 per share. On February 14, 2014, we delivered approximately €3.4 million in cash in accordance with the second Deferred Payment.

In connection with our acquisitions of CURNA, OPKO Diagnostics, FineTech and OPKO Renal, we agreed to pay future consideration to the sellers upon the achievement of certain events, including minimum cash payments of $5.0 million to the former stockholder of FineTech upon the achievement of certain sales milestones, of which $2.7 million and $3.2 million were paid in March 2013 and 2014, respectively; up to an additional $19.1 million in shares of our Common Stock to the former

38

stockholders of OPKO Diagnostics upon and subject to the achievement of certain milestones; and up to an additional $190.0 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.

As of March 31, 2014, we have outstanding lines of credit in the aggregate amount of $8.1 million with 12 financial institutions in Chile and Spain, of which $6.4 million is unused. The weighted average interest rate on these lines of credit is approximately 5.9%. These lines of credit are short-term and are generally due within three months. These lines of credit are used primarily as a source of working capital for inventory purchases. The highest balance at any time during the three months ended March 31, 2014, was $8.9 million. We intend to continue to enter into 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.

We expect to incur losses from operations for the foreseeable future. We expect to incur substantial research and development expenses, including expenses related to the hiring of personnel and additional clinical trials. We expect that selling, general and administrative expenses will also increase as we expand our sales, marketing and administrative staff and add infrastructure.

We believe that the cash, cash equivalents, and marketable securities on hand at March 31, 2014 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 will depend on a number of factors, including 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, and our success in developing markets for our product candidates. 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.

39

The following table provides information as of March 31, 2014, with respect to the amounts and timing of our known contractual obligation payments due by period.

Contractual obligations (In thousands)	Remaining Nine Months ending December 31, 2014		2015		2016		2017		2018		2019		Thereafter		Total
Open purchase orders	$	13,854	$	29	$	—	$	—	$	—	$	—	$	—	$	13,883
Operating leases	2,338		1,914		1,553		876		578		12		12		7,283
2033 Senior Notes	—		—		—		—		—		—		224,801		224,801
Deferred payments	840		—		—		—		—		—		—		840
Mortgages and other debts payable (1)	482		499		376		337		280		272		1,486		3,732
Lines of credit	8,299		—		—		—		—		—		—		8,299
Interest commitments	3,830		4,850		4,833		4,821		4,808		452		62		23,656
Total	$	29,643	$	7,292	$	6,762	$	6,034	$	5,666	$	736	$	226,361	$	282,494

⁽¹⁾  Excludes $2.1 million of consolidated liabilities related to SciVac, as to which there is no recourse against us.

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, new drug application approvals by the U.S. FDA and revenue milestones upon the achievement of certain revenue targets all of which are anticipated to be paid within the next 7 years and are payable in either shares of our Common Stock or cash, at our option, and that may aggregate up to $213.5 million.

40

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Accounting estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of sales and expenses during the reporting period. Actual results could differ from those estimates.

Goodwill and Intangible Assets. Goodwill and other intangible assets, including in-process research and development (“IPR&D”), acquired in business combinations, licensing and other transactions was $1.1 billion at both March 31, 2014 and December 31, 2013, representing approximately 80% and 79% of total assets, respectively.

Assets acquired and liabilities assumed in business combinations, licensing and other transactions are recognized at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. We determined the fair value of intangible assets, including in-process research and development (“IPR&D”), using the “income method.” This method starts with a forecast of net cash flows, risk adjusted for estimated probabilities of technical and regulatory success (for IPR&D) and adjusted to present value using an appropriate discount rate that reflects the risk associated with the cash flow streams. All assets are valued from a market participant view which might be different than our specific views. The valuation process is very complex and requires significant input and judgment using internal and external sources. Although the valuations are required to be finalized within a one-year period, it must consider all and only those facts and evidence available at the acquisition date. The most complex and judgmental matters applicable to the valuation process are summarized below:

• Unit of account – Most intangible assets are valued as single global assets rather than multiple assets for each jurisdiction or indication after considering the development stage, expected levels of incremental costs to obtain additional approvals, risks associated with further development, amount and timing of benefits expected to be derived in the future, expected patent lives in various jurisdictions and the intention to promote the asset as a global brand.

• Estimated useful life – The asset life expected to contribute meaningful cash flows is determined after considering all pertinent matters associated with the asset, including expected regulatory approval dates (if unapproved), exclusivity periods and other legal, regulatory or contractual provisions as well as the effects of any obsolescence, demand, competition, and other economic factors, including barriers to entry.

• Probability of Technical and Regulatory Success (“PTRS”) Rate – PTRS rates are determined based upon industry averages considering the respective programs development stage and disease indication and adjusted for specific information or data known at the acquisition date. Subsequent clinical results or other internal or external data obtained could alter the PTRS rate and materially impact the estimated fair value of the intangible asset in subsequent periods leading to impairment charges.

• Projections – Future revenues are estimated after considering many factors such as initial market opportunity, pricing, sales trajectories to peak sales levels, competitive environment and product evolution. Future costs and expenses are estimated after considering historical market trends, market participant synergies and the timing and level of additional development costs to obtain the initial or additional regulatory approvals, maintain or further enhance the product. We generally assume initial positive cash flows to commence shortly after the receipt of expected regulatory approvals which typically may not occur for a number of years. 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. Our recent valuations typically use a U.S. tax rate (and applicable state taxes) after considering the jurisdiction in which the intellectual property is held and location of research and manufacturing infrastructure. We also considered that any earnings repatriation would likely have U.S. tax consequences.

• Discount rate – Discount rates are selected after considering the risks inherent in the future cash flows; the assessment of the asset’s life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry, as well as expected changes in standards of practice for indications addressed by the asset.

Goodwill was $226.1 million and $226.4 million, respectively, at March 31, 2014 and December 31, 2013. Goodwill is tested at least annually for impairment or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, on an enterprise level by assessing qualitative factors or performing a quantitative analysis in

41

determining whether it is more likely than not that its fair value exceeds the carrying value. Examples of qualitative factors include our share price, our financial performance compared to budgets, long-term financial plans, macroeconomic, industry and market conditions as well as the substantial excess of fair value over the carrying value of net assets from the annual impairment test performed in the prior year.

The estimated fair value of the reporting units whose fair value was calculated for purposes of the 2013 impairment testing is derived from the valuation techniques described above, incorporating the related projections and assumptions. An indication of possible impairment occurs when the estimated fair value of the reporting unit is below the carrying value of its equity. The estimated fair value for these reporting units exceeded their related carrying value as of October 1, 2013. As a result, no goodwill impairment was recorded.

The estimated fair value of the reporting unit is highly sensitive to changes in these projections and assumptions; therefore, in some instances changes in these assumptions could impact whether the fair value of a reporting unit is greater than its carrying value. For example, an increase in the discount rate and decline in the projected cumulative cash flow of a reporting unit could cause the fair value of certain reporting units to be below its carrying value. We perform sensitivity analyses around these assumptions in order to assess the reasonableness of the assumptions and the resulting estimated fair values. Ultimately, future potential changes in these assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value. The excess of fair value over carrying value for our reporting units as of October 1, 2013, was 70%. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value. However, if actual results are not consistent with our estimates and assumptions, we may be exposed to an impairment charge that could be material.

Intangible assets were $865.3 million and $867.9 million, including IPR&D of $793.3 million and $793.3 million, respectively, at March 31, 2014 and December 31, 2013. Intangible assets are tested for impairment whenever events or changes in circumstances warrant a review, although IPRD is required to be tested at least annually. Intangible assets are highly vulnerable to impairment charges, particularly newly acquired assets for recently launched products or IPR&D. These assets are initially measured at fair value and therefore any reduction in expectations used in the valuations could potentially lead to impairment. Some of the more common potential risks leading to impairment include competition, earlier than expected loss of exclusivity, pricing pressures, adverse regulatory changes or clinical trial results, delay or failure to obtain regulatory approval and additional development costs, inability to achieve expected synergies, higher operating costs, changes in tax laws and other macro-economic changes. The complexity in estimating the fair value of intangible assets in connection with an impairment test is similar to the initial valuation.

Considering the high risk nature of research and development and the industry’s success rate of bringing developmental compounds to market, IPR&D impairment charges are likely to occur in future periods. IPR&D is closely monitored and assessed each period for impairment.

Contingent consideration. Each period we revalue the contingent consideration obligations associated with certain acquisitions to their fair value and record increases in the fair value as contingent consideration expense and decreases in the fair value as contingent consideration income. Changes in contingent consideration result from changes in the assumptions regarding probabilities of successful achievement of related milestones, the estimated timing in which the milestones are achieved and the discount rate used to estimate the fair value of the liability. Contingent consideration may change significantly as our development programs progress, revenue estimates evolve and additional data is obtained, impacting our assumptions. The assumptions used in estimating fair value require significant judgment. The use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

Equity-based compensation. We recognize equity based compensation as an expense in our financial statements and that cost is measured at the fair value of the awards and expensed over their vesting period. Equity-based compensation arrangements to non-employees are recorded at their fair value on the measurement date. We estimate the grant-date fair value of our stock option grants using a valuation model known as the Black-Scholes-Merton formula or the “Black-Scholes Model” and allocate the resulting compensation expense over the corresponding requisite service period associated with each grant. The Black-Scholes Model requires the use of several variables to estimate the grant-date fair value of stock options including expected term, expected volatility, expected dividends and risk-free interest rate. We perform significant analyses to calculate and select the appropriate variable assumptions used in the Black-Scholes Model. We also perform significant analyses to estimate forfeitures of equity-based awards. We are required to adjust our forfeiture estimates on at least an annual basis based on the number of share-based awards that ultimately vest. The selection of assumptions and estimated forfeiture rates is subject to significant judgment and future changes to our assumptions and estimates may have a material impact on our Condensed Consolidated Financial Statements.

42

Allowance for doubtful accounts and revenue recognition. Generally, we recognize revenue from product sales when goods are shipped and title and risk of loss transfer to our customers. Our estimates for sales returns are based upon the historical patterns of products returned matched against the sales from which they originated, and management’s evaluation of specific factors that may increase or decrease the risk of product returns. Revenue for services is recognized on the accrual basis at the time test results are reported, which approximates when services are provided. Services are provided to certain patients covered by various third-party payer programs including various managed care organizations, as well as the Medicare and Medicaid programs. Billings for services under third-party payer programs are included in sales net of allowances for contractual discounts and allowances for differences between the amounts billed and estimated program payment amounts. Adjustments to the estimated payment amounts based on final settlement with the programs are recorded upon settlement as an adjustment to revenue.We analyze accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts using the specific identification method. Our reported net loss is directly affected by management’s estimate of the collectability of accounts receivable. The allowance for doubtful accounts recognized in our Condensed Consolidated Balance Sheets at March 31, 2014 and December 31, 2013 was $1.6 million and $1.9 million, respectively.

Inventories. Inventories are valued at the lower of cost or market (net realizable value). Cost is determined by the first-in, first-out method. We consider such factors as the amount of inventory on hand, estimated time required to sell such inventories, remaining shelf-life, and current market conditions to determine whether inventories are stated at the lower of cost or market.

Recent accounting pronouncements. In July 2013, the FASB issued an Accounting Standards Update (“ASU”), ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 is intended to eliminate inconsistent practices regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from the disallowance of a tax position. ASU 2013-11 is effective for our fiscal year beginning January 1, 2014 and subsequent interim periods. The adoption of ASU 2013-11 does not have a material effect on our Condensed Consolidated Financial Statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of doing business, we are exposed to the risks associated with foreign currency exchange rates and changes in interest rates.

Foreign Currency Exchange Rate Risk – Although we do not speculate in the foreign exchange market, we may from time to time manage exposures that arise in the normal course of business related to fluctuations in foreign currency exchange rates by entering into offsetting positions through the use of foreign exchange forward contracts. Certain firmly committed transactions are hedged with foreign exchange forward contracts. As exchange rates change, gains and losses on the exposed transactions are partially offset by gains and losses related to the hedging contracts. Both the exposed transactions and the hedging contracts are translated at current spot rates, with gains and losses included in earnings.

Our derivative activities, which consist of foreign exchange forward contracts, are initiated to hedge forecasted cash flows that are exposed to foreign currency risk. The foreign exchange forward contracts generally require us to exchange local currencies for foreign currencies based on pre-established exchange rates at the contracts’ maturity dates. As exchange rates change, gains and losses on these contracts are generated based on the change in the exchange rates that are recognized in the Condensed Consolidated Statement of Operations at maturity, and offset the impact of the change in exchange rates on the foreign currency cash flows that are hedged. If the counterparties to the exchange contracts do not fulfill their obligations to deliver the contracted currencies, we could be at risk for currency related fluctuations. We had $2.4 million in foreign exchange forward contracts outstanding at March 31, 2014, primarily to hedge Chilean-based operating cash flows against U.S. dollars. If Chilean Pesos were to strengthen in relation to the U.S. dollar, our loss or gain on hedged foreign currency cash-flows would be offset by the derivative contracts, with a net effect of zero.

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.

Interest Rate Risk – Our exposure to market risk relates to our cash and investments and to our borrowings. We maintain an investment portfolio of money market funds. The securities in our investment portfolio are not leveraged, and are, due to their very short-term nature, subject to minimal interest rate risk. 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 income in a low interest rate environment.

43

At March 31, 2014, we had cash and cash equivalents and marketable securities of $156.4 million. The weighted average interest rate related to our cash and cash equivalents for the three months ended March 31, 2014 was 0%. As of March 31, 2014, the principal value of our credit lines was $8.1 million at a weighted average interest rate of approximately 5.9% for the three months then ended.

Our $158.1 million aggregate principal amount of our 2033 Senior Notes has a fixed interest rate, and therefore is not subject to fluctuations in market interest rates.

The primary objective of our investment activities is to preserve principal while at the same time maximizing yields without significantly increasing risk. To achieve this objective, we invest our excess cash in debt instruments of the U.S. Government and its agencies, bank obligations, repurchase agreements and high-quality corporate issuers, and money market funds that invest in such debt instruments, and, by policy, restrict our exposure to any single corporate issuer by imposing concentration limits. To minimize the exposure due to adverse shifts in interest rates, we maintain investments at an average maturity of generally less than three months.

Equity Price Risk – We are subject to equity price risk related to the (i) rights to convert into shares of our Common Stock, including upon a fundamental change; and (ii) a coupon make-whole payment in the event of a conversion by the holders of the 2033 Senior Notes on or after February 1, 2017 but prior to February 1, 2019. These terms are considered to be embedded derivatives. On a quarterly basis, we are required to record these embedded derivatives at fair value with the changes being recorded in our Condensed Consolidated Statement of Operations. Accordingly, our results of operations are subject to exposure associated with increases or decreases in the estimated fair value of our embedded derivatives.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, management concluded that our disclosure controls and procedures were not effective at the reasonable assurance level as of the end of the period covered by this Quarterly Report on Form 10-Q due to a material weakness existing in our internal controls over financial reporting as of December 31, 2013 (described below), which has not been fully remediated as of the end of the period covered by this Quarterly Report on Form 10-Q.

In connection with the preparation of our financial statements for the year ended December 31, 2013, we concluded there was a material weakness in the design and operating effectiveness of our internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness in internal control over financial reporting relates to the Company’s financial statement close process at its Chilean subsidiary due to the lack of sufficient controls to assure that inventory and accounts receivable balances are recorded correctly in accordance with U.S. generally accepted accounting principles.

With the oversight of senior management and our audit committee, we have taken steps, and plan to take additional measures, to remediate the underlying causes of the material weakness, primarily through the development and implementation of formal policies, improved processes and documented procedures, as well as the hiring of additional finance personnel.

As part of these ongoing efforts, we have documented and are in the process of testing our internal control over financial reporting in order to report on the effectiveness of our internal controls as of December 31, 2014. We have continued to expend significant internal and external resources in this effort. In particular, we have continued to work with a global accounting firm in preparation for reporting on the effectiveness of our internal controls, and we have engaged an additional accounting firm to assist our local management team to address the underlying cause of the material weakness primarily through the development and implementation of additional policies, improved processes and documented procedures, as well as

44

the hiring of additional finance personnel. However, we can provide no assurance at this time that management will be able to report that our internal control over financial reporting is effective as of December 31, 2014, or that our registered independent public accounting firm will be able to attest that such internal controls are effective.

Notwithstanding the identified material weakness, management believes the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q fairly represent in all material respects our financial condition, results of operations and cash flows at and for the periods presented in accordance with U.S. GAAP.

Changes to the Company’s Internal Control Over Financial Reporting

In addition to the changes above, in connection with the OPKO Renal and OPKO Biologics acquisitions in March 2013 and August 2013, respectively, we began implementing standards and procedures at OPKO Renal and OPKO Biologics, including upgrading and establishing controls over accounting systems, and adding employees and consultants who are trained and experienced in the preparation of financial statements in accordance with U.S. GAAP to ensure that we have in place appropriate internal control over financial reporting at OPKO Renal and OPKO Biologics. These changes to the Company’s internal control over financial reporting that occurred during the Company’s first fiscal quarter of 2014 have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

45

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

On April 29, 2013, a putative class action was filed in the Eighth Judicial District Court in and for Clark County, Nevada against PROLOR Biotech, Inc. (now OPKO Biologics), the members of the PROLOR Board of Directors, individually (including Drs. Frost and Hsiao and Steven Rubin), and the Company. From May 1, 2013 through May 6, 2013, we were named in an additional five putative class actions lawsuits filed in the Eight Judicial District Court in and for Clark County, Nevada against the same defendants. On July 17, 2013, these six suits were consolidated, for all purposes, into an amended class action complaint. The lawsuit is brought by purported holders of PROLOR’s common stock, both individually and on behalf of a putative class of PROLOR’s stockholders, asserting claims that PROLOR’s Board of Directors breached its fiduciary duties in connection with the merger by purportedly failing to maximize stockholder value, that PROLOR and its Board of Directors failed to disclose material information to PROLOR’s stockholders, and that the Company aided and abetted the alleged breaches of fiduciary duty. On May 5, 2014, the court issued an order dismissing all claims as to all defendants without prejudice.

Item 1A. Risk Factors

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On December 13, 2013, the Company entered into an agreement pursuant to which it agreed to acquire Laboratorio Arama De Uruguay Ltda (“Arama Uruguay”) for approximately $0.4 million, of which $.2 million was paid in cash and $.02 was paid in shares of OPKO Common Stock at closing based on the average closing sale price of our Common Stock on the New York Stock Exchange for the fifteen day trading period ending on the day prior to the execution of the definitive agreement. The transaction closed on January 7, 2014. In connection with the transaction, the Company issued an aggregate of 19,140 shares of OPKO Common Stock, of which 11,483 shares were delivered to sellers at closing and 7,656 shares were placed in escrow as security for indemnity claims. The stock consideration was issued in reliance upon an exemption from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(2) or Regulation S thereof.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

46

Item 6. Exhibits

Exhibit 3.1(1)	Amended and Restated Certificate of Incorporation.
Exhibit 3.2(2)	Amended and Restated By-Laws.
Exhibit 3.3(3)	Certificate of Designation of Series D Preferred Stock.
Exhibit 4.3(4)	Indenture, dated as of January 30, 2013, between OPKO Health, Inc. and Wells Fargo Bank, National Association.
Exhibit 31.1	Certification by Phillip Frost, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 31.2	Certification by Adam Logal, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 32.1	Certification by Phillip Frost, Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 32.2	Certification by Adam Logal, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 101.INS	XBRL Instance Document
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

⁽¹⁾  Filed with the Company’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on November 12, 2013 for the Company’s three month period ended September 30, 2013, and incorporated herein by reference.

⁽²⁾  Filed with the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2008, and incorporated herein by reference.

⁽³⁾  Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 24, 2009, and incorporated herein by reference.

⁽⁴⁾  Filed with the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 5, 2013, and incorporated herein by reference.

