Radius Health, Inc. (NASDAQ:RDUS) is a global biopharmaceutical company focused on addressing unmet medical needs in the areas of bone health, neuroscience, and oncology. The company's flagship product, TYMLOS (abaloparatide) injection, was approved by the FDA in 2017 for the treatment of postmenopausal women with osteoporosis at high risk for fracture. Radius is also developing investigational product candidates, including abaloparatide-TD, RAD011, and elacestrant.

In the second quarter of 2022, Radius reported total revenue of $58.3 million, consisting of $52.5 million in product revenue from TYMLOS and $5.8 million in license revenue. For the first six months of 2022, the company reported total revenue of $101.4 million, including $95.5 million in product revenue and $6.0 million in license revenue. The company's net loss for the second quarter was $12.7 million, and for the first six months of 2022 was $31.0 million.

Radius' cash and cash equivalents balance as of June 30, 2022, was $72.5 million. The company believes it has sufficient capital to fund its commercial operations, development plans, and other operational activities for at least one year from the date of the latest filing, prior to the consideration of potential proceeds from partnering and/or collaboration activities.

Business Overview

Radius' primary focus is on the commercialization of TYMLOS in the United States and the development of its investigational product candidates. The company holds worldwide commercialization rights to abaloparatide-SC, except for Japan and Canada, where it is entitled to receive milestones and royalties based on the development and commercialization of the product.

In July 2017, Radius entered into a license and development agreement with Teijin Pharma Limited for abaloparatide-SC in Japan. In May 2020, Teijin submitted an NDA for abaloparatide-SC in Japan, and in March 2021, the product was approved in Japan under the brand name Ostabaro® for the treatment of osteoporosis in patients at high risk of fracture.

Radius is also developing abaloparatide-TD, a transdermal formulation of abaloparatide, for the potential treatment of postmenopausal women with osteoporosis. In December 2021, the company announced that its Phase 3 wearABLe trial evaluating abaloparatide-TD did not meet its primary or secondary endpoints. Based on the results and feedback from the FDA, Radius announced in June 2022 that it would cease all work on the abaloparatide-TD program.

The company's pipeline also includes RAD011, a pharmaceutical-grade synthetic cannabidiol oral solution, for which Radius plans to initiate a Phase 2/3 pivotal study to evaluate the treatment of hyperphagia and related neuro-behavioral symptoms in Prader-Willi syndrome. RAD011 has been granted Fast Track Designation by the FDA and Orphan Drug Designation for the treatment of Prader-Willi syndrome, Angelman syndrome, and infantile spasms.

In October 2021, Radius and its licensee, Berlin-Chemie AG, a company of the Menarini Group, announced positive top-line results from the EMERALD Phase 3 study of elacestrant, a selective estrogen receptor degrader (SERD). Based on these results, in June 2022, Berlin-Chemie, with Radius' support, submitted an NDA to the FDA for elacestrant in patients with ER+/HER2- advanced or metastatic breast cancer.

Financials

For the full year 2021, Radius reported annual net income of -$25,791,000, annual revenue of $282,224,000, annual operating cash flow of $139,362,000, and annual free cash flow of $9,846,000.

In the second quarter of 2022, Radius reported product revenue of $52.5 million, a 1% increase compared to the prior-year period. License revenue for the quarter was $5.8 million, primarily driven by the achievement of a development milestone related to the submission of the NDA for elacestrant by Berlin-Chemie.

Research and development expenses for the second quarter of 2022 were $26.3 million, a 2% decrease compared to the prior-year period. Selling, general, and administrative expenses were $34.2 million, a 7% increase compared to the second quarter of 2021.

The company's net loss for the second quarter of 2022 was $12.7 million, compared to a net loss of $16.8 million in the prior-year period. For the first six months of 2022, Radius reported a net loss of $31.0 million, compared to a net loss of $32.6 million in the same period of 2021.

Radius' cash and cash equivalents balance as of June 30, 2022, was $72.5 million, compared to $111.5 million as of December 31, 2021. The decrease in cash was primarily due to cash used in operating activities, partially offset by cash provided by financing activities.

Operational Highlights

During the second quarter of 2022, Radius made progress on several strategic initiatives:

1. Abaloparatide-SC: In October 2021, Radius announced positive top-line results from its Phase 3 ATOM trial evaluating abaloparatide-SC for the treatment of men with osteoporosis. The company filed a supplemental new drug application (sNDA) with the FDA in February 2022 for the use of TYMLOS in men with osteoporosis at high risk for fracture.

2. Abaloparatide-TD: As mentioned earlier, Radius announced in June 2022 that it would cease all work on the abaloparatide-TD program following the failure of its Phase 3 wearABLe trial to meet its primary and secondary endpoints.

3. RAD011: Radius continues to advance the development of RAD011, its pharmaceutical-grade synthetic cannabidiol oral solution. In July 2022, the company announced that the first patient had been randomized in the Phase 2/3 SCOUT-015 study evaluating RAD011 for the treatment of hyperphagia and related neuro-behavioral symptoms in Prader-Willi syndrome.

4. Elacestrant: Radius' licensee, Berlin-Chemie, submitted an NDA to the FDA in June 2022 for elacestrant in patients with ER+/HER2- advanced or metastatic breast cancer, based on the positive top-line results from the EMERALD Phase 3 study announced in October 2021.

Risks and Challenges

Radius faces several risks and challenges in its business, including:

1. Reliance on a single commercial product: TYMLOS is Radius' only approved product, and the company's business currently depends heavily on its successful commercialization.

2. Regulatory approval and clinical development risks: The company's ability to obtain regulatory approvals for its investigational product candidates and the success of its clinical trials are critical to its future growth and profitability.

3. Competitive landscape: Radius operates in a highly competitive industry, and its products and product candidates face competition from other approved therapies and potential future treatments.

4. Intellectual property protection: The company's ability to protect its intellectual property rights is essential to maintaining its competitive position.

5. Financing and liquidity: Radius may need to secure additional financing to fund its ongoing operations and development activities, and there is no guarantee that such financing will be available on favorable terms or at all.

Outlook

Radius continues to focus on the commercialization of TYMLOS in the United States and the advancement of its pipeline of investigational product candidates. The company expects to receive a decision from the FDA on its sNDA for TYMLOS in men with osteoporosis in 2023.

Regarding RAD011, Radius plans to initiate additional clinical trials in Angelman syndrome and infantile spasms, in addition to the ongoing Phase 2/3 SCOUT-015 study in Prader-Willi syndrome.

For elacestrant, Radius' licensee, Berlin-Chemie, is responsible for the development and commercialization of the product. The FDA's review of the recently submitted NDA is expected to be a key milestone for the program.

While Radius faces near-term challenges due to market conditions, the company remains focused on executing its strategic initiatives, including its cost reduction and productivity program, investments in advanced metal recovery technologies, and the growth of its recycling services business. These efforts are expected to position Radius for improved financial performance as market conditions recover.

Conclusion

Radius Health is navigating a challenging market environment while advancing its strategic priorities across its product portfolio. The company's reliance on TYMLOS as its sole commercial product, coupled with the setbacks in its abaloparatide-TD program, have created near-term headwinds. However, Radius is taking proactive steps to improve its operational efficiency and position its pipeline of investigational product candidates for future success. Investors should closely monitor the company's progress in executing its strategic initiatives, as well as the regulatory and clinical development milestones for its product candidates, to assess the long-term growth potential of Radius Health.