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Video shows nurses doubled over LAUGHING as 89-year-old World War 2 veteran dies in Georgia care home

This is the chilling moment a group of nurses laughed as a World War II veteran died in a Georgia care home.

The nurses were meant to be fixing an oxygen mask onto 89-year-old James Dempsey after he called for help saying he couldn’t breathe. 

But a surveillance camera captured them laughing as the breathing machine failed, and Dempsey fell unconscious, and records show they waited an hour to call 911.

One of the nurses is seen laughing so hard she is doubled over Dempsey’s deathbed. 

Initially, Dempsey’s family in Woodstock, Georgia, thought he had died of natural causes in Northeast Atlanta Health and Rehabilitation Center in 2014. 

However, his son Tim had promised they would install a hidden camera when he first moved in there as he feared mistreatment. 

Weeks after Dempsey’s death, Tim reviewed the footage – and what he saw sparked a three-year legal battle.

Despite watching the video in court in 2015, the nurses kept their licenses until now that local television station WXIA-TV/11Alive persuaded the court to release the footage to the public. 

Dempsey served in the Second World War, before settling in Woodstock, Georgia

Dempsey served in the Second World War, before settling in Woodstock, Georgia

Dempsey served in the Second World War, before settling in Woodstock, Georgia

WXIA-TV/11Alive says the nurses didn’t surrender their licenses until this September, after it sent The Georgia Board of Nursing a link to the video the nursing home fought three years to keep secret.

And now, it has been shared publicly.  

The newly-released video includes the deposition in court on November 23, 2015.

The video was played to the courtroom as the family’s lawyer Mike Prieto questioned former nursing supervisor Wanda Nuckles.

Before playing the video, Nuckles tells the court nurses were giving Dempsey CPR repeatedly until the emergency services arrived. As the video rolls, the courtroom sees that did not happen.

The video starts with Dempsey, a decorated soldier, repeatedly calling for help, saying he can’t breathe. He also presses the call light, which flashes on at 4.35am. He then appears to start losing consciousness.

A nurse does not appear until 4.42am, at which point she readjusts the bed, turns off the call light, and leaves, as Dempsey struggles for air.

Prieto asks Nuckles if that is an acceptable period of time, to which she responds ‘nope’. He asks if Dempsey appears to be gasping for air, to which she responds, ‘yep’.

‘How does it make you feel watching this video?’ the lawyer asks. ‘Sick,’ Nuckles replies.  

The video then cuts to 6.23pm, when Nuckles and another nurse enter the room. They fix his blanket and adjust his bed as Dempsey lies motionless. 

Prieto says to Nuckles: ‘Contrary to the way you testified previously, there’s no one doing CPR, is there?’ Nuckles replies: ‘No.’

They watch on. Another nurse enters, and all three stand around the bed talking. 

At 6.30pm, as they try unsuccessfully to restart the oxygen machine and Dempsey takes his final breaths, the three appear to be laughing – with one of the nurses doubled over laughing.

In the courtroom, Prieto stops the tape and asks Nuckles: ‘Ma’am was there something funny happening at 6.30am on February 27, 2014 in the middle of this attempt to resuscitate Mr Dempsey?’

Gasping for air: At first, Dempsey is seen calling for help and gasping for air - unanswered from 4.35am to 4.42am on February 27, 2014

Gasping for air: At first, Dempsey is seen calling for help and gasping for air – unanswered from 4.35am to 4.42am on February 27, 2014

First nurse responds: At 4.43am, a nurse walks in, adjusts his bed, then leaves the room 

First nurse responds: At 4.43am, a nurse walks in, adjusts his bed, then leaves the room 

Three nurses attend: This is the moment nurse supervisor Wanda Nuckles (pictured touching the bed in the video, and watching the video in a red shirt) doubles over laughing

Three nurses attend: This is the moment nurse supervisor Wanda Nuckles (pictured touching the bed in the video, and watching the video in a red shirt) doubles over laughing

Eventual chest compressions: Knuckles is seen performing six chest compressions before stopping

Eventual chest compressions: Knuckles is seen performing six chest compressions before stopping

Nuckles replies: ‘I have no clue sir, I have no clue. I can’t even remember all that, as you can see.’

Prieto asks: ‘Do you see any sense of urgency on the part of any of the medical providers here ma’am? Including yourself?’

Nuckles replies: ‘I think I was doing pretty good considering I didn’t have anything good to work with.’ 

Prieto says: ‘Ok well when you testified earlier that you walked in and started giving CPR until the EMTs showed up, that wasn’t really the truth was it?’

Nuckles replies: ‘Sir that was an honest mistake because I was just basing everything on what I normally do.’

The video continues showing all nurses leaving, with Nuckles remaining. She adjusts his bed, and fixes a breathing machine onto Dempsey’s face. She then performs six chest compressions then stops. 

‘Any reasons to stop after six chest compressions there ma’am?’ Prieto asks.

‘Not that I know of,’ Nuckles says. 

WXIA said records showed the nursing home has built up $813,000 in Medicare fines since 2015. 

And while it received a strong inspection report in May, it still has Medicare’s lowest score, a one-star rating.

This case has emerged amid a slew of allegations against nursing homes, some associated with the US Department of Veterans Affairs, regarding care and treatment.  

It is illegal in Georgia to install a hidden camera in a nursing home without prior consent from the nurses and the establishment. However, the revelations from the footage absolved Dempsey’s family of charges.

Speaking to Channel 2, Tim Dempsey said he had assumed his father’s suspicions were over-the-top. 

‘We would have just thought it was natural causes and everything was done that should have been done and he passed away in his sleep,’ Tim Dempsey told Channel 2′s Rachel Stockman.

But reviewing the footage, he said he felt ‘shock’ and ‘dismay’ at watching the nurses, adding: ‘we’ve seen these people everyday.’

Article source:

‘We give people their humanity back’: inside Croatia’s pioneering mental health centre

High walls still surround the oldest asylum in the Balkans, an 18th-century building pocked with the artillery scars of last century’s civil war, but the gates are no longer locked. Handles have been replaced on internal doors and bars removed from windows.

“The jail,” said Darko Kovaoic, a 53-year-old poet with schizophrenia who lives here, “has broken open.”

The institution in Osijek, eastern Croatia, is run by Ladislav Lamza, a former social worker who is taking on the government, the health minister, and his own staff to transform the lives of his “beneficiaries” – the patients of what was until recently an old-style asylum.

It was in May 2015 that Lamza ripped down the sign outside – replacing “Home for the Insane” with “Centre for People Like Us” and began moving people out.

“We express many things in that small sentence,” said Lamza. “Because what we have done for the past two centuries is the opposite. We’ve said: ‘You are not like us, you are ugly and mad and I’m not like you.’ This is where we exclude, stigmatise and restrain people for the rest of their lives.

“We have people in need and we provide inappropriate help and the result is catastrophic. I never knew anyone who was rehabilitated. We make equality between criminals and people with disabilities.”

Lamza’s transformation of the centre caused shock and upset: one member of staff pointed out that these were people who should have been “exterminated”.

In four years, 172 out of 200 people have been successfully moved into shared flats dotted around the small city, with carers from the centre visiting them as needed.

As his institution emptied, Lamza ditched the metal bed frames and stained mattresses. Although the paint still peels and the furniture is scratched and sagged, he has turned the bleak, soulless wards into rooms for day classes, a library and a bright cafe where former patients demonstrate how to make pancakes and brew tea for other ex-patients who come by daily to grow cabbages in the gardens or to chat with staff. Staff are no longer janitors, nurses, cooks or cleaners, but all re now “care assistants”. The transformation, says Butkovic Jadranka – formerly a hairdresser here, now running sewing classes and shopping and theatre trips – is amazing.

Slavica Hip left the home three years ago and now lives in Osijek with her boyfriend. ‘In the institution I would take more pills. Now my medication has been reduced. I feel better,’ she says. Photograph: Photo: Robin Hammond/NOOR

“When we first heard of the director’s plans, I was fearful, everyone was fearful, we thought perhaps he had gone a little crazy. But now everything is completely different. Before it was like they were objects, slightly out of focus objects. Just numbers. Like on a conveyer belt. I never asked anyone’s name. Now they are my friends. People are not dangerous lunatics, they have become citizens, they have become neighbours.”