47

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: May 09, 2014	OPKO Health, Inc.
	/s/ Adam Logal
	Adam Logal
	Senior Vice President, Chief Financial Officer,
	Chief Accounting Officer and Treasurer

48

Exhibit Index

Exhibit Number	Description
Exhibit 31.1	Certification by Phillip Frost, Chief Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 31.2	Certification by Adam Logal, Chief Financial Officer, pursuant to Rule 13a-14(a) and 15d-14(a) of the Securities and Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 32.1	Certification by Phillip Frost, Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 32.2	Certification by Adam Logal, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the quarterly period ended March 31, 2014.
Exhibit 101.INS	XBRL Instance Document
Exhibit 101.SCH	XBRL Taxonomy Extension Schema Document
Exhibit 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
Exhibit 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
Exhibit 101.LAB	XBRL Taxonomy Extension Label Linkbase Document
Exhibit 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

49

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Phillip Frost, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of OPKO Health, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014	/s/ Dr. Phillip Frost, M.D.
	Dr. Phillip Frost, M.D.
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Adam Logal, certify that:

(1) I have reviewed this Quarterly Report on Form 10-Q of OPKO Health, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2014	/s/ Adam Logal
	Adam Logal
	Senior Vice President, Chief Financial Officer, Chief Accounting Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant section 906 of the Sarbanes-Oxley Act of 2002, I, Phillip Frost, Chief Executive Officer of OPKO Health, Inc. (the “Company”), hereby certify that:

The Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2014	/s/ Dr. Phillip Frost, M.D.
	Dr. Phillip Frost, M.D.
	Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United States Code)

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant section 906 of the Sarbanes-Oxley Act of 2002, I, Adam Logal, Chief Financial Officer of OPKO Health, Inc. (the “Company”), hereby certify that:

The Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2014 (the “Form 10-Q”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2014	/s/ Adam Logal
	Adam Logal
	Senior Vice President, Chief Financial Officer Chief Accounting Officer and Treasurer

XML

Debt - Inputs Used In Lattice Model (Details) (Notes [Member], Notes Due February 1, 2033 [Member], USD $)	0 Months Ended	1 Months Ended	3 Months Ended
	Aug. 29, 2013	Jan. 30, 2013 Rate	Mar. 31, 2014 Rate
Notes [Member] | Notes Due February 1, 2033 [Member]
Debt Instrument [Line Items]
Share price		$ 6.20	$ 9.32
Conversion Rate	141.4827	141.4827	141.4827
Conversion Price		$ 7.07	$ 7.07
Maturity date		Feb. 01, 2033	Feb. 01, 2033
Risk-free interest rate		1.12%	1.66%
Estimated stock volatility		40.00%	50.00%
Estimated credit spread		9.44%	8.23%

XML

Related Party Transactions - Textual (Details) (USD $)		1 Months Ended			1 Months Ended				0 Months Ended	1 Months Ended					1 Months Ended						0 Months Ended		1 Months Ended		0 Months Ended						1 Months Ended	3 Months Ended	1 Months Ended			1 Months Ended				1 Months Ended			1 Months Ended	3 Months Ended		0 Months Ended		1 Months Ended
	Jan. 30, 2013 Notes [Member] Notes Due February 1, 2033 [Member]	Sep. 30, 2009 Convertible Preferred Stock [Member]	Oct. 31, 2013 Zebra [Member]	Oct. 31, 2013 Zebra [Member] Series A Preferred Stock [Member]	Oct. 31, 2013 Zebra [Member] Restricted Stock [Member]	Feb. 29, 2012 Chromadex Corporation [Member]	Feb. 29, 2012 Biozone Pharmaceuticals Inc [Member]	Nov. 30, 2010 Fabrus Inc [Member]	Sep. 21, 2009 Cocrystal [Member]	Sep. 30, 2009 Cocrystal [Member]	Aug. 31, 2011 Dr Frost [Member]	Aug. 29, 2013 Dr Frost [Member] OPKO Biologics [Member]	Oct. 31, 2013 Dr Frost [Member] Zebra [Member] Series A Preferred Stock [Member]	Aug. 31, 2011 Dr. Hsiao [Member]	Oct. 31, 2013 Equity Method Investee [Member]	Oct. 31, 2013 Equity Method Investee [Member] ARNO [Member]	Oct. 31, 2013 Equity Method Investee [Member] ARNO [Member] One Year Warrants [Member]	Oct. 31, 2013 Equity Method Investee [Member] ARNO [Member] Five Year Warrants [Member]	Dec. 31, 2013 Equity Method Investee [Member] Sorrento [Member]	Jun. 30, 2009 Equity Method Investee [Member] Sorrento [Member]	Jan. 16, 2014 Equity Method Investee [Member] Biozone [Member]	Jan. 03, 2014 Equity Method Investee [Member] Biozone [Member]	Dec. 31, 2013 Equity Method Investee [Member] Biozone [Member]	Jul. 31, 2012 Equity Method Investee [Member] Biozone [Member]	Jan. 03, 2014 Equity Method Investee [Member] Biozone [Member] Series B Convertible Preferred Stock [Member]	Jan. 03, 2014 Equity Method Investee [Member] MusclePharm Corporation [Member] Common Stock [Member]	Aug. 31, 2011 Mr. Rubin [Member]	Aug. 29, 2013 Mr. Rubin [Member] OPKO Biologics [Member]	Sep. 21, 2011 Mr. Rubin [Member] Biozone Pharmaceuticals Inc [Member]	Jan. 30, 2013 Frost Gamma Investments Trust and Hsu Gamma Investment, L.P. [Member] Notes [Member] Notes Due February 1, 2033 [Member]	Dec. 31, 2012 Avi Properties LLC [Member] sqft	Mar. 31, 2014 Teva [Member] FineTech [Member]	Feb. 29, 2012 Scripps Research Institute [Member]	Feb. 29, 2012 Gamma Trust [Member] Chromadex Corporation [Member]	Feb. 29, 2012 Hsu Gamma [Member] Chromadex Corporation [Member]	Nov. 30, 2010 Dr. Lerner [Member] Fabrus Inc [Member]	Nov. 30, 2010 Gamma Trust and Hsu Gamma [Member] Fabrus Inc [Member]	Jun. 30, 2010 Academia Sinica [Member]	Sep. 30, 2009 Frost Group, LLC [Member] Installment	Aug. 31, 2012 Real Estate Holdings LLC [Member]	Nov. 30, 2007 Real Estate Holdings LLC [Member] sqft	Jan. 02, 2014 Real Estate Holdings LLC [Member] sqft	Oct. 31, 2013 FTC Filings [Member] Dr. Hsiao [Member]	Mar. 31, 2014 Reimbursement Of Travel Expense [Member] Dr Frost [Member]	Mar. 31, 2013 Reimbursement Of Travel Expense [Member] Dr Frost [Member]	May 02, 2013 Lab Space Agreement [Member] Dr. Hsiao [Member] sqft	May 02, 2013 Consulting Agreement [Member] Dr. Hsiao [Member]	Oct. 31, 2013 Loans Receivable [Member] Fabrus [Member]	Dec. 31, 2013 License Agreement Early Termination Fee [Member] Equity Method Investee [Member] Sorrento [Member]
Related Party Transaction [Line Items]
Payments for Filing Fees																																											$ 170,000
Invested in common shares			2,000,000						2,500,000	2,500,000						2,000,000				2,300,000	500,000
Private Placement Financing															30,000,000						2,750,000
Investment Owned, Balance, Shares				840,000									900,000			833,333					1,000,000
Warrants expiration period																	1 year	5 years
Warrants to purchase common shares							8,500,000.0										833,333	833,333			1,000,000
Class of Warrant or Right, Exercise Price of Warrants or Rights																	2.40	4.00			0.50
Investment Agreement, Requirement to Hold Rights to Board, Minimum Stock Percentage																3.00%
Equity Method Investment, Ownership Percentage				23.50%
Shares Received As Gift					900,000
Area of Real Estate Property																																										11,000				5,000
Lessor Leasing Arrangements, Operating Leases, Term of Contract																																														5 years
Contractual Obligation, Due in Fifth Year																																															60,000
Beneficially owned held by members								13.00%			36.00%	5.00%		6.00%													1.00%	5.00%	1.00%					16.00%	1.00%
Debt face amount	175,000,000.0																													175,000,000
Period of lease																															5 years
Square feet of laboratory																															44,000										8,300
Payments of lease per month																															18,000										18,000
Exceeds consumer price index																															5.00%
Sale of API to TEVA																																100,000
Fund for research agreement																																	900,000
Research agreement maturity period																																	5 years
Approximate funding for development of technology																																	200,000
Period for development of technology																																	3 years
Invested in common shares						1,000,000	1,700,000
Beneficially owned held by owners						1.50%
Convertible senior notes interest rate							10.00%
Par value							$ 0.20
Warrants duration							10 years														10 years
Exercise price per share							$ 0.40
Convertible debt, stock issued from conversion																							10,000,000
Biozone Pharmaceuticals Warrants Exercised																								7,700,000
Noncash or Part Noncash Divestiture, Shares Received																										1,200,000
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued																									1,000,000
Stock Conversion, Common Shares Issued upon Conversion																						205.08308640
Investment was part of financing for Fabrus																																					2,100,000
Ownership percentage held by director																																				5.00%
Increase (Decrease) in Due from Related Parties																																																100,000
Related Party Transaction, Rate																																																7.00%
Research and development agreement amount																																						200,000
Equity method investment, number of shares purchased		1,701,723
Previous investment by a group of investor																																							5,000,000
Additional investment by a group of investor																																							5,000,000
Number of equal installments payable for additional investment																																							2
Equity Method Investment, Realized Gain (Loss) on Disposal																			17,200,000
Related Party Transaction, Other Revenues from Transactions with Related Party																																																	2,700,000
Lease rent per month for fifth year																																									24,000
Credit for tenant improvements																																									30,000
Period of lease agreement																																								6 months
Operating Leases, Monthly Payments, Year One																																										30,000
Operating Leases, Monthly Payments, Year Five																																										34,000
Tenant Improvements, Offset Against Operating Lease in Next Twelve Months																																										155,200
Tenant Improvements, Rent Reduction, Amount																																										68,000
Reimbursement paid to related party for travel																																												$ 13,000	$ 13,000

XML

Fair Value Measurements - Notes (Details) (Notes [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2014
Estimate of Fair Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2033 Senior Notes	$ 118,163
Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2033 Senior Notes
Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2033 Senior Notes
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2033 Senior Notes	118,163
Carrying Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
2033 Senior Notes	$ 112,602

XML

Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended							0 Months Ended
	Jul. 31, 2012 claim	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Accrued Liabilities [Member]	Dec. 31, 2013 Accrued Liabilities [Member]	Mar. 31, 2014 Other Noncurrent Liabilities [Member]	Dec. 31, 2013 Other Noncurrent Liabilities [Member]	May 06, 2013 Pending Litigation [Member] PROLOR Biotech, Inc. Shareholders' Litigation [Member] Suit
Loss Contingencies [Line Items]
Number of putative class action suits filed								5
Number of claims included in post-payment audit	183
Business Acquisition, Contingent Consideration [Line Items]
Contingent consideration		$ 71.0	$ 71.6	$ 25.7	$ 28.0	$ 45.3	$ 43.6

XML

Fair Value Measurements - Summary Of Investments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 4,745	$ 4,301
Gross unrealized gains in Accumulated OCI	3,645	3,739
Gross unrealized losses in Accumulated OCI	(150)	0
Gain/(Loss) in Accumulated Deficit	3,762	4,022
Fair value	12,002	12,062
Common Stock [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	3,320	3,376
Gross unrealized gains in Accumulated OCI	2,035	2,698
Gross unrealized losses in Accumulated OCI	(150)	0
Gain/(Loss) in Accumulated Deficit
Fair value	5,205	6,074
US Treasury Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,425
Gross unrealized gains in Accumulated OCI	1,610
Gross unrealized losses in Accumulated OCI
Gain/(Loss) in Accumulated Deficit	3,762
Fair value	6,797
Common stock options/warrants [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		925
Gross unrealized gains in Accumulated OCI		1,041
Gross unrealized losses in Accumulated OCI		0
Gain/(Loss) in Accumulated Deficit		4,022
Fair value		$ 5,988

XML

Acquisitions, Investments, and Licenses - Textual (Details)	3 Months Ended			1 Months Ended			1 Months Ended	0 Months Ended		1 Months Ended		0 Months Ended	1 Months Ended	3 Months Ended	1 Months Ended			3 Months Ended	1 Months Ended	3 Months Ended	1 Months Ended		1 Months Ended			0 Months Ended	3 Months Ended	1 Months Ended	3 Months Ended
	Mar. 31, 2014 USD ($)	Mar. 31, 2013 USD ($)	Dec. 31, 2013 USD ($)	Jun. 30, 2012 SciVac [Member] Variable Interest Entity, Primary Beneficiary [Member] USD ($) member	Mar. 31, 2014 SciVac [Member] Variable Interest Entity, Primary Beneficiary [Member] USD ($)	Oct. 31, 2013 ARNO [Member] USD ($)	Oct. 31, 2013 ARNO [Member] Equity Method Investee [Member] USD ($)	Jan. 16, 2014 Biozone [Member] Equity Method Investee [Member] USD ($)	Jan. 03, 2014 Biozone [Member] Equity Method Investee [Member]	Dec. 31, 2013 Biozone [Member] Equity Method Investee [Member]	Jul. 31, 2012 Biozone [Member] Equity Method Investee [Member]	Jan. 03, 2014 Biozone [Member] Equity Method Investee [Member] Series B Convertible Preferred Stock [Member]	Aug. 31, 2011 Neovasc [Member] USD ($)	Mar. 31, 2014 Neovasc [Member] USD ($)	Jan. 31, 2014 Pharmsynthez [Member]	Apr. 30, 2013 Pharmsynthez [Member] USD ($)	Apr. 30, 2013 Pharmsynthez [Member] RUB	Mar. 31, 2014 Pharmsynthez [Member] USD ($)	Mar. 31, 2013 RXi Pharmaceuticals Corporation [Member] USD ($)	Mar. 31, 2014 RXi Pharmaceuticals Corporation [Member] USD ($)	Oct. 31, 2013 Zebra [Member] USD ($)	Oct. 31, 2013 Zebra [Member] Series A Preferred Stock [Member]	Oct. 31, 2013 Zebra [Member] Restricted Stock [Member]	Oct. 31, 2013 One Year Warrants [Member] ARNO [Member] Equity Method Investee [Member]	Oct. 31, 2013 Five Year Warrants [Member] ARNO [Member] Equity Method Investee [Member]	Aug. 29, 2013 OPKO Biologics [Member] USD ($)	Mar. 31, 2014 OPKO Biologics [Member] USD ($)	Mar. 31, 2013 OPKO Renal [Member] USD ($)	Mar. 31, 2014 OPKO Renal [Member] USD ($)
Business Acquisition [Line Items]
Shares conversion ratio																										0.9951
Delivery of common stock																										63,670,805		20,517,030
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned																										$ 540,600,000		$ 146,900,000
Share price																										$ 8.49		$ 7.16
Options and warrants outstanding (shares)																										7,889,265
Fair value of warrants outstanding						3,600,000																				46,100,000
Percentage of ownership held by chairman																										5.00%
Percentage of ownership held by directors																										5.00%
Number of trading days																												10 days
Business acquisition share price on shares issue																												$ 4.87
Amount payable in cash or shares on achieving milestones for acquiring a product in development																												190,000,000.0
Contingent consideration	71,000,000		71,600,000																									47,700,000
Cash paid at closing date				700,000
Deferred acquisition payments	840,000		5,465,000
Net loss																											22,400,000		29,200,000
Invested in common shares							2,000,000	500,000					2,000,000	1,200,000						2,500,000	2,000,000
Number of shares purchased													2,000,000			13,600,000	13,600,000		17,241,380
Warrants expiration period													2 years											1 year	5 years
Warrants to purchase common shares								1,000,000					1,000,000											833,333	833,333
Class of Warrant or Right, Exercise Price of Warrants or Rights								0.50																2.40	4.00
Investment Warrants, Exercise Price													$ 1.25
Asset Purchase Agreement																9,600,000
Number of share options received in purchase agreement																12,000,000	12,000,000
Proceeds to be received from sale of proprietary technology																8,100,000	265,000,000
Deferred revenue	8,600,000		8,300,000													9,500,000
Period for development of technology																3 years	3 years
Deferred revenue received from collaboration agreement	1,400,000
Revenue related to our license agreements																		500,000
Revenue collaboration agreement, offset to research and development	400,000
Shares Received In Satisfaction of Notes Receivable															12,000,000
Issue of common stock shares																			50,000,000
RXi common stock received	0	12,500,000
Milestone payments																			50,000,000.0
Asset purchase agreement financing for Rxi																				16,400,000
Investment Owned, Balance, Shares							833,333	1,000,000														840,000
Cocrystal on a fully diluted basis				50.00%
Additional working capital					2,500,000
Number of members of board of directors				5
Number of members of board of directors appointed by reporting entity				3
Percent of board of directors appointed by reporting entity				60.00%
Convertible debt, stock issued from conversion										10,000,000
Biozone Pharmaceuticals Warrants Exercised											7,700,000
Shares Received As Gift																							900,000
Equity Method Investment, Ownership Percentage																						23.50%
Noncash or Part Noncash Acquisition, Noncash Financial or Equity Instrument Consideration, Shares Issued												1,000,000
Stock Conversion, Common Shares Issued upon Conversion									205.08308640
Total assets of equity method investees	119,100,000
Total liabilities of equity method investees	41,200,000
Net losses of equity method investees	$ 12,500,000

XML

Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Product revenues	$ 19,828		$ 15,527
Revenue from services	1,970		3,092
Revenue from transfer of intellectual property	476		12,757
Operating (loss) income	(30,277)		(6,773)
Depreciation and amortization	3,564		3,429
Total revenues	22,274		31,376
Assets	1,355,692	[1]		1,391,516	[1]
Goodwill	226,062	[1]		226,373	[1]
United States [Member]
Segment Reporting Information [Line Items]
Total revenues	2,446		15,849
Chile [Member]
Segment Reporting Information [Line Items]
Total revenues	7,285		7,741
Spain [Member]
Segment Reporting Information [Line Items]
Total revenues	6,150		4,324
Israel [Member]
Segment Reporting Information [Line Items]
Total revenues	4,546		2,572
Mexico [Member]
Segment Reporting Information [Line Items]
Total revenues	1,831		890
Uruguay [Member]
Segment Reporting Information [Line Items]
Total revenues	16		0
Corporate, Non-Segment [Member]
Segment Reporting Information [Line Items]
Product revenues
Revenue from services	60		40
Revenue from transfer of intellectual property	0		0
Operating (loss) income	(6,137)		(5,025)
Depreciation and amortization	24		45
Assets	174,329			209,539
Goodwill	0			0
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Operating (loss) income	(489)		(597)
Pharmaceutical [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Product revenues	19,828		15,527
Revenue from services	0		0
Revenue from transfer of intellectual property	285		12,500
Operating (loss) income	(16,573)		8,483
Depreciation and amortization	1,849		1,695
Assets	1,067,848			1,065,033
Goodwill	175,097			175,408
Diagnostics [Member] | Operating Segments [Member]
Segment Reporting Information [Line Items]
Product revenues
Revenue from services	1,910		3,052
Revenue from transfer of intellectual property	191		257
Operating (loss) income	(7,078)		(9,634)
Depreciation and amortization	1,691		1,689
Assets	113,515			116,944
Goodwill	$ 50,965			$ 50,965

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

Changes in accumulated other comprehensive income net of tax

For the three months ended March 31, 2014, changes in Accumulated other comprehensive income, net of tax, were as follows:

(In thousands)	Foreign currency			Unrealized gains in Accumulated OCI			Total
Balance at December 31, 2013	$	1,371		$	2,047		$	3,418
Other comprehensive income before reclassifications, net of tax (1)	(1,801		)	335			(1,466		)
Amounts reclassified from accumulated other comprehensive income, net of tax (1)	—			(553		)	(553		)
Net other comprehensive income	(1,801		)	(218		)	(2,019		)
Balance at March 31, 2014	$	(430	)	$	1,829		$	1,399

(1) Effective tax rate of 38.47%.

XML

Fair Value Measurements - Textual (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change in contingent consideration on discount rates increase	$ 1.7
Decrease of estimated future sales in amount	0.5
Contingent consideration	71.0	71.6
Maximum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates related to consideration	27.00%
Minimum [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Discount rates related to consideration	6.00%
Accrued Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	25.7	28.0
Other Noncurrent Liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ 45.3	$ 43.6

XML

Debt - Mortgage Notes And Other Debt (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Mortgage notes and other debt payables
Current portion of lines of credit and notes payable	$ 11,032	[1]	$ 12,562	[1]
Mortgages and other debts payable	3,101		3,270
Farmadiet Acquisition [Member]
Mortgage notes and other debt payables
Current portion of lines of credit and notes payable	631		1,964
Mortgages and other debts payable	3,101		3,270
Total mortgage notes and other debt	$ 3,732		$ 5,234

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Acquisitions, Investments, and Licenses - Schedule of Consolidated Assets and Non-Recourse Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 156,396	[1]	$ 185,798	[1]	$ 181,596	$ 27,361
Accounts receivable, net	19,664	[1]	19,767	[1]
Inventory, net	18,865	[1]	18,079	[1]
Prepaid expenses and other current assets	10,347	[1]	19,084	[1]
Total current assets	205,272	[1]	242,728	[1]
Property, plant and equipment, net	16,881	[1]	17,027	[1]
Intangible assets, net	71,921	[1]	74,533	[1]
Goodwill	226,062	[1]	226,373	[1]
Other assets	6,520	[1]	6,861	[1]
Total assets	1,355,692	[1]	1,391,516	[1]
Current liabilities:
Accounts payable	14,696	[1]	13,414	[1]
Accrued expenses	58,772	[1]	65,874	[1]
Total current liabilities	84,500	[1]	91,850	[1]
Other long-term liabilities	215,142	[1]	214,775	[1]
Total liabilities	524,443	[1]	518,537	[1]
SciVac [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Current assets:
Cash and cash equivalents	123		2
Accounts receivable, net	103		283
Inventory, net	1,704		1,696
Prepaid expenses and other current assets	337		218
Total current assets	2,267		2,199
Property, plant and equipment, net	1,441		1,374
Intangible assets, net	1,073		1,111
Goodwill	1,732		1,821
Other assets	268		261
Total assets	6,781		6,766
Current liabilities:
Accounts payable	1,223		1,136
Accrued expenses	7,800		6,498
Notes payable	2,101		1,537
Total current liabilities	11,124		9,171
Other long-term liabilities	266		1,240
Total liabilities	$ 11,390		$ 10,411

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Derivative Contracts (Details 1) (Not Designated as Hedging Instrument [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Total	$ (10,515)	$ (23,549)
Common stock options/warrants [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total	596	1,260
Notes [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total	(11,112)	(24,788)
Forward contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Total	$ 1	$ (21)	$ 49

XML

Fair Value Measurements - Assets And Liabilities Measured At Fair Value (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Level 1 [Member]
Assets:
Total assets	$ 137,548	$ 174,492
Level 2 [Member]
Assets:
Total assets	7,614	13,015
Level 3 [Member]
Assets:
Total assets		0
Liabilities:
Total liabilities	184,055	178,160
Estimate of Fair Value Measurement [Member]
Assets:
Total assets	145,162	187,507
Liabilities:
Total liabilities	184,055	178,160
OPKO Spain [Member] | Level 3 [Member]
Liabilities:
Total liabilities		1,043
OPKO Spain [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities		1,043
Embedded conversion option [Member] | Level 3 [Member]
Liabilities:
Total liabilities	112,199	101,087
Embedded conversion option [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities	112,199	101,087
Deferred acquisition payments, net of discount [Member] | Level 3 [Member]
Liabilities:
Total liabilities	840	5,465
Deferred acquisition payments, net of discount [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities	840	5,465
Contingent consideration [Member] | CURNA [Member] | Level 3 [Member]
Liabilities:
Total liabilities	583	573
Contingent consideration [Member] | CURNA [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities	583	573
Contingent consideration [Member] | Opko Diagnostics [Member] | Level 3 [Member]
Liabilities:
Total liabilities	14,193	13,776
Contingent consideration [Member] | Opko Diagnostics [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities	14,193	13,776
Contingent consideration [Member] | FineTech [Member] | Level 3 [Member]
Liabilities:
Total liabilities		3,124
Contingent consideration [Member] | FineTech [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities		3,124
Contingent consideration [Member] | OPKO Renal [Member] | Level 3 [Member]
Liabilities:
Total liabilities	54,819	53,092
Contingent consideration [Member] | OPKO Renal [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities	54,819	53,092
Contingent consideration [Member] | OPKO Spain [Member] | Level 3 [Member]
Liabilities:
Total liabilities	1,421
Contingent consideration [Member] | OPKO Spain [Member] | Estimate of Fair Value Measurement [Member]
Liabilities:
Total liabilities	1,421
Money market funds [Member] | Level 1 [Member]
Assets:
Total assets	132,343	168,418
Money market funds [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Total assets	132,343	168,418
Certificates of Deposit [Member] | Level 2 [Member]
Assets:
Total assets		827
Certificates of Deposit [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Total assets		827
Notes Receivable [Member] | Level 2 [Member]
Assets:
Total assets		6,151
Notes Receivable [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Total assets		6,151
Common Stock [Member] | Level 1 [Member]
Assets:
Total assets	5,205	6,074
Common Stock [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Total assets	5,205	6,074
Common stock options/warrants [Member] | Level 2 [Member]
Assets:
Total assets	6,797	5,988
Common stock options/warrants [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Total assets	6,797	5,988
Forward Contracts [Member] | Level 2 [Member]
Assets:
Total assets	1	49
Forward Contracts [Member] | Estimate of Fair Value Measurement [Member]
Assets:
Total assets	$ 1	$ 49

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the Company’s results of operations, financial position and cash flows have been made. The results of operations and cash flows for the three months ended March 31, 2014, are not necessarily indicative of the results of operations and cash flows that may be reported for the remainder of 2014 or for future periods. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Principles of consolidation. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of OPKO Health, Inc. and of our wholly-owned subsidiaries and variable interest entities (“VIEs”) in which we are deemed to be the primary beneficiary. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents. Cash and cash equivalents include short-term, interest-bearing instruments with original maturities of 90 days or less at the date of purchase. We also consider all highly liquid investments with original maturities at the date of purchase of 90 days or less as cash equivalents. These investments include money markets, bank deposits, certificates of deposit and U.S. treasury securities.

