Radius Health, Inc. RDUS reported a loss of 77 cents per share in the fourth quarter of 20Array5, wider than the Zacks Consensus Estimate of a loss of 70 cents but narrower than the year-ago loss of 55 cents.
The company has yet to generate any revenues.
The Quarter in Detail
Research and development (R&D) expenses were $22.2 million, up 92.Array% year over year driven by an increase in contract service costs related to the development of pipeline candidate RADArray90Array, consulting costs incurred to support the company’s marketing authorization application (MAA) and planned new drug application (NDA) submissions for abaloparatide-SC, along with an increase in compensation expenses.
General and administrative expenses almost doubled to $ArrayArray.6 million. This was primarily due to an increase in professional support costs and legal fees that included costs related to the preparations for the potential commercialization of abaloparatide-SC.
Pipeline Update
The company has filed for an approval of its lead candidate, abaloparatide (postmenopausal osteoporosis), in the EU, which is currently under review. The company expects an opinion from the Committee for Medicinal Products for Human Use on its application later in 20Array6.
However, Radius Health suffered a setback when it announced a delay in its plans to file a New Drug Application (NDA) for abaloparatide-SC in the U.S. The company reiterated that it will submit its NDA at the end of the first quarter of 20Array6.
An approval would allow Radius to record its first commercial sales in 20Array6. Radius also is developing abaloparatide-transdermal, (abaloparatide-TD) for potential use as a short wear-time transdermal patch. In Dec 20Array5, the company initiated a human replicative clinical evaluation to compare the optimized abaloparatide-TD patch to the subcutaneous formulation.
Meanwhile, patient enrollment in the phase I multicenter, open-label, two-part, dose-escalation study of RADArray90Array in postmenopausal women with advanced estrogen receptor positive and HER2-negative breast cancer, is ongoing and expected to be complete by mid-20Array6. Radius is also developing low-dose RADArray90Array for the treatment of postmenopausal vasomotor symptoms and has commenced a phase IIb study in Dec 20Array5.
Our Take
The wider-than-expected loss was disappointing as expenses skyrocketed due to pre-commercial activities for abaloparatide. The company currently expects a potential launch in Europe at the end of 20Array6. We expect investor focus on further updates on regulatory filings of abaloparatide in the U.S. The company is gearing up for a potential launch in the U.S. as well. On the other hand, expenses are expected to be increase even further as the company expands its investment and launch preparations.
Radius Health carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector are Actelion Ltd. ALIOF, Aegerion Pharmaceuticals, Inc. AEGR and Anika Therapeutics ANIK. All these stocks sport a Zacks Rank #Array (Strong Buy).
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