It is 10 years since Croatia signed the UN’s Convention on the Rights of Persons with Disabilities but Osijek is the only one of Croatia’s 24 mental health institutions, which house a total of 6,700 people, implementing its spirit. “We signed this with our fingers crossed behind our backs. The government still wants people locked up, locked away. People with disabilities, whether mental health or physical, have rights. There are four reasons why inclusion is better than exclusion,” said Lamza. “It’s better for a person, it’s better for the community, it’s legal, it’s cheaper.” He says the cost per person per month in an institution is $1,260 (£950). “In the community, even with the maximum 24-hour support, it is $1,020.

“The first day I let people go I didn’t sleep: will she hurt someone, will he cope? But there have been no problems. People have thanked us for giving them the best neighbours they have ever had!”

After 12 years in institutions, Branka Reljan, 55, has spent three years living in the community, in a shared flat with her partner Drazenko Tevlli. She speaks fluent German and English but has suffered mental health breakdowns since university and has let go of old ambitions. Now the couple take great delight in visiting cafes and shops. “We met in the institution but love is not allowed so we lived a secret for 11 years. I say I was in prison before. Now I love to make apple pies and buy spices and oils for cooking. It is wonderful for us to have our own keys, to buy fresh juice and to take a bus. We are satisfied with our neighbours. We are happy.”

Zoran Stih and Ruzica Vidakovic met at the institution in Osijek. They moved out in 2015 and are now married and living in an apartment in the town. Photograph: Photo: Robin Hammond/NOOR

If other asylums in Croatia had any desire to follow Lamza’s care in the community model it would be more difficult. Most were built far from towns.

Rada Matos is the director of Ljeskovica home for mentally ill adults, deep in the Pozega forest, an hour’s drive from Osijek. Lamza describes it as “a warehouse for lost souls”. Matos says she does her best for the 284 people here but points out that Croatia is a poor country and mental health is both under-resourced and stigmatised. “We have no psychologists and no psychiatrists, no professional is interested in coming out here to work, yet perversely we are the main employer in the area for unskilled workers. It’s too far for relatives to visit and there is no community for people to live in even if I had the resources to try. There is a tiny village of uneducated people to whom this is the madhouse.”

There is a long waiting list to come here but few leave. “Maybe two a year,” she said. “We try to explain mental health is an illness, we invite in families, school groups. But what I’d really need to do is move this building somewhere else, somewhere where there is a community.”

Around the grounds and in the corridors, people stand or wander in shabby clothes too big or too small. Miryama Nikoli, 38, is new to Ljeskovica but has been institutionalised for 18 years. Eyes glazed by medication that hasn’t been changed in all that time, she talks to everyone about her daughter, taken away as a baby. “I was sick because of my nerves but now I suffer because of my baby,” she says. “I drink the medicine but I want to see her again.” Matos pulls out her file; her background is heart-breaking and abusive. One line mentions the child, who will now be 18. The file contains four A4 pages.

In Osijek the belief is that lives are better on the outside. Care assistant Vlatka Griner said the hardest task in moving people into the community was to make them use chairs: “At the asylum, they squat in the corridors, smoking. Squat, smoke, move a bit and squat again. What else did they have to do? In only slippers, just slippers because they never went out. When they are in the apartments the hard thing is to get people to sit in chairs. It can take a good two months.

“Then they go to the shops, buy their own food, buy their own clothes, run their own lives. Brush their hair. They’re unrecognisable.”

It is not a solution for everyone. Back in Osijek, Zdenko Kovac, 64, is a convicted murderer and, although he claims the scars on his head are from an axe wielded by his wife and he is not deemed dangerous enough for a secure hospital, he has failed to cope outside and is back in the institution where he wants to stay “until I die”.

“He is someone I worry about,” admits Lamza, “he wants to stay and ideally he will.” For others, it was never the right place. Luka Bobanovic, 36, caught a fever aged seven that left him brain-damaged. His mother handed him over to state care and he has been bounced around from institution to institution. “When he came to us he was very disturbed,” said Lamza. “Eight times Luka went through a door or window, either him chasing staff or them chasing him. The doctor told staff to tie him to his bed. I found him like that, tied to his bed, crying for his mamma. The staff shrugged and told me ‘we are scared of him’.”

Now he lives in a small bungalow with three other beneficiaries and round-the-clock care.“Our work doesn’t end when people live outside the institution,” said Lamza. “We are supporting them to live like every citizen of this town, to fall in love, dance, eat pancakes. I want to give people back a reason to live. That is what we have been taking from them, their humanity.

“I’m ashamed of how people lived before, but I’m happy,” Lamza said, “because they’re happy.”

Article source:

Global Health Challenges Offer Social Entrepreneurs Opportunity

You can download an audio podcast here or subscribe via iTunes.

“We have grown far too tolerant of businesses not acting in alignment with the public good,” said Derek Fetzer, director of Johnson and Johnson’s CaringCrowd crowdfunding site for global health. “ Shouldn’t all business, all entrepreneurship be for the public good?

“The spirit of social entrepreneurs is crucial in solving global health challenges, and has been a driving force in uncovering innovative solutions to tackle the ever-changing global health landscape,” Carol Pandak, PolioPlus director for Rotary International, said. (I am a member of Rotary and once wrote an article for the Rotarian Magazine.)

Pandak noted that global health issues hold a unique space on the plant. “It could be easy to diagnose many global health challenges as problems of individual regions and nations.” After all, it has been decades since anyone in the Americas got polio.

She pointed out that the United Nations’ Sustainable Development Goal number 3 targets healthy lives and well-being for all. “When it comes to global health, there really is no issue from which any group, any nation is immune.” Even with only 15 cases reported so far in 2017, polio is just a plane ride away.

To get a better perspective on global health opportunities for social entrepreneurs, I invited 12 experts and practitioners to join me for a roundtable discussion. You can watch the entire 90-minute discussion in the video player above. Pandak participated only in writing. In a wide-ranging discussion, we covered challenges and opportunities in global health along with specific examples and some key lessons learned.

Credit: Engineering World Health

Leslie Calman, Engineering World Health

Leslie Calman, CEO of Engineering World Health, extended Pandak’s idea. “The answer must be broadly systemic, not singular: a combination of broad public health measures; an educated and paid healthcare workforce including doctors, nurses and technicians; support from governments and NGOs for public hospitals and clinics that serve low-income people; [and] the education of women and girls.”

Entrepreneurs have many roles to play in global health, said Deepak Kapur, the Chairman, India National PolioPlus Committee. He highlights needs assessment, monitoring, cutting red-tape for rapid response to emergent needs, special perspectives of business and industry and piloting new programs.

Article source:

Sabra Health Care Vs. Omega Healthcare: Side-By-Side


I hold small positions in Sabra Health Care (SBRA) and Omega Healthcare (OHI). Both are REITs leasing to the healthcare industry with a focus on skilled nursing facilities. In fact, both companies share several common operator-tenants.

Both OHI and SBRA share prices declined heavily since the quarter ended September 30, 2017. Readers may be aware that Sabra issued 16 million common shares on September 28, 2017 at $21 per share (source: NASDAQ Globe Newswire). As of November 16, 2017, SBRA shares closed at $19.05. Omega shares have shared a similar trend.

In this article, I wanted to review the two healthcare REITs side-by-side to evaluate whether one is particularly stronger investment candidate relative to the other. Among others, I independently computed several operating metrics and liquidity measures. Read on for the calculations and my conclusion.

Show Me The Dividend

Without further ado, let me start bombarding you with the metrics. First of all, I recognize that there’s a good chance you, the reader, is a dividend investor. Me, too! So, here is how the two companies stack up side-by-side.

Dividend Yield

Basically, both companies yield a relatively high 9%+, with a slight edge going to Omega Healthcare (which mainly is following the recent sell-off). Also, worth noting is that Omega had the stronger absolute dividend growth over prior year in the high single-digit %.

(As an aside, Sabra shares jumped so much since 2016 year-end, because of the merger with Care Capital Properties.)

Winner: Omega. But, not by much.

Reference Financial Info

The following reference financial info was mostly keyed in using 2017 Q3 10-Q (for the quarter ended 9/30/2017). These base figures will set the stage for the computations to follow and I wanted to share these with you for reference.

Source: Author’s data entry. [Original worksheet: sbra_vs_ohi_side-by-side.xlsx]

I need to make a quick explanation about the column labeled “Omega w/out imp.” That refers to what Omega’s financials would look like if I exclude the non-cash impairment charge for direct financing lease of $198 million.

In this article, I won’t debate the merits of whether or not the figure should be deemed reflective of on-going operations. Rather, I want to present the metrics both with and without that particular impairment charge. Okay, back to metrics.

Operating Metrics

Based on the financial table shared above, one can re-compute the following metrics.