Inventories. Inventories are valued at the lower of cost or market (net realizable value). Cost is determined by the first-in, first-out method. We consider such factors as the amount of inventory on hand, estimated time required to sell such inventories, remaining shelf-life, and current market conditions to determine whether inventories are stated at the lower of cost or market.

Goodwill and intangible assets. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired when accounted for by the purchase method of accounting and arose from our acquisitions of Pharma Genexx, S.A. (“OPKO Chile”), Pharmacos Exakta S.A. de C.V. (“Exakta-OPKO”), CURNA, Inc. (“CURNA”), Claros Diagnostics, Inc. (“OPKO Diagnostics”), FineTech Pharmaceuticals, Ltd. (“FineTech”), ALS Distribuidora Limitada (“ALS”), Farmadiet Group Holding, S.L. (“OPKO Spain”), Prost-Data, Inc. (“OPKO Lab”), Cytochroma Inc. (“OPKO Renal”), Silcon Comércio, Importacao E Exportacao de Produtos Farmaceuticos e Cosmeticos Ltda. (“OPKO Brazil”) and PROLOR Biotech, Inc. (“OPKO Biologics”). Goodwill, in-process research and development (“IPR&D”) and other intangible assets acquired in business combinations, licensing and other transactions at March 31, 2014 and December 31, 2013 were $1.1 billion and $1.1 billion, respectively.

Assets acquired and liabilities assumed in business combinations, licensing and other transactions are recognized at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. We determined the fair value of intangible assets, including IPR&D, using the “income method.”

Goodwill is tested at least annually for impairment, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives, ranging from 3 to 10 years, and review for impairment at least annually, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We use the straight-line method of amortization as there is no reliably determinable pattern in which the economic benefits of our intangible assets are consumed or otherwise used up. Amortization expense from continuing operations was $2.7 million at March 31, 2014 and 2013, respectively.

Fair value measurements. The carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term maturities of these instruments. Investments that are considered available for sale as of March 31, 2014 are carried at fair value.

Short-term investments, which we invest in from time to time, include bank deposits, corporate notes, U.S. treasury securities and U.S. government agency securities with original maturities of greater than 90 days and remaining maturities of less than one year. Long-term investments include corporate notes, U.S. treasury securities and U.S. government agency securities with maturities greater than one year.

In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts. Accordingly, the estimates of fair value presented herein may not be indicative of the amounts that could be realized in a current market exchange. Refer to Note 8.

Contingent consideration. Each period we revalue the contingent consideration obligations associated with certain acquisitions to their fair value and record increases in the fair value as contingent consideration expense and decreases in the fair value as contingent consideration income. Changes in contingent consideration result from changes in the assumptions regarding probabilities of successful achievement of related milestones, the estimated timing in which the milestones are achieved and the discount rate used to estimate the fair value of the liability. Contingent consideration may change significantly as our development programs progress, revenue estimates evolve and additional data is obtained, impacting our assumptions. The assumptions used in estimating fair value require significant judgment. The use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

Derivative financial instruments. We record derivative financial instruments on our Condensed Consolidated Balance Sheet at their fair value and recognize the changes in the fair value in our Condensed Consolidated Statement of Operations, when they occur, the only exception being derivatives that qualify as hedges. For the derivative instrument to qualify as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At March 31, 2014 and December 31, 2013, our forward contracts for inventory purchases did not meet the documentation requirements to be designated as hedges. Accordingly, we recognize all changes in the fair values of our derivatives instruments, net, in our Condensed Consolidated Statement of Operations. Refer to Note 9.

Revenue recognition. Generally, we recognize revenue from product sales when goods are shipped and title and risk of loss transfer to our customers. Our estimates for sales returns and allowances are based upon the historical patterns of product returns and allowances taken, matched against the sales from which they originated, and management’s evaluation of specific factors that may increase or decrease the risk of product returns.

Revenue for laboratory services is recognized on the accrual basis at the time test results are reported, which approximates when services are provided. Services are provided to certain patients covered by various third-party payer programs including various managed care organizations, as well as the Medicare and Medicaid programs. Billings for services under third-party payer programs are included in sales net of allowances for contractual discounts and allowances for differences between the amounts billed and estimated program payment amounts. Adjustments to the estimated payment amounts based on final settlement with the programs are recorded upon settlement as an adjustment to revenue. For the three months ended March 31, 2014 and 2013, revenue from services also includes $0.1 million and $0.2 million, respectively, of revenue related to our consulting agreement with Neovasc and to revenue related to molecular diagnostics collaboration agreements. We recognize this revenue on a straight-line basis over the contractual term of the agreements.

Revenue from transfer of intellectual property includes revenue related to the sale, license or transfer of intellectual property such as upfront license payments, license fees and milestone payments received through our license, collaboration and commercialization agreements. We analyze our multiple-element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting.

Non-refundable license fees for the out-license of our technology are recognized depending on the provisions of each agreement. We recognize non-refundable upfront license payments as revenue upon receipt if the license has standalone value and the fair value of our undelivered obligations, if any, can be determined. If the license is considered to have standalone value but the fair value of any of the undelivered items cannot be determined, the license payments are recognized as revenue over the period of our performance for such undelivered items or services. License fees with ongoing involvement or performance obligations are recorded as deferred revenue, included in Accrued expenses or Other long-term liabilities, when received and generally are recognized ratably over the period of such performance obligation only after both the license period has commenced and we have delivered the technology.

The assessment of our obligations and related performance periods requires significant management judgment. If an agreement contains research and development obligations, the relevant time period for the research and development phase is based on management estimates and could vary depending on the outcome of clinical trials and the regulatory approval process. Such changes could materially impact the revenue recognized, and as a result, management reviews the estimates related to the relevant time period of research and development on a quarterly basis. For the three months ended March 31, 2014, we recorded $0.5 million of revenue from the transfer of intellectual property. Refer to Note 5.

Revenue from milestone payments related to arrangements under which we have continuing performance obligations are recognized as Revenue from transfer of intellectual property upon achievement of the milestone only if all of the following conditions are met: the milestone payments are non-refundable; there was substantive uncertainty at the date of entering into the arrangement that the milestone would be achieved; the milestone is commensurate with either the vendor’s performance to achieve the milestone or the enhancement of the value of the delivered item by the vendor; the milestone relates solely to past performance; and the amount of the milestone is reasonable in relation to the effort expended or the risk associated with the achievement of the milestone. If any of these conditions are not met, the milestone payments are not considered to be substantive and are, therefore, deferred and recognized as Revenue from transfer of intellectual property over the term of the arrangement as we complete our performance obligations.

Total deferred revenue included in Accrued expenses and Other long-term liabilities was $8.6 million and $8.3 million at March 31, 2014 and December 31, 2013, respectively.

Allowance for doubtful accounts. We analyze accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts using the specific identification method. Our reported net loss is directly affected by our estimate of the collectability of accounts receivable. The amount of the allowance for doubtful accounts was $1.6 million and $1.9 million at March 31, 2014 and December 31, 2013, respectively.

Equity-based compensation. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in the Condensed Consolidated Statement of Operations over the period during which an employee is required to provide service in exchange for the award. We record excess tax benefits, realized from the exercise of stock options as a financing cash inflow rather than as a reduction of taxes paid in cash flow from operations. Equity-based compensation arrangements to non-employees are recorded at their fair value on the measurement date. The measurement of equity-based compensation is subject to periodic adjustment as the underlying equity instruments vest. During the three months ended March 31, 2014 and 2013, we recorded $3.6 million and $5.2 million, respectively, of equity-based compensation expense.

Research and development expenses.Research and development expenses include external and internal expenses, partially offset by third-party grants and fundings 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. Research and development employee-related expenses include salaries, benefits and stock-based compensation expense. Other unallocated internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities. We expense these costs in the period in which they are incurred. We estimate our liabilities for research and development expenses in order to match the recognition of expenses to the period in which the actual services are received. As such, accrued liabilities related to third party research and development activities are recognized based upon our estimate of services received and degree of completion of the services in accordance with the specific third party contract.

Segment reporting. Our chief operating decision-maker (“CODM”) is comprised of our executive management with the oversight of our Board of Directors. Our CODM reviews our operating results and operating plans and makes resource allocation decisions on a Company-wide or aggregate basis. We currently manage our operations in two reportable segments, pharmaceuticals and diagnostics. The pharmaceutical segment consists of two operating segments, our (i) pharmaceutical research and development segment which is focused on the research and development of pharmaceutical products, and vaccines, and (ii) the pharmaceutical operations we acquired in Chile, Mexico, Israel, Spain, Uruguay and Brazil. The diagnostics segment consists of two operating segments, our (i) pathology operations we acquired through the acquisition of OPKO Lab and (ii) point-of-care and molecular diagnostics operations. There are no inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no inter-segment allocation of interest expense and income taxes.

Variable interest entities. The consolidation of variable interest entities (“VIE”) is required when an enterprise has a controlling financial interest. A controlling financial interest in a VIE will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE. Refer to Note 5.

Investments. We have made strategic investments in development stage and emerging companies. We record these investments as equity method investments or investments available for sale based on our percentage of ownership and whether we have significant influence over the operations of the investees. For investments classified under the equity method of accounting, we record our proportionate share of their losses in Losses from investments in investees in our Condensed Consolidated Statement of Operations. Refer to Note 5. For investments classified as available for sale, we record changes in their fair value as unrealized gain or loss in Other comprehensive loss based on their closing price per share at the end of each reporting period. Refer to Note 5.

Recent accounting pronouncements. In July 2013, the FASB issued an Accounting Standards Update (“ASU”), ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 is intended to eliminate inconsistent practices regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from the disallowance of a tax position. ASU 2013-11 is effective for our fiscal year beginning January 1, 2014 and subsequent interim periods. The adoption of ASU 2013-11 does not have a material effect on our Condensed Consolidated Financial Statements.

XML

Debt - Textual (Details) (USD $)	3 Months Ended							0 Months Ended	1 Months Ended	3 Months Ended
	Mar. 31, 2014 institution	Mar. 31, 2014 Farmadiet Acquisition [Member]	Dec. 31, 2013 Farmadiet Acquisition [Member]	Mar. 31, 2014 Minimum [Member] Farmadiet Acquisition [Member]	Mar. 31, 2014 Maximum [Member] Farmadiet Acquisition [Member]	Mar. 31, 2014 Notes [Member]	Dec. 31, 2013 Notes [Member]	Aug. 29, 2013 Notes [Member] Notes Due February 1, 2033 [Member]	Jan. 30, 2013 Notes [Member] Notes Due February 1, 2033 [Member] Rate	Mar. 31, 2014 Notes [Member] Notes Due February 1, 2033 [Member] Rate	Mar. 31, 2014 Notes [Member] Notes Due February 1, 2033 [Member] Minimum [Member]	Mar. 31, 2014 Notes [Member] Notes Due February 1, 2033 [Member] Maximum [Member]	Mar. 31, 2014 Notes [Member] Notes Due February 1, 2033 [Member] On or after February 1, 2017 and before February 1, 2019 [Member]	Mar. 31, 2014 Notes [Member] Notes Due February 1, 2033 [Member] On or after February 1, 2019 [Member]	Mar. 31, 2014 Line of Credit [Member]	Dec. 31, 2013 Line of Credit [Member]
Debt Instrument [Line Items]
Principal balance		$ 3,732,000	$ 5,234,000			$ 224,801,000	$ 211,912,000			$ 158,100,000
Debt face amount									175,000,000.0
Interest rate of notes payable	3.00%								3.00%
Equivalent redemption price										100.00%			100.00%	100.00%
Convertible debt, conversion ratio								141.4827	141.4827	141.4827
Convertible debt, principal amount for conversion								1,000
Convertible debt, conversion price									$ 7.07	$ 7.07
Convertible debt, threshold percentage of stock price trigger										130.00%
Number of trading days applicable conversion price											20 days
Number of consecutive trading days applicable conversion price												30 days
Gain (loss) on embedded derivative	$ 11,100,000
Number of financial institutions	12
Weighted average interest rate		3.40%	3.90%												5.90%	7.70%
Variable interest rates				2.70%	6.30%

XML

Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended
	Mar. 31, 2014 Segment	Mar. 31, 2013	Dec. 31, 2013
Summary of Significant Accounting Policies [Line Items]
Goodwill and intangible assets	$ 1,100,000,000		$ 1,100,000,000
Amortization of intangible assets	2,744,000	2,714,000
Revenue from services	1,970,000	3,092,000
Revenue From Transfer Of Intellectual Property	476,000	12,757,000
Total deferred revenue related to other revenues	8,600,000		8,300,000
Allowance for doubtful accounts receivable	(1,566,000)		(1,885,000)
Equity-based compensation expense for continuing operations	3,579,000	5,205,000
Number of reportable segments	2
Pharmaceutical [Member]
Summary of Significant Accounting Policies [Line Items]
Number of operating segments	2
Diagnostics [Member]
Summary of Significant Accounting Policies [Line Items]
Number of operating segments	2
Neovasc [Member]
Summary of Significant Accounting Policies [Line Items]
Revenue from services	$ 100,000	$ 200,000
Minimum [Member]
Summary of Significant Accounting Policies [Line Items]
Intangible assets, estimated useful lives	3 years
Maximum [Member]
Summary of Significant Accounting Policies [Line Items]
Intangible assets, estimated useful lives	10 years

XML

Segments (Tables)

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Information regarding our geographic activities

Information regarding our operations and assets for our operating segments and the unallocated corporate operations as well as geographic information are as follows:

	For the three months ended March 31,
(In thousands)	2014			2013
Product revenues:
Pharmaceuticals	$	19,828		$	15,527
Diagnostics	—			—
Corporate	—			—
	$	19,828		$	15,527
Revenue from services:
Pharmaceuticals	$	—		$	—
Diagnostics	1,910			3,052
Corporate	60			40
	$	1,970		$	3,092
Revenue from transfer of intellectual property:
Pharmaceuticals	$	285		$	12,500
Diagnostics	191			257
Corporate	—			—
	$	476		$	12,757
Operating (loss) income:
Pharmaceuticals	$	(16,573	)	$	8,483
Diagnostics	(7,078		)	(9,634		)
Corporate	(6,137		)	(5,025		)
Less: Operating loss attributable to noncontrolling interests	(489		)	(597		)
	$	(30,277	)	$	(6,773	)
Depreciation and amortization:
Pharmaceuticals	$	1,849		$	1,695
Diagnostics	1,691			1,689
Corporate	24			45
	$	3,564		$	3,429
Revenues:
United States	$	2,446		$	15,849
Chile	7,285			7,741
Spain	6,150			4,324
Israel	4,546			2,572
Mexico	1,831			890
Uruguay	16			—
	$	22,274		$	31,376

(In thousands)	March 31, 2014		December 31, 2013
Assets:
Pharmaceuticals	$	1,067,848	$	1,065,033
Diagnostics	113,515		116,944
Corporate	174,329		209,539
	$	1,355,692	$	1,391,516
Goodwill:
Pharmaceuticals	$	175,097	$	175,408
Diagnostics	50,965		50,965
Corporate	—		—
	$	226,062	$	226,373

XML

Segments (Details Textual) (USD $)	3 Months Ended					12 Months Ended	3 Months Ended
	Mar. 31, 2014 Segment	Mar. 31, 2013	Mar. 31, 2014 Customer Concentration Risk [Member] Sales Revenue, Net [Member] Customer	Mar. 31, 2013 Customer Concentration Risk [Member] Sales Revenue, Net [Member] Customer	Mar. 31, 2014 Customer Concentration Risk [Member] Accounts Receivable [Member] Customer	Dec. 31, 2013 Customer Concentration Risk [Member] Accounts Receivable [Member] Customer	Mar. 31, 2014 Intersegment Elimination [Member]	Mar. 31, 2014 Pharmaceutical [Member] Segment	Mar. 31, 2014 Diagnostics [Member] Segment
Segment Reporting Information [Line Items]
Number of reportable segments	2
Number of operating segments								2	2
Inter-segment sales							$ 0
Inter-segment allocation of interest expense							0
Inter-segment allocation of income taxes	$ 614,000	$ 43,000					$ 0
Number of customer represented			0	0	0	0
Percentage of product revenue contributed by customer			10.00%	10.00%	10.00%	10.00%

XML

Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Accumulated Other Comprehensive Income (Loss), Net [Rollforward]
Beginning Balance	$ 3,418	[1]
Other comprehensive income before reclassifications, net of tax	(1,466)	[2]
Amounts reclassified from accumulated other comprehensive income, net of tax	(553)	[2]
Net other comprehensive income	(2,019)
Ending Balance	1,399	[1]
Accumulated Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss), Net [Rollforward]
Beginning Balance	1,371
Other comprehensive income before reclassifications, net of tax	(1,801)	[2]
Amounts reclassified from accumulated other comprehensive income, net of tax	0	[2]
Net other comprehensive income	(1,801)
Ending Balance	(430)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Other Comprehensive Income (Loss), Net [Rollforward]
Beginning Balance	2,047
Other comprehensive income before reclassifications, net of tax	335	[2]
Amounts reclassified from accumulated other comprehensive income, net of tax	(553)	[2]
Net other comprehensive income	(218)
Ending Balance	$ 1,829

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

[2] Effective tax rate of 38.47%.

XML

Loss Per Share (Details)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of common stock warrant and common stock options exercised	602,665
Number of common stock issued for stock warrant and stock options exercised	527,926
Shares surrendered in lieu of cash payment	74,739
Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential common shares	29,874,112	30,119,145

XML

Composition of Certain Financial Statement Captions (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Accounts receivable, net
Accounts receivable	$ 21,230		$ 21,652
Less: allowance for doubtful accounts	(1,566)		(1,885)
Accounts receivable, net	19,664	[1]	19,767	[1]
Inventories, net
Finished products	12,880		13,374
Work in-process	1,112		1,350
Raw materials	5,355		4,132
Less: inventory reserve	(482)		(777)
Inventory, net	18,865	[1]	18,079	[1]
Prepaid expense and other assets:
Prepaid supplies	1,919		945
Prepaid insurance	902		892
Pharmsynthez notes receivable	0		6,151
Other receivables	605		1,985
Taxes recoverable	1,266		3,458
Other	5,655		5,653
Prepaid expenses and other current assets	10,347	[1]	19,084	[1]
Intangible assets, net:
Less: accumulated amortization	(26,819)		(24,403)
Intangible assets, net	71,921	[1]	74,533	[1]
Accrued expenses:
Taxes payable	124		702
Deferred revenue	8,112		7,639
Clinical trials	4,710		3,342
Professional fees	1,108		402
Employee benefits	5,451		4,399
Deferred acquisition payments, net of discount	840		5,465
Contingent consideration	25,722		28,047
Other	12,705		15,878
Accrued expenses	58,772	[1]	65,874	[1]
Other long-term liabilities:
Mortgages and other debts payable	3,101		3,270
Deferred tax liabilities	166,068		166,435
Other, including deferred revenue	679		1,509
Other long-term liabilities	215,142	[1]	214,775	[1]
Cytochroma [Member]
Other long-term liabilities:
Contingent consideration	36,127		34,401
Farmadiet [Member]
Other long-term liabilities:
Contingent consideration	248		504
OPKO Diagnostics [Member]
Other long-term liabilities:
Contingent consideration	8,593		8,340
CURNA [Member]
Other long-term liabilities:
Contingent consideration	326		316
Technologies [Member]
Intangible assets, net:
Intangible assets	53,020		51,660
Customer relationships [Member]
Intangible assets, net:
Intangible assets	22,525		22,725
Product registrations [Member]
Intangible assets, net:
Intangible assets	9,731		9,692
Tradenames [Member]
Intangible assets, net:
Intangible assets	3,621		3,669
Covenants not to compete [Member]
Intangible assets, net:
Intangible assets	8,670		8,671
Other [Member]
Intangible assets, net:
Intangible assets	$ 1,173		$ 2,519

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Business and Organization

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BUSINESS AND ORGANIZATION

BUSINESS AND ORGANIZATION

We are a multi-national biopharmaceutical and diagnostics company that seeks to establish industry-leading positions in large and rapidly growing medical markets by leveraging our discovery, development and commercialization expertise and our novel and proprietary technologies. We are developing a range of solutions to diagnose, treat and prevent various conditions, including point-of-care tests, molecular diagnostics tests, laboratory developed tests, and proprietary pharmaceuticals and vaccines. We plan to commercialize these solutions on a global basis in large and high growth markets, including emerging markets.

