OPKO Health (OPK) Stock Climbs On Coverage News

Opko Health OPK Stock News

OPKO Health Inc. (NASDAQ: OPK) is headed for the top in the market this morning, trading on gains of nearly 10% early on. The gains come after the company announced insurance coverage news that will likely lead to stronger sales of its 4Kscore test. Here’s what’s going on:

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OPK Stock Gains On Insurance Coverage Announcement

OPKO health excited investors with a press release about insurance coverage this morning. In the release, the company announced that Novitas Solutions has issued a new proposed local coverage determination for the company’s 4Kscore test with defined criteria.

Under the local coverage determination, more patients will have access to the test as Medicare will reimburse the test for patients who meet the criteria.

What Is The 4Kscore Test?

The 4Kscore test is a blood test that was developed by OPK. The test is currently used by healthcare professionals to asses the risk of prostate cancer in male patients. In particular, the test is given to patients that have received a prostate specific antigen test that results in abnormal results.

The 4Kscore test has been offered by OPK since 2014 and is available in the United States, Europe, and other regions around the world.

It’s also worth mentioning that the test has been included in the National Comprehensive Cancer Network Guidelines since 2015. It has also been featured in the European Association of Urology Prostate Cancer Guidelines since 2016.

What Is Novitas

Novitas is a Medicare Administrative Contractor. The company’s jurisdiction includes New Jersey, the state in which OPKO Healths BioReference Laboratories, Inc. is located. This is also where all 4Kscore testing is performed.

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Why This News Is Significant

The prostate cancer diagnostics market is a massive and growing one. In fact, experts at Grand View Research expect that by the year 2025, this market will grow to be worth more than $5.5 billion annually! For a company like OPK with a market cap of around $1.5 billion, this is a significant opportunity.

With that said, as coverage starts to expand for the company, sales of its 4Kscore test are likely to see a significant increase in volume. Of course, this means strong potential for growth in revenue and earnings capabilities.

Moreover, coverage tends to come in a domino effect. As more payors decide to cover a treatment, device, diagnostic test, or any other medical product, other payors tend to step up and do the same. As such, we could see a domino effect here, compounding on the back of the potential growth from today’s announcement.

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