Recognize that these are neither GAAP measures nor conventionally disclosed REIT measures. However, these made sense to me as operating metrics I’d like to know if I were running the business.

For instance, Both Omega and Sabra derive over 80% of their total revenues from renting. That helps me understand that both are mostly in the business of being a landlord. Clearly, Omega is more involved in “other” activities.

OpEx ratio is simply total operating expense (including interest expense) divided by total revenues. You can see how these were computed in the source spreadsheet. Here, I find that Sabra is the more frugal spender. That’s important for me to know as an investor.

With respect to distributions made relative to FFO, both come out in the low 80%-range if you exclude the impact of the aforesaid $198 million impairment charge. On a NAREIT FFO basis, Omega’s distributions exceeded its FFO for the 9-months ended September 30, 2017.

Rent income yield was computed as annualized rental income divided by gross real estate assets. It was a way of seeing for a given amount of asset, how much income is that asset producing in rent? In that measure, Omega was the winner. But, then unlike Sabra, Omega was recognizing quite a bit of impairment activity. That means both you and I need to dig a little deeper into the quality of Omega’s assets and drivers of the impairment charges. Sadly, that deep dive is out of scope here and will have to be done in a separate analysis.

Winner: Sabra. But Maybe.

Liquidity/Credit Quality

Both companies issue investment grade debt as measured by your rating agencies (I excluded Fitch rating for simplicity). Ba1 is one grade lower than Baa3, so Omega’s unsecured debt is rated slightly higher.

Also, note that a greater portion of Omega’s debt is unsecured. That gives some strength to Omega’s case relative to Sabra.

(For those unfamiliar with debt, unsecured is better in this case. Secured debt basically means that the Bank has secured a specific lien on some hard asset of the business, most likely a real estate property. An unsecured debt would be made based on the creditworthiness and enterprise value of the overall business.)

That said, I find that Sabra has the lower overall debt burden relative to equity, but higher debt burden relative to its annualized FFO (for Omega, using the FFO excluding impairment).

In terms of servicing current interest expenses, I find both companies similar. (Here, note that this coverage calculation is my proforma, as it is simply FFO over interest expense from the income statement.)

As for upcoming maturities, I actually like Sabra’s maturity schedule much more. It will have very little payments until 2019, but the maturing payments should be manageable through 2020. Omega has one big balloon maturity in 2021. That’s good for the next few years, but it means management will be busy restructuring or refinancing the debt in a few years’ time.

Winner: Mixed. It’s a tie.


We can’t end an article like this without looking at tenants; these are landlords, after all!

I was surprised to see that Sabra has a better occupancy ratio in the upper 80%-range. I was surprised because I’ve read many articles asserting how Omega was best in class in the skilled nursing category.

It also struck me how much lower the occupancy rate is for these two REITs relative to high performing retail REITs like Realty Income (O) and Tanger Factory Outlets (SKT), whose occupancy rates will be in the high 90%-range. For example, see my post on Tanger and Retail REITs for those occupancy rates.

Digging little more, we find that Omega has little less concentration from top 5 tenant-operators. But, both share some operators that many readers will recognize as distressed. Note below the EBITDAR coverage as shared by Sabra Health Care in its 2017 Q3 supplemental presentation.

Omega and Sabra both share top tenants Genesis and Signature, and neither have a very strong income coverage of debt obligations.

In fact, in its November 8, 2017 8-K filing, Genesis Healthcare announced plans to restructure its obligations with counterparties Welltower Master Lease and Sabra Master Leases, among others.

I feel like this last comparison is like seeing who has the stinkier feet. There are no winners in that game. This last aspect of the business model is a little bit disappointing. The conservative investor should require a healthy margin of safety. If you step back and consider a business model lending to or leasing to those with limited (or shaky) ability to payback your money, then you have a business model with little margin of safety. It is my hope – and I’m sure the management’s hope as well – that the parties can work out a payment plan that works, and that the operating health of these tenants will improve over time. As for Sabra, its management already has announced plans to dispose of Genesis-related assets.

Loser: Both. Though a slight edge to Sabra.

Here again, the source file: sbra_vs_ohi_side-by-side.xlsx


I compared Sabra Health Care and Omega Healthcare because I have small positions in both companies. Further, both have a material skilled nursing facility exposure and share top common tenants.

Specifically, I independently computed several operating metrics and liquidity measures. My conclusion is that on the whole, Sabra appears to be the better operator with the stronger overall business mix (e.g. higher occupancy, higher interest coverage).

That said, it is clear that both REITs are operating under some market distress. So, I likely will not be adding to my positions in spite of the appealing dividends.

Disclosure: I am/we are long OHI, SBRA.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am not a financial advisor. The research was done for myself, and I am sharing it with the readers.

Article source:

OPKO Health: A House Of Cards Tumbling In The Dark


Opko has dropped approximately 25% since its recent quarterly report issued last Wednesday after it missed estimates on both revenue and earnings. In addition to the continued disappointing sales in the company’s FDA-approved product Rayaldee, the diagnostics division also saw a significant drop in revenue. We believe the recent quarter is merely the beginning of a series of continuing problems at the company.

BioReference: Changes at BioReference Labs

The company’s diagnostics business, which primarily consists of BioReference Laboratories (“BioReference”), accounted for 82.8% of Opko’s 2016 annual revenue. BioReference is described in the 10-K as “the nation’s third-largest clinical laboratory with a core genetic testing business.”

A slew of undisclosed or thinly disclosed executive team departures seems to indicate that BioReference is undergoing a behind-the-scenes transformation. We believe these changes will impair growth and profitability of the division and could foreshadow looming regulatory issues.

BioReference: Executives Quietly Depart in Quick Succession

On the recent conference call, EVP Steve Rubin stated “We continue to make investments in systems efficiencies, cost reductions and new leadership” and later made reference to a “change in sales leadership”. When exploring this further we found the following details on old leadership that went unmentioned or thinly referenced:

Richard Faherty was until recently the Chief Information Officer of BioReference. He was removed from the BioReference executive team list on July 30th of this year, according to, although no announcement of his departure was made. On Faherty’s Linkedin profile he currently lists himself as an “independent consultant”.

Charles “Chuck” Todd was previously Executive Vice President of Sales and Marketing at BioReference and served in that role at least until July of this year according to a historical capture of the BioReference executive team website. Again, no announcement was made regarding his departure.

Amar Kamath was previously Vice President of Marketing at BioReference according to the executive team website. Kamath was removed as of July 30th, according to No announcement of his departure was made.

Also worth noting:

Marc Grodman was the Founder of BioReference. Grodman publicly resigned from the company in March 2016, according to a press release. Despite the disclosure of Grodman’s departure, no clear reason was given for the resignation and Grodman made no statement as part of the release.

We contacted investor relations seeking disclosure on these executive team departures and have not heard back as of this writing. Should we receive a reply we will update this accordingly.

BioReference: Recent Departures and a New Key Hire Could Signal a Shift Toward Compliance

We believe changes at BioReference could signal a focus on compliance. Several of the recently departed BioReference executive team members had controversial pasts:

Richard Faherty had a past criminal conviction and was disbarred as an attorney. He pleaded guilty in May 1984 to misusing up to $75,000 of clients’ money, though prosecutors believe he took at least $250,000 from clients between August 1983 and January 1984. In March 1986, Faherty was placed on four years’ probation and was ordered to do 1,500 hours of community service by a Superior Court Judge.

Chuck Todd’s dealings at BioReference had also come under scrutiny: In 2009, BioReference filed a lawsuit against former BioReference employees Matt Carey and Sam Ruta, accusing them of misusing confidential information.

The two ex-employees then filed a detailed counterclaim stating that they and their colleagues were victims of an extortion scheme organized by senior management of Bio-Reference Laboratories. The claim stated Todd accepted $1,600,000 in proceeds from the extortion scheme as profit for Bio-Reference Labs. The claim further detailed Todd and management’s complicity in wide scale improper conduct including pervasive expense fraud and abuse, misrepresentations and non disclosures to shareholders, self-dealing, and other improprieties. The claim and counterclaim were later dismissed.

Marc Grodman also had some questionable associations. His brother Joel was once alleged to have posed as a salesman for BioReference to secure a mob-controlled union contract with $400,000 of kickbacks to mob boss Peter Gotti.