We own established pharmaceutical platforms in Chile, Spain, Mexico, and Uruguay, which are generating revenue and which we expect to generate positive cash flow and facilitate future market entry for our products currently in development. In addition, we have also established pharmaceutical operations in Brazil. We own a specialty active pharmaceutical ingredients (“APIs”) 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. In the U.S., we own a laboratory certified under the Clinical Laboratory Improvement Amendments of 1988, as amended (“CLIA”), with a urologic focus that generates revenue and serves as the commercial platform for the U.S. launch of our next generation prostate cancer test to improve cancer risk stratification of patient candidates prior to prostate biopsy.

We are incorporated in Delaware and our principal executive offices are located in leased offices in Miami, Florida. We lease office and lab space in Jupiter and Miramar, Florida, and Nes Ziona, Israel, which is where our molecular diagnostics research and development, oligonucleotide research and development and carboxyl terminal peptide research and development operations are based, respectively. We lease office, manufacturing and warehouse space in Woburn, Massachusetts for our point-of-care diagnostics business, and in Nesher, Israel for our API business. We lease laboratory and office space in Nashville, Tennessee and Burlingame, California for our CLIA-certified laboratory business, and we lease office space in Bannockburn, Illinois, and Markham, Ontario for our pharmaceutical business directed to chronic kidney disease (“CKD”). Our Chilean and Uruguayan operations are located in leased offices and warehouse facilities in Santiago and Montevideo, respectively. Our Mexican operations are based in owned offices, an owned manufacturing facility and a leased warehouse facility in Guadalajara and in leased offices in Mexico City. Our Spanish operations are based in owned offices in Barcelona, in an owned manufacturing facility in Banyoles and a leased warehouse facility in Palol de Revardit. Our Brazilian operations are located in leased offices in Sao Paulo.

XML

Composition of Certain Financial Statement Captions (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended			3 Months Ended
	Mar. 31, 2014		Aug. 29, 2013 OPKO Biologics [Member]	Mar. 31, 2014 Pharmaceutical [Member] CURNA [Member]	Mar. 31, 2014 Pharmaceutical [Member] Exakta Opko [Member]	Mar. 31, 2014 Pharmaceutical [Member] OPKO Chile [Member]	Mar. 31, 2014 Pharmaceutical [Member] Farmadiet [Member]	Mar. 31, 2014 Pharmaceutical [Member] FineTech [Member]	Mar. 31, 2014 Pharmaceutical [Member] Sci Gen [Member]	Mar. 31, 2014 Pharmaceutical [Member] Cytochroma [Member]	Mar. 31, 2014 Pharmaceutical [Member] OPKO Biologics [Member]	Mar. 31, 2014 Diagnostics [Member] Claros [Member]	Mar. 31, 2014 Diagnostics [Member] Opko Diagnostics [Member]
Goodwill [Roll Forward]
Beginning balance	$ 226,373	[1]	$ 139,784	$ 4,827	$ 113	$ 6,102	$ 9,075	$ 11,698	$ 1,740	$ 2,069	$ 139,784	$ 17,977	$ 32,988
Acquisitions	0			0	0	0	0	0	0	0	0	0	0
Foreign exchange, other	(311)			0	0	(294)	(9)	0	(8)	0	0	0	0
Ending balance	$ 226,062	[1]	$ 139,784	$ 4,827	$ 113	$ 5,808	$ 9,066	$ 11,698	$ 1,732	$ 2,069	$ 139,784	$ 17,977	$ 32,988

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Debt - Fair Value Of Embedded Derivatives (Details) (Notes [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013	Jan. 30, 2013
Notes [Member]
Fair value of Notes:
With the embedded derivatives	$ 230,362		$ 175,000
Without the embedded derivatives	118,163		115,796
Estimated fair value of the embedded derivatives	$ 112,199	$ 101,087	$ 59,204

XML

Derivative Contracts (Details 2) (Not Designated as Hedging Instrument [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Derivative [Line Items]
Derivative, Gain (Loss) on Derivative, Net	$ (10,515)	$ (23,549)
Forward Contracts [Member]
Derivative [Line Items]
Contract value	2,435		1,537
Fair value	2,436		1,585
Derivative, Gain (Loss) on Derivative, Net	1	(21)	49
Forward Contracts [Member] | 0 to 30 [Member]
Derivative [Line Items]
Contract value	285		472
Fair value	294		489
Derivative, Gain (Loss) on Derivative, Net	9		17
Contract days until maturity, lower range	0 days		0 days
Contract days until maturity, higher range	30 days		30 days
Forward Contracts [Member] | 31 to 60 [Member]
Derivative [Line Items]
Contract value	952		562
Fair value	957		579
Derivative, Gain (Loss) on Derivative, Net	5		18
Contract days until maturity, lower range	31 days		31 days
Contract days until maturity, higher range	60 days		60 days
Forward Contracts [Member] | 61 to 90 [Member]
Derivative [Line Items]
Contract value	121		503
Fair value	120		517
Derivative, Gain (Loss) on Derivative, Net	(1)		14
Contract days until maturity, lower range	61 days		61 days
Contract days until maturity, higher range	90 days		90 days
Forward Contracts [Member] | 91 to 120 [Member]
Derivative [Line Items]
Contract value	921		0
Fair value	911		0
Derivative, Gain (Loss) on Derivative, Net	(10)		0
Contract days until maturity, lower range	91 days		91 days
Contract days until maturity, higher range	120 days		120 days
Forward Contracts [Member] | 121 to 180 [Member]
Derivative [Line Items]
Contract value	156		0
Fair value	154		0
Derivative, Gain (Loss) on Derivative, Net	(2)		0
Contract days until maturity, lower range	121 days		121 days
Contract days until maturity, higher range	180 days		180 days
Forward Contracts [Member] | More than 180 [Member]
Derivative [Line Items]
Contract value			0
Fair value
Derivative, Gain (Loss) on Derivative, Net			$ 0
Contract days until maturity, higher range	180 days		180 days

XML

Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 156,396	[1]	$ 185,798	[1]
Accounts receivable, net	19,664	[1]	19,767	[1]
Inventory, net	18,865	[1]	18,079	[1]
Prepaid expenses and other current assets	10,347	[1]	19,084	[1]
Total current assets	205,272	[1]	242,728	[1]
Property, plant, equipment, and investment properties, net	16,881	[1]	17,027	[1]
Intangible assets, net	71,921	[1]	74,533	[1]
In-process research and development	793,339	[1]	793,341	[1]
Goodwill	226,062	[1]	226,373	[1]
Investments, net	35,697	[1]	30,653	[1]
Other assets	6,520	[1]	6,861	[1]
Total assets	1,355,692	[1]	1,391,516	[1]
Current liabilities:
Accounts payable	14,696	[1]	13,414	[1]
Accrued expenses	58,772	[1]	65,874	[1]
Current portion of lines of credit and notes payable	11,032	[1]	12,562	[1]
Total current liabilities	84,500	[1]	91,850	[1]
2033 Senior Notes, net of discount and estimated fair value of embedded derivatives	224,801	[1]	211,912	[1]
Other long-term liabilities, principally contingent consideration and deferred tax liabilities	215,142	[1]	214,775	[1]
Total long-term liabilities	439,943	[1]	426,687	[1]
Total liabilities	524,443	[1]	518,537	[1]
Equity:
Common Stock - $0.01 par value, 750,000,000 shares authorized; 415,346,120 and 414,818,195 shares issued at March 31, 2014 and December 31, 2013, respectively	4,154	[1]	4,148	[1]
Treasury Stock - 2,244,923 and 2,264,063 shares at March 31, 2014 and December 31, 2013, respectively	(7,300)	[1]	(7,362)	[1]
Additional paid-in capital	1,384,694	[1]	1,379,383	[1]
Accumulated other comprehensive income	1,399	[1]	3,418	[1]
Accumulated deficit	(547,727)	[1]	(503,177)	[1]
Total shareholders’ equity attributable to parent	835,220	[1]	876,410	[1]
Noncontrolling interests	(3,971)	[1]	(3,431)	[1]
Total shareholders’ equity	831,249	[1]	872,979	[1]
Total liabilities and equity	$ 1,355,692	[1]	$ 1,391,516	[1]

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Accumulated Other Comprehensive Income (Details Textual) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014
Equity [Abstract]
Effective tax rate	38.47%
Realized gain	$ 1.3
Unrealized gain reclassified	$ 0.9

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Cash flows from operating activities:
Net loss	$ (45,091)		$ (34,762)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	3,564		3,429
Non-cash interest on 2033 Senior Notes	1,777		1,303
Amortization of deferred financing costs	177		145
Losses from investments in investees	2,056		3,890
Equity-based compensation – employees and non-employees	3,579		5,205
Provision for (recovery of) bad debts	(74)		381
Provision for inventory obsolescence	337		939
Revenue from receipt of equity	(60)		(12,540)
Realized gain on sale of equity securities	(1,273)		(2,347)
Change in fair value of derivatives instruments	10,515		23,549
Change in fair value of contingent consideration	2,610		1,344
Deferred income tax benefit	0		98
Changes in assets and liabilities, net of the effects of acquisitions:
Accounts receivable	(557)		(558)
Inventory	(1,676)		(1,439)
Prepaid expenses and other current assets	1,145		(2,570)
Other assets	1,429		71
Accounts payable	1,479		(103)
Foreign currency measurement	(976)		(340)
Accrued expenses	(8,007)		(440)
Net cash used in operating activities	(29,046)		(14,745)
Cash flows from investing activities:
Investments in investees	(500)		(2,500)
Proceeds from sale of equity securities	1,297		2,528
Acquisition of businesses, net of cash	(200)		78
Capital expenditures	(861)		(755)
Net cash provided by (used in) investing activities	(264)		(649)
Cash flows from financing activities:
Issuance of 2033 Senior Notes, net, including related parties	0		170,184
Payment of Series D dividends, including related parties	0		(3,015)
Proceeds from the exercise of Common Stock options and warrants	1,639		995
Borrowings on lines of credit	4,250		8,428
Repayments of lines of credit	(5,985)		(6,951)
Net cash provided by financing activities	(96)		169,641
Effect of exchange rate on cash and cash equivalents	4		(12)
Net (decrease) increase in cash and cash equivalents	(29,402)		154,235
Cash and cash equivalents at beginning of period	185,798	[1]	27,361
Cash and cash equivalents at end of period	156,396	[1]	181,596
SUPPLEMENTAL INFORMATION:
Interest paid	2,420		242
Income taxes paid (refunded), net	377		(118)
RXi common stock received	0		12,500
Pharmsynthez common stock received	6,264		0
Non-cash financing:
Series D Preferred Stock	0		24,386
Common Stock options and warrants, net exercised	657		815
Cytochroma [Member]
Issuance of Common Stock to acquire:
Stock Issued	0		146,902
OPKO Brazil [Member]
Issuance of Common Stock to acquire:
Stock Issued	0		436
Farmadiet [Member]
Issuance of Common Stock to acquire:
Stock Issued	$ 159		$ 0

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Acquisitions, Investments, and Licenses - Summary of Pro Forma Results (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Pro Forma Result of Combined Companies
Revenues	$ 31,376
Net loss	(41,379)
Net loss attributable to common shareholders	$ (41,252)
Business Acquisition, Pro Forma Income (Loss) from Continuing Operations, Per Share Basic and Diluted	$ 0.11
Basic and diluted loss per share (in dollars per share)	$ (0.11)

XML

Composition of Certain Financial Statement Captions (Tables)

3 Months Ended

Mar. 31, 2014

Compositions of Certain Financial Statement Captions [Abstract]

Composition of certain financial statement captions

(In thousands)	March 31, 2014			December 31, 2013
Accounts receivable, net
Accounts receivable	$	21,230		$	21,652
Less: allowance for doubtful accounts	(1,566		)	(1,885		)
	$	19,664		$	19,767
Inventories, net
Finished products	$	12,880		$	13,374
Work in-process	1,112			1,350
Raw materials	5,355			4,132
Less: inventory reserve	(482		)	(777		)
	$	18,865		$	18,079
Prepaid expenses and other current assets
Prepaid supplies	$	1,919		$	945
Prepaid insurance	902			892
Pharmsynthez notes receivable	—			6,151
Other receivables	605			1,985
Taxes recoverable	1,266			3,458
Other	5,655			5,653
	$	10,347		$	19,084
Intangible assets, net:
Technologies	$	53,020		$	51,660
Customer relationships	22,525			22,725
Product registrations	9,731			9,692
Tradenames	3,621			3,669
Covenants not to compete	8,670			8,671
Other	1,173			2,519
Less:  accumulated amortization	(26,819		)	(24,403		)
	$	71,921		$	74,533
Accrued expenses:
Taxes payable	$	124		$	702
Deferred revenue	8,112			7,639
Clinical trials	4,710			3,342
Professional fees	1,108			402
Employee benefits	5,451			4,399
Deferred acquisition payments, net of discount	840			5,465
Contingent consideration	25,722			28,047
Other	12,705			15,878
	$	58,772		$	65,874

(In thousands)	March 31, 2014		December 31, 2013
Other long-term liabilities:
Contingent consideration – OPKO Renal	$	36,127	$	34,401
Contingent consideration – OPKO Spain	248		504
Contingent consideration – OPKO Diagnostics	8,593		8,340
Contingent consideration – CURNA	326		316
Mortgages and other debts payable	3,101		3,270
Deferred tax liabilities	166,068		166,435
Other, including deferred revenue	679		1,509
	$	215,142	$	214,775

Schedule of goodwill

The following table summarizes the changes in Goodwill during the three months ended March 31, 2014.

	2014
(In thousands)	Balance at January 1		Acquisitions		Foreign exchange, other			Balance at March 31
Pharmaceuticals
CURNA	$	4,827	$	—	$	—		$	4,827
Exakta-OPKO	113		—		—			113
OPKO Chile	6,102		—		(294		)	5,808
OPKO Spain	9,075		—		(9		)	9,066
FineTech	11,698		—		—			11,698
SciVac	1,740		—		(8		)	1,732
OPKO Renal	2,069		—		—			2,069
OPKO Biologics	139,784		—		—			139,784
Diagnostics
Claros	17,977		—		—			17,977
OPKO Lab	32,988		—		—			32,988
	$	226,373	$	—	$	(311	)	$	226,062

XML

Acquisitions, Investments, and Licenses - Summary of Investments (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Investment [Line Items]
Investment, available for sale	$ 4,745		$ 4,301
Plus unrealized gains on investments, options and warrants, net	13,120
Less accumulated losses in investees	(20,492)
Investments, net	35,697	[1]	30,653	[1]
Neovasc [Member]
Investment [Line Items]
Ownership at March 31, 2014	6.00%
Investment, equity method	3,798
Underlying equity in net assets	1,558
Fabrus [Member]
Investment [Line Items]
Ownership at March 31, 2014	12.00%
Investment, equity method	750
Underlying equity in net assets	(362)
RXi [Member]
Investment [Line Items]
Ownership at March 31, 2014	17.00%
Investment, equity method	15,000
Underlying equity in net assets	1,841
Pharmasynthez [Member]
Investment [Line Items]
Ownership at March 31, 2014	17.00%
Investment, equity method	11,300
Underlying equity in net assets	6,405
Zebra [Member]
Investment [Line Items]
Ownership at March 31, 2014	19.00%
Investment, equity method	2,000
Underlying equity in net assets	840
Cocrystal/BZNE [Member]
Investment [Line Items]
Ownership at March 31, 2014	16.00%
Investment, equity method	5,476
Underlying equity in net assets	20
Neovasc Options [Member]
Investment [Line Items]
Investment, available for sale	925
Closing share price at March 31, 2014 for investments available for sale	$ 4.10
ChromaDex [Member]
Investment [Line Items]
Ownership at March 31, 2014	1.00%
Investment, available for sale	1,320
Closing share price at March 31, 2014 for investments available for sale	$ 1.83
ARNO [Member]
Investment [Line Items]
Ownership at March 31, 2014	5.00%
Investment, available for sale	2,000
Closing share price at March 31, 2014 for investments available for sale	$ 2.22
Cocrystal Warrants [Member]
Investment [Line Items]
Investment, available for sale	$ 500

[1] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Debt (Tables)

3 Months Ended

Mar. 31, 2014

Debt Instrument [Line Items]

Schedule of principal amounts, unamortized discount and net carrying amounts

The following table sets forth information related to the 2033 Senior Notes which is included our Condensed Consolidated Balance Sheets:

(In thousands)	Embedded conversion option		2033 Senior Notes		Discount			Total
Balance at December 31, 2013	$	101,087	$	158,064	$	(47,239	)	$	211,912
Amortization of debt discount	—		—		1,777			1,777
Change in fair value of embedded derivative	11,112		—		—			11,112
Balance at March 31, 2014	$	112,199	$	158,064	$	(45,462	)	$	224,801

Summary of lines of credit

(Dollars in thousands)			Balance Outstanding
Lender	Interest rate on borrowings at March 31, 2014	Credit line capacity	March 31, 2014	December 31, 2013
Itau Bank	5.00%	$3,000	$1,628	$1,999
Bank of Chile	6.40%	2,250	1,534	2,079
BICE Bank	5.00%	1,700	1,315	516
Corp Banca	—%	—	—	(47)
BBVA Bank	5.00%	2,000	998	523
Penta Bank	8.20%	1,000	907	946
Security Bank	7.26%	1,300	907	1,075
BCI	—%	—	—	198
Estado Bank	5.44%	2,000	858	1,772
Sabadell Bank	4.50%	206	—	—
Bilbao Vizcaya Bank	4.72%	344	—	—
Banco Popular	6.09%	275	—	—
Deutsche Bank	4.00%	206	—	—
Santander Bank	4.50%	275	—	—
Total		$14,556	$8,147	$9,061

Farmadiet Acquisition [Member]

Debt Instrument [Line Items]

Schedule of principal amounts, unamortized discount and net carrying amounts

At March 31, 2014 and December 31, 2013, we had mortgage notes and other debt related to OPKO Spain as follows:

(In thousands)	March 31, 2014		December 31, 2013
Current portion of notes payable	$	631	$	1,964
Other long-term liabilities	3,101		3,270
Total mortgage notes and other debt	$	3,732	$	5,234

Notes [Member]

Debt Instrument [Line Items]

Inputs to lattice model used to value the embedded derivative

The following table sets forth the inputs to the lattice model used to value the embedded derivative:

	March 31, 2014	Issuance Date
Stock price	$9.32	$6.20
Conversion Rate	141.4827	141.4827
Conversion Price	$7.07	$7.07
Maturity date	February 1, 2033	February 1, 2033
Risk-free interest rate	1.66%	1.12%
Estimated stock volatility	50%	40%
Estimated credit spread	823 basis points	944 basis points

Fair value of notes with and without the embedded derivatives and fair value of embedded derivatives

The following table sets forth the fair value of the 2033 Senior Notes with and without the embedded derivatives, and the fair value of the embedded derivatives as of the issuance date and March 31, 2014. At March 31, 2014 and at issuance date the principal amount of the 2033 Senior Notes was $158.1 million and $175.0 million, respectively:

(In thousands)	March 31, 2014		Issuance Date
Fair value of 2033 Senior Notes:
With the embedded derivatives	$	230,362	$	175,000
Without the embedded derivatives	$	118,163	$	115,796
Estimated fair value of the embedded derivatives	$	112,199	$	59,204

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical)	Mar. 31, 2014
Statement of Cash Flows [Abstract]
Convertible senior notes interest rate	3.00%

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, shares authorized (in shares)	750,000,000	750,000,000
Common Stock, shares issued (in shares)	415,346,120	414,818,195
Treasury stock, shares (in shares)	2,244,923	2,264,063
Total assets in variable interest entity	$ 6.8	$ 6.7
Total liability in variable interest entity	$ 11.4	$ 10.4

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

In October, 2013, we paid the $170,000 filing fee to the Federal Trade Commission (the “FTC”) in connection with filings made by us and Dr. Hsiao, our Vice Chairman of the Board and Chief Technical Officer, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (“HSR Act”).

In October 2013, we entered into an agreement with ARNO pursuant to which we invested $2.0 million as part of an approximate $30 million financing. In exchange for our investment, we received 833,333 shares of ARNO common stock, one-year warrants to purchase 833,333 shares of ARNO common stock, for $2.40 a share and five-year warrants to purchase an additional 833,333 shares of ARNO common stock for $4.00 a share. Other investors participating in the private financing included Frost Gamma Investments Trust, a trust affiliated with Dr. Frost (the “Gamma Trust”), Hsu Gamma Investment, L.P., an entity affiliated with Dr. Hsiao (the “Hsu Gamma”), and other members of our board of directors and management. In connection with the transaction, ARNO agreed that for so long as we continue to hold at least 3% of the total number of outstanding shares of ARNO’s common stock on a fully-diluted basis, we will have the right to appoint a non-voting observer to attend all meetings of ARNO’s board of directors and we shall have a right of first negotiation that provides us with exclusive rights to negotiate with ARNO for a 45-day period regarding any potential strategic transactions that ARNO’s board of directors elects to pursue.

In October 2013, we made an investment in Zebra pursuant to which we acquired 840,000 shares of Zebra’s Series A-2 Preferred stock for $2.0 million. Zebra is a privately held biotechnology company focused on the discovery and development of biosuperior antibody therapeutics and complex drugs. Zebra’s patented platform is an advanced version of a core technology developed at The Scripps Research Institute (“TSRI”) by Dr. Lerner (the “TSRI Technology”). Zebra acquired the license to the TSRI Technology from a third party who had licensed such rights from TSRI. In connection with its acquisition of rights to the TSRI Technology, Zebra agreed to make certain research funding payments to Dr. Lerner’s laboratory at TSRI to further support development of the TSRI Technology. Dr. Lerner also participated in the Series A-2 Preferred Stock financing on the same financial terms as the Company. Each of Drs. Frost and Lerner serve as members of the board of directors and scientific consultants to Zebra. After the closing, we own 23.5% of the Series A-2 Preferred stock issued and outstanding by Zebra. Each of Drs. Frost and Lerner received 900,000 restricted shares of Zebra common stock in connection with their roles as founders and scientific consultants to Zebra. Dr. Frost gifted his 900,000 shares of Zebra restricted common stock to OPKO.

