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Radius Health (RDUS) Reports Wider-than-Expected Q2 Loss
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Radius Health, Inc. (RDUS - Free Report) posted a loss of $1.01 per share in the second quarter of 2016, wider than both the Zacks Consensus Estimate of a loss of 98 cents and the year-ago loss of 61 cents.
Research and development (R&D) expenses were $26.9 million, up 65.2% year over year, due to an increase in contract service costs related to the development of pipeline candidate, RAD1901, to support a phase I study in metastatic breast cancer that had commenced in late 2014 and a phase IIb study in postmenopausal vasomotor symptoms that had been initiated in Dec 2015. Expenses also rose due to higher compensation expenses as a result of increased headcount.
General and administrative expenses were up 186.6% to $17.2 million primarily due to higher professional support costs and legal fees that included costs related to increased headcount, and preparations for a potential commercialization of abaloparatide-SC.
Pipeline Update
Radius Health has been making considerable progress on its candidates in its pipeline. The company’s lead candidate, abaloparatide subcutaneous (abaloparatide-SC), is being developed for reducing the risk of fractures in postmenopausal osteoporosis. The candidate is currently under review in both the U.S. and the EU.
An opinion from the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) for the marketing application is expected in late 2016 or 2017. Meanwhile, the FDA has assigned a Prescription Drug User Fee Act (PDUFA) action date of Mar 30, 2017.
In addition, the company is developing abaloparatide-transdermal (abaloparatide-TD) for potential use as a short wear-time transdermal patch.
The company is also evaluating RAD1901 in a phase I study in postmenopausal women with advanced estrogen receptor (ER)-positive and HER2-negative breast cancer. While the phase I study is designed to evaluate escalating doses of RAD1901 in Part A, the Part B expansion cohorts allow an evaluation of additional safety, tolerability and preliminary efficacy.
Radius Health is also evaluating RAD1901 in a phase 1 FES-PET study in patients with ER+, HER2-negative advanced breast cancer, which includes the use of FES-PET imaging to assess ER occupancy in tumor lesions following RAD1901 treatment.
Radius Health’s wider-than-expected loss in the second quarter and surging expenses are concerning. We expect investor focus to remain on the regulatory status of abaloparatide-SC.
A potential approval would allow Radius Health to record its first commercial sales. The company is now gearing up for a potential launch in both the U.S and the EU and has thus increased its headcount. Expenses are expected to rise further as the company increases investment and launch preparations. Meanwhile, Radius Health is also looking for a collaboration partner for the potential commercialization of abaloparatide-SC prior to its launch.
Radius Health carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Anika Therapeutics Inc. (ANIK - Free Report) , Geron Corporation (GERN - Free Report) and Corcept Therapeutics Incorporated (CORT - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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Radius Health (RDUS) Reports Wider-than-Expected Q2 Loss
Radius Health, Inc. (RDUS - Free Report) posted a loss of $1.01 per share in the second quarter of 2016, wider than both the Zacks Consensus Estimate of a loss of 98 cents and the year-ago loss of 61 cents.
The company is yet to generate any revenue.
The Quarter in Detail
Research and development (R&D) expenses were $26.9 million, up 65.2% year over year, due to an increase in contract service costs related to the development of pipeline candidate, RAD1901, to support a phase I study in metastatic breast cancer that had commenced in late 2014 and a phase IIb study in postmenopausal vasomotor symptoms that had been initiated in Dec 2015. Expenses also rose due to higher compensation expenses as a result of increased headcount.
General and administrative expenses were up 186.6% to $17.2 million primarily due to higher professional support costs and legal fees that included costs related to increased headcount, and preparations for a potential commercialization of abaloparatide-SC.
Pipeline Update
Radius Health has been making considerable progress on its candidates in its pipeline. The company’s lead candidate, abaloparatide subcutaneous (abaloparatide-SC), is being developed for reducing the risk of fractures in postmenopausal osteoporosis. The candidate is currently under review in both the U.S. and the EU.
An opinion from the European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) for the marketing application is expected in late 2016 or 2017. Meanwhile, the FDA has assigned a Prescription Drug User Fee Act (PDUFA) action date of Mar 30, 2017.
In addition, the company is developing abaloparatide-transdermal (abaloparatide-TD) for potential use as a short wear-time transdermal patch.
The company is also evaluating RAD1901 in a phase I study in postmenopausal women with advanced estrogen receptor (ER)-positive and HER2-negative breast cancer. While the phase I study is designed to evaluate escalating doses of RAD1901 in Part A, the Part B expansion cohorts allow an evaluation of additional safety, tolerability and preliminary efficacy.
Radius Health is also evaluating RAD1901 in a phase 1 FES-PET study in patients with ER+, HER2-negative advanced breast cancer, which includes the use of FES-PET imaging to assess ER occupancy in tumor lesions following RAD1901 treatment.
RADIUS HEALTH Price and EPS Surprise
RADIUS HEALTH Price and EPS Surprise | RADIUS HEALTH Quote
Our Take
Radius Health’s wider-than-expected loss in the second quarter and surging expenses are concerning. We expect investor focus to remain on the regulatory status of abaloparatide-SC.
A potential approval would allow Radius Health to record its first commercial sales. The company is now gearing up for a potential launch in both the U.S and the EU and has thus increased its headcount. Expenses are expected to rise further as the company increases investment and launch preparations. Meanwhile, Radius Health is also looking for a collaboration partner for the potential commercialization of abaloparatide-SC prior to its launch.
Radius Health carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Anika Therapeutics Inc. (ANIK - Free Report) , Geron Corporation (GERN - Free Report) and Corcept Therapeutics Incorporated (CORT - Free Report) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>