On August 6, 2015 Radius Health, Inc. ("Radius" or the "Company") (Nasdaq:RDUS), a science-driven biopharmaceutical company focused on developing new therapeutics for patients with osteoporosis as well as other serious endocrine-mediated diseases, including hormone responsive metastatic breast cancer, reported its financial results for the second quarter ended June 30, 2015, and provided recent corporate highlights (Filing, 8-K, Radius, AUG 6, 2015, View Source [SID:1234507051]). As of June 30, 2015, Radius had $224.0 million in cash, cash equivalents and marketable securities, and on July 28, 2015, raised approximately $323.8 million of net proceeds in a follow-on public offering of its common stock.
"Radius has achieved a number of significant milestones in the second quarter of 2015, including announcing positive top-line data from the first six months of the ACTIVExtend trial, and adding to the talent of our management team and Board of Directors," said Robert Ward, President and Chief Executive Officer of Radius Health. "This progress as well as the success of our recent follow-on public offering positions us well to execute on our top priorities; submit an MAA and NDA by the end of this year for the investigational drug abaloparatide-SC, continue our partnering discussions as part of our preparation for the potential commercial launch of abaloparatide-SC, and to advance the development of RAD 1901 in multiple indications."
Recent Corporate Highlights
Follow On Public Offering
On July 28, 2015, Radius completed a public offering whereby it sold 4,054,054 shares of common stock at a public offering price of $74.00 per share, for aggregate proceeds, net of underwriting discounts, commissions, and estimated offering costs, of approximately $281.5 million. The underwriters purchased an additional 608,108 shares by exercising their option to purchase additional shares granted to them in connection with the offering. As a result of the public offering and exercise of the underwriters’ option to purchase additional shares, Radius received aggregate proceeds, net of underwriting discounts, commissions, and estimated offering costs of approximately $323.8 million. Radius plans to use these additional funds to expand the development of RAD1901 for potential use in metastatic breast cancer in combination with other approved therapies, to fund the continued development of the optimized abaloparatide transdermal patch and related manufacturing capabilities, and to continue to build the commercial infrastructure, inventory and manufacturing capabilities necessary for commercialization of abaloparatide-SC following regulatory approval.
Abaloparatide-SC
On July 14, 2015, we announced that four abaloparatide abstracts will be presented at the American Society for Bone and Mineral Research (ASBMR) 2015 Annual Meeting, October 9-12, 2015. Dr. Felicia Cosman will make an Oral Plenary presentation titled "Eighteen Months of Treatment with Abaloparatide Followed by Six Months of Treatment with Alendronate in Postmenopausal Women with Osteoporosis – Results of the ACTIVExtend Trial". Dr. Cosman is a Professor of Clinical Medicine at Columbia University in New York and also serves as a Clinical Director at the National Osteoporosis Foundation. Dr. Lorraine Fitzpatrick will make an oral presentation titled "Effects of Abaloparatide on Major Osteoporotic Fracture Incidence in Postmenopausal Women with Osteoporosis – Results of the Phase 3 ACTIVE Trial". Dr. Fitzpatrick recently joined Radius where she holds the position of Chief Medical Officer. Additional posters on the results from the abaloparatide-SC responder analysis and transdermal development programs will be presented.
In June 2015, we announced new data from our ACTIVE trial, as well as the top-line data from the first six months of ACTIVExtend, the 24-month extension trial of the Phase 3 ACTIVE trial in which patients from the abaloparatide-SC and placebo groups of the ACTIVE trial received an approved alendronate therapy for osteoporosis management. The results from the ACTIVExtend study showed that the group previously treated with abaloparatide had no new vertebral fractures during the first six months of receiving alendronate. From the start of the ACTIVE study, this group showed a statistically significant 87% reduction in new vertebral fractures (p<0.0001), a 52% reduction in non-vertebral fractures (p=0.0168), a 48% reduction in clinical fractures (p=0.0139), and a 58% reduction in major osteoporotic fractures (p=0.0122) over the 25-month period, as compared to placebo. This group also achieved a 12.8% increase in BMD at the lumbar spine, a 5.5% increase in BMD at total hip, and a 4.5% increase in BMD at the femoral neck. In addition, 20.4% of patients achieved a 6% increase or greater in BMD at all three sites (i.e., lumbar spine, total hip and femoral neck).
A recent exploratory analysis of the ACTIVE trial showed that, for major osteoporotic fractures, there was a statistically significant 67% reduction in major osteoporotic fractures (p=0.0014) for the abaloparatide treatment group versus placebo, and a statistically significant 53% reduction in major osteoporotic fractures (p=0.0437) for the abaloparatide treatment group as compared to teriparatide over the 18-month period.
