A month has gone by since the last earnings report for Radius Health . Shares have added about 20.7% 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 drivers.
Radius Q2 Earnings Beat Estimates, Tymlos Sales Solid
Radius incurred a loss of 55 cents per share in the second quarter, narrower than the year-ago quarter’s loss of 98 cents. Including one-time items, loss came in at 77 cents, which was narrower than the Zacks Consensus Estimate of a loss of 85 cents. The year-over-year improvement was backed by an increase in revenues.
The company reported Tymlos’ sales of $41 million, surpassing the Zacks Consensus Estimate by 0.64% and increasing from $22.6 million in the year-ago quarter.
Quarter in Detail
We remind investors that Radius obtained 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.
The anabolic market grew 4% year over year in the first half of 2019. During the reported quarter, Tymlos continued to increase its market share and captured, on average, 35% of the U.S. anabolic osteoporosis market (based on Patient Months on Therapy, TRx PMOT) and 46% of new anabolic patient starts (NBRx).
Research & development expenses for the reported quarter were $27.2 million, up 3% year over year due to higher abaloparatide-SC project costs. General & administrative expenses decreased 17% to $40.1 million.
The pipeline includes abaloparatide injection for potential use in the treatment of men with osteoporosis, abaloparatide patch for potential use in osteoporosis and elacestrant (RAD1901) for potential use in hormone receptor-positive breast cancer.
In July 2019, Radius obtained preliminary results from the abaloparatide-transdermal patch (abaloparatide-patch) patient assessment study, which evaluated self-administration of abaloparatide-patch over 29 days in 22 postmenopausal women with low bone density. The top-line results showed that patients were able to follow the instructions for use (IFU) and applied the patches with a 99.7% success rate.
Earlier this month, the first patient was randomized in the phase III wearABLe clinical trial, assessing the safety and efficacy of abaloparatide-patch for the treatment of postmenopausal patients with osteoporosis at high risk for fracture. The study is a pivotal, randomized, open-label, active-controlled, bone mineral density (“BMD”) non-inferiority bridging study that will evaluate the efficacy and safety of abaloparatide-patch versus Tymlos (abaloparatide injection) in approximately 470 patients with postmenopausal osteoporosis at high risk of fracture. The study is currently open for enrollment at multiple clinical sites. Radius plans to complete patient enrollment in this study by the end of 2019.
2019 Sales Guidance Updated
Radius expects Tymlos net revenues to be $165-$170 million (previous guidance was $160-$170 million) for 2019.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 11.76% due to these changes.
Currently, Radius Health has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Radius Health has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.