On November 1, 2018 Radius Health, Inc. ("Radius" or the "Company") (Nasdaq: RDUS), reported its financial and operating results for the third quarter ended September 30, 2018 and provided a business update (Press release, Radius, NOV 1, 2018, View Source [SID1234530571]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"I am very pleased with the continued strong trajectory of our launch and success in growing the U.S. anabolic osteoporosis market. Our financial guidance reflects our confidence in continuing to capture further market share gains for TYMLOS and expanding the osteoporosis anabolic market," said Jesper Hoeiland, President and Chief Executive Officer of Radius.

"With our updated Phase 3 protocol for elacestrant, we are excited to have the opportunity to address a larger patient population with unmet needs. We are on track to deliver on this key milestone and initiate the study in the fourth quarter of this year," said Dr. Charles Morris, Chief Medical Officer of Radius.

TYMLOS (abaloparatide) injection

Third quarter 2018 U.S. net sales of TYMLOS were $27.6 million, a 22% increase over the prior quarter and approximately sevenfold increase from the third quarter of 2017. TYMLOS prescriptions in the third quarter of 2018 accounted for 22% of the total U.S. anabolic osteoporosis market on average (based on Patient Months on Therapy, TRx PMOT).

In October 2018, the U.S. Food and Drug Administration (FDA) approved a labeling supplement for TYMLOS to include additional information from the ACTIVExtend study. The labeling now reflects that after 24 months of open-label alendronate therapy, the vertebral fracture risk reduction achieved with TYMLOS therapy was maintained.

The growth trajectory of the U.S. anabolic market since TYMLOS launched in May 2017 continued in the third quarter of 2018, showing 9% volume growth as compared to the third quarter of 2017, all driven by TYMLOS.

Effective January 1, 2019, TYMLOS is expected to be covered for approximately 274 million U.S. insured lives, representing approximately 95% of U.S. commercial and 64% of Medicare insured lives. 2019 Medicare Part D coverage for TYMLOS increased to approximately 26.2 million lives or 64% of those enrolled in Medicare Part D plans in the U.S., after the decisions from SilverScript Insurance Company (CVS), WellCare Health Plans, Inc., Prime Therapeutics and others to cover TYMLOS for their Medicare Part D beneficiaries. The increased access for TYMLOS in Medicare Part D Formularies for 2019 represents an incremental 28% of anabolic volume opportunity in Medicare Part D. Express Scripts, Inc., UnitedHealthcare (AARP), Kaiser Permanente, and EnvisionRx, among others, decided to continue Medicare Part D coverage of TYMLOS through 2019.

Radius maintains its guidance for TYMLOS to capture on average 19-21% of the U.S. anabolic osteoporosis market in 2018 and its expectations for the U.S. anabolic market to grow at a rate of 7-9% in volume versus 2017.

Financial Guidance

In 2018, Radius expects full-year TYMLOS U.S. net revenues to be between $95 to $98 million and its year-end cash, cash equivalents and investments balance to exceed $220 million.

In 2019, Radius expects full-year TYMLOS U.S. net revenues to be between $155 to $175 million and its year-end cash, cash equivalents and investments balance to exceed $100 million.

Pipeline Highlights

Abaloparatide-Transdermal Patch (abaloparatide-patch)

Radius remains on track with its preparations for the Phase 3 trial and expects to start the study in mid-2019. The Company is in the process of conducting development activities in preparation for the Phase 3 trial and potential NDA filing, including qualification and validation of analytical methods, process development and design control activities. Planning for the facility build-out is also ongoing at the commercial manufacturing site, including scaling up equipment and ensuring readiness for the manufacture of commercial abaloparatide-patches.

