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Edited Transcript of RDUS earnings conference call or presentation 28-Feb-19 9:30pm GMT

Q4 2018 Radius Health Inc Earnings Call

Cambridge Apr 18, 2019 (Thomson StreetEvents) -- Edited Transcript of Radius Health Inc earnings conference call or presentation Thursday, February 28, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Charles Q. Morris

Radius Health, Inc. - Chief Medical Officer

* Chhaya Shah

Radius Health, Inc. - SVP of Technical Operations

* Elhan Webb

Radius Health, Inc. - Head of IR & External Communications

* Jesper Høiland

Radius Health, Inc. - President, CEO & Director

* Jose Carmona

Radius Health, Inc. - CFO, Senior VP & Treasurer

* Joseph Kelly

Radius Health, Inc. - SVP of Sales & Marketing

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Conference Call Participants

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* Alec Warren Stranahan

BofA Merrill Lynch, Research Division - Research Analyst

* Christopher John Zopf

Cowen and Company, LLC, Research Division - Associate

* Geoffrey Craig Porges

SVB Leerink LLC, Research Division - Director of Therapeutics Research, MD & Senior Biotechnology Analyst

* Jessica Macomber Fye

JP Morgan Chase & Co, Research Division - Analyst

* Kyung Yang

Jefferies LLC, Research Division - MD & Senior Equity Research Analyst

* Maryana Ilya Breitman

Goldman Sachs Group Inc., Research Division - Research Analyst

* Nicole Germino

Citigroup Inc, Research Division - Senior Research Associate

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Presentation

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Operator [1]

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Good day, ladies and gentlemen, and thank you for standing by. Welcome to the fourth quarter Radius Health, Incorporated earnings conference call. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the conference over to Ms. Elhan Webb. Ma'am, please begin.

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Elhan Webb, Radius Health, Inc. - Head of IR & External Communications [2]

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Thank you, Howard. Welcome and thank you all for joining us on the conference call and webcast for Radius Fourth Quarter 2018 Financial Results and Business Update.

Before we begin, I would like to remind you that statements made during this call that are not historical fact are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in your annual report on Form 10-K and other reports filed with the SEC. Any forward-looking statements represent our views as of today, February 28, 2019, only. During today's, call we may refer to certain non-GAAP financial measures that involve adjustments to GAAP figures in order to provide greater transparency regarding our operating performance. These non-GAAP financial measures are not to be relied upon as a substitute for our financial information presented in accordance with GAAP and are unlikely to be comparable to non-GAAP information provided by other companies. Please refer to the slides at the end of today's presentation, which contain the reconciliations between our non-GAAP and GAAP financial measures.

A replay of this call will be available on our company website and you can find the dial-in information for the conference call replay in today's press release as well as on our website.

On today's call, we will provide you with a review of Radius' fourth quarter and full year 2018 financial results, an update on our pipeline and upcoming milestones. Joining me on the call now are Jesper Hoiland, our President and CEO; Joe Kelly, SVP Sales and Marketing; Chhaya Shah, SVP Technical Operations; Dr. Charlie Morris, Chief Medical Officer; and Pepe Carmona, our Chief Financial Officer. Our management team will also be available for Q&A at the end of the call.

I would like to now turn the call over to Jesper for an overview of our fourth quarter and full year 2018 results.

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Jesper Høiland, Radius Health, Inc. - President, CEO & Director [3]

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Thank you, Elhan. Welcome, everybody, and thank you for joining us on the call today. I'm very pleased with our results in 2018 as we continued our strong commercial launch of TYMLOS and made significant achievements towards our long-term goals. As we ended 2018, TYMLOS' first full commercial year, we exited the year with a 28% total market share and over 40% new patient share which gives us confidence in our sales guidance for 2019 and long-term goal of anabolic leadership. Our mission for Radius is to drive value from growing sales of TYMLOS and leveraging our innovation and technical expertise to advance the development of our pipeline assets, which have blockbuster potential in our 2 therapeutical areas of focus: osteoporosis and oncology.

I would like to highlight a few of the achievements we made in 2018 towards these goals. In osteoporosis, we finalized the prototype of our Abalo-patch to be used in a Phase III study, aligned our regulatory pathway with the FDA and initiated commercial development with 3M to prepare for our pivotal Phase III trial. Chhaya will be walking you in the details through the progress we made on our preparations to start our Phase III trial in the middle of this year and our progress on our commercial manufacturing activities.

