Opko Health Inc. (OPK), the Tel Aviv-traded drug developer headed by billionaire Phillip Frost, tumbled the most in five years after short seller Lakewood Capital Management said the stock is “grossly overvalued.”
Shares of the Miami-based company sank 15 percent to $9.81, paring its gain this year to 104 percent. The New York shares’ discount to the Tel Aviv stock widened to 43 cents, the most in two weeks. Shares slumped 12 percent to 36 shekels, or $10.24.
Opko’s shares are worth least 75 percent “less than where they are currently trading,” Lakewood said in a report on its website. The health-care holding company’s Alzheimer test is unlikely to be commercialized, it said.
“The likelihood with Opko is that you will see lots of volatility,” Daniel Goldstein, the global head of sales at IBI-Israel Brokerage and Investments Ltd. in Tel Aviv, said by phone. “The stock has risen very strongly based on little more than belief. Any bad news is likely to have a strong impact.”
Juan Rodriguez, Opko’s chief financial officer in Miami, didn’t immediately respond to a voicemail message requesting comment on the report.
The company was included on the benchmark TA-25 Index in October after it completed the acquisition of Nes Ziona, Israel-based Prolor Biotech Inc.
After selling Ivax Corp. to Teva Pharmaceutical Industries Ltd. for $7.4 billion in 2006, Frost and his associates began assembling Opko, a health-care holding company for diagnostic equipment and medical products. Frost is the chairman and largest shareholder in both Opko and Prolor and one of Prolor’s early investors. He’s also chairman of Teva.
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