Elacestrant (RAD1901)

In the third quarter 2018, the Company finalized the Phase 3 study protocol for elacestrant based on regulatory feedback and additional considerations. The Phase 3 trial will be a single, randomized, open label, active-controlled study of elacestrant as a second- or third-line monotherapy in approximately 460 patients with ER+/HER2- advanced/metastatic breast cancer who have received prior treatment with one or two lines of endocrine therapy, including a cyclin-dependent kinase (CDK) 4/6 inhibitor. Patients in the study will be randomized to receive either elacestrant or the investigator’s choice of an approved hormonal agent. The primary endpoint of the study will be progression-free survival ("PFS"), which the Company will analyze in the overall patient population and in patients with estrogen receptor 1 gene (ESR1) mutations. Secondary endpoints will include evaluation of overall survival (OS), objective response rate (ORR), and duration of response (DOR). Depending on the results, this single trial is intended to support applications for marketing approvals for elacestrant as a second- and third-line monotherapy in the U.S., European Union (EU), and other markets.

Radius expects to initiate the Phase 3 study in the fourth quarter of 2018 with a planned recruitment period of 18-21 months and potential data read-out in 2021.

RAD140

Patient enrollment is ongoing in the Phase 1 study evaluating the safety and maximum tolerated dose of RAD140, a nonsteroidal selective androgen receptor modulator (SARM), in patients with hormone receptor-positive, locally advanced or metastatic breast cancer. The Company expects to present two posters on RAD140 at the San Antonio Breast Cancer Symposium (SABCS) and to provide an update on the RAD140 Phase 1 development program by the end of 2018.

Anticipated Upcoming Milestones

Elacestrant

Initiate a Phase 3 clinical trial as second or third-line monotherapy in advanced/metastatic ER-positive/HER2-negative breast cancer patients in the fourth quarter of 2018

Clinical collaboration agreement for elacestrant combination therapy

RAD140

Continue enrollment in the Phase 1 study and provide a program update by the end of 2018

Abaloparatide

Enter into a partnership for the potential commercialization of abaloparatide-SC outside the U.S. and Japan

Expected Radius Presentations at Upcoming Conferences

On January 7-10, 2019, the Company will present and host one-on-one meetings at the JP Morgan Annual Healthcare Conference in San Francisco.

Third Quarter 2018 Financial Results

Three Months Ended September 30, 2018

For the three months ended September 30, 2018, Radius reported a net loss of $49.8 million, or $1.09 per share, compared to a net loss of $57.8 million, or $1.31 per share, for the three months ended September 30, 2017.

For the three months ended September 30, 2018, non-GAAP adjusted net loss, which excludes expenses related to stock-based compensation, restructuring plans, non-cash interest obligations under debt obligations, and amortization of intangible assets, was $38.8 million, or $0.85 per share, compared to non-GAAP adjusted net loss of $49.3 million, or $1.12 per share, for the three months ended September 30, 2017.

For the three months ended September 30, 2018, TYMLOS net product revenues were $27.6 million compared to approximately $3.5 million for the three months ended September 30, 2017.

Research and development expense for the three months ended September 30, 2018 was $26.8 million compared to $21.0 million for the three months ended September 30, 2017, an increase of $5.8 million, or 28%. This increase was primarily driven by a $2.8 million increase in elacestrant project costs, a $2.3 million increase in abaloparatide-patch project costs, a $1.0 million increase in abaloparatide-SC project costs, and a $0.8 million increase in RAD140 project costs. These increases were partially offset by a $0.2 million decrease in other project related spending, and $0.5 million decrease in personnel related spending attributed to a decrease in headcount from 105 research and development employees as of September 30, 2017 to 95 research and development employees as of September 30, 2018.

For the three months ended September 30, 2018, selling, general and administrative expense was $43.7 million compared to $47.7 million for the three months ended September 30, 2017, a decrease of $4.1 million, or 9%. This decrease was primarily the result of $2.8 million and $0.9 million decreases in compensation and travel related expenses, respectively.

Nine Months Ended September 30, 2018

For the nine months ended September 30, 2018, Radius reported a net loss of $180.2 million, or $3.98 per share, compared to a net loss of $183.2 million, or $4.21 per share, for the nine months ended September 30, 2017.

