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Radius Health (RDUS) Up 14.7% Since Last Earnings Report: Can It Continue?

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It has been about a month since the last earnings report for Radius Health (RDUS - Free Report) . Shares have added about 14.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Radius Health due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Radius' Q4 Loss Wider Than Expected, Revenues Beat

The company incurred a loss of 46 cents per share in the fourth quarter, wider than the Zacks Consensus Estimate of a loss of 32 cents. The figure was, however, narrower than the year-ago quarter’s loss of 54 cents per share due to higher revenues.

The company reported revenues of $62.8 million, beating the Zacks Consensus Estimate of $59 million and increasing from the year-ago quarter’s $55.7 million owing to continued growth in demand for lead drug, Tymlos, which is approved for the treatment of postmenopausal women with osteoporosis at high risk of fracture.

Quarter in Detail

Net sales of Tymlos were $59.9 million, up 7.7% year over year. New patient starts increased 26% sequentially.

Research & development expenses for the reported quarter were $36.4 million, up from $34.5 million year over year, primarily driven by a $16.0-million increase in RAD011 program expenses. Selling, general & administrative expenses were roughly flat at $35.8 million.

Pipeline Updates

Data from the phase III ATOM study, evaluating the use of abaloparatide in osteoporotic men at high risk for fracture, are expected in the second half of the year.

Data from the wearABLe study, evaluating the effects on bone mineral density of abaloparatide delivered via a novel transdermal system, are also expected in the second half of year.

In July 2020, Radius entered into an exclusive global license agreement with Menarini Group for the development and commercialization of elacestrant. Per the agreement, Menarini Group will be responsible for the worldwide commercialization of elacestrant, after the completion of the phase III study. The EMERALD study is evaluating the use of elacestrant to treat ER+/HER2- advanced or metastatic breast cancer and data are expected in the second half of the year.

Last month, Radius announced a definitive agreement to acquire the global development and commercialization rights of Benuvia Therapeutics Inc.’s synthetic cannabidiol oral solution, RAD011. The company also entered into definitive agreements with Endo Ventures Limited, a subsidiary of Endo International to register, commercialize and distribute abaloparatide on an exclusive basis in Canada.

2020 Results

Revenues of $238.6 million increased from $173.3 million in 2019 and beat the Zacks Consensus Estimate of $235 million.

Loss per share narrowed to $2.35 from $2.89 in 2019.



 

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision. The consensus estimate has shifted 15.97% due to these changes.

VGM Scores

At this time, Radius Health has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Radius Health has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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