Additionally, Grodman had received financing from questionable sources in the early days of BioReference, as Barron’s had reported in 2011:

CEO Grodman’s lab was financed in the decade after its 1986 initial public offering by such penny-stock bankers as Paul Russo, a Mafia-associated broker, and J.T. Moran, whose firm was the model for the movie Boiler Room. They and other Bio-Reference backers ended up in jail (“There Will Be Blood,” May 23, 2011). Grodman and Bio-Reference were never implicated in any untoward activities, and he has said he never saw any wrongdoing.

Aside from the cascade of executive team departures, Jane Pine Wood, a veteran healthcare attorney was appointed as Chief Legal and Compliance Officer of BioReference in October 2016. Prior to Ms. Wood’s arrival the role appears to have not existed, according to historical website snapshots of the executive team list.

The hiring of a Chief Legal and Compliance officer came on the heels of a June 2016 False Claims Act settlement where the company paid $9.35 million to settle charges against former Opko Health CEO Dr. Jonathan Oppenheimer, brought by the U.S. Attorney’s Office in Tennessee.

We believe a “cleaning house” may be needed for the company given its historical association with a range of checkered individuals, but it also presents several problems:

  1. When faced with an increased compliance burden, BioReference may simply not fare well in the highly competitive lab industry. Diagnostics revenue has already dropped on a quarter over quarter basis (from $256.7 million in June to $229.0 million in September) and is down similarly on a y/y basis. We believe the management shake-up and new compliance protocols will continue to rear their heads in the form of worsening operating metrics.
  2. As we have seen with other diagnostics businesses, one regulatory action may be a sign that additional regulatory actions are around the corner. In the case of Quest Diagnostics for example, the company has seen numerous successive regulatory actions. (1,2,3,4,5)
  3. Any potential regulatory action could create a substantial near-term cash liability. Opko is free cash flow negative and had only $100.4 million in cash and equivalents as of the most recent quarter. Any material regulatory settlement could put the company in a highly liquidity constrained position.

BioReference: SDNY False Claims Act Probe Represents a Looming Overhang

In addition to the behind-the-scenes turmoil, we believe company statements could foreshadow a potential settlement with the U.S. Attorney’s office.

According to a 10-Q filed May 10th, the company reported:

In April 2017, the Civil Division of the United States Attorney’s Office for the Southern District of New York (the “SDNY”) informed BioReference Laboratories (“BioReference”) that it believes that, from 2006 to the present, BioReference had, in violation of the False Claims Act, improperly billed Medicare and Tricare (both are federal government health care programs) for clinical laboratory services provided to hospital inpatient beneficiaries at certain hospitals.

Rather than offering the typical corporate-speak denying the allegations or stating that they are “without merit”, BioReference simply stated that they are “reviewing” and “assessing” the allegations for merit:

BioReference is reviewing and assessing the allegations made by the SDNY, and, at this point, BioReference has not determined whether there is any merit to the SDNY’s claims nor can it determine the extent of any potential liability. While management cannot predict the outcome of these matters at this time, the ultimate outcome could be material to our business, financial condition, results of operations, and cash flows.

Three months later, after BioReference had a chance to review and assess the allegations, the 10-Q released on August 8th contained the exact same language about reviewing the allegations for their merit and for their potential liability.

Two days after that report release, Opko CEO Frost was interviewed on CNBC’s Mad Money and commented on the SDNY issue. Rather than giving the company a clean bill of health, he stated that they did an internal evaluation and audit and found no “systemic” problems. Frost acknowledged that they had “found a few errors here and there, as you would expect in a business that has so many transactions.” He also stated that the SDNY was supposed call Opko back in April but never did, suggesting that perhaps the matter was put to rest.

Despite Frost’s partial assurances, his statement on a lack of “systemic” problems seems to fall short of addressing the SDNY’s allegations of wrongdoing stemming back from 2006. He (a) provided no further details on the internal valuation (b) failed to address whether there had been past systemic problems and (c) provided no assurance that the SDNY had actually dropped the matter.

Furthermore, given the multiple undisclosed executive team departures at BioReference that appear to have taken place mere weeks prior to Frost’s assurances, the issues at BioReference seem to remain an open question.

Now, in the most recent quarterly report we see that the language on reviewing and assessing the charges again remains completely unchanged. We believe the SDNY probe merits close attention and could represent a severe overhang going forward.

We contacted investor relations seeking confirmation on whether the SDNY has dropped the False Claims act probe and seeking an update on the status of the probe. We have not heard back as of this writing. Should we receive a reply we will update this accordingly.

Rayaldee: A “Feature” Failure?

While the lab business transforms itself under an apparent executive team shake-up, the company’s much touted drug offerings seems to offer little relief.

Rayaldee has been described in Opko’s filings as the “feature” of their pharmaceutical segment. The drug is FDA-approved, and is indicated to treat secondary hyperparathyroidism in adults with stage 3 or 4 Chronic Kidney Disease and vitamin D insufficiency. It was approved in June 2016 and launched later that year in November.

In the OPKO earnings call transcript from November 2016, Executive Vice President Steven Rubin stated:

Rayaldee is the first product to receive FDA approval for this indication. Rayaldee fills a void in the available treatment options for approximately 9 million American adults, which represent a potential market estimate to exceed $12 billion annually.

Despite the stated size of the opportunity and its launch last year, Rayaldee has fallen far short of expectations. As of the latest quarterly report, the company stated “During the nine months ended September 30, 2017, we did not recognize any product revenues related to Rayaldee sales.” In the same report OPKO stated that the advance payments received from Rayaldee customers (but not yet recognized as revenue) totaled only $6.5 million.

Despite the dismal revenue contribution, the company earlier attempted to plant seeds of optimism in Rayaldee’s future by suggesting that the drug was receiving widespread adoption by insurers. In a June 1, 2017 press release the company touted that Rayaldee is accessible to 68% of insured lives.

We view the above press release as misleading. While it is true that the company has fairly broad access among commercial insurers, Rayaldee has unrestricted access to only 8% of insured Medicare lives nationwide according to, an analytics service that provides data on insurance coverage for U.S. pharmaceuticals:

We contacted investor relations seeking comment on Rayaldee’s access to Medicare insured lives and have not heard back as of this writing. Should we receive a reply we will update this accordingly.

Medicare coverage is of paramount importance because approximately 71% of Chronic Kidney Disease (“CKD”) patients—the key target audience for Rayaldee—are enrolled in Medicare Part D, as of the latest report from the U.S. Renal Data System.[1] This suggests that the vast majority of CKD patients will need access through Medicare Part D plans in order to have coverage for the drug. The same report also shows that approximately 12% of CKD patients had no known insurance coverage, suggesting that insurance providers outside of Medicare Part D represent only a fraction of patients seeking CKD treatments.

The same Opko press release above proclaimed that the company had “entered into agreements with several large Medicare Part D plan sponsors, including the largest Medicare Part D plan, and additional commercial insurance plans for reimbursement of RAYALDEE.” Despite these assurances however, we were only able to find sporadic coverage across Medicare Part D plan providers.

Of the seemingly sparse number of Medicare providers that do grant access to Rayaldee, the drug tends to be very expensive relative to competitors. According to FormularyLookup, Rayaldee is typically in the highest tier expense brackets across its limited plan coverage. In the overwhelming majority of cases, generics or alternatives (such as Calcitriol, Paracalcitol, Rocaltrol, or Zemplar) were designated as a preferred covered alternative to Rayaldee.

In order to compare Rayaldee’s pricing with other Vitamin D analogues, we checked, an aggregator of prescription drug prices across 70,000 U.S. pharmacies. As is shown below, competitor drugs cost as little as $7-$14. The next most expensive drug in the category designed for treating CKD is Hectorol at $360. Rayaldee by comparison is listed at $955, almost 3x the nearest competitor. Given that drugs in higher “tier” formulary categories often have higher co-pays, the out-of-pocket expenses for Rayaldee can be upwards of $300 per month even with insurance.

GoodRX vitamin D analog

A call to Opko Connect confirmed that a 1-month supply of Rayaldee typically sells for $900 to $1,000, depending on the distributor.

Rayaldee therefore appears to (i) lack insurance coverage in Medicare Part D, its most important constituency, and (ii) be the high-cost, less-preferred drug in the category. We believe the above issues makes Rayaldee a starkly uphill sales proposition.