The results from the ACTIVE trial and the first six months of the ACTIVExtend trial will form the basis of Radius’ planned submission of a marketing authorization application ("MAA") to the European Medicines Agency ("EMA") and of a new drug application ("NDA") to the U.S. Food and Drug Administration ("FDA"), by the end of 2015.
During the second quarter, Radius continued the non-human primate pharmacokinetic studies of the investigational drug abaloparatide-TD, a short wear time transdermal patch form of abaloparatide. In December 2014, Radius reported that a prototype achieved a desirable pharmacokinetic profile, with comparable AUC, Cmax, Tmax and T1/2 relative to abaloparatide-SC.
RAD1901
Radius is continuing to enroll and dose patients in the United States in its Phase 1 clinical trial of the investigational drug RAD1901 for potential use in the treatment of metastatic breast cancer. The Phase 1 study is a multicenter, open-label, two-part, dose-escalation study of RAD1901 in postmenopausal women with advanced estrogen receptor positive and HER2-negative breast cancer that is designed to determine the recommended dose for a Phase 2 clinical trial and includes a preliminary evaluation of the potential anti-tumor effect of RAD1901. Radius expects to report further progress on this study in the second half of 2015. Radius plans to commence Phase 1 clinical development in metastatic breast cancer patients in the European Union in 2015.
On July 15, 2015, Radius announced that early but promising preclinical data show that its investigational drug RAD1901, in combination with Pfizer’s palbociclib, a CDK4/6 inhibitor, or Novartis’ everolimus, an mTOR inhibitor, was effective in shrinking tumors. In patient-derived xenograft (PDx) breast cancer models with either wild type or mutant ESR1, treatment with RAD1901 resulted in marked tumor growth inhibition, and the combination of RAD1901 with either agent, palbociclib or everolimus, showed anti-tumor activity that was significantly greater than either agent alone.
Radius Expects the Following Upcoming Milestones
· Abaloparatide-SC
· Three abstract presentations at American Society of Bone Mineral Research (ASBMR) October 9-12, 2015, in Seattle, Washington.
· Submit an MAA and NDA for abaloparatide-SC by the end of 2015.
· Abaloparatide-TD
· Poster presentation at ASBMR titled "Optimization of the Pharmacokinetic Profile in Cynomologus Monkeys".
· Commence the clinical evaluation of the optimized abaloparatide-TD patch in the second half of 2015.
· RAD1901
· Commence Phase 1 clinical development in the European Union for RAD1901 in metastatic breast cancer patients in 2015.
· Commence a Phase 2b clinical trial for low-dose RAD1901 as a selective estrogen receptor modulator (SERM) for the potential treatment of vasomotor symptoms in the second half of 2015.
Radius Expects To Make Presentations At The Following Upcoming Conferences:
· Canaccord Genuity Growth Conference, August 12-13, 2015, InterContinental in Boston, MA.
· Multiple oral and poster presentations at the American Society for Bone and Mineral Research 2015 Annual Meeting, October 9-12, 2015, Seattle, WA, including an oral presentation at the Plenary Session of the 25-month ACTIVE and ACTIVExtend trial data.
· San Antonio Breast Cancer Symposium, December 8-12, 2015, San Antonio, Texas.
Recent Corporate Highlights
· On August 4, 2015, Radius paid all amounts owed under its Loan and Security Agreement with Solar Capital Ltd. and Oxford Finance LLC. After consideration of relevant fees required under the Loan and Security Agreement, the total payment amounted to approximately $26.5 million.
· On July 28, 2015, Radius completed a public offering of 4,662,162 shares of common stock at a public offering price of $74.00 per share, raising aggregate proceeds, net of underwriting discounts, commissions and estimated offering costs, of approximately $323.8 million.
· On July 27, 2015, Radius announced that it hired Dr. Lorraine A. Fitzpatrick as Chief Medical Officer of Radius. Dr. Fitzpatrick was previously Medicine Development Leader at GlaxoSmithKline of an international clinical development team for denosumab responsible for clinical development, regulatory, manufacturing, commercial operations epidemiology, and global health outcomes. Previously, Dr. Fitzpatrick led the clinical development of novel agents to treat musculoskeletal diseases and women’s health at GlaxoSmithKline. Before joining GlaxoSmithKline, Dr. Fitzpatrick was Executive Director at Amgen, where she worked in the fields of osteoporosis and oncology.