In our oncology franchise, we initiated our Phase III study for Elacestrant with a program intended to achieve registration in the U.S. and other major markets. We also surpassed our financial commitments by exceeding the upper end of net sales guidance generating $34 million sales in the fourth quarter and reaching $99 million net sales for the full year. We ended 2018 with a healthy year-end cash balance of $237 million, totally in line with our guidance.

I now would like to turn the call over to Joe for an update on TYMLOS.

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Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [4]

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Thank you, Jesper, and good afternoon, everyone. I'm excited to present our commercial update for TYMLOS sales for the fourth quarter and full year 2018 results.

On Slide 7 you'll see that since the beginning of 2018, we saw a solid overall growth pattern with TYMLOS, especially in Q4 which represented accelerated growth for the brand as we achieved a year-end exit of 40% NBRx market share moving TYMLOS towards market leadership within the anabolic space. Our TRx and NRx market share for TYMLOS also demonstrated growth in 2018 with a continued upward trend so far this year. We expect that both the commercial and Part D books of business will continue to provide sustainable growth for TYMLOS helping us achieve our overall market share and revenue goals for 2019.

On the next slide, we are encouraged by how the anabolic market grew in 2018 where there was healthy class growth with an 8% year-over-year increase. As a reminder, prior to the launch of TYMLOS in the second quarter of 2017, the anabolic segment had been in decline for 5 years. Our focused efforts across the commercial team have not only resulted in impressive growth of TYMLOS since launch, but we've -- also clearly played a significant role in the growth of the anabolic marketplace.

On Slide 9, here we see continued TRx market share growth with activated TYMLOS prescribers from their quarter of initiation and each quarter after. We have shown our ability to successfully break through and accelerate TYMLOS volume and market share as we make significant progress towards leadership in the anabolic space. It's encouraging to see TYMLOS prescribers continue to build confidence in the brand due to our clinical profile, pricing advantage and our first-class teams across the organization.

On the next slide, we are seeing success with our commercial organization in activating the top 10% of teriparatide writers by demonstrating a volume growth rate for TYMLOS at 19% during Q4 of 2018. That's outpacing the rate of decline of 7% by our competitor. What's important to recognize is this segment of prescribers represents 38% of the total anabolic marketplace potential, therefore pushing TYMLOS towards anabolic market leadership.

The next slide shows that due to formulary coverage decisions made during the fourth quarter of 2018, TYMLOS coverage grew to 283 million covered lives. With about a 50% increase in Medicare covered lives starting this year we are already seeing pull-through and increased TYMLOS market share in the Medicare segment which already has grown by 4 percentage points this year versus Q4 of 2018. Starting on the next slide, we'll transition to an Abalo-patch update.

Now going to Slide 13. We know that our success in growing TYMLOS subcu today lays the groundwork for this potential blockbuster pipeline asset. We continue to advance the planning for the Abalo-patch, a potentially first-of-its-kind technology that would bring the value of anabolic therapy to patients without the requirement for self-injection. According to market research we conducted with 200 physicians, the approval of the patch could signify an anabolic market opportunity nearly triple where it is today, and Radius' abaloparatide franchise could capture 60% of the market at peak year in the U.S. This type of growth would come through adoption by both our current prescriber base and new to anabolic prescribers who have avoided writing injectable anabolic therapies to date but who would potentially prescribe an anabolic with our patch delivery system.

With that, I'll turn it over to my colleague, Chhaya Shah, to share more on how the patch R&D program is progressing.

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Chhaya Shah, Radius Health, Inc. - SVP of Technical Operations [5]

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Thank you, Joe. I am very excited to give you a technical update on our Abalo-patch program. On Slide 14 starting with the status of Phase III readiness, we are on track to start manufacturing Phase III supplies in the second quarter of this year which is in line with starting our Phase III trials in the middle of this year. We are pleased to report that we have significantly increased the scale-up of our production for readiness of Phase III clinical supplies and with the increased patch size we have maintained patch-to-patch content uniformity which is a critical milestone towards manufacturing Phase III supplies. We have validated the majority of our analytical methods and they are at near completion. Significant progress has been made in qualifying the patch applicator device design. We have also confirmed the patch's PK profile with a shorter wear time of 5 minutes on a thigh.