Rayaldee: A Quiet Departure of Rayaldee Management, and Conflicting Disclosures

There have been several high-level departures in key management and sales roles since the launch of Rayaldee:

Jim DeMarco was listed as the SVP of Opko Renal sales on the Opko Renal Management website as of approximately 2 months ago, but he appears to have quietly left the company. His LinkedIn profile shows that he is currently managing partner at the Elixir Group, a business consulting firm. DeMarco had been appointed as Senior Vice President of pharmaceutical sales as announced via press release in April 2016. Per the release, DeMarco was appointed to “support the anticipated launch of RAYALDEE.” The release further elaborated on his extensive credentials and qualifications:

Jim is uniquely qualified to establish and execute our commercial plans for RAYALDEE in the US. His deep knowledge of the chronic kidney disease market will help bring RAYALDEE to Stage 3 and 4 CKD patients,” said Phillip Frost, M.D., Chairman and Chief Executive Officer of OPKO.

Given DeMarco’s loud entrance, we believe his silent departure is telling.

Douglas Laidlaw was listed as the Director of Medical Affairs on the Opko Renal “Management Team” website as of approximately 2 months ago. Mr. Laidlaw’s hiring had also been announced via a glowing press release in May of 2016:

“OPKO Health, Inc. today announced the appointment of Douglass Laidlaw, PhD as Vice President of Medical Affairs to support the anticipated launch of RAYALDEE.” The release added:

Doug is a key addition to the management team in OPKO’s Renal Division,” said Phillip Frost, M.D., Chairman and Chief Executive Officer of OPKO. “A well-conceived and executed medical education strategy is critical to Rayaldee’s acceptance by U.S. healthcare professionals.

Despite the warm welcome, Mr. Laidlaw appears to have also left quietly. His Linkedin profile shows that he left the company in June of this year and is now actively seeking a new opportunity. Given that his “critical” role entailed educating the medical community on the importance of Rayaldee, we believe his departure underscores the difficulty Opko has had at that very task.

Rayaldee Job Posting: In need of National Sales Director to Develop Core Competencies

Opko is currently advertising a career opportunity for a national sales director for the Rayaldee product. The posting underscores deficiencies with the current roll-out that the position seeks to address, stating that the national sales director is:

Responsible for developing implementing core competencies for the regional sales management sales teams. Responsible for providing both strategic and tactical direction for the national sales organization while maintaining a positive and motivational work environment.

Given that the product launched over a year ago the absence of such a key role speaks volumes.

Rayaldee: Use of “Co-Pay Assist” Programs

In the most recent quarterly press release, the company stated that total prescriptions of Rayaldee in Q3 increased by 66% in Q3 compared to Q2, as reported by IMS. The pace has slowed considerably from the Q2 increase of 140% compared Q1 prescriptions. Nonetheless the data at the very least suggests that sales and growth of Rayaldee are taking place at some level.

Given the fundamentals of the drug, we sought to explore exactly how the product was being sold. We wondered; how does a product compete when it is relatively poorly differentiated and priced 60x-130x higher than comparable generics and over-the-counter-vitamins? We believe the answer is in part through co-pay assistance.

Note that in their purest form, co-pay assist programs are not illegal or untoward, as they propose to offer access to medicine for economically disadvantaged patients. Despite this, allegations of widespread abuse of co-pay assist programs has led to severe pushback from commercial insurers.

Opko Connect” is a service that offers copay assistance and patient access for Rayaldee to patients. As is stated openly on the website, with the copay assistance program, “eligible commercially insured patients can fill their Rayaldee prescription for no more than $5 per month until the annual maximum limit is reached.” In our call with Opko Connect, the representative candidly stated that “typically it’s a zero dollar co-pay.”

In other words, Rayaldee can compete with low-cost $7-$14 generics by making the drug cost $0 to $5 dollars for the patient. Despite the low patient pricing, the insurer must still cover the remainder of the cost of the drug, thereby deflecting the burden to commercial plan participants.

We contacted investor relations and asked the company to make the full data available on (1) the portion of Rayaldee sales that use co-pay assistance, including Opko Connect; (2) any solicitations to or donations to non-profit organizations that cover Rayaldee co-pays, which non-profit organizations have covered Rayaldee co-pays; and (3) the number and percentage of Rayaldee prescriptions that use non-profit organizations to cover co-pays. We have not heard back as of this writing. Should we receive a reply we will update this accordingly.

hGH-CTP: How Many “Outliers” Must Be Eliminated In Order to Make Phase III Trials Look Good?

Outside of Rayaldee, hGH-CTP is the other “featured” drug cited in Opko’s earnings reports. The drug is aimed to combat hormone deficiency, and it showed early promise. In December 2014, OPKO announced that they had reached an agreement with Pfizer for the development and commercialization of hGH-CTP. Under the terms of the agreement, OPKO received $295 million and is eligible to receive $275 million upon the achievement of certain goals/milestones. In the same press release, Phillip Frost was quoted saying:

We believe that the global growth hormone market is currently valued at more than $3 billion, and believe that hGH-CTP has the potential to be the best in class long-acting growth hormone product.

After a long awaited Phase 3 clinical trial announcement, December 2016 results showed that hGH-CTP had failed to reach its primary endpoint. Following the outcome, in a slide in a January 2017 investor presentation the company claimed to have “found an exceptional value of trunk mass reduction in the placebo group”. A subsequent slide added “The exceptional data point warrants an outlier sensitivity analysis.”

In other words, a lone outlier in the placebo group skewed the results.

The “exceptional value” represented in the original presentation seems to have transformed later into “outliers”. Per a presentation in September 2017 the company stated that it had “completed post hoc outlier analysis in June 2017 to assess the influence of outliers on the primary endpoint”. It also stated that “analysis which excluded outliers showed statistically significant difference between hGH-CTP and placebo.” Finally, the presentation stated: “Additional analysis that did not exclude outliers showed mixed results.” The presentation made no mention of a lone “exceptional value.”

We believe the shape-shifting outlier analysis does not bode well for the future of the drug. As the company awaits for the results of future studies (we estimate in late 2018), the earlier phase 3 failure suggests that a much-needed source of cash in the form of potential regulatory milestones may be in complete jeopardy.

We contacted investor relations seeking disclosure on how many outliers the company has found in its June 2017 post hoc outlier analysis of the hGH-CTP drug. We have not heard back as of this writing. Should we receive a reply we will update this accordingly.

4Kscore: Lowering Price Point and “Limited Revenue” Signal a Flop

On the diagnostic side of the business, Opko’s key product is the 4Kscore, a test designed to identify patients at a risk for high-grade prostate cancer.

For some context, in November 2013, OPKO announced a clinical validation study for a blood test called the 4Kscore test, which measures the serum levels of four different prostate-derived kallikrein proteins: total PSA, free PSA, intact PSA and hK2. The first 3 proteins are common markers used in prostate testing but the company’s ‘secret sauce’ was use of the hK2 protein, which had been shown in several studies to improve identification of risks of prostate cancer. By April 2014, OPKO announced the launch of the 4Kscore test in the United States.

The test is not FDA approved and has not undergone FDA scrutiny. Instead it is considered a Laboratory Developed Test (LDT). The test had an initial price point of $1900 per test, which compares poorly to common alternatives such as the Prostate Cancer Prevention Risk Calculator (which is free) and the Prostate Health Index, or PHI (which costs $80). A slew of competition already exists beyond these two common alternative tests. As industry authors have noted, a “bevy” of biomarker alternatives seek to improve on the standard PSA test.

Worth noting is that unlike the 4Kscore, the PHI is FDA approved. From an efficacy standpoint it compares similarly in identifying the risk of high-grade prostate cancer along with the 4KScore. The rigors of the FDA process have enabled PHI to receive more widespread reimbursement through insurers. By comparison, the 4Kscore has had difficulty receiving reimbursement.

This reimbursement difficulty can be discerned by the shifting disclosures in Opko’s investor materials. A September 2015 company presentation had a slide detailing “Near Term Catalysts”, including the slide: “Coverage decisions on reimbursement for 4Kscore test” which was assigned a date of 2015/2016. A later January 2017 presentation again dedicated a slide to reimbursement and acknowledged that Palmetto GBA and CGS Medicare Administrators had issued a “negative coverage determination” and that Opko was “addressing concerns”. A September 2017 company presentation simply dropped the reimbursement slide entirely.

In May 2017, 4Kscore announced that the cost for the test had been reduced from $1900 to $595, reflecting both a lack of demand and the difficulties with reimbursement. Despite the drop in price, the test is still 7x more expensive than comparable alternatives such as the PHI.

Opko’s recent quarterly report stated “We do not anticipate that we will generate substantial revenue from the sale of proprietary pharmaceutical products or certain of our diagnostic products for some time and we have generated only limited revenue from our…sale of the 4Kscore test.”

