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Radius (RDUS) Q2 Loss Narrower Than Expected, Tymlos Sales Up

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Radius Health, Inc. (RDUS - Free Report) reported encouraging results for the second-quarter of 2018, wherein loss was narrower than expected and sales beat estimates.

The company reported a loss of $0.99 per share in the second quarter of 2018, narrower than both the Zacks Consensus Estimate of a loss of $1.32 and the year-ago period loss of $1.31.  Increase in revenues led to the narrower than anticipated loss on a year-over-year basis.

Radius Health, Inc. Price, Consensus and EPS Surprise

 

 

Radius Health, Inc. Price, Consensus and EPS Surprise | Radius Health, Inc. Quote

The company reported Tymlos’ sales of $22.6 million surpassing the Zacks Consensus Estimate of $20.8 million.

Quarter in Detail

Tymlos’ sales also increased 56% from the first quarter of 2018. We remind investors that Radius Health received the FDA approval for Tymlos (abaloparatide) injection in April 2017 for the treatment of postmenopausal women with osteoporosis at high risk of fracture. The company began shipments of the drug to wholesalers at the end of May 2017. Hence, revenues recorded in the year-ago quarter were $0.9 million only.

Tymlos continues to gain traction with approximately 265 million covered lives in the U.S. market access. This represents 95% coverage in Commercial and Medicaid/All Other, and 44% coverage in Medicare Part D for a total of 88% of the U.S. insured population.

Tymlos’ market share reached approximately 34% of new anabolic patients starting anabolic therapy (NBRx) and the total prescriptions accounted for 19% of total U.S. anabolic osteoporosis market (based on Patient Months on Therapy, TRx PMOT) in the second quarter of 2018.

Research and development expenses for the reported quarter were $26.3 million, up 33.9% year over year. General and administrative expenses for the reported quarter decreased 3.1% to $48.6 million due to decrease in compensation and travel-related expenses.

Pipeline Updates

The pipeline includes abaloparatide injection for potential use in the treatment of men with osteoporosis, abaloparatide patch for potential use in osteoporosis, elacestrant (RAD1901) for potential use in hormone-receptor positive breast cancer; and RAD140 for potential use in hormone-receptor positive breast cancer.

The company is developing two formulations — abaloparatide-Subcutaneous (SC) and abaloparatide-transdermal patch.  The company’s Marketing Authorisation Application (MAA) for abaloparatide-SC in Europe, for the treatment of postmenopausal women with osteoporosis, was under review. However, in Jul 2018, the company announced that the Committee for Medicinal Products for Human Use (CHMP), the scientific committee of the European Medicines Agency (EMA), has communicated a negative trend vote for the MAA following a re-examination procedure. Thereafter, the CHMP communicated that it maintained its negative opinion on the MAA at its formal final vote.

In June 2018, the FDA approved a labeling supplement for Tymlos to revise the needle length in the instructions for use from 8 mm to 5 to 8 mm. Moreover, in July 2018, Radius Health initiated a bone histomorphometry study, which will enrol approximately 25 postmenopausal women with osteoporosis to evaluate the early effects of abaloparatide-SC on tissue-based bone remodeling and structural indices.

Meanwhile, Radius Health will conduct a single, randomized, comparator controlled phase III trial of elacestrant as a third-line monotherapy in approximately 300 patients with ER positive/HER2 negative advanced/metastatic breast cancer, as per the feedback from the FDA and EMA.  The results are expected to support applications for global marketing approvals if positive. Patients in the study would be randomized to receive either elacestrant or an investigator’s choice of an approved hormonal agent. The primary endpoint of the study will be progression-free survival. The study is planned to be initiated in the second half of 2018.

A phase I study evaluating the safety and maximum tolerated dose of RAD140 in patients with hormone receptor-positive, locally advanced or metastatic breast cancer is currently enrolling patients. Radius Health expects to provide an update on the RAD140 development program by the end of 2018.

Our Take

The company’s narrower-than-expected loss in the second quarter was encouraging as sales of Tymlos continue to gain traction.

Radius Health expects Tymlos to capture an average of 19-21% of the U.S. anabolic osteoporosis market in 2018, while anabolic market in the United States is now expected to increase 7-9% in volumes compared with the earlier projection of 5-7%.

Radius Health’s shares have lost 27.5% in the year so far compared with the industry’s  growth of 1.2%.

 

Although the osteoporosis market in the United Sates has great potential, Tymlos is expected to face significant competition from Eli Lilly & Co's (LLY - Free Report) Forteo and Amgen's (AMGN - Free Report) Prolia.

Zacks Rank & Stock to Consider

Radius Health currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the healthcare sector is Gilead Sciences, Inc. (GILD - Free Report) , which sports a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

Gilead’s earnings per share estimates increased from $6.10 to $6.57 for 2018 over the last sixty days. Estimates for 2019 are also up by 14 cents.

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