Note 15 - Segments

3 Months Ended

Mar. 31, 2025

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 15 SEGMENTS

We manage our operations in two reportable segments - pharmaceutical and diagnostics. The following is a brief description of our reportable segments and a description of business activities conducted by our corporate operations. 

Pharmaceutical — this segment consists of our operations in Chile, Mexico, Ireland, Israel, Spain, Brazil, and Uruguay, Rayaldee product sales, NGENLA royalty and profit-sharing sales, and our pharmaceutical research and development.

Diagnostics — this segment primarily consists of clinical laboratory operations through BioReference and our point-of-care operations.

To provide greater transparency into the factors affecting segment profitability, the Company discloses significant expense categories for each reportable segment in the tables below. Our CODM is Phillip Frost, M.D., our Chairman and Chief Executive Officer. Dr. Frost reviews our operating results and operating plans and makes resource allocation decisions on a Company-wide or aggregate basis. Our CODM may discuss and review financial information at the Pharmaceutical and Diagnostic operating segment level. The CODM uses segment information to evaluate segment profitability, monitor trends, identify risks and opportunities, allocate resources (such as capital expenditures and R&D funding), and set strategic priorities (including new product development and market expansion). These expenses, along with segment revenue, are used to calculate gross margin, a key profitability metric that the CODM uses to assess segment performance. In computing operating income, none of the following items have been included: interest expense, other non-operating income and expenses, and income taxes. Segment operating income (expense) is total revenue, less cost of revenue and operating expenses relative to each segment. There are no significant inter-segment sales, nor is there any inter-segment allocation of interest expense or income taxes.

The following are descriptions of the significant expense categories included in the segment reporting tables below:

For the pharmaceutical segment:

● Cost of product revenue: Represents the direct costs of manufacturing and distributing pharmaceutical products, including raw materials, manufacturing overhead, and distribution costs.

● Selling, general and administrative (SG&A) expenses: Encompasses operating expenses such as salaries, marketing and advertising costs, and administrative overhead.

● Research and development (R&D) expenses: Incurred in developing new pharmaceutical products, including costs related to research, clinical trials, and regulatory approvals.

● Intangible asset amortization: Represents the periodic expensing of acquired intangible assets, such as patents and licenses.

● Depreciation: Relates to the depreciation of property, plant, and equipment used in the segment's operations.

For the diagnostics segment:

● Cost of service revenue: Includes the direct costs of providing diagnostic testing services, such as laboratory supplies, equipment costs, and labor costs.

● Selling, general and administrative (SG&A) expenses: Similar to the Pharmaceuticals segment, includes salaries, marketing expenses, and administrative overhead.

● Research and development (R&D) expenses: Incurred in developing new diagnostic products and services, including costs related to research, clinical studies, regulatory submissions, and new technology development.

● Intangible asset amortization: Represents the periodic expensing of acquired intangible assets, such as intellectual property and customer relationships.

● Depreciation: Relates to the depreciation of property, plant, and equipment used in the segment's operations.

The tables below present information about reported segments, unallocated corporate operations as well as geographic information for the three months ended March 31, 2025 and 2024:

	For the three months ended March 31,
(In thousands)	2025			2024
Revenue from services:
Pharmaceutical	$	—		$	—
Diagnostics		102,844			126,890
Corporate		—			—
	$	102,844		$	126,890
Revenue from products:
Pharmaceutical	$	34,842		$	38,047
Diagnostics		—			—
Corporate		—			—
	$	34,842		$	38,047
Revenue from transfer of intellectual property and other:
Pharmaceutical	$	12,266		$	8,749
Diagnostics		—			—
Corporate		—			—
	$	12,266		$	8,749
Cost of revenue:
Pharmaceutical	$	22,814		$	21,743
Diagnostics		84,518			109,874
Corporate		—			—
	$	107,332		$	131,617
Gross margin:
Pharmaceutical	$	24,294		$	25,053
Diagnostics		18,326			17,016
Corporate		—			—
	$	42,620		$	42,069
Selling, general and administrative:
Pharmaceutical	$	12,710		$	15,040
Diagnostics		37,956			45,761
Corporate		8,420			9,366
	$	59,086		$	70,167
Research and development:
Pharmaceutical	$	30,238		$	21,247
Diagnostics		538			665
Corporate		65			25
	$	30,841		$	21,937
Amortization of intangible assets:
Pharmaceutical	$	16,111		$	16,443
Diagnostics		3,750			4,994
Corporate		—			—
	$	19,861		$	21,437
Segment operating loss:
Pharmaceutical	$	(34,765	)	$	(27,677	)
Diagnostics		(23,918	)		(34,404	)
Corporate		(8,485	)		(9,391	)
	$	(67,168	)	$	(71,472	)

	For the three months ended March 31,
Depreciation and amortization:	2025		2024
Pharmaceutical	$	17,788	$	17,952
Diagnostics		5,699		7,868
Corporate		—		—
	$	23,487	$	25,820
Revenues:
United States	$	116,207	$	136,043
Ireland		5,480		9,222
Chile		14,532		14,889
Spain		6,439		5,659
Israel		73		160
Mexico		6,229		7,083
Other		992		630
	$	149,952	$	173,686

Segment assets for the two reportable segments in which we operate are shown in the following tables.  Corporate assets are principally cash and are not allocated to an operating segment. Identifiable assets by segment are those assets that are used in our operations in each segment. The accounting policies of the segments are the same as those described in Note 3 summary of significant accounting policies.

	March 31,		December 31,
(In thousands)	2025		2024
Assets:
Pharmaceutical	$	1,336,076	$	1,359,270
Diagnostics		482,666		493,898
Corporate		309,585		347,044
	$	2,128,327	$	2,200,212
Goodwill:
Pharmaceutical	$	313,230	$	309,545
Diagnostics		163,442		219,707
	$	476,672	$	529,252

No customer represented more than 10% of our total consolidated revenue for the three months ended March 31, 2025 and 2024. As of March 31, 2025 and December 31, 2024, no customer represented more than 10% of our accounts receivable balance.