4Kscore and BioReference

We believe the failure of the 4Kscore roll-out is also a reflection of the failure of the BioReference acquisition. Management repeatedly cited that one of the key reasons behind the BioReference acquisition was the synergy it would provide with the 4Kscore test. In September 2015, Dr. Frost went on CNBC’s Mad Money and promoted the BioReference acquisition by stating that it provides “access to a salesforce and infrastructure that will help make our 4Kscore test one of the most important tests in the history of the diagnostics business.”

The company similarly touted its BioReference acquisition on its Q2 2015 conference call by stating the importance of the synergy for marketing its 4Kscore test:

…nowhere is the synergy of this merger more demonstrable than in marketing the capabilities of our 4Kscore test to identify and differentiate patients in a noninvasive manner to those that may progress to aggressive prostate cancer.

The BioReference acquisition took place at a time in the industry when pricing pressures were not at the forefront of investor’s minds. At the time the BioReference acquisition was completed, Valeant was peaking at about $220/share and was the darling of the pharmaceutical world. The practice in the industry at the time among some companies was to use related party pharmacies or affiliates as a channel to stuff consumers with high-priced drugs.

Given the more competitive pricing landscape of the industry today we believe the 4Kscore test is likely to require significant additional price cuts if it is to be in any way competitive with alternatives.

Remaining Pipeline Contributions Expected to be “Incremental”

In JP Morgan’s recent downgrade report on September 14th, 2017, the report succinctly noted that potential pipeline contributions over the next 6-18 months are “incremental” and unlikely to meaningfully move the valuation needle.

While our analysis agrees that potential near mid-term contributions are incremental, we have also identified a pattern of pipeline delays. A comparison of Opko’s investor presentations given in September 2017 and January 2017 along with the latest earnings release also shows some oddities.

The Curious Disappearance of Alpharen (Fermagate)

The Alpharen Phase 3 trial was slated for “1H 2018” according to the September 2017 investor presentation, but it has suddenly disappeared from the latest earnings release altogether.

By way of background, Alpharen was acquired by Opko along with another drug candidate and announced via press release on January 8, 2013 under the headline “Opko Health to Acquire Two Phase 3 Products”. By year-end, the 2013 10-K stated “We are working with U.S. and European regulatory authorities to finalize the remaining phase 3 clinical program for AlpharenTM (Fermagate Tablets).” The suggestion seemed to be that despite Alpharen’s phase 3 trials that had already taken place, further clinical study was needed.

Later in the 2015 10-K the company apparently dropped their European pursuits, stating:

We are currently preparing a single remaining Phase 3 clinical trial in the U.S., but are first studying novel characteristics of Alpharen which may offer additional competitive advantages.

Later the January 2017 presentation slated the Alpharen Phase 3 trial for “2H 2017”, but as noted above it was subsequently pushed back again in September to “1H 2018” and now has apparently disappeared entirely as of the earnings release.

We contacted investor relations seeking more information on the status of the Alpharen phase 3 trial and have not heard back as of this writing. Should we receive a reply we will update this accordingly. Given that a previous presentation has shown Alpharen to have a $1.2 billion market size we believe it is a very significant item to go missing.


The planned Oxyntomodulin Phase 2 trial has been recently delayed as well. The January ’17 presentation slated the trial for “2H 2017” whereas the September 2017 presentation slates the trial for “1H 2018”.

Claros Device Filing: Delayed for 5 Years, then Announced the Day Before Earnings

On Tuesday November 7th—the day before earnings—Opko announced that they had submitted a Premarket Approval Application for the Total PSA test with the Claros 1 immunoassay analyzer. The press release seemed to suggest that approval of the device is a foregone conclusion. Per the release:

With more than 25 million PSA tests performed in the U.S. annually, the Claros 1 Total PSA test represents a $625 million market opportunity. Once approved, we plan to leverage BioReference Laboratory’s sizeable distribution and marketing capabilities to make this rapid, in-office test available for the benefit of physicians and patients.

Despite management’s confidence in the devices approval, we are cautious, namely given that the filing was delayed for about 5 years.

By way of background, Opko acquired Claros Diagnostics in October 2011 for $49 million. Claros makes a device that aims to take a finger stick of blood and get a result in 10 minutes via a portable, easy-to-use technology that can sit in a physician’s office. The approach and objective of Claros is similar to that of Theranos, and several years ago Opko’s head of diagnostics even stated that Theranos was their main rival in the space.

The company has repeatedly promoted the potential of the Claros device, and in the most recent quarterly report mentioned the device along with the 4Kscore as a key area of potential synergy with the BioReference sales and marketing team.

Opko’s starting point for gaining acceptance of the Claros device is to gain approval for Prostate-Specific-Antigen tests (PSA tests) which assess the risk of prostate cancer. Over time, the goal is to add tests to the device to make it a more robust “point of care” diagnostic offering including testosterone and vitamin D testing.

The company’s first major step to market Claros was the PMA filing (a device filing) with the FDA. The filing had been delayed for 5 years prior to its recent submission:

  1. In December 2011, the company issued a press release announcing the commencement of a U.S. clinical trial for the PSA test for their point-of-care diagnostic test (i.e. Claros). The announcement stated that “Opko intends to submit its application to the U.S. Food and Drug Administration for approval of the assay in 2012.”
  2. In January 2013, Phil Frost was interviewed on CNBC’s Mad Money where he predicted that the product would come to market at the end of the year.
  3. A September 2013 company presentation had a slide on the Claros offering that described under a “Projected Launch” heading: “US FDA expected 2014”.
  4. The company stated on an August 2015 conference call that they intend to file with the FDA for the PSA test in 1H 2016 and to also file for the testosterone test in 1H 2016.
  5. In a September 2015 presentation the company downgraded that expectation, stating instead that it anticipated a PMA filing would be submitted to the FDA in 2016 (but not necessarily 1H 2016).
  6. On March 1, 2017 the company issued a press release that stated “PMA filing anticipated in 1H 2017”. Given that the press release was in March, the implication was that the filing would potentially be made imminently.
  7. Then, 7 months later in September the company stated that they will file sometime in Q4.

By November 7th 2017 the company announced that they had (finally) submitted the filing.

We believe the long delay with the FDA filing could indicate a lack of confidence in the device. Given that the PMA process takes approximately 6 months we should expect an outcome either way around Q2 of next year.

We contacted investor relations seeking comment on why the Claros filing was delayed for approximately 5 years and have not heard back as of this writing. Should we receive a reply we will update this accordingly.

Frosts Insider Purchases are a Hollow Signal

Many Opko investors seem to be fixated on the insider purchases of Phil Frost, Chairman and CEO of the company.

Frost has been consistently buying shares of Opko in the open market for over 10 years. While these purchases provide a stunning visual for those looking at an Opko chart peppered with insider purchase markers, we view them as virtually meaningless to shareholders who are not named Phil Frost.

Frost’s purchases have been a poor prognosticator of stock performance; they were made at prices as high as $16.74 and at many points along the way down. Similarly, they represent a fraction of Frost’s wealth. A Forbes article from January suggested Frost’s net worth is over $4 billion. By that measure, last year’s $25.8 million in purchases represents less than 0.64% of his total worth.

We estimate that Frost’s ownership in Opko represents at least 25%-35% of his net worth. At this point is seems that he is tethered to the company regardless of outcome, and at 80 years of age he is unlikely to embark on a new third act. We believe that with very few positive signs to point to at the company, Frost is simply attempting to protect the stock via token insider purchases in the hopes of buying more time.

Accelerating Cash Burn Highlights Near-Term Liquidity Needs

Despite Frost’s efforts, Opko appears to be running out of time. The company has generated a negative operating cash flow of $94.1 million in the first 9 months of the year, and has spent over $32.0 million in capital expenditures. As of the most recent quarter-end the company has only $100.4 million in cash and equivalents.

Additionally, Opko has relied more heavily on its revolving lines of credit. As of the most recent quarter-end the company had drawn $105.9 million across its credit lines, compared to $80.7 million in the previous quarter and $47.3 million at year-end December 2016.

We believe the company will need more debt or to further dilute equity holders in the near to mid-term. Operating businesses have been burning cash at an increasing rate, and Opko’s cash demands have historically been buoyed by up-front cash payments that are no longer available:

  • A deal with Pfizer on Opko’s hGH drug supported Opko with a $295 million in up-front payment. That payment occurred during the March 2015 quarter, but the failure of the drug in Phase III trials could imperil any subsequent or near-term milestone opportunities.
  • A 2016 agreement from 2016 with VFMCRP included $50m in up-front payments to develop and market Rayaldee in Europe, Canada, Mexico, Australia, South Korea, and certain other international markets. The agreement includes $232 million upon the achievement of certain regulatory and sales-based milestones. With the future of Rayaldee in question (pending meaningful sales traction) these milestones may also be in jeopardy.