For the nine months ended September 30, 2018, non-GAAP adjusted net loss, which excludes expenses related to stock-based compensation, restructuring plans, non-cash interest obligations under debt obligations, litigation related payments, and amortization of intangible assets, was $134.4 million, or $2.97 per share, compared to non-GAAP adjusted net loss of $154.2 million, or $3.54 per share, for the nine months ended September 30, 2017.

For the nine months ended September 30, 2018, TYMLOS net product revenues were $64.8 million compared to approximately $4.4 million for the nine months ended September 30, 2017.

Research and development expense for the nine months ended September 30, 2018 was $76.0 million compared to $60.2 million for the nine months ended September 30, 2017, an increase of $15.8 million, or 26%. This increase was primarily driven by a $7.6 million increase in elacestrant project costs, a $4.0 million increase in abaloparatide-SC project costs, a $3.8 million increase in abaloparatide-patch project costs, and a $2.1 million increase in RAD140 project costs. These increases were partially offset by a $0.7 million decrease in other project related spending and a $0.9 million decrease in compensation and travel related expenses attributed to a decrease in headcount from 105 research and development employees as of September 30, 2017 to 95 research and development employees as of September 30, 2018.

Selling, general, and administrative expense for the nine months ended September 30, 2018, was $140.3 million compared to $135.9 million for the nine months ended September 30, 2017, an increase of $4.3 million, or 3%. This increase was primarily the result of $2.5 million and $0.7 million increases in compensation and travel related expenses, respectively attributed to an increase in headcount from 361 selling, general and administrative employees as of September 30, 2017 to 384 selling, general and administrative employees as of September 30, 2018. Additionally, there was a $0.8 million increase in professional fees and other operating expenses.

As of September 30, 2018, Radius had $276.9 million in cash, cash equivalents, restricted cash, marketable securities and investments. Based upon our cash, cash equivalents, marketable securities and investments balance as of September 30, 2018, we believe that, prior to the consideration of potential proceeds from partnering and/or collaboration activities, we have sufficient capital to fund our development plans, U.S. commercial and other operational activities for not less than twelve months from the date of this press release.

Webcast and Conference Call

In connection with today’s reporting of Third Quarter Financial Results, Radius will host a conference call and live audio webcast at 8:00 a.m. ET today, November 1, 2018, to discuss the commercial outlook for TYMLOS, review the financial results and provide a Company update.

Conference Call Information:

Date: November 1, 2018

Time: 8:00 a.m. ET

Domestic Dial-in Number: (866) 323-7965

International Dial-in Number: (346) 406-0961

Conference ID: 3875777

Live webcast: View Source

For those unable to participate in the conference call or webcast, a replay will be available from November 1, 2018 at 11:00 a.m. ET and will be archived on the Company’s website for 90 days. To access the replay, dial (855) 859-2056 for U.S. or (404) 537-3406 for International, using conference ID number 3875777.

A live audio webcast of the call can be accessed from the Investors section of the Company’s website, www.radiuspharm.com. The full text of the announcement and financial results will also be available on the Company’s website.

Use of Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (GAAP), we use the following non-GAAP financial measures: non-GAAP adjusted net loss and non-GAAP net loss per share. These non-GAAP financial measures exclude certain amounts or expenses from the corresponding financial measures determined in accordance with GAAP. Management believes this non-GAAP information is useful for investors, taken in conjunction with Radius’ GAAP financial statements, because it provides greater transparency regarding Radius’ operating performance. Management uses these measures, among other factors, to assess and analyze operational results and trends and to make financial and operational decisions. Non-GAAP information is not prepared under a comprehensive set of accounting rules and should only be used to supplement an understanding of Radius’ operating results as reported under GAAP, not in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. In addition, these non-GAAP financial measures are unlikely to be comparable with non-GAAP information provided by other companies. The determination of the amounts that are excluded from non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts. Reconciliations between these non-GAAP financial measures and the most comparable GAAP financial measures for the three and nine months ended September 30, 2017 and 2018 are included in the tables accompanying this press release after the unaudited condensed consolidated financial statements.