Effective May 1, 2013, we entered into an agreement with Dr. Hsiao pursuant to which we have the right to utilize approximately 5,000 square feet of laboratory space in Taiwan, inclusive of any and all utility costs, taxes and building maintenance fees. In addition, Dr. Hsiao provides certain other services to us relating to government grant work in Taiwan, as well as the coordination of work flow between the our U.S. and Taiwanese operations. The term of the agreement is for five years and obligates us to pay Dr. Hsiao approximately $60,000 annually.  

In August 2013, we acquired OPKO Biologics (formerly PROLOR) pursuant to an Agreement and Plan of Merger dated as of April 23, 2013 in an all-stock transaction.  Until completion of the acquisition, Dr. Frost was PROLOR’s Chairman of the Board and a greater than 5% stockholder of PROLOR. Dr. Hsiao and Mr. Rubin were also directors and less than 5% stockholders of PROLOR. 

In January 2013, we sold $175.0 million aggregate principal amount of 2033 Senior Notes in a private placement in reliance on exemptions from registration under the Securities Act. The Purchasers of the 2033 Senior Notes include The Gamma Trust and Hsu Gamma. The 2033 Senior Notes were issued on January 30, 2013.

In December 2012, we entered into a five-year lease agreement with AVI Properties, LLC (“AVI”), an entity affiliated with Dr. Jonathan Oppenheimer, who previously served as OPKO Lab’s Chief Executive Officer and currently serves as Strategic Director. The lease is for approximately 44,000 square feet of laboratory and office space in Nashville, Tennessee, where OPKO Lab is based. The lease provides for payments of approximately $18 thousand per month in the first year, increasing annually if the consumer price index exceeds 5%, plus applicable sales tax. In addition to the rent, we pay a portion of operating expenses, property taxes and parking.

During the three months ended March 31, 2014 and the year ended December 31, 2013, FineTech recorded revenue of $0.1 million and $0.3 million, respectively, for the sale of APIs to Teva Pharmaceutical Industries, Limited (“Teva”). Dr. Frost serves as the Chairman of the Board of Directors of Teva.

In February 2012, we entered into a cooperative research funding and option agreement with TSRI to support research for the development of novel oligomeric compounds relating to our molecular diagnostics technology (the “Research Agreement”). Pursuant to the Research Agreement, we agreed to provide funding of approximately $0.9 million annually over a five year period. In conjunction with entering into the Research Agreement, we also entered into a license agreement with TSRI for technology relating to libraries of peptide tertiary amides. In addition, we entered into a second license with TSRI for technology relating to highly selective inhibitors of c-Jun-N-Terminal Kinases that may be useful for the treatment of various diseases, including Parkinson’s disease. We also entered into a research funding and option agreement to provide funding of approximately $0.2 million annually over three years to support further development of the technology. Dr. Frost served as a Trustee for TSRI until November 2012 and Dr. Lerner, a member of our Board of Directors, served as its President until December 2011.

In February 2012, we made a $1.0 million investment in ChromaDex. Other investors participating in the private financing included the Gamma Trust, Hsu Gamma, and Dr. Lerner. Following our investment, we own 1.5% of ChromaDex, the Gamma Trust owns approximately 16% of ChromaDex; Hsu Gamma owns approximately 1%; and certain of our directors own less than 1% of ChromaDex.

In February 2012, we purchased from Biozone, now known as CPI, $1.7 million of 10% secured convertible promissory notes (the “Biozone Notes”), convertible into Biozone common stock at a price equal to $0.20 per common share, which Biozone Notes are due and payable on February 24, 2014 and ten year warrants to purchase 8.5 million shares of Biozone common stock at an exercise price of $0.40 per share.

In December 2013, we converted the Biozone Notes into approximately 10 million shares of Biozone common stock. In July 2012, we exercised the Biozone Warrants utilizing the net exercise feature and received approximately 7,700,000 shares of Biozone common stock. We also entered into a license agreement pursuant to which we acquired a world-wide license for the development and commercialization of products utilizing Biozone’s proprietary drug delivery technology, including a technology called QuSomes, exclusively for OPKO in the field of ophthalmology and non-exclusive for all other therapeutic fields, subject in each case to certain excluded products.

On January 2, 2014, Biozone sold substantially all of its operating assets, including its QuSomes technology, to MusclePharm Corporation (OTCQB: MSLP), an international, award-winning sports nutrition company (“Musclepharm”)

in exchange for 1.2 million shares of Musclepharm’s common stock.  Effective January 3, 2014, Biozone completed a merger with Cocrystal, another entity in which we have an equity investment. In connection with the merger, Biozone issued to Cocrystal’s security holders 1,000,000 shares of Biozone Series B Convertible Preferred Stock (“Series B”). The Series B shares: (i) automatically convert into shares of Biozone’s common stock at a rate of 205.08308640 shares for each share of Series B at such time that Biozone has sufficient authorized capital, (ii) are entitled to vote on all matters submitted to shareholders of Biozone and vote on an as converted basis and (iii) have a nominal liquidation preference. Effective January 16, 2014, we invested an additional $0.5 million in the company as part of a $2.75 million private placement and received 1 million shares of common stock and 1 million10-year warrants exercisable at $0.50 per share.

In August 2011, we made an investment in Neovasc. Dr. Frost and other members of our management are shareholders of Neovasc. Prior to the investment, Dr. Frost beneficially owned approximately 36% of Neovasc, Dr. Hsiao owned approximately 6%, and Mr. Rubin owned less than 1%. Dr. Hsiao and Mr. Rubin also serve on the board of directors of Neovasc.

In November 2010, we made an investment in Fabrus. In exchange for the investment, we acquired approximately 13% of Fabrus on a fully diluted basis. Our investment was part of a $2.1 million financing for Fabrus. Other investors participating in the financing include the Gamma Trust and Hsu Gamma. In connection with the financing, Drs. Frost and Hsiao joined the Fabrus Board of Managers. Dr. Lerner owns approximately 5% of Fabrus. Mr. Vaughn Smider, Founder and CEO of Fabrus, is an Assistant Professor at TSRI. Dr. Frost served as a Trustee for TSRI until November 2012, and Dr. Lerner served as President of TSRI until December 2011. In October 2013, we made loans totaling $0.1 million to Fabrus, which loans are due and payable in January, 2014 and accrue interest as a rate of 7% per annum. No payments have been made to date.

In June 2010, we entered into a cooperative research and development agreement with Academia Sinica, Taipei, Taiwan (“Academia Sinica”), for pre-clinical work for a compound against various forms of cancer. Dr. Alice Yu, a member of our Board of Directors, previously served as a Distinguished Research Fellow and Associate Director at the Genomics Research Center, Academia Sinica (“Genomics Research Center”). In connection with the Academia Sinica Agreement, we are required to pay Academia Sinica approximately $0.2 million over the term of the agreement.

Effective in September 2009, we entered into an agreement pursuant to which we invested $2.5 million in Cocrystal (now CPI) in exchange for 1,701,723 shares of Cocrystal’s Convertible Series A Preferred Stock. A group of investors, led by the Frost Group LLC, which is an entity controlled by Dr. Frost, Dr. Hsiao and Mr. Rubin, (the “Cocrystal Investors”), previously invested $5.0 million in Cocrystal, and agreed to invest an additional $5.0 million payable in two equal installments in September 2009 and March 2010. As a result of an amendment to the Cocrystal Investors’ agreements dated June 9, 2009, we, rather than the Cocrystal Investors, made the first installment investment ($2.5 million) on September 21, 2009. As discussed above, effective January 2014, Cocrystal completed a merger with Biozone and is now known as Cocrystal Pharma, Inc.

In June 2009, we entered into a stock purchase agreement with Sorrento, pursuant to which we invested $2.3 million in Sorrento Therapeutics, Inc. (“Sorrento”). In exchange for the investment, we acquired approximately one-third of the outstanding common shares of Sorrento and received a fully-paid, exclusive license to the Sorrento antibody library for the discovery and development of therapeutic antibodies in the field of ophthalmology. On September 21, 2009, Sorrento entered into a merger transaction with Quikbyte Software, Inc. (“Quikbyte”). Prior to the merger transaction, certain investors, including Dr. Frost and other members of our management group, made an investment in Quikbyte. Dr. Lerner serves as a consultant and scientific advisory board member to Sorrento and owns less than one percent of its shares. In December 2013, we completed the sale of our stake in Sorrento and recorded a gain on the sale of $17.2 million and other income of $2.7 million related to an early termination fee under a license agreement with Sorrento.

In November 2007, we entered into an office lease with Frost Real Estate Holdings, LLC (“Frost Holdings”), an entity affiliated with Dr. Frost. The lease was for approximately 8,300 square feet of space in an office building in Miami, Florida, where our principal executive offices are located. The lease provided for payments of approximately $18 thousand per month in the first year increasing annually to $24 thousand per month in the fifth year, plus applicable sales tax. The rent was inclusive of operating expenses, property taxes and parking. The rent for the first year was reduced to reflect a $30 thousand credit for the costs of tenant improvements. In August 2012, we entered into a six-month extension on the same terms as the 2007 expiring lease and in February 2013, we agreed to extend the lease on a month-to-month basis. Effective January 1, 2014, we entered into a new lease agreement with Frost Holdings for approximately 11,000 square feet of space. The lease provides for payments of approximately $30 thousand per month in the first year increasing annually to $34 thousand per month in the fifth year, plus applicable sales tax. As in the original lease, the rent is inclusive of operating expenses, property taxes and parking. The rent will be reduced by $155,200 for the cost of tenant improvements, of which approximately $68 thousand will be credited against rent payments over a period of 12 months.

We reimburse Dr. Frost for Company-related use by Dr. Frost and our other executives of an airplane owned by a company that is beneficially owned by Dr. Frost. We reimburse Dr. Frost in an amount equal to the cost of a first class airline ticket between the travel cities for each executive, including Dr. Frost, traveling on the airplane for Company-related business. We do not reimburse Dr. Frost for personal use of the airplane by Dr. Frost or any other executive; nor do we pay for any other fixed or variable operating costs of the airplane. We reimbursed Dr. Frost approximately $13 thousand and $13 thousand for Company-related travel by Dr. Frost and other OPKO executives during the three months ended March 31, 2014 and 2013.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	May 01, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	Opko Health, Inc.
Entity Central Index Key	0000944809
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		413,750,781

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

In connection with our acquisitions of CURNA, OPKO Diagnostics, OPKO Spain, and OPKO Renal, we agreed to pay future consideration to the sellers upon the achievement of certain events. As a result, as of March 31, 2014 , we recorded $71.0 million as contingent consideration, with $25.7 million recorded within Accrued expenses and $45.3 million recorded within Other long-term liabilities in the accompanying Condensed Consolidated Balance Sheets. Refer to Note 4.

On April 29, 2013, we were named in a putative class action filed in the Eighth Judicial District Court in and for Clark County, Nevada against PROLOR (now known as OPKO Biologics), the members of the PROLOR Board of Directors, individually (including Drs. Frost and Hsiao and Steven Rubin), and the Company. From May 1, 2013 through May 6, 2013, we were named in an additional five putative class actions suits filed in the Eighth Judicial District Court in and for Clark County, Nevada against the same defendants. On July 17, 2013, these suits were consolidated, for all purposes, into an amended class action complaint. The lawsuit is brought by purported holders of PROLOR’s common stock, both individually and on behalf of a putative class of PROLOR’s stockholders, asserting claims that PROLOR’s Board of Directors breached its fiduciary duties in connection with the merger by purportedly failing to maximize stockholder value, that PROLOR and its Board of Directors failed to disclose material information to PROLOR’s stockholders, and that the Company aided and abetted the alleged breaches of fiduciary duty. The lawsuit seeks monetary damages, including increased consideration to PROLOR’s stockholders, equitable relief, including, among other things, rescission of the Merger Agreement along with rescissionary damages, and an award of all costs, including reasonable attorneys’ fees. On May 5, 2014, the court issued an order dismissing all claims as to all defendants without prejudice.

In July 2012, OPKO Lab received a letter from AdvanceMed Corporation (“AdvanceMed”) regarding a post-payment review conducted by AdvanceMed (the “Post-Payment Review Letter”). The Post-Payment Review Letter originated with a post payment review audit by AdvanceMed of 183 claims submitted by OPKO Lab to the Medicare program. OPKO Lab believes that its billing practices were appropriate and it is following the appeal process set forth by Medicare. OPKO Lab received a partially favorable determination, which reduced the amount of the alleged overpayment, and it continues to appeal the remaining alleged overpayments. No assurances can be given about the outcome of the appeal.

We are a party to other litigation in the ordinary course of business. We do not believe that any such litigation will have a material adverse effect on our business, financial condition, or results of operations.

We expect to incur substantial losses as we continue the development of our product candidates, continue our other research and development activities, and establish a sales and marketing infrastructure in anticipation of the commercialization of our diagnostic and pharmaceutical product candidates. We currently have limited commercialization capabilities, and it is possible that we may never successfully commercialize any of our diagnostic and pharmaceutical product candidates. We do not currently generate revenue from any of our diagnostic and pharmaceutical product candidates. Our research and development activities are budgeted to expand over a period of time and will require further resources if we are to be successful. As a result, we believe that our operating losses are likely to be substantial over the next several years. We may need to obtain additional funds to further develop our research and development programs, and there can be no assurance that additional capital will be available to us on acceptable terms, or at all.

XML

Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenues:
Products	$ 19,828	$ 15,527
Revenue from services	1,970	3,092
Revenue from transfer of intellectual property	476	12,757
Total revenues	22,274	31,376
Costs and expenses:
Costs of revenues	12,391	11,757
Selling, general and administrative	13,812	12,424
Research and development	20,994	9,910
Contingent consideration	2,610	1,344
Amortization of intangible assets	2,744	2,714
Total costs and expenses	52,551	38,149
Operating loss	(30,277)	(6,773)
Other income and (expense), net:
Interest income	40	59
Interest expense	(3,486)	(2,897)
Fair value changes of derivative instruments, net	(10,515)	(23,549)
Other income (expense), net	1,817	2,331
Other income and (expense), net	(12,144)	(24,056)
Loss before income taxes and investment losses	(42,421)	(30,829)
Income tax benefit (provision)	(614)	(43)
Loss before investment losses	(43,035)	(30,872)
Loss from investments in investees	(2,056)	(3,890)
Net loss	(45,091)	(34,762)
Less: Net loss attributable to noncontrolling interests	(540)	(547)
Net loss attributable to common shareholders before preferred stock dividend	(44,551)	(34,215)
Preferred stock dividend	0	(420)
Net loss attributable to common shareholders	$ (44,551)	$ (34,635)
Net loss per share (usd per share)	$ (0.11)	$ (0.11)
Weighted average number of common shares outstanding, basic and diluted	412,909,809	312,932,561

XML

Acquisitions, Investments, and Licenses

3 Months Ended

Mar. 31, 2014

Business Combinations [Abstract]

ACQUISITIONS, INVESTMENTS, AND LICENSES

ACQUISITIONS, INVESTMENTS AND LICENSES

OPKO Biologics acquisition

In August 2013, we acquired OPKO Biologics (formerly PROLOR) pursuant to an agreement and plan of merger dated April 23, 2013 (the “Merger Agreement”) in an all-stock transaction. OPKO Biologics is an Israeli-based biopharmaceutical company focused on developing and commercializing longer-acting proprietary versions of already approved therapeutic proteins.

Under the terms of the Merger Agreement, holders of PROLOR common stock received 0.9951 shares of our Common Stock for each share of PROLOR common stock. At closing, we delivered 63,670,805 shares of our Common Stock valued at $540.6 million based on the closing price per share of our Common Stock as reported by the NYSE on the closing date of the acquisition, or $8.49 per share. In addition, each outstanding option and warrant to purchase shares of PROLOR common stock that was outstanding and unexercised immediately prior to the closing date, whether vested or not vested, was converted into 7,889,265 options and warrants to purchase OPKO Common Stock at a fair value of $46.1 million.

Until completion of the acquisition, Dr. Phillip Frost, our Chairman and Chief Executive Officer, was PROLOR’s Chairman of the Board and owned greater than 5% of its stock. Dr. Jane H. Hsiao, our Vice Chairman and Chief Technology Officer, and Mr. Steven Rubin, our Executive Vice President, Administration, were both directors of PROLOR and owned less than 5% of its stock.

OPKO Renal acquisition

In March 2013, we acquired OPKO Renal (formerly Cytochroma, Inc.), whose lead products, both in Phase 3 development, are Rayaldee^TM (CTAP101), a vitamin D prohormone to treat secondary hyperparathyroidism in patients with stage 3 or 4 CKD and vitamin D insufficiency, and Alpharen^TM (Fermagate Tablets), a non-absorbed phosphate binder to treat hyperphosphatemia in dialysis patients (the “OPKO Renal Acquisition”).

In connection with the OPKO Renal Acquisition, we delivered 20,517,030 of shares of our Common Stock valued at $146.9 million based on the closing price per share of our Common Stock as reported by the NYSE on the actual closing date of the acquisition, or $7.16 per share. The number of shares issued was based on the volume-weighted average price per share of our Common Stock as reported on the NYSE for the 10 trading days immediately preceding the date of the purchase agreement for the OPKO Renal Acquisition, or $4.87 per share.

In addition, the OPKO Renal Acquisition requires payments of up to an additional $190.0 million in cash or additional shares of our Common Stock, at our election, upon the achievement of certain milestones relating to development and annual revenue. As a result, we recorded $47.7 million as contingent consideration at acquisition. We evaluate the contingent consideration on an ongoing basis and the changes in the fair value are recognized in earnings until the milestones are achieved. Refer to Note 8.

The following table summarizes the purchase price allocation and the fair value of the net assets acquired and liabilities assumed in the acquisitions of OPKO Renal and OPKO Biologics at the dates of acquisition. The purchase price allocation for OPKO Biologics is subject to change while contingencies that existed on the acquisition date are resolved:

(In thousands)	OPKO Renal			OPKO Biologics
Current assets (1)	$	1,224		$	21,500
Intangible assets:
In-process research and development	191,530			590,200
Patents	210			—
Total intangible assets	191,740			590,200
Goodwill	2,411			139,784
Property, plant and equipment	306			1,057
Other assets	—			371
Accounts payable and accrued expenses	(1,069		)	(9,866		)
Deferred tax liability	—			(156,403		)
Total purchase price	$	194,612		$	586,643

(1)Current assets include cash of $0.4 million and $20.5 million related to the OPKO Renal and OPKO Biologics acquisitions, respectively.

Goodwill from the acquisition of OPKO Biologics principally relates to the deferred tax liability generated as a result of this being a stock transaction and the assembled workforce. Goodwill from the acquisition of OPKO Renal principally relates to the assembled workforce. Goodwill is not tax deductible for income tax purposes.

Pro forma disclosure for acquisitions

The following table includes the pro forma results for the three months ended March 31, 2013 of the combined companies as though the acquisition of OPKO Renal and OPKO Biologics had been completed as of the beginning of the period presented.

	March 31,
(In thousands)	2013
Revenues	$	31,376
Loss from continuing operations	—
Net loss	(41,379		)
Net loss attributable to common shareholders	(41,252		)
Basic and diluted loss from continued operations per share	0.11
Basic and diluted loss per share	$	(0.11	)

The unaudited pro forma financial information is presented for information purposes only. The unaudited pro forma financial information may not necessarily reflect our future results of operations or what the results of operations would have been had we owned and operated each company as of the beginning of the period presented.

Investments

The total assets, liabilities, and net losses of our equity method investees for three months ended March 31, 2014 were $119.1 million, $41.2 million, and $12.5 million, respectively. The following table reflects our maximum exposure, accounting method, ownership interest and underlying equity in net assets of each of our unconsolidated investments as of March 31, 2014:

(Dollars in thousands, except per share prices) Investee name	Year invested	Accounting method	Ownership at March 31, 2014		Investment			Underlying equity in net assets		Closing share price at March 31, 2014 for investments available for sale
Neovasc	2011	Equity method	6	%	3,798			1,558
Fabrus	2010	VIE, equity method	12	%	750			(362	)
RXi	2013	Equity method	17	%	15,000			1,841
Pharmasynthez	2013	Equity method	17	%	11,300			6,405
Zebra	2013	VIE, equity method	19	%	2,000			840
Cocrystal	2009	Equity method	16	%	5,476			20
Neovasc options	2011	Investment available for sale	N/A		925					CA	$	4.10
ChromaDex	2012	Investment available for sale	1	%	1,320						$	1.83
ARNO	2013	Investment available for sale	5	%	2,000						$	2.22
Cocrystal 10 yr warrants	2014	Investment available for sale	N/A		500
Plus unrealized gains on investments, options and warrants, net					13,120
Less accumulated losses in investees					(20,492		)
Total carrying value of equity method investees and investments, available for sale					$	35,697

Cocrystal Pharma, Inc.

We previously made investments in Biozone Pharmaceuticals, Inc. (“Biozone”) and Cocrystal Discovery, Inc. (“Cocrystal”). Effective January 2, 2014, Biozone and Cocrystal completed a merger transaction pursuant to which Cocrystal was the surviving entity, and the name of the issuer was changed to Cocrystal Pharma, Inc. (“CPI”). In connection with the transaction, CPI issued to Cocrystal’s former security holders 1,000,000 shares of the CPI’s Series B Convertible Preferred Stock (“Series B”). The Series B shares: (i) automatically convert into shares of the CPI’s common stock at a rate of 205.08308640 shares for each share of Series B at such time that CPI has sufficient authorized capital, (ii) are entitled to vote on all matters submitted to shareholders of CPI and vote on an as converted basis and (iii) have a nominal liquidation preference. The merger was being treated as a reverse merger and recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of the former Biozone’s operations were disposed of immediately prior to the consummation of the merger as reported on a Form 8-K filed on January 8, 2014. Cocrystal is treated as the accounting acquirer as its shareholders control CPI after the Merger.