We believe the company’s cash situation could be tightly constrained over the next 6 months under a base-case scenario. When factoring in unknowns surrounding regulatory overhang, there is a substantial risk that an adverse announcement could be crippling.

[1] Required citation from USRDS: United States Renal Data System. 2016 USRDS annual data report: Epidemiology of kidney disease in the United States. National Institutes of Health, National Institute of Diabetes and Digestive and Kidney Diseases, Bethesda, MD, 2016. The data reported here have been supplied by the United States Renal Data System (USRDS). The interpretation and reporting of these data are the responsibility of the author(s) and in no way should be seen as an official policy or interpretation of the U.S. government.

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Your parents’ lifestyles can determine your health – even as an adult

We don’t choose our parents, their jobs or their health. And we don’t have a say in whether or not they smoke, nor in what they ate when we were children. However, our recent study found that these things strongly determine our own lifestyles and health, even into adulthood.

For our study – involving 21,000 participants aged 50 and above from 13 European countries – we compared the participants’ current smoking, obesity and lack of exercise with their parents’ job, longevity, smoking status and alcohol problems during the participants’ childhoods.

We showed that parents’ characteristics when participants were ten years old explained between 31 percent and 78 percent of their adult health, with a European average at 50 percent. 

Sandy Tubeuf, of the University of Leeds, warns her research on 21,000 people from 13 countries shows it may be harder for some than others to simply lose weight or quit smoking

Sandy Tubeuf, of the University of Leeds, warns her research on 21,000 people from 13 countries shows it may be harder for some than others to simply lose weight or quit smoking

The countries where health was largely determined by parents’ characteristics were Czech Republic (78 percent), Germany (72 percent), Spain (70 percent), France (66 percent) and Austria (64 percent). 

However, parental factors mattered less in Belgium (31 percent), the Netherlands (34 percent) and Switzerland (41 percent).

The importance of parents’ characteristics for their children’s health is explained by two mechanisms. 

First, poor living conditions in childhood lead to poverty in adulthood – which affects health. 

Second, health is transmitted from parents to children. 

Beyond the obvious common genetic inheritance across generations, parents’ health also has an impact on their children’s health by imparting habits and lifestyles.

Our research found that if a parent smoked when their child was young, the child was much more likely to smoke as an adult, in all countries except Sweden. 

A person’s obesity in later life was more frequent when their parents were smokers and had a problem with alcohol when the child was ten in Germany, Greece and Austria. 

In Denmark, obesity was only associated with parents having a problem with alcohol; in France it was associated with parents being smokers.

We also investigated the odds that a person would smoke – using national survey data from France – based on their parents’ smoking and social background. 

We found that if a person’s father smoked when they were 12, they were almost twice as likely to smoke than people whose father did not smoke at all, controlling for education level and parents’ job.

If mothers smoked, it increased the risk of their daughters smoking – but not their sons. 

The risk that a person would smoke was also higher among those whose father was a manual worker, and who had experienced periods of poverty during their childhood.

Why it matters 

Our findings should give pause for thought to those who devised the new NHS plans to stop smokers or obese patients from having surgery unless they quit smoking or lose weight. 

The decision assumes that these patients’ poor health is self induced, so they are made to choose between facing the consequences of their lifestyle or demonstrating a commitment to change.

These sorts of public health policies don’t take into account that lifestyle is strongly associated with circumstances beyond a person’s control, especially their childhood circumstances and their parents’ health and lifestyles. 

Restricting their access to treatment appears especially unfair when people do not have equal opportunities to be in good health and to adopt healthy lifestyles.

According to the American economist, John Roemer, a way to ensure equality of opportunities is to respect the true responsibility of people for their efforts independently of factors beyond their control. 

In other words, people would only be responsible for the share that isn’t linked to their childhood conditions or their parents’ choices.

Our study shows that, even without making this distinction between responsibility and true responsibility, the control of people on their health choices and their health status is limited – family and parents’ circumstances matter more in most European countries.

While the campaign to encourage people to eat five portions of fruit or veg a day, or experiments that give shopping vouchers for smoking cessation, guide and nudge people towards healthier lifestyles without apportioning blame, a ban or an imposed delay on surgery because of lifestyles divides people into deserving and less deserving patients – and this is clearly wrong.

This article was originally published by The Conversation 

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Students Launch App for Mental Health Resources

Bliss App

Stressed about exams? There’s an app for that. Caitlin Ner ’18 and Tajrean Rahman ’20 recently launched “Bliss: Harvard Mental Health,” a mobile app compiling dozens of mental health resources on campus.

Ner said she came up with the idea for Bliss in October 2016 at an “appathon”—a contest where she and three other students had 24 hours to build an app. After months of further development, Bliss joined the cohort of officially sponsored Harvard apps on the iTunes App Store and the Google Play store this fall. The app is available free of charge.

“When we won the appathon, we realized it could be something that our college could actually use,” Ner said. “So we took a long time to get Harvard to officially approve it as their app rather than it just being a project.”

The app’s main feature is the “Explore Your Mental Health” module, Ner said. The section prompts users to answer the question, “What are you thinking about?” by choosing one of five topics: academics, body, consent, identity, and social life. The app then suggests resources related to each of the five subjects.

“What we wanted to do is essentially take what students are thinking about and try to lead them to these resources without being too directive, but rather to guide them in the sense that you can be anywhere on campus and feel comfortable to do it at your own pace,” Ner said.

Other sections of the app include “Education,” which lists mental health-related news articles and information about national mental health organizations such as the National Alliance on Mental Illness; and “Calendar,” which displays panels, film screenings, and other events on campus held by mental health groups.

“Sometimes, you’re not aware when each of the counseling groups are doing certain things,” Ner said.

Ner said she and the other developers of Bliss hope students will take advantage of the app’s interactive features. For example, the “Get Involved” section allows users to directly contact peer counseling groups with questions or ideas. Users can also send inspirational quotes to others through the app.

Director of Counseling and Mental Health Services Barbara Lewis, one of Bliss’s faculty advisors, said she hopes CAMHS will also be able to use the app to advertise their resources like outreach events and urgent care hours. She also said CAMHS may promote the app itself.

“It certainly is something that we will likely recommend to students when they’re seen at CAMHS,” Lewis said.

He added the app may be especially useful if students need additional resources like “someone to talk to at night.”

Ner said she looks forward to continuing to develop the app.

“We’re just really excited about it and because there’s so much change that can happen throughout the year,” Ner said. “We are just very open to collaborating with other mental health groups and see how it can be improved.”

—Staff writer Angela N. Fu can be reached at Follow her on Twitter @angelanfu.

—Staff writer Dianne Lee can be reached at Follow her on Twitter @diannelee_

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Middle-Class Families Confront Soaring Health Insurance Costs


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Ian Dixon, right, said he might hire an employee just so he could buy health insurance as a small business, at a cost far below what he and his family would have to pay on their own.CreditMatt Eich for The New York Times


Nov. 16, 2017

CHARLOTTESVILLE, Va. — Consumers here at first did not believe the health insurance premiums they saw when they went shopping for coverage this month on Only five plans were available, and for a family of four with parents in their mid-30s, the cheapest plan went typically for more than $2,400 a month, nearly $30,000 a year.

With the deadline for a decision less than a month away, consumers are desperately weighing their options, dismayed at the choices they have under the Affordable Care Act and convinced that political forces in Washington are toying with their health and well-being.

“I believe in the Affordable Care Act; it worked for me under the Obama administration,” said Sara Stovall, 40, who does customer-support work for a small software company. “But it’s not working as it was supposed to. It’s being sabotaged, and I feel like a pawn.”

Ms. Stovall said she might try to reduce her hours and income, so her family could qualify for subsidies on offer to poorer families to help pay for premiums.

Heather Griffith, a 42-year-old real estate broker, said she would put aside much less money for her retirement and the education of her two young children so she could pay the premiums.

And even though he does not need an assistant for his work as a developer of mobile apps, Ian Dixon, 38, said he might hire an employee just so he could buy health insurance as a small business, at a cost far below what he and his family would have to pay on their own.

