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Radius (RDUS) Q1 Loss Wider Than Expected, Revenues Decline

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Shares of Radius Health, Inc. (RDUS - Free Report) were down 13.87% following lower-than-expected first-quarter results.

The company incurred a loss of 39 cents per share in the first quarter, wider than the Zacks Consensus Estimate of a loss of 21 cents and the year-ago quarter’s loss of 34 cents.

The company’s revenues of $43.1 million missed the Zacks Consensus Estimate by 16.07% and fell from $56.2 million reported in the year-ago quarter.  Revenues came in from the sales of the lead drug, Tymlos (abaloparatide-SC) injection, which is approved for the treatment of postmenopausal women with osteoporosis at high risk of fracture and license revenues.

Shares of the company have lost 11.2% in the year so far compared with the industry’s decline of 19.7%.

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Quarter in Detail

Tymlos revenues in the quarter came in $43 million, down from $45 million in the year-ago quarter, driven primarily by inventory destocking and seasonal payer dynamics.

Research & development expenses in the reported quarter were $22.7 million, down from $31.4 million, due to a decrease in abaloparatide-TD program costs.

Selling, general and administrative expenses were $30 million, down 11.8%.

Pipeline Updates

Radius Health is evaluating Tymlos for additional indications.  The company filed a supplemental new drug application (sNDA) with the FDA for Tymlos (abaloparatide) subcutaneous injection in men with osteoporosis at high risk for fracture.

Another pipeline candidate, elacestrant, is being evaluated for the treatment of ER+HER2-advanced or metastatic breast cancer (mBC) in collaboration with Menarini Group. Both the companies are working toward regulatory submission in the United States in the second quarter of 2022, with EU filing to follow later.

It is also developing RAD011, a pharmaceutical-grade synthetic cannabidiol oral solution manufactured utilizing traditional pharmaceutical manufacturing processes.  The company plans to initiate two single pivotal trials in Angelman syndrome (AS) in the third quarter and Prader-Willi syndrome (PWS) in the second quarter. SCOUT-015 study evaluating hyperphagia in PWS is open for recruitment and has begun patient screening in the United States.  It also plans a phase II infantile spasms (IS) trial evaluating spasm resolution.

2022 Guidance Reiterated

Tymlos revenues are expected to be $232 million, while revenues in the first half are likely to be around $97 million.

Our Take

Radius reported a wider loss in the first quarter on lower revenues. However, the guidance for 2022 was reiterated. Tymlos is most likely facing challenges.
Moreover, competition is stiff for Tymlos from Eli Lilly & Co's (LLY - Free Report) Forteo and Amgen's (AMGN - Free Report) Prolia.

Eli Lilly’s Forteo generated sales of $137 million in the first quarter.

Amgen’s Prolia sales increased 12% year over year in the first quarter, driven by 10% volume growth and higher net selling price. Amgen’s Evenity is also approved for treating osteoporosis in women after menopause who are at high risk of fracture or cannot use another osteoporosis medicine or other osteoporosis medicines did not work well.

Zacks Rank & A Stock to Consider

Radius currently carries a Zacks Rank #3 (Hold). 

A better-ranked stock in the healthcare sector is Vertex Pharmaceuticals (VRTX - Free Report) , which at present carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The consensus estimate for Vertex’s 2022 earnings has increased 25 cents over the past 60 days to $14.58. Shares of VRTX have gained 17.5% in the year so far.