We have determined that we and our related parties can significantly influence the success of CPI through our board representation and voting power. Accordingly, as we and our related parties have the ability to exercise significant influence over CPI’s operations, we account for our investment in CPI under the equity method.

ARNO

In October 2013, we made an investment in ARNO Therapeutics, Inc. (“ARNO”), a clinical stage company focused on the development of oncology drugs. We invested $2.0 million and received 833,333 ARNO common shares, one year warrants to purchase 833,333 ARNO common shares for $2.40 a share and five year warrants to purchase an additional 833,333 ARNO common shares for $4.00 a share. Our investment was part of a private placement by ARNO. Other investors participating in the private financing included certain related parties. Refer to Note 10. We have determined that our ownership, along with that of our related parties, does not provide us with significant influence over the operations of ARNO and as a result, we account for ARNO as an investment, available for sale, and we record changes in the fair value of ARNO as an unrealized gain or loss in Other comprehensive loss each reporting period. We recorded the warrants on the date of the grant at their estimated fair value of $3.6 million using the Black-Scholes-Merton Model. We record changes in fair value of ARNO warrants in Other income (expense), net in our Condensed Consolidated Statement of Operations.

Neovasc

In 2011, we made an investment in Neovasc, a medical technology company based in Vancouver, Canada. We invested $2.0 million and received two million Neovasc common shares, and two-year warrants to purchase an additional one million shares for $1.25 a share. During the year ended December 31, 2013 we exercised the warrants and paid $1.2 million. We accounted for the warrants as an investment, available for sale and recorded the warrants at fair value on the date of acquisition. We recorded the changes in the fair value of the warrants in Fair value changes of derivatives instruments, net in our Condensed Consolidated Statements of Operations. We have determined that our related parties can significantly influence the success of Neovasc through our board representation and voting power. Accordingly, as we and our related parties have the ability to exercise significant influence over Neovasc’s operations, we account for our investment in Neovasc under the equity method.

2013 licensing agreements

An element of our growth strategy is to leverage our proprietary technology through a combination of internal development, acquisition, and external partnerships to maximize the commercial opportunities for our portfolio of proprietary pharmaceutical and diagnostic products and as such during 2013, we have entered into licensing agreements with Pharmsynthez and RXi.

Pharmsynthez transactions

In April 2013, we entered into a series of concurrent transactions with Pharmsynthez, a Russian pharmaceutical company traded on the Moscow Stock Exchange. The transactions consisted of:

•We delivered approximately $9.6 million to Pharmsynthez.

•Pharmsynthez issued to us approximately 13.6 million of its common shares.

•Pharmsynthez agreed, at its option, to issue approximately 12.0 million common shares to us or to pay us RussianRubles (“RUR”) 265.0 million ($8.1 million) on or before December 31, 2013 (the “Pharmsynthez Note Receivable”). In January 2014, Pharmsynthez delivered to us approximately 12.0 million shares of its common stock in satisfaction of the Pharmsynthez Notes Receivable.

• We had a right to purchase additional shares in Pharmsynthez at a fixed price if Pharmsynthez pays us in cash rather than delivering to us the 12.0 million Pharmsynthez common shares (the “Purchase Option”), however in connection with the settlement of the Pharmsynthez Note Receivable in January 2014, this right terminated. 

• We granted rights to certain technologies in the Russian Federation, Ukraine, Belorussia, Azerbaidjan and Kazakhstan (the “Territories”) to Pharmsynthez. 

•We will receive from Pharmsynthez royalty on net sales of products incorporating the technologies in the Territories, as well as a percentage of any sublicense income from third parties for the technologies in the Territories.

•Pharmsynthez paid us $9.5 million under the various collaboration and funding agreements for the development of the technologies (the “Collaboration Payments”).

We recorded the shares received in Pharmsynthez as an equity method investment.  We initially recorded the Pharmsynthez Note Receivable, and the Purchase Option, as financial instruments and elected the fair value option for subsequent measurement. Changes in the fair value of the receivable from Pharmsynthez for its common stock or RUR, with the embedded derivative, and the Purchase Option are recorded in Fair value changes of derivative instruments, net in our Condensed Consolidated Statements of Operations. Upon settlement in January 2014, we recorded the additional shares at fair value as an equity method investment.

We have accounted for the license and development activities as a multi-element arrangement, and allocated the total arrangement consideration based on the relative selling prices of the elements. We will record the allocated consideration for development activities as an offset to Research and development expenses over the three-year term of the Collaboration Payments.  We will record revenue in connection with the grant of rights to the technologies proportionately as the payments are received. 

During the three months ended March 31, 2014, we received $1.4 million related to the Collaboration Payments of which we recorded $0.5 million in Revenue from transfer of intellectual property and $0.4 million as an offset to Research and development expenses.

RXi transactions

In March 2013, we completed the sale to RXi Pharmaceuticals, Inc. (“RXi”) of substantially all of our assets in the field of RNA interference (the “RNAi Assets”) (collectively, the “Asset Purchase Agreement”). As consideration for the RNAi Assets, at the closing of the Asset Purchase Agreement, RXi issued to us 50 million shares of its common stock (the “APA Shares”).

Pursuant to the Asset Purchase Agreement, RXi will be required to pay us up to $50.0 million in milestone payments upon the successful development and commercialization of each drug developed by RXi, certain of its affiliates or any of its or their licensees or sublicensees utilizing patents included within the RNAi Assets (each, a “Qualified Drug”). In addition, RXi will also be required to pay us royalties equal to: (a) a mid single-digit percentage of “Net Sales” (as defined in the Asset Purchase Agreement) with respect to each Qualified Drug sold for an ophthalmologic use during the applicable “Royalty Period” (as defined in the Asset Purchase Agreement); and (b) a low single-digit percentage of net sales with respect to each Qualified Drug sold for a non-ophthalmologic use during the applicable royalty period.

In addition to the Asset Purchase Agreement, we purchased 17,241,380 shares of RXi, for $2.5 million, as part of a $16.4 million financing for RXi, which included other related parties. We have determined that our ownership, along with that of our related parties, provides us the ability to exercise significant influence over RXi operations and as such we have accounted for our investment in RXi under the equity method.

Investments in variable interest entities

We have determined that we hold variable interests in Fabrus, Inc. (“Fabrus”), SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, and Zebra Biologics, Inc. (“Zebra”). We made this determination as a result of our assessment that they do not have sufficient resources to carry out their principal activities without additional financial support.

In October 2013, we acquired 840,000 shares of Zebra Series A-2 Preferred Stock for $2.0 million. In connection with the transactions, Dr. Frost also gifted to OPKO 900,000 shares of Zebra restricted common stock which he had received as a founding member of Zebra. Zebra is a privately held biotechnology company focused on the discovery and development of biosuperior antibody therapeutics and complex drugs. After the closing on October 29, 2013, OPKO owns 23.5% of the Series A-2 Preferred stock issued and outstanding of Zebra. Dr. Richard Lerner, M.D., a member of our Board of Directors, is a founder of Zebra and, along with Dr. Frost, serves as a member of Zebra’s Board of Directors.

In order to determine the primary beneficiary of Zebra, we evaluated our investment and our related parties’ investment, as well as our investment combined with the related party group’s investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Zebra. We determined that we do not have the power to direct the activities that most significantly impact Zebra’s economic performance. Based on the capital structure, governing documents and overall business operations of Zebra, we determined that, while a VIE, we do not have the power to direct the activities that most significantly impact Zebra’s economic performance. We did determine, however, that we can significantly influence the success of Zebra through our board representation and voting power. Accordingly, as we have the ability to exercise significant influence over Zebra’s operations, we account for our investment in Zebra under the equity method.

In order to determine the primary beneficiary of Fabrus, we evaluated our investment and our related parties’ investment, as well as our investment combined with the related party group’s investment to identify if we had the power to direct the activities that most significantly impact the economic performance of Fabrus. We determined that power to direct the activities that most significantly impact Fabrus’ economic performance is conveyed through the board of directors of Fabrus as no entity is able to appoint the Fabrus governing body that oversees its executive management team. Based on the capital structure, governing documents and overall business operations of Fabrus, we determined that, while a VIE, no single entity has the power to direct the activities that most significantly impact Fabrus’ economic performance. We did determine, however, that our related parties can significantly influence the success of Fabrus through our board representation and voting power. Accordingly, as we and our related parties have the ability to exercise significant influence over Fabrus’ operations, we account for our investment in Fabrus under the equity method.

Consolidated variable interest entities

In June 2012, we entered into a share and debt purchase agreement whereby in exchange for $0.7 million we acquired shares representing a 50% stock ownership in SciVac from FDS Pharma LLP (“FDS”). SciVac is a privately-held Israeli company that produces a third-generation hepatitis B-vaccine. From November 2012 until March 31, 2014, we loaned to SciVac a combined $2.5 million for working capital purposes. We have determined that we hold variable interests in SciVac based on our assessment that SciVac does not have sufficient resources to carry out its principal activities without financial support. In order to determine the fair market value of our investment in SciVac, we have utilized a business enterprise valuation approach.

In order to determine the primary beneficiary of SciVac, we evaluated our investment to identify if we had the power to direct the activities that most significantly impact the economic performance of SciVac. We have determined that the power to direct the activities that most significantly impact the economic performance of SciVac is conveyed through SciVac’s board of directors. SciVac’s board of directors appoint and oversee SciVac’s management team who carry out the activities that most significantly impact the economic performance of SciVac. As part of the share and debt purchase agreement, SciVac’s board of directors is constituted by 5 members, of which 3 members will be appointed by us, representing 60% of SciVac’s board. Based on this analysis, we determined that we have the power to direct the activities of SciVac and as such we are the primary beneficiary. As a result of this conclusion, we have consolidated the results of operations and financial position of SciVac and recorded a reduction of equity for the portion of SciVac we do not own.

The following table represents the consolidated assets and non-recourse liabilities related to SciVac as of March 31, 2014 and December 31, 2013. These assets are owned by, and these liabilities are obligations of, SciVac, not us.

(In thousands)	March 31, 2014		December 31, 2013
Assets
Current assets:
Cash and cash equivalents	$	123	$	2
Accounts receivable, net	103		283
Inventories, net	1,704		1,696
Prepaid expenses and other current assets	337		218
Total current assets	2,267		2,199
Property, plant and equipment, net	1,441		1,374
Intangible assets, net	1,073		1,111
Goodwill	1,732		1,821
Other assets	268		261
Total assets	$	6,781	6,766
Liabilities
Current liabilities:
Accounts payable	$	1,223	$	1,136
Accrued expenses	7,800		6,498
Notes payable	2,101		1,537
Total current liabilities	11,124		9,171
Other long-term liabilities	266		1,240
Total liabilities	$	11,390	$	10,411

XML

Composition of Certain Financial Statement Captions

3 Months Ended

Mar. 31, 2014

Compositions of Certain Financial Statement Captions [Abstract]

COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

COMPOSITION OF CERTAIN FINANCIAL STATEMENT CAPTIONS

(In thousands)	March 31, 2014			December 31, 2013
Accounts receivable, net
Accounts receivable	$	21,230		$	21,652
Less: allowance for doubtful accounts	(1,566		)	(1,885		)
	$	19,664		$	19,767
Inventories, net
Finished products	$	12,880		$	13,374
Work in-process	1,112			1,350
Raw materials	5,355			4,132
Less: inventory reserve	(482		)	(777		)
	$	18,865		$	18,079
Prepaid expenses and other current assets
Prepaid supplies	$	1,919		$	945
Prepaid insurance	902			892
Pharmsynthez notes receivable	—			6,151
Other receivables	605			1,985
Taxes recoverable	1,266			3,458
Other	5,655			5,653
	$	10,347		$	19,084
Intangible assets, net:
Technologies	$	53,020		$	51,660
Customer relationships	22,525			22,725
Product registrations	9,731			9,692
Tradenames	3,621			3,669
Covenants not to compete	8,670			8,671
Other	1,173			2,519
Less:  accumulated amortization	(26,819		)	(24,403		)
	$	71,921		$	74,533
Accrued expenses:
Taxes payable	$	124		$	702
Deferred revenue	8,112			7,639
Clinical trials	4,710			3,342
Professional fees	1,108			402
Employee benefits	5,451			4,399
Deferred acquisition payments, net of discount	840			5,465
Contingent consideration	25,722			28,047
Other	12,705			15,878
	$	58,772		$	65,874

(In thousands)	March 31, 2014		December 31, 2013
Other long-term liabilities:
Contingent consideration – OPKO Renal	$	36,127	$	34,401
Contingent consideration – OPKO Spain	248		504
Contingent consideration – OPKO Diagnostics	8,593		8,340
Contingent consideration – CURNA	326		316
Mortgages and other debts payable	3,101		3,270
Deferred tax liabilities	166,068		166,435
Other, including deferred revenue	679		1,509
	$	215,142	$	214,775

All of the intangible assets and goodwill acquired relate to our acquisitions of OPKO Chile, including the intangible assets and goodwill related to the ALS acquisition, Exakta-OPKO, CURNA, OPKO Diagnostics, FineTech, OPKO Spain, OPKO Lab, OPKO Renal and OPKO Biologics. The pharmaceutical, nutraceutical and veterinary products from ALS and OPKO Spain do not require ongoing product renewals. We do not anticipate capitalizing the cost of product registration renewals, rather we expect to expense these costs, as incurred. Our goodwill is not tax deductible for income tax purposes in the U.S., Chile, Canada, Mexico, Spain, or Israel.

At March 31, 2014, the changes in value of the intangible assets and goodwill are primarily due to foreign currency fluctuations between the Chilean and Mexican pesos, the Euro and the Shekel against the U.S. dollar.

The following table summarizes the changes in Goodwill during the three months ended March 31, 2014.

	2014
(In thousands)	Balance at January 1		Acquisitions		Foreign exchange, other			Balance at March 31
Pharmaceuticals
CURNA	$	4,827	$	—	$	—		$	4,827
Exakta-OPKO	113		—		—			113
OPKO Chile	6,102		—		(294		)	5,808
OPKO Spain	9,075		—		(9		)	9,066
FineTech	11,698		—		—			11,698
SciVac	1,740		—		(8		)	1,732
OPKO Renal	2,069		—		—			2,069
OPKO Biologics	139,784		—		—			139,784
Diagnostics
Claros	17,977		—		—			17,977
OPKO Lab	32,988		—		—			32,988
	$	226,373	$	—	$	(311	)	$	226,062

XML

Acquisitions, Investments, and Licenses (Tables)

3 Months Ended

Mar. 31, 2014

Business Acquisition [Line Items]

Pro forma disclosure for acquisitions

The following table includes the pro forma results for the three months ended March 31, 2013 of the combined companies as though the acquisition of OPKO Renal and OPKO Biologics had been completed as of the beginning of the period presented.

	March 31,
(In thousands)	2013
Revenues	$	31,376
Loss from continuing operations	—
Net loss	(41,379		)
Net loss attributable to common shareholders	(41,252		)
Basic and diluted loss from continued operations per share	0.11
Basic and diluted loss per share	$	(0.11	)

Maximum exposure of unconsolidated investments

The following table reflects our maximum exposure, accounting method, ownership interest and underlying equity in net assets of each of our unconsolidated investments as of March 31, 2014:

(Dollars in thousands, except per share prices) Investee name	Year invested	Accounting method	Ownership at March 31, 2014		Investment			Underlying equity in net assets		Closing share price at March 31, 2014 for investments available for sale
Neovasc	2011	Equity method	6	%	3,798			1,558
Fabrus	2010	VIE, equity method	12	%	750			(362	)
RXi	2013	Equity method	17	%	15,000			1,841
Pharmasynthez	2013	Equity method	17	%	11,300			6,405
Zebra	2013	VIE, equity method	19	%	2,000			840
Cocrystal	2009	Equity method	16	%	5,476			20
Neovasc options	2011	Investment available for sale	N/A		925					CA	$	4.10
ChromaDex	2012	Investment available for sale	1	%	1,320						$	1.83
ARNO	2013	Investment available for sale	5	%	2,000						$	2.22
Cocrystal 10 yr warrants	2014	Investment available for sale	N/A		500
Plus unrealized gains on investments, options and warrants, net					13,120
Less accumulated losses in investees					(20,492		)
Total carrying value of equity method investees and investments, available for sale					$	35,697

Cytochroma and PROLOR [Member]

Business Acquisition [Line Items]

Estimated fair value of the net assets acquired and liabilities assumed in the acquisition of at the date of acquisition

The following table summarizes the purchase price allocation and the fair value of the net assets acquired and liabilities assumed in the acquisitions of OPKO Renal and OPKO Biologics at the dates of acquisition. The purchase price allocation for OPKO Biologics is subject to change while contingencies that existed on the acquisition date are resolved:

(In thousands)	OPKO Renal			OPKO Biologics
Current assets (1)	$	1,224		$	21,500
Intangible assets:
In-process research and development	191,530			590,200
Patents	210			—
Total intangible assets	191,740			590,200
Goodwill	2,411			139,784
Property, plant and equipment	306			1,057
Other assets	—			371
Accounts payable and accrued expenses	(1,069		)	(9,866		)
Deferred tax liability	—			(156,403		)
Total purchase price	$	194,612		$	586,643

(1)Current assets include cash of $0.4 million and $20.5 million related to the OPKO Renal and OPKO Biologics acquisitions, respectively.

SciVac [Member]

Business Acquisition [Line Items]

Summary of consolidated assets and non-recourse liabilities related to SciVac

The following table represents the consolidated assets and non-recourse liabilities related to SciVac as of March 31, 2014 and December 31, 2013. These assets are owned by, and these liabilities are obligations of, SciVac, not us.

(In thousands)	March 31, 2014		December 31, 2013
Assets
Current assets:
Cash and cash equivalents	$	123	$	2
Accounts receivable, net	103		283
Inventories, net	1,704		1,696
Prepaid expenses and other current assets	337		218
Total current assets	2,267		2,199
Property, plant and equipment, net	1,441		1,374
Intangible assets, net	1,073		1,111
Goodwill	1,732		1,821
Other assets	268		261
Total assets	$	6,781	6,766
Liabilities
Current liabilities:
Accounts payable	$	1,223	$	1,136
Accrued expenses	7,800		6,498
Notes payable	2,101		1,537
Total current liabilities	11,124		9,171
Other long-term liabilities	266		1,240
Total liabilities	$	11,390	$	10,411

XML

Segments

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

SEGMENTS

SEGMENTS

We currently manage our operations in two reportable segments, pharmaceuticals and diagnostics. The pharmaceuticals segment consists of two operating segments, our (i) pharmaceutical research and development segment which is focused on the research and development of pharmaceutical products, and vaccines, and (ii) the pharmaceutical operations we acquired in Chile, Mexico, Israel, Spain, Brazil, and Uruguay. The diagnostics segment consists of two operating segments, our (i) pathology operations we acquired through the acquisition of OPKO Lab and (ii) point-of-care and molecular diagnostics operations. There are no inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no inter-segment allocation of interest expense and income taxes.

Information regarding our operations and assets for our operating segments and the unallocated corporate operations as well as geographic information are as follows:

	For the three months ended March 31,
(In thousands)	2014			2013
Product revenues:
Pharmaceuticals	$	19,828		$	15,527
Diagnostics	—			—
Corporate	—			—
	$	19,828		$	15,527
Revenue from services:
Pharmaceuticals	$	—		$	—
Diagnostics	1,910			3,052
Corporate	60			40
	$	1,970		$	3,092
Revenue from transfer of intellectual property:
Pharmaceuticals	$	285		$	12,500
Diagnostics	191			257
Corporate	—			—
	$	476		$	12,757
Operating (loss) income:
Pharmaceuticals	$	(16,573	)	$	8,483
Diagnostics	(7,078		)	(9,634		)
Corporate	(6,137		)	(5,025		)
Less: Operating loss attributable to noncontrolling interests	(489		)	(597		)
	$	(30,277	)	$	(6,773	)
Depreciation and amortization:
Pharmaceuticals	$	1,849		$	1,695
Diagnostics	1,691			1,689
Corporate	24			45
	$	3,564		$	3,429
Revenues:
United States	$	2,446		$	15,849
Chile	7,285			7,741
Spain	6,150			4,324
Israel	4,546			2,572
Mexico	1,831			890
Uruguay	16			—
	$	22,274		$	31,376

(In thousands)	March 31, 2014		December 31, 2013
Assets:
Pharmaceuticals	$	1,067,848	$	1,065,033
Diagnostics	113,515		116,944
Corporate	174,329		209,539
	$	1,355,692	$	1,391,516
Goodwill:
Pharmaceuticals	$	175,097	$	175,408
Diagnostics	50,965		50,965
Corporate	—		—
	$	226,062	$	226,373

During the three months ended March 31, 2014 and 2013, no customer represented more than 10% of our total revenue. As of March 31, 2014 and December 31, 2013, no customer represented more than 10% of our accounts receivable balance.

XML

Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

We record fair values at an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We utilize a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

A summary of our investments as of March 31, 2014, classified as available for sale and carried at fair value, is as follows:

	As of March 31, 2014
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI			Gain/(Loss) in Accumulated Deficit		Fair value
Common stock investments, available for sale	$	3,320	$	2,035	$	(150	)	$	—	$	5,205
Common stock options/warrants	1,425		1,610		—			3,762		6,797
Total assets	$	4,745	$	3,645	$	(150	)	$	3,762	$	12,002

A summary of our investments as of December 31, 2013, classified as available for sale and carried at fair value is as follows:

	As of December 31, 2013
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI		Gain/(Loss) in Accumulated Deficit		Fair value
Common stock investments, available for sale	$	3,376	$	2,698	$	—	$	—	$	6,074
Common stock options/warrants	925		1,041		—		4,022		5,988
Total assets	$	4,301	$	3,739	$	—	$	4,022	$	12,062

Any future fluctuation in fair value related to these instruments that is judged to be temporary, including any recoveries of previous write-downs, will be recorded in Accumulated other comprehensive income or loss. If we determine that any future valuation adjustment was other-than-temporary, we will record a loss during the period such determination is made.