· On July 20, 2015, Radius announced that Debasish Roychowdhury, M.D., who previously served as Seragon’s Acting Chief Medical Officer, was elected to the Company’s Board of Directors. Dr. Roychowdhury is a leader in the pharmaceutical industry with a strong background in oncology research and development, and regulatory and commercial operations, having previously served in key senior leadership roles at Sanofi, GlaxoSmithKline and Eli Lilly. Dr. Roychowdhury played a key role in the development and advancement of Seragon’s selective estrogen receptor degraders (SERDs) platform for breast cancer and other hormone-driven cancers.
· On July 20, 2015, Radius announced that it has formed an Oncology Clinical Advisory Board (OCAB). The board is currently comprised of renowned leaders in the field of oncology: Professor Mitch Dowsett, FMedSci, Ph.D., Head of the Academic Department of Biochemistry and Head of the Centre for Molecular Pathology at the Royal Marsden Hospital in London, UK; Dr. George W. Sledge Jr., Professor and Chief of Medical Oncology at Stanford University Medical Center; and Martine Piccart, M.D., Ph.D., Professor of Oncology at the Université Libre de Bruxelles, Director of Medicine and Head of Chemotherapy at the Institut Jules Bordet in Brussels, Belgium, and President of the European Organisation for Research and Treatment of Cancer (EORTC).
· On July 15, 2015, Radius announced that early but promising preclinical data showed that its investigational drug RAD1901, in combination with Pfizer’s palbociclib, a CDK4/6 inhibitor, or Novartis’ everolimus, an mTOR inhibitor, was effective in shrinking tumors. In patient-derived xenograft (PDx) breast cancer models with either wild type or mutant ESR1, treatment with RAD1901 resulted in marked tumor growth inhibition, and the combination of RAD1901 with either agent, palbociclib or everolimus, showed anti-tumor activity that was significantly greater than either agent alone.
· On June 17, 2015, Radius announced top line data from the first six months of ACTIVExtend and the 25-month combined data from ACTIVE and ACTIVExtend clinical trials, as well as new data from an exploratory analysis of major osteoporotic fractures in the ACTIVE trial.
· On June 1, 2015, Radius announced that it engaged Myrtle Potter & Company, LLC to support the development of the future global commercial strategy for its lead investigational drug abaloparatide-SC for the potential treatment of post-menopausal osteoporosis.
Second Quarter 2015 Financial Results
For the three months ended June 30, 2015, Radius reported a net loss of $23.0 million, or $0.61 per share, as compared to a net loss of $12.6 million, or $2.22 per share for the three months ended June 30, 2014. The net loss per share calculation for the three months ended June 30, 2015 includes the impact of the conversion of Radius’ convertible preferred stock into common stock upon the completion of its initial public offering in June 2014. The increase in net loss for the three months ended June 30, 2015 as compared to the three months ended June 30, 2014 was primarily due to an increase in research and development and general and administrative expenses, which were partially offset by a decrease in other (expense) income, net.
Research and development expenses for the three months ended June 30, 2015 were $16.3 million, compared to $10.6 million for the same period in 2014. The increase for the 2015 period as compared to the 2014 period was primarily attributable to an increase in compensation costs, including non-cash stock-based compensation costs, due to an increase in our research and development headcount and an increase in stock-based compensation expense for non-employees due to the significant increase in the Radius stock price. This increase was also driven by an increase in consulting costs incurred to support Radius’ NDA submission for abaloparatide-SC and an increase in contract service costs associated with the development of RAD1901. These increases were partially offset by a decrease in the costs associated with the abaloparatide-SC Phase 3 ACTIVE clinical trial.
General and administrative expenses for the three months ended June 30, 2015 were $6.0 million, compared to $3.1 million for the same period in 2014. The increase for the 2015 period as compared to the 2014 period was primarily attributable to an increase in professional support costs and legal fees, including the costs associated with growing Radius’ headcount and preparing for the potential commercialization of abaloparatide-SC, subject to a favorable regulatory review. This increase can also be attributed to higher compensation costs, including non-cash stock-based compensation expense, due to an overall increase in employee headcount.
For the three months ended June 30, 2015, other expense, net of income was $(78) thousand, as compared to other income, net of expense $1.7 million for the same period in 2014. Other (expense) income, net, for the 2014 period reflected changes in the fair value of Radius’ stock liability and other liability.
As of June 30, 2015, Radius had $224.0 million in cash, cash equivalents and marketable securities. Based upon Radius’ cash, cash equivalents and marketable securities balance following the public offering of shares of its common stock in July 2015, Radius believes that, prior to the consideration of revenue from the potential future sales of any of its investigational products, it has sufficient capital to fund its development plans, U.S. commercial scale-up and other operational activities into 2018.
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