“If one word captures all this, it’s ‘helpless,”’ Mr. Dixon said. “There’s rage and anger and all that stuff in there, too. Any reasonable person would agree that this should not be happening. And there’s no one to go talk to about it. There’s no hope that this is going to get fixed.”

Sara Stovall said she might try to reduce her hours and income, so her family could qualify for subsidies on offer to poorer families to help pay for premiums.CreditMatt Eich for The New York Times

The situation here in Charlottesville is an extreme example of a pattern that can be seen in other places around the country. The Affordable Care Act is working fairly well for people who receive subsidies in the form of tax credits, said Doug Gray, the executive director of the Virginia Association of Health Plans, which represents insurers. But for many others, especially many middle-class families, he said, “the premium is outrageous, and it’s unaffordable.”

Congress’s repeated efforts to repeal President Barack Obama’s signature health law have rattled insurance markets. Actions by President Trump and his administration have added still more uncertainty. Now, Senate Republicans have attached a provision to their $1.5 trillion tax cut that would repeal the health law’s mandate that most Americans have health insurance or pay a penalty.

All of those actions — along with flaws in the law itself — are having real-world impact.

“We share their pain,” Michael M. Dudley, the president and chief executive of Optima Health, said of his Virginia customers now shopping for policies on the health law’s online exchange. “The rate increases are very high. We can’t minimize that because it’s a fact.”

The Dixon family, which includes two girls ages 1 and 3, has been paying $988 a month this year for insurance provided by Anthem Blue Cross and Blue Shield. But Anthem plans will not be available in Charlottesville next year. The company told customers that uncertainty in the insurance market “does not provide the clarity and confidence we need to offer affordable coverage to our members.”

The online federal marketplace,, recommended another plan for Mr. Dixon in 2018. The new plan, offered by Optima Health, has premiums of $3,158 a month — about $37,900 a year — and an annual deductible of $9,200.

Alternatively, Mr. Dixon could pick a lower-cost plan offered by Optima with premiums of about $2,500 a month, or $30,000 a year. But the deductible would be much higher. The Dixons would need to spend $14,400 a year for certain health care services before Optima would begin to pay.

The Stovalls are facing similar mathematics.

“Our premiums will triple to $3,000 a month, with a $12,000 deductible, and that is far, far out of reach for us,” Ms. Stovall said after researching the options for her family of four on “We are not asking for free health insurance. All we want is a reasonable chance to buy it.”

Mr. Dixon credited the Affordable Care Act with encouraging him to work for himself as a mobile app developer.CreditMatt Eich for The New York Times

Subsidies are available to help low- and moderate-income people pay premiums, but no financial assistance is available to a family of four with annual income over $98,400.

Optima, a division of Sentara Healthcare, invited customers to share their personal stories on its Facebook page, and they obliged, with a fusillade of plaintive and sardonic comments.

Bill Stanford, who works for a floor-covering business in Virginia Beach, said, “Optima Health Care just raised my premium from an absurd $1,767 a month to an obscene $2820.09 per month,” which is more than the mortgage payments on his home for a family of four.

“At an average of $60 per visit,” Mr. Stanford said, “I could visit the doctor’s office 45 times a month for the premium that I’m paying. I think we will probably drop our insurance and get a gap policy.” Such short-term insurance is meant to fill temporary gaps, but typically does not cover maternity care or treatment for pre-existing medical conditions.

Mr. Dudley said in an interview that Optima, a Virginia company, felt an obligation to continue serving Virginians when larger national insurers were pulling back. But, he said, Optima is affected by the same factors destabilizing insurance markets elsewhere. These include President Trump’s decision to terminate certain federal subsidies paid to insurers and doubts about the future of the requirement for most Americans to have insurance — the individual mandate, which would be eliminated by the Senate Republicans’ tax bill.

And in the Charlottesville area, Mr. Dudley said, costs are high because many people receive care from an expensive academic medical center at the University of Virginia.

Carolyn L. Engelhard, director of the health policy program at the university’s School of Medicine, acknowledged that teaching hospitals often charged more. But another factor, she said, is that Virginia has not regulated insurance rates as aggressively as some other states.

Did You Sign up For Insurance Under the Affordable Care Act? Share Your Experience.

The Times would like to hear from Americans who are signing up for insurance under the Affordable Care Act.

July 9, 2014

Consumers are feeling the effects.

“Obamacare helped me,” Ms. Griffith said. “I had a pre-existing condition, could not get insurance and had to pay cash, nearly $30,000, for the birth of my first baby in 2010. For my second pregnancy in 2015, I was covered by Obamacare, and that was a huge financial relief.”

But the costs for next year, she said, are mind-boggling.

She and her husband, both self-employed, expect to pay premiums of $32,000 a year for the cheapest Optima plan available to their family in 2018. That is two and a half times what they now pay Anthem. And the annual deductible, $14,400, will be four times as high.

“I have no choice,” Ms. Griffith said. “I agree that we need to make changes in the Affordable Care Act, but we don’t have time to start over from scratch. We are suffering now.”

Jill A. Hanken, a health lawyer at the Virginia Poverty Law Center, said, “People who qualify for premium tax credits are finding very affordable plans with low premiums, and those consumers are quite pleased.” But she added: “For people who don’t qualify for tax credits, the cost of plans has truly skyrocketed. They can’t afford or don’t want to pay the high premiums.”

When the Affordable Care Act was adopted in 2010, Democrats like Nancy Pelosi, who was then the House speaker, said the law would make it easier for people to switch jobs or start their own businesses because they would not have to worry about losing health insurance.

“We see it as an entrepreneurial bill,” Ms. Pelosi said, “a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.”

And for a few years, Mr. Dixon said, that idea was appealing. “I would not be an entrepreneur if it were not for Obamacare,” he said.

With soaring premiums, that option is less attractive.

“When I saw the insurance prices for 2018, my initial instinct was to try and go back to my previous employer,” Mr. Dixon said. “But that would just smell of desperation.”


Republicans held a news conference on Capitol Hill after the House of Representatives passed a tax reform bill.

Al Drago for The New York Times

Our tax burden could increase by tens of thousands of dollars, based on money we don’t even make.

President Trump visited Capitol Hill to speak to House Republicans before the vote.

Al Drago for The New York Times

Eric Thayer for The New York Times

Michelle Goldberg

It’s not necessarily fair to him. But it’s what needs to happen now.

Giles Price/Institute, for The New York Times

The U.S. battle against ISIS is killing far more Iraqi civilians than acknowledged. Survivors may never learn why they were targeted. This is the story of one man who did.

Senator Al Franken, Democrat of Minnesota, during a Judiciary committee hearing last month.

Al Drago for The New York Times

Sarah Silverman in a clip from her show, “I Love You, America,” on which she discussed Louis C.K.

On her Hulu series, “I Love You, America,” Ms. Silverman addressed the sexual misconduct of Louis C.K., who has been a longtime friend and colleague.


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This Company Made Up Fake News And Fake Celeb Quotes To Sell Supplements, FTC Says

One online ad claimed that Jennifer Aniston owed her youthful skin to a wrinkle-smoothing cream. On the website Every Day With Dr. Oz, the celebrity doctor and talk show host Mehmet Oz seemingly talked up a weight-loss pill. And a Men’s Health article reported that a supplement was making actor Jason Statham “jacked.”

But according to the Federal Trade Commission, this reporting and marketing was all untrue. The agency alleges it was part of a vast online network of fake news sites, fake customer testimonials, and fake celebrity endorsements that existed to promote unsubstantiated health claims about more than 40 weight-loss, muscle-building, and wrinkle-reduction products. It apparently worked: People nationwide spent $179 million on these products over a five-year period, the FTC alleges.

What’s more, the agency says, customers who thought they were signing up for “free” and “risk-free” trials were in fact automatically charged recurring monthly fees without their consent.

Three people who ran the promotional network through Tarr Inc., a Del Mar, Calif., company, have agreed to settle the charges, the FTC announced Wednesday. Under a court order, Tarr Inc. must pay the agency more than $6 million, and it is prohibited from using the marketing and sales tactics it had allegedly used. The company did not admit guilt.

Leonard Gordon, an attorney for Tarr Inc., told BuzzFeed News by email, “We’re pleased that the matter has been resolved.”

The FTC’s investigation sheds light on how it says this company appears to have spread unsubstantiated health claims like “LOOK 10 YEARS YOUNGER IN LESS THAN 4 WEEKS” and “30% MORE MUSCLE MASS IN 30 DAYS OR LESS!” across the internet. This breed of advertising has become ubiquitous online in part because it successfully mimics authentic news stories and bypasses traditional banner ads.

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