As of March 31, 2014, we have money market funds that qualify as cash equivalents, forward contracts for inventory purchases (Refer to Note 9) and contingent consideration related to the acquisitions of CURNA, OPKO Diagnostics, FineTech, OPKO Spain, and OPKO Renal that are required to be measured at fair value on a recurring basis. In addition, in connection with our investment and our consulting agreement with Neovasc, we record the related Neovasc options at fair value as well as the derivative instruments related to our transactions with Pharmsynthez.

Our financial assets and liabilities measured at fair value on a recurring basis are as follows:

	Fair value measurements as of March 31, 2014
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Money market funds	$	132,343	$	—	$	—	$	132,343
Certificates of deposit	—		816		—		816
Common stock investments, available for sale	5,205		—		—		5,205
Common stock options/warrants	—		6,797		—		6,797
Forward contracts	—		1		—		1
Total assets	$	137,548	$	7,614	$	—	$	145,162
Liabilities:
Embedded conversion option	$	—	$	—	$	112,199	$	112,199
Deferred acquisition payments, net of discount	—		—		840		840
Contingent consideration:
CURNA	—		—		583		583
OPKO Diagnostics	—		—		14,193		14,193
OPKO Renal	—		—		54,819		54,819
OPKO Spain	—		—		1,421		1,421
Total liabilities	$	—	$	—	$	184,055	$	184,055

	Fair value measurements as of December 31, 2013
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Money market funds	$	168,418	$	—	$	—	$	168,418
Certificates of deposit	—		827		—		827
Pharmsynthez Notes Receivable & Purchase Option	—		6,151		—		6,151
Common stock investments, available for sale	6,074		—		—		6,074
Common stock options/warrants	—		5,988		—		5,988
Forward contracts	—		49		—		49
Total assets	$	174,492	$	13,015	$	—	$	187,507
Liabilities:
Embedded conversion option	—		—		101,087		101,087
Deferred acquisition payments, net of discount	—		—		5,465		5,465
Contingent consideration:
CURNA	—		—		573		573
OPKO Diagnostics	—		—		13,776		13,776
FineTech	—		—		3,124		3,124
OPKO Renal	—		—		53,092		53,092
OPKO Spain	—		—		1,043		1,043
Total liabilities	$	—	$	—	$	178,160	$	178,160

The carrying amount and estimated fair value of our long-term debt, as well as the applicable fair value hierarchy tiers, are contained in the table below. The fair value of the 2033 Senior Notes is determined using a binomial lattice approach in order to estimate the fair value of the embedded derivative in the 2033 Senior Notes. Refer to Note 6.

	March 31, 2014
(In thousands)	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3
2033 Senior Notes	$	112,602	$	118,163	$	—	$	—	$	118,163

As of March 31, 2014 and December 31, 2013, the carrying value of our other assets and liabilities approximates their fair value due to their short-term nature.

The following tables reconcile the beginning and ending balances of our Level 3 assets and liabilities as of March 31, 2014 and December 31, 2013:

	March 31, 2014
(In thousands)	Contingent consideration			Deferred acquisition payments, net of discount			Embedded conversion option
Balance at December 31, 2013	$	71,620		$	5,484		$	101,087
Additions	—			—			—
Total losses (gains) for the period:
Included in results of operations	2,610			—			11,112
Payments	(3,214		)	(4,644		)	—
Balance at March 31, 2014	$	71,016		$	840		$	112,199

	December 31, 2013
(In thousands)	BZNE Note and conversion feature			Contingent consideration			Deferred acquisition payments, net of discount			Embedded conversion option
Balance at December 31, 2012	$	2,040		$	20,056		$	10,103		$	—
Additions	—			47,710			—			59,204
Total losses (gains) for the period:
Included in results of operations	—			6,947			829			43,082
Foreign currency impact	—			31			—			—
Conversion	(2,040		)	—			—			(1,199		)
Payments	—			(3,124		)	(5,448		)	—
Balance at December 31, 2013	$	—		$	71,620		$	5,484		$	101,087

The estimated fair values of our financial instruments have been determined by using available market information and what we believe to be appropriate valuation methodologies. We use the following methods and assumptions in estimating fair value:

Contingent consideration – We estimate the fair value of the contingent consideration utilizing a discounted cash flow model for the expected payments based on estimated timing and expected revenues. We use several discount rates depending on each type of contingent consideration related to FineTech, OPKO Diagnostics, CURNA, OPKO Spain and OPKO Renal transactions. The discount rates used range from 6% to 27% and were based on the weighted average cost of capital for those businesses. If the discount rates were to increase by 1%, on each transaction, the contingent consideration would decrease by $1.7 million. If estimated future sales were to decrease by 10%, the contingent consideration related to CURNA, FineTech and OPKO Renal would decrease by $0.5 million. As of March 31, 2014, of the $71.0 million of contingent consideration, $25.7 million is recorded in Accrued expenses and $45.3 million is recorded in Other long-term liabilities. As of December 31, 2013, of the $71.6 million of contingent consideration, $28.0 million is recorded in Accrued expenses and $43.6 million is recorded in Other long-term liabilities.

Deferred payments – We estimate the fair value of the deferred payments utilizing a discounted cash flow model for the expected payments.

Embedded conversion option – We estimate the fair value of the embedded conversion option related to the 2033 Senior Notes using a binomial lattice model. Refer to Note 6 for detail description of the binomial lattice model and the fair value assumptions used.

XML

Debt

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

DEBT

DEBT

In January 2013, we entered into note purchase agreements (the “2033 Senior Notes”) with qualified institutional buyers and accredited investors (collectively the “Purchaser”) in a private placement in reliance on exemptions from registration under the Securities Act of 1933, (the “Securities Act”). The Purchasers of the 2033 Senior Notes include Frost Gamma Investments Trust, a trust affiliated with Dr. Frost, and Hsu Gamma Investment, L.P., an entity affiliated with Dr. Hsiao. The 2033 Senior Notes were issued on January 30, 2013. The 2033 Senior Notes, which total $175.0 million, bear interest at the rate of 3.00% per year, payable semiannually on February 1 and August 1 of each year, beginning August 1, 2013. The 2033 Senior Notes will mature on February 1, 2033, unless earlier repurchased, redeemed or converted. Upon a fundamental change as defined in the instruments governing the 2033 Senior Notes, subject to certain exceptions, the holders may require us to repurchase all or any portion of their 2033 Senior Notes for cash at a repurchase price equal to 100% of the principal amount of the 2033 Senior Notes being repurchased, plus any accrued and unpaid interest to but not including the fundamental change repurchase date.

The following table sets forth information related to the 2033 Senior Notes which is included our Condensed Consolidated Balance Sheets:

(In thousands)	Embedded conversion option		2033 Senior Notes		Discount			Total
Balance at December 31, 2013	$	101,087	$	158,064	$	(47,239	)	$	211,912
Amortization of debt discount	—		—		1,777			1,777
Change in fair value of embedded derivative	11,112		—		—			11,112
Balance at March 31, 2014	$	112,199	$	158,064	$	(45,462	)	$	224,801

The 2033 Senior Notes will be convertible at any time on or after November 1, 2032, through the second scheduled trading day immediately preceding the maturity date, at the option of the holders. Additionally, holders may convert their 2033 Senior Notes prior to the close of business on the scheduled trading day immediately preceding November 1, 2032, under the following circumstances: (1) conversion based upon satisfaction of the trading price condition relating to the 2033 Senior Notes; (2) conversion based on the Common Stock price; (3) conversion based upon the occurrence of specified corporate events; or (4) if we call the 2033 Senior Notes for redemption. The 2033 Senior Notes will be convertible into cash, shares of our Common Stock, or a combination of cash and shares of Common Stock, at our election unless we have made an irrevocable election of net share settlement. The initial conversion rate for the 2033 Senior Notes will be 141.4827 shares of Common Stock per $1,000 principal amount of 2033 Senior Notes (equivalent to an initial conversion price of approximately $7.07 per share of Common Stock), and will be subject to adjustment upon the occurrence of certain events. In addition, we will, in certain circumstances, increase the conversion rate for holders who convert their 2033 Senior Notes in connection with a make-whole fundamental change (as defined in the Indenture) and holders who convert upon the occurrence of certain specific events prior to February 1, 2017 (other than in connection with a make-whole fundamental change).

We may not redeem the 2033 Senior Notes prior to February 1, 2017. On or after February 1, 2017 and before February 1, 2019, we may redeem for cash any or all of the 2033 Senior Notes but only if the last reported sale price of our Common Stock exceeds 130% of the applicable conversion price for at least 20 trading days during the 30 consecutive trading day period ending on the trading day immediately prior to the date on which we deliver the redemption notice. The redemption price will equal 100% of the principal amount of the 2033 Senior Notes to be redeemed, plus any accrued and unpaid interest to but not including the redemption date. On or after February 1, 2019, we may redeem for cash any or all of the 2033 Senior Notes at a redemption price of 100% of the principal amount of the 2033 Senior Notes to be redeemed, plus any accrued and unpaid interest up to but not including the redemption date.

The terms of the 2033 Senior Notes, include, among others: (i) rights to convert into shares of our Common Stock, including upon a fundamental change; and (ii) a coupon make-whole payment in the event of a conversion by the holders of the 2033 Senior Notes on or after February 1, 2017 but prior to February 1, 2019. We have determined that these specific terms are considered to be embedded derivatives. As a result, embedded derivatives are required to be separated from the host contract, the 2033 Senior Notes, and carried at fair value when: (a) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract; and (b) a separate, stand-alone instrument with the same terms would qualify as a derivative instrument. We have concluded that the embedded derivatives within the 2033 Senior Notes meet these criteria and, as such, must be valued separate and apart from the 2033 Senior Notes and recorded at fair value each reporting period.

For accounting and financial reporting purposes, we combine these embedded derivatives and value them together as one unit of accounting. At each reporting period, we record these embedded derivatives at fair value which is included as a component of the 2033 Senior Notes on our Condensed Consolidated Balance Sheets.

We used a binomial lattice model in order to estimate the fair value of the embedded derivative in the 2033 Senior Notes. A binomial lattice model generates two probable outcomes — one up and another down —arising at each point in time, starting from the date of valuation until the maturity date. A lattice was initially used to determine if the 2033 Senior Notes would be converted, called or held at each decision point. Within the lattice model, the following assumptions are made: (i) the 2033 Senior Notes will be converted early if the conversion value is greater than the holding value; or (ii) the 2033 Senior Notes will be called if the holding value is greater than both (a) the redemption price (as defined in the Indenture) and (b) the conversion value plus the coupon make-whole payment at the time. If the 2033 Senior Notes are called, then the holder will maximize their value by finding the optimal decision between (1) redeeming at the redemption price and (2) converting the 2033 Senior Notes.

Using this lattice model, we valued the embedded derivatives using the “with-and-without method,” where the value of the 2033 Senior Notes including the embedded derivatives is defined as the “with,” and the value of the 2033 Senior Notes excluding the embedded derivatives is defined as the “without.” This method estimates the value of the embedded derivatives by looking at the difference in the values between the 2033 Senior Notes with the embedded derivatives and the value of the 2033 Senior Notes without the embedded derivatives.

The lattice model requires the following inputs: (i) price of our Common Stock; (ii) Conversion Rate (as defined in the Indenture); (iii) Conversion Price (as defined in the Indenture); (iv) maturity date; (v) risk-free interest rate; (vi) estimated stock volatility; and (vii) estimated credit spread for the Company.

The following table sets forth the inputs to the lattice model used to value the embedded derivative:

	March 31, 2014	Issuance Date
Stock price	$9.32	$6.20
Conversion Rate	141.4827	141.4827
Conversion Price	$7.07	$7.07
Maturity date	February 1, 2033	February 1, 2033
Risk-free interest rate	1.66%	1.12%
Estimated stock volatility	50%	40%
Estimated credit spread	823 basis points	944 basis points

The following table sets forth the fair value of the 2033 Senior Notes with and without the embedded derivatives, and the fair value of the embedded derivatives as of the issuance date and March 31, 2014. At March 31, 2014 and at issuance date the principal amount of the 2033 Senior Notes was $158.1 million and $175.0 million, respectively:

(In thousands)	March 31, 2014		Issuance Date
Fair value of 2033 Senior Notes:
With the embedded derivatives	$	230,362	$	175,000
Without the embedded derivatives	$	118,163	$	115,796
Estimated fair value of the embedded derivatives	$	112,199	$	59,204

Changes in certain inputs into the lattice model can have a significant impact on changes in the estimated fair value of the embedded derivatives. For example, a decrease in our estimated credit spread results in an increase in the estimated value of the embedded derivatives. Conversely, a decrease in the price of our Common Stock results in a decrease in the estimated fair value of the embedded derivatives. From the date the 2033 Senior Notes were issued through March 31, 2014, we observed an increase in the market price of our Common Stock which primarily resulted in a $11.1 million increase in the estimated fair value of our embedded derivatives recorded in Fair value changes of derivative instruments, net in our Condensed Consolidated Statements of Operations.

We have entered into line of credit agreements with twelve financial institutions in Chile and Spain. These lines of credit are used primarily as a source of working capital for inventory purchases.

The following table summarizes the amounts outstanding under the Chilean and Spanish lines of credit:

(Dollars in thousands)			Balance Outstanding
Lender	Interest rate on borrowings at March 31, 2014	Credit line capacity	March 31, 2014	December 31, 2013
Itau Bank	5.00%	$3,000	$1,628	$1,999
Bank of Chile	6.40%	2,250	1,534	2,079
BICE Bank	5.00%	1,700	1,315	516
Corp Banca	—%	—	—	(47)
BBVA Bank	5.00%	2,000	998	523
Penta Bank	8.20%	1,000	907	946
Security Bank	7.26%	1,300	907	1,075
BCI	—%	—	—	198
Estado Bank	5.44%	2,000	858	1,772
Sabadell Bank	4.50%	206	—	—
Bilbao Vizcaya Bank	4.72%	344	—	—
Banco Popular	6.09%	275	—	—
Deutsche Bank	4.00%	206	—	—
Santander Bank	4.50%	275	—	—
Total		$14,556	$8,147	$9,061

At March 31, 2014 and December 31, 2013, the weighted average interest rate on our lines of credit was approximately 5.9% and 7.7%, respectively.

At March 31, 2014 and December 31, 2013, we had mortgage notes and other debt related to OPKO Spain as follows:

(In thousands)	March 31, 2014		December 31, 2013
Current portion of notes payable	$	631	$	1,964
Other long-term liabilities	3,101		3,270
Total mortgage notes and other debt	$	3,732	$	5,234

The mortgages and other debts mature at various dates ranging from 2015 through 2024 bearing variable interest rates from 2.7% up to 6.3%. The weighted average interest rate on the mortgage notes and other debt at March 31, 2014 and December 31, 2013, was 3.4% and 3.9%, respectively. The mortgages are secured by our office space in Barcelona.

XML

Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2014

Equity [Abstract]

ACCUMULATED OTHER COMPREHENSIVE INCOME

ACCUMULATED OTHER COMPREHENSIVE INCOME

For the three months ended March 31, 2014, changes in Accumulated other comprehensive income, net of tax, were as follows:

(In thousands)	Foreign currency			Unrealized gains in Accumulated OCI			Total
Balance at December 31, 2013	$	1,371		$	2,047		$	3,418
Other comprehensive income before reclassifications, net of tax (1)	(1,801		)	335			(1,466		)
Amounts reclassified from accumulated other comprehensive income, net of tax (1)	—			(553		)	(553		)
Net other comprehensive income	(1,801		)	(218		)	(2,019		)
Balance at March 31, 2014	$	(430	)	$	1,829		$	1,399

(1) Effective tax rate of 38.47%.

Amounts reclassified from Accumulated other comprehensive income for the three months ended March 31, 2014 related to $1.3 million realized gain on the sales of certain of our investments available for sale. Of the $1.3 million gain on the sales of our investments available for sale, a $0.9 million gain was reclassified from unrealized gains in Accumulated other comprehensive income to Other income (expense), net for the three months ended March 31, 2014.

XML

Derivative Contracts

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE CONTRACTS

DERIVATIVE CONTRACTS

The following table summarizes the fair values and the presentation of our derivative financial instruments in the Condensed Consolidated Balance Sheets:

(In thousands)	Balance Sheet Component	March 31, 2014		December 31, 2013
Derivative financial instruments:
Common stock options/warrants	Investment, net	$	6,797	$	5,988
Embedded conversion option	2033 Senior Notes, net of discount and estimated fair value of embedded derivatives	$	112,199	$	101,087
Forward contracts (1)	Current portion of lines of credit and notes payable	$	2,436	$	1,585

⁽¹⁾  The loss on forward contracts is recorded in Accrued expenses. The gain on the forward contracts is recorded in Prepaid expenses and other current assets.

We enter into foreign currency forward exchange contracts to cover the risk of exposure to exchange rate differences arising from inventory purchases on letters of credit. Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.

To qualify the derivative instrument as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At March 31, 2014 and December 31, 2013, our derivative financial instruments do not meet the documentation requirements to be designated as hedges. Accordingly, we recognize the changes in Fair value of derivative instruments, net in our Condensed Consolidated Statements of Operations. The following table summarizes the (losses) and gains recorded during the three months ended March 31, 2014 and 2013:

	Three months ended March 31,
(In thousands)	2014			2013
Derivative gain (loss):
Common stock options/warrants	$	596		$	1,260
2033 Senior Notes	(11,112		)	(24,788		)
Forward contracts	1			(21		)
Total	$	(10,515	)	$	(23,549	)

The outstanding forward contracts at March 31, 2014 and December 31, 2013, have been recorded at fair value, and their maturity details are as follows:

(In thousands) Days until maturity	Contract value		Fair value at  March 31, 2014		Effect on income (loss)
0 to 30	$	285	$	294	$	9
31 to 60	952		957		5
61 to 90	121		120		(1		)
91 to 120	921		911		(10		)
121 to 180	156		154		(2		)
Total	$	2,435	$	2,436	$	1

(In thousands) Days until maturity	Contract value		Fair value at  December 31, 2013		Effect on income (loss)
0 to 30	$	472	$	489	$	17
31 to 60	562		579		18
61 to 90	503		517		14
91 to 120	—		—		—
121 to 180	—		—		—
More than 180	—		—		—
Total	$	1,537	$	1,585	$	49

XML

Acquisitions, Investments, and Licenses - Summary of Assets Acquired and Liabilities Assumed (Details) (USD $)	Mar. 31, 2014		Dec. 31, 2013		Mar. 31, 2013 OPKO Renal [Member]		Mar. 31, 2013 OPKO Renal [Member] Patents [Member]	Mar. 31, 2013 OPKO Renal [Member] In process research and development [Member]	Aug. 29, 2013 OPKO Biologics [Member]		Aug. 29, 2013 OPKO Biologics [Member] Patents [Member]	Aug. 29, 2013 OPKO Biologics [Member] In process research and development [Member]
Business Acquisition [Line Items]
Current assets					$ 1,224,000	[1]			$ 21,500,000	[1]
Intangible assets:
Indefinite lived intangible assets								191,530,000				590,200,000
Finite lived intangible assets							210,000				0
Total intangible assets					191,740,000				590,200,000
Goodwill	226,062,000	[2]	226,373,000	[2]	2,411,000				139,784,000
Property, plant and equipment					306,000				1,057,000
Other assets					0				371,000
Accounts payable and accrued expenses					(1,069,000)				(9,866,000)
Deferred tax liability					0				(156,403,000)
Total purchase price					194,612,000				586,643,000
Current Asset include cash					$ 400,000				$ 20,500,000

[1] Current assets include cash of $0.4 million and $20.5 million related to the OPKO Renal and OPKO Biologics acquisitions, respectively

[2] As of March 31, 2014 and December 31, 2013, total assets include $6.8 million and $6.7 million, respectively, and total liabilities include $11.4 million and $10.4 million, respectively, related to SciVac Ltd (“SciVac”), previously known as SciGen (I.L.) Ltd, a consolidated variable interest entity. SciVac’s consolidated assets are owned by SciVac and SciVac’s consolidated liabilities have no recourse against us. Refer to Note 5.

XML

Derivative Contracts (Details) (Not Designated as Hedging Instrument [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Common stock options/warrants [Member] | Investments, net [Member]
Derivatives, Fair Value [Line Items]
Derivative asset, fair value	$ 6,797		$ 5,988
Embedded conversion option [Member] | 2033 Senior Notes, net of discount and estimated fair value of embedded derivatives [Member]
Derivatives, Fair Value [Line Items]
Derivative liability, fair value	112,199		101,087
Forward contracts [Member]
Derivatives, Fair Value [Line Items]
Derivative liability, fair value	2,436		1,585
Forward contracts [Member] | Current portion of lines of credit and notes payable [Member]
Derivatives, Fair Value [Line Items]
Derivative liability, fair value	$ 2,436	[1]	$ 1,585	[1]

[1] The loss on forward contracts is recorded in Accrued expenses. The gain on the forward contracts is recorded in Prepaid expenses and other current assets.

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation. The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the Company’s results of operations, financial position and cash flows have been made. The results of operations and cash flows for the three months ended March 31, 2014, are not necessarily indicative of the results of operations and cash flows that may be reported for the remainder of 2014 or for future periods. The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.

Principles of consolidation

Principles of consolidation. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of OPKO Health, Inc. and of our wholly-owned subsidiaries and variable interest entities (“VIEs”) in which we are deemed to be the primary beneficiary. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of estimates

Use of estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and cash equivalents

Cash and cash equivalents. Cash and cash equivalents include short-term, interest-bearing instruments with original maturities of 90 days or less at the date of purchase. We also consider all highly liquid investments with original maturities at the date of purchase of 90 days or less as cash equivalents. These investments include money markets, bank deposits, certificates of deposit and U.S. treasury securities.

Inventories

Inventories. Inventories are valued at the lower of cost or market (net realizable value). Cost is determined by the first-in, first-out method. We consider such factors as the amount of inventory on hand, estimated time required to sell such inventories, remaining shelf-life, and current market conditions to determine whether inventories are stated at the lower of cost or market.

Goodwill and Intangible Assets

Goodwill and intangible assets. Goodwill represents the difference between the purchase price and the estimated fair value of the net assets acquired when accounted for by the purchase method of accounting and arose from our acquisitions of Pharma Genexx, S.A. (“OPKO Chile”), Pharmacos Exakta S.A. de C.V. (“Exakta-OPKO”), CURNA, Inc. (“CURNA”), Claros Diagnostics, Inc. (“OPKO Diagnostics”), FineTech Pharmaceuticals, Ltd. (“FineTech”), ALS Distribuidora Limitada (“ALS”), Farmadiet Group Holding, S.L. (“OPKO Spain”), Prost-Data, Inc. (“OPKO Lab”), Cytochroma Inc. (“OPKO Renal”), Silcon Comércio, Importacao E Exportacao de Produtos Farmaceuticos e Cosmeticos Ltda. (“OPKO Brazil”) and PROLOR Biotech, Inc. (“OPKO Biologics”). Goodwill, in-process research and development (“IPR&D”) and other intangible assets acquired in business combinations, licensing and other transactions at March 31, 2014 and December 31, 2013 were $1.1 billion and $1.1 billion, respectively.

Assets acquired and liabilities assumed in business combinations, licensing and other transactions are recognized at the date of acquisition at their respective fair values. Any excess of the purchase price over the estimated fair values of the net assets acquired is recognized as goodwill. We determined the fair value of intangible assets, including IPR&D, using the “income method.”

Goodwill is tested at least annually for impairment, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable, by assessing qualitative factors or performing a quantitative analysis in determining whether it is more likely than not that its fair value exceeds the carrying value.

We amortize intangible assets with definite lives on a straight-line basis over their estimated useful lives, ranging from 3 to 10 years, and review for impairment at least annually, or when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. We use the straight-line method of amortization as there is no reliably determinable pattern in which the economic benefits of our intangible assets are consumed or otherwise used up.

Fair value measurements

Fair value measurements. The carrying amounts of our cash and cash equivalents, accounts receivable and accounts payable approximate their fair value due to the short-term maturities of these instruments. Investments that are considered available for sale as of March 31, 2014 are carried at fair value.

Short-term investments, which we invest in from time to time, include bank deposits, corporate notes, U.S. treasury securities and U.S. government agency securities with original maturities of greater than 90 days and remaining maturities of less than one year. Long-term investments include corporate notes, U.S. treasury securities and U.S. government agency securities with maturities greater than one year.

In evaluating the fair value information, considerable judgment is required to interpret the market data used to develop the estimates. The use of different market assumptions and/or different valuation techniques may have a material effect on the estimated fair value amounts. Accordingly, the estimates of fair value presented herein may not be indicative of the amounts that could be realized in a current market exchange.

Contingent consideration

Contingent consideration. Each period we revalue the contingent consideration obligations associated with certain acquisitions to their fair value and record increases in the fair value as contingent consideration expense and decreases in the fair value as contingent consideration income. Changes in contingent consideration result from changes in the assumptions regarding probabilities of successful achievement of related milestones, the estimated timing in which the milestones are achieved and the discount rate used to estimate the fair value of the liability. Contingent consideration may change significantly as our development programs progress, revenue estimates evolve and additional data is obtained, impacting our assumptions. The assumptions used in estimating fair value require significant judgment. The use of different assumptions and judgments could result in a materially different estimate of fair value which may have a material impact on our results from operations and financial position.

Derivative financial instruments

Derivative financial instruments. We record derivative financial instruments on our Condensed Consolidated Balance Sheet at their fair value and recognize the changes in the fair value in our Condensed Consolidated Statement of Operations, when they occur, the only exception being derivatives that qualify as hedges. For the derivative instrument to qualify as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At March 31, 2014 and December 31, 2013, our forward contracts for inventory purchases did not meet the documentation requirements to be designated as hedges. Accordingly, we recognize all changes in the fair values of our derivatives instruments, net, in our Condensed Consolidated Statement of Operations.

Revenue recognition

Revenue recognition. Generally, we recognize revenue from product sales when goods are shipped and title and risk of loss transfer to our customers. Our estimates for sales returns and allowances are based upon the historical patterns of product returns and allowances taken, matched against the sales from which they originated, and management’s evaluation of specific factors that may increase or decrease the risk of product returns.

Revenue for laboratory services is recognized on the accrual basis at the time test results are reported, which approximates when services are provided. Services are provided to certain patients covered by various third-party payer programs including various managed care organizations, as well as the Medicare and Medicaid programs. Billings for services under third-party payer programs are included in sales net of allowances for contractual discounts and allowances for differences between the amounts billed and estimated program payment amounts. Adjustments to the estimated payment amounts based on final settlement with the programs are recorded upon settlement as an adjustment to revenue. For the three months ended March 31, 2014 and 2013, revenue from services also includes $0.1 million and $0.2 million, respectively, of revenue related to our consulting agreement with Neovasc and to revenue related to molecular diagnostics collaboration agreements. We recognize this revenue on a straight-line basis over the contractual term of the agreements.

Revenue from transfer of intellectual property includes revenue related to the sale, license or transfer of intellectual property such as upfront license payments, license fees and milestone payments received through our license, collaboration and commercialization agreements. We analyze our multiple-element arrangements to determine whether the elements can be separated and accounted for individually as separate units of accounting.

Non-refundable license fees for the out-license of our technology are recognized depending on the provisions of each agreement. We recognize non-refundable upfront license payments as revenue upon receipt if the license has standalone value and the fair value of our undelivered obligations, if any, can be determined. If the license is considered to have standalone value but the fair value of any of the undelivered items cannot be determined, the license payments are recognized as revenue over the period of our performance for such undelivered items or services. License fees with ongoing involvement or performance obligations are recorded as deferred revenue, included in Accrued expenses or Other long-term liabilities, when received and generally are recognized ratably over the period of such performance obligation only after both the license period has commenced and we have delivered the technology.

The assessment of our obligations and related performance periods requires significant management judgment. If an agreement contains research and development obligations, the relevant time period for the research and development phase is based on management estimates and could vary depending on the outcome of clinical trials and the regulatory approval process. Such changes could materially impact the revenue recognized, and as a result, management reviews the estimates related to the relevant time period of research and development on a quarterly basis. For the three months ended March 31, 2014, we recorded $0.5 million of revenue from the transfer of intellectual property. Refer to Note 5.

Revenue from milestone payments related to arrangements under which we have continuing performance obligations are recognized as Revenue from transfer of intellectual property upon achievement of the milestone only if all of the following conditions are met: the milestone payments are non-refundable; there was substantive uncertainty at the date of entering into the arrangement that the milestone would be achieved; the milestone is commensurate with either the vendor’s performance to achieve the milestone or the enhancement of the value of the delivered item by the vendor; the milestone relates solely to past performance; and the amount of the milestone is reasonable in relation to the effort expended or the risk associated with the achievement of the milestone. If any of these conditions are not met, the milestone payments are not considered to be substantive and are, therefore, deferred and recognized as Revenue from transfer of intellectual property over the term of the arrangement as we complete our performance obligations.

Allowance for doubtful accounts

Allowance for doubtful accounts. We analyze accounts receivable and historical bad debt levels, customer credit worthiness and current economic trends when evaluating the adequacy of the allowance for doubtful accounts using the specific identification method. Our reported net loss is directly affected by our estimate of the collectability of accounts receivable.

Equity-based compensation

Equity-based compensation. We measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized in the Condensed Consolidated Statement of Operations over the period during which an employee is required to provide service in exchange for the award. We record excess tax benefits, realized from the exercise of stock options as a financing cash inflow rather than as a reduction of taxes paid in cash flow from operations. Equity-based compensation arrangements to non-employees are recorded at their fair value on the measurement date. The measurement of equity-based compensation is subject to periodic adjustment as the underlying equity instruments vest.

Research and development expenses

Research and development expenses.Research and development expenses include external and internal expenses, partially offset by third-party grants and fundings 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. Research and development employee-related expenses include salaries, benefits and stock-based compensation expense. Other unallocated internal research and development expenses are incurred to support overall research and development activities and include expenses related to general overhead and facilities. We expense these costs in the period in which they are incurred. We estimate our liabilities for research and development expenses in order to match the recognition of expenses to the period in which the actual services are received. As such, accrued liabilities related to third party research and development activities are recognized based upon our estimate of services received and degree of completion of the services in accordance with the specific third party contract.

Segment reporting

Segment reporting. Our chief operating decision-maker (“CODM”) is comprised of our executive management with the oversight of our Board of Directors. Our CODM reviews our operating results and operating plans and makes resource allocation decisions on a Company-wide or aggregate basis. We currently manage our operations in two reportable segments, pharmaceuticals and diagnostics. The pharmaceutical segment consists of two operating segments, our (i) pharmaceutical research and development segment which is focused on the research and development of pharmaceutical products, and vaccines, and (ii) the pharmaceutical operations we acquired in Chile, Mexico, Israel, Spain, Uruguay and Brazil. The diagnostics segment consists of two operating segments, our (i) pathology operations we acquired through the acquisition of OPKO Lab and (ii) point-of-care and molecular diagnostics operations. There are no inter-segment sales. We evaluate the performance of each segment based on operating profit or loss. There is no inter-segment allocation of interest expense and income taxes.

Variable interest entities

Variable interest entities. The consolidation of variable interest entities (“VIE”) is required when an enterprise has a controlling financial interest. A controlling financial interest in a VIE will have both of the following characteristics: (a) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses of the VIE that could potentially be significant to the VIE.

Investments

Investments. We have made strategic investments in development stage and emerging companies. We record these investments as equity method investments or investments available for sale based on our percentage of ownership and whether we have significant influence over the operations of the investees. For investments classified under the equity method of accounting, we record our proportionate share of their losses in Losses from investments in investees in our Condensed Consolidated Statement of Operations. Refer to Note 5. For investments classified as available for sale, we record changes in their fair value as unrealized gain or loss in Other comprehensive loss based on their closing price per share at the end of each reporting period.

Recent accounting pronouncements

Recent accounting pronouncements. In July 2013, the FASB issued an Accounting Standards Update (“ASU”), ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU 2013-11 is intended to eliminate inconsistent practices regarding the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is available to reduce the taxable income or tax payable that would result from the disallowance of a tax position. ASU 2013-11 is effective for our fiscal year beginning January 1, 2014 and subsequent interim periods. The adoption of ASU 2013-11 does not have a material effect on our Condensed Consolidated Financial Statements.

XML

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Summary of investments classified as available for sale, and carried at fair value

A summary of our investments as of March 31, 2014, classified as available for sale and carried at fair value, is as follows:

	As of March 31, 2014
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI			Gain/(Loss) in Accumulated Deficit		Fair value
Common stock investments, available for sale	$	3,320	$	2,035	$	(150	)	$	—	$	5,205
Common stock options/warrants	1,425		1,610		—			3,762		6,797
Total assets	$	4,745	$	3,645	$	(150	)	$	3,762	$	12,002

A summary of our investments as of December 31, 2013, classified as available for sale and carried at fair value is as follows:

	As of December 31, 2013
(In thousands)	Amortized Cost		Gross unrealized gains in Accumulated OCI		Gross unrealized losses in Accumulated OCI		Gain/(Loss) in Accumulated Deficit		Fair value
Common stock investments, available for sale	$	3,376	$	2,698	$	—	$	—	$	6,074
Common stock options/warrants	925		1,041		—		4,022		5,988
Total assets	$	4,301	$	3,739	$	—	$	4,022	$	12,062

Financial assets and liabilities measured at fair value on a recurring basis

Our financial assets and liabilities measured at fair value on a recurring basis are as follows:

	Fair value measurements as of March 31, 2014
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Money market funds	$	132,343	$	—	$	—	$	132,343
Certificates of deposit	—		816		—		816
Common stock investments, available for sale	5,205		—		—		5,205
Common stock options/warrants	—		6,797		—		6,797
Forward contracts	—		1		—		1
Total assets	$	137,548	$	7,614	$	—	$	145,162
Liabilities:
Embedded conversion option	$	—	$	—	$	112,199	$	112,199
Deferred acquisition payments, net of discount	—		—		840		840
Contingent consideration:
CURNA	—		—		583		583
OPKO Diagnostics	—		—		14,193		14,193
OPKO Renal	—		—		54,819		54,819
OPKO Spain	—		—		1,421		1,421
Total liabilities	$	—	$	—	$	184,055	$	184,055

	Fair value measurements as of December 31, 2013
(In thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Money market funds	$	168,418	$	—	$	—	$	168,418
Certificates of deposit	—		827		—		827
Pharmsynthez Notes Receivable & Purchase Option	—		6,151		—		6,151
Common stock investments, available for sale	6,074		—		—		6,074
Common stock options/warrants	—		5,988		—		5,988
Forward contracts	—		49		—		49
Total assets	$	174,492	$	13,015	$	—	$	187,507
Liabilities:
Embedded conversion option	—		—		101,087		101,087
Deferred acquisition payments, net of discount	—		—		5,465		5,465
Contingent consideration:
CURNA	—		—		573		573
OPKO Diagnostics	—		—		13,776		13,776
FineTech	—		—		3,124		3,124
OPKO Renal	—		—		53,092		53,092
OPKO Spain	—		—		1,043		1,043
Total liabilities	$	—	$	—	$	178,160	$	178,160

The carrying amount and estimated fair value of our long-term debt

	March 31, 2014
(In thousands)	Carrying Value		Total Fair Value		Level 1		Level 2		Level 3
2033 Senior Notes	$	112,602	$	118,163	$	—	$	—	$	118,163

Reconcile the beginning and ending balances of Level 3 assets and liabilities

The following tables reconcile the beginning and ending balances of our Level 3 assets and liabilities as of March 31, 2014 and December 31, 2013:

	March 31, 2014
(In thousands)	Contingent consideration			Deferred acquisition payments, net of discount			Embedded conversion option
Balance at December 31, 2013	$	71,620		$	5,484		$	101,087
Additions	—			—			—
Total losses (gains) for the period:
Included in results of operations	2,610			—			11,112
Payments	(3,214		)	(4,644		)	—
Balance at March 31, 2014	$	71,016		$	840		$	112,199

	December 31, 2013
(In thousands)	BZNE Note and conversion feature			Contingent consideration			Deferred acquisition payments, net of discount			Embedded conversion option
Balance at December 31, 2012	$	2,040		$	20,056		$	10,103		$	—
Additions	—			47,710			—			59,204
Total losses (gains) for the period:
Included in results of operations	—			6,947			829			43,082
Foreign currency impact	—			31			—			—
Conversion	(2,040		)	—			—			(1,199		)
Payments	—			(3,124		)	(5,448		)	—
Balance at December 31, 2013	$	—		$	71,620		$	5,484		$	101,087

XML

Fair Value Measurements - Level 3 Reconciliation (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended	3 Months Ended	12 Months Ended
	Mar. 31, 2014 Contingent consideration [Member]	Dec. 31, 2012 Contingent consideration [Member]	Mar. 31, 2014 Deferred acquisition payments, net of discount [Member]	Dec. 31, 2012 Deferred acquisition payments, net of discount [Member]	Mar. 31, 2014 Embedded conversion option [Member]	Dec. 31, 2012 Embedded conversion option [Member]	Dec. 31, 2012 Common stock options/warrants [Member]	Dec. 31, 2013 Common stock options/warrants [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance, assets							$ 2,040	$ 0
Additions, assets							0
Total losses (gains) for the period:
Included in results of operations, assets							0
Included in Other comprehensive loss, assets		0		0		1,199	(2,040)
Transfer out to equity method investment, assets		(3,124)		(5,448)		0	0
Ending Balance, assets								0
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance, liabilities	71,620	20,056	5,484	10,103	101,087	0
Additions, liabilities		47,710		0		59,204
Total losses (gains) for the period:
Included in results of operations, liabilities	2,610	6,947		829	11,112	43,082
Payments	(3,214)		(4,644)
Foreign currency impact		31
Ending Balance, liabilities	$ 71,016		$ 840		$ 112,199

XML

Debt - Lines Of Credit (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Line of Credit Facility [Line Items]
Credit line capacity	$ 14,556,000
Balance outstanding	8,147,000	9,061,000
Itau Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	5.00%
Credit line capacity	3,000,000
Balance outstanding	1,628,000	1,999,000
Bank of Chile [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	6.40%
Credit line capacity	2,250,000
Balance outstanding	1,534,000	2,079,000
BICE Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	5.00%
Credit line capacity	1,700,000
Balance outstanding	1,315,000	516,000
Corp Banca [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	0.00%
Credit line capacity	0
Balance outstanding	0	(47,000)
BBVA Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	5.00%
Credit line capacity	2,000,000
Balance outstanding	998,000	523,000
Penta Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	8.20%
Credit line capacity	1,000,000
Balance outstanding	907,000	946,000
Security Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	7.26%
Credit line capacity	1,300,000
Balance outstanding	907,000	1,075,000
BCI [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	0.00%
Credit line capacity	0
Balance outstanding	0	198,000
Estado Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	5.44%
Credit line capacity	2,000,000
Balance outstanding	858,000	1,772,000
Sabadell Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	4.50%
Credit line capacity	206,000
Balance outstanding	0	0
Bilbao Vizcaya Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	4.72%
Credit line capacity	344,000
Balance outstanding	0	0
Banco Popular [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	6.09%
Credit line capacity	275,000
Balance outstanding	0	0
Deutsche Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	4.00%
Credit line capacity	206,000
Balance outstanding	0	0
Santander Bank [Member]
Line of Credit Facility [Line Items]
Interest rate on borrowings at March 31, 2014	4.50%
Credit line capacity	275,000
Balance outstanding	$ 0	$ 0

XML

Condensed Consolidated Statements of Comprehensive Loss (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Statement of Comprehensive Income [Abstract]
Net loss attributable to common shareholders	$ (44,551)	$ (34,635)
Other comprehensive income (loss), net of tax:
Change in foreign currency translation	(1,801)	323
Available for sale investments:
Change in other unrealized gains, net	335	414
Less: reclassification adjustments for gains included in net loss, net of tax	(553)	0
Comprehensive loss	$ (46,570)	$ (33,898)

XML

Loss Per Share

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

LOSS PER SHARE

LOSS PER SHARE

Basic loss per share is computed by dividing our net loss by the weighted average number of shares outstanding during the period. Diluted loss per share is computed by dividing our net loss increased by dividends on preferred stock by the weighted average number of shares outstanding and the impact of all dilutive potential common shares, primarily stock options. The dilutive impact of stock options and warrants is determined by applying the “treasury stock” method. In the periods in which their effect would be anti-dilutive, no effect has been given to outstanding options, warrants or convertible Preferred Stock in the diluted computation. Potentially dilutive shares issuable pursuant to the 2033 Senior Notes (defined in Note 6) were not included in the computation of net loss per share for the three months ended March 31, 2014, because their inclusion would be anti-dilutive.

Also, a total of 29,874,112 and 30,119,145 potential shares of Common Stock have been excluded from the calculation of diluted net loss per share for the three months ended March 31, 2014 and 2013, respectively, because their inclusion would be anti-dilutive.

During the three months ended March 31, 2014, 602,665 Common Stock options and Common Stock warrants to purchase shares of our Common Stock were exercised, resulting in the issuance of 527,926 shares of Common Stock. Of the 602,665 Common Stock options and Common Stock warrants exercised, 74,739 shares of Common Stock were surrendered in lieu of a cash payment via the net exercise feature of the warrant agreements.

XML

Derivative Contracts (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of fair values and derivative financial instrument

The following table summarizes the fair values and the presentation of our derivative financial instruments in the Condensed Consolidated Balance Sheets:

(In thousands)	Balance Sheet Component	March 31, 2014		December 31, 2013
Derivative financial instruments:
Common stock options/warrants	Investment, net	$	6,797	$	5,988
Embedded conversion option	2033 Senior Notes, net of discount and estimated fair value of embedded derivatives	$	112,199	$	101,087
Forward contracts (1)	Current portion of lines of credit and notes payable	$	2,436	$	1,585

⁽¹⁾  The loss on forward contracts is recorded in Accrued expenses. The gain on the forward contracts is recorded in Prepaid expenses and other current assets.

Summary of loss (gain) recorded in Fair value changes of derivative financial instruments

The following table summarizes the (losses) and gains recorded during the three months ended March 31, 2014 and 2013:

	Three months ended March 31,
(In thousands)	2014			2013
Derivative gain (loss):
Common stock options/warrants	$	596		$	1,260
2033 Senior Notes	(11,112		)	(24,788		)
Forward contracts	1			(21		)
Total	$	(10,515	)	$	(23,549	)

Outstanding contracts recorded at fair value and their maturity details

The outstanding forward contracts at March 31, 2014 and December 31, 2013, have been recorded at fair value, and their maturity details are as follows:

(In thousands) Days until maturity	Contract value		Fair value at  March 31, 2014		Effect on income (loss)
0 to 30	$	285	$	294	$	9
31 to 60	952		957		5
61 to 90	121		120		(1		)
91 to 120	921		911		(10		)
121 to 180	156		154		(2		)
Total	$	2,435	$	2,436	$	1

(In thousands) Days until maturity	Contract value		Fair value at  December 31, 2013		Effect on income (loss)
0 to 30	$	472	$	489	$	17
31 to 60	562		579		18
61 to 90	503		517		14
91 to 120	—		—		—
121 to 180	—		—		—
More than 180	—		—		—
Total	$	1,537	$	1,585	$	49

XML

Debt - Notes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2014 Notes [Member]	Jan. 30, 2013 Notes [Member]
Debt Instrument [Roll Forward]
Embedded derivatives, beginning balance			$ 101,087	$ 59,204
Convertible notes, beginning balance			158,064
Discount, beginning balance			(47,239)
Total, beginning balance			211,912
Amortization of debt discount			1,777
Change in fair value of embedded derivative	(10,515)	(23,549)	11,112
Embedded derivatives, ending balance			112,199	59,204
Convertible notes, ending balance			158,064
Discount, ending balance			(45,462)
Total, ending balance			$ 224,801

XML

Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

We have reviewed all subsequent events and transactions that occurred after the date of our March 31, 2014 condensed consolidated balance sheet date, through the time of filing this Quarterly Report on Form 10-Q.