As far as our commercial manufacturing status on Slide 15, we are excited to announce that in partnership with 3M we have chosen Patheon, and now part of Thermo Fisher Scientific, as a contract manufacturer for commercial supplies. Patheon is a well-known contract manufacturer and an expert in quality manufacturing and will be responsible for coding and packaging activities. As part of the readiness of commercial manufacturing, we have purchased major equipment, an isolator, which is in the process of being built. In parallel, we have also started the facility buildout at Patheon and some of our equipment installation will start first half of 2019. Overall, in partnership with 3M, we have made very, very good progress in both Phase III supply readiness and commercial manufacturing site preparation.

I will now turn the call over to Charlie for an update on our R&D activities.

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Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [6]

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Thank you, Chhaya, and good afternoon, everyone. Our R&D pipeline slide shows the extent of our commitment to both TYMLOS and to our emerging oncology pipeline. Our Phase III trial for TYMLOS for male osteoporosis is ongoing as you have heard from Chhaya. We are in the advanced stages of preparation for launching the Phase III study for the abaloparatide patch.

In oncology, we announced in December that our Phase III Emerald trial for our SERD, Elacestrant for metastatic, ER-positive, HER2-negative breast cancer is open for enrollment. RAD140, our selective androgen receptor modulator, or SARM, is in a Phase I study in advanced breast cancer and we continue to investigate additional ER-targeting molecules preclinically.

On Slide 18, you will see an update from our Phase I study of Elacestrant. Recall that we have previously reported data from 3 cohorts, A, B and C, in which the eligibility criteria requires that patients have ER-positive, HER2-negative, advanced or metastatic breast cancer. The 40 patients we recruited and treated at the 400-milligram dose had received a median of 3 prior lines of treatment and we observed a 27.3% objective response rate and a median progression-free survival of 5.4 months. After completion of cohorts A through C, we added a fourth cohort, cohort D, with different eligibility criteria. This was intended to support a regulatory strategy based on patients who had progressed after both prior fulvestrant and prior CDK 4/6 inhibitor therapy. The great majority of patients in the earlier cohorts would not have been eligible for cohort D, showing that these are largely different populations.

We enrolled 10 out of the planned 36 patients to cohort D, ending recruitment in April 2018 because of a change in strategy to evaluate Elacestrant as an early-aligner therapy in Phase III. A preliminary review of data from those 10 patients as of December 27, 2018, showed that they were more heavily pretreated than those in cohorts A through C with a median of 4 prior therapies. Indeed, half of the patients in cohort D have more than four prior lines of therapy. Eight of the 10 patients had visceral metastases as opposed to 60% in cohorts A through C.Of 9 patients with RECIST measurable disease, 4 had a best response of stable disease, 2 of them for greater than 24 weeks. The tolerability was similar to the previous cohorts and as of January 3, 2019, one patient remains on treatment.

While the populations of the various cohorts are somewhat different, different baseline characteristics, different prior treatments, for example. If we pool all the cohorts in the Phase I trial, we see an overall response rate of 19.4% and a median progression-free survival of 4.5 months, encouraging data for a single agent in such a heavily-pretreated patient population.

I would now like to hand over to Pepe to walk you through the financials. Pepe?

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Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [7]

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Thanks, Charlie. I will walk through the income statement for Q4 2018 and afterwards, I will share perspective on quarterly growth dynamics over the past 18 months and discuss our financial guidance for 2019. For the 3 months ended December 31, 2018, Radius reported net sales of $34.4 million and a net loss of $41.1 million and $0.90 per share as compared to a net loss -- sorry, net sales of $7.7 million and a net loss of $71 million or $1.59 per share for the 3 months ended December 31, 2017.

On the right side of the slide, we present the figures on a non-GAAP basis which excludes expenses related to share-based compensation, intangible asset amortization, noncash interest from the convertible note and other one-offs. You can see the reconciliation between our GAAP and non-GAAP measures in the appendix. Radius on a non-GAAP basis for the 3 months ended December 31, 2018, had an adjusted net loss of $30 million or $0.66 per share as compared to an adjusted net loss of $60.5 million or $1.36 per share for the 3 months ended December 31, 2017. On a non-GAAP basis, I want to highlight that: first, our sales growth continues to mirror the growth of our TRx demand volume and has a stable gross margin of 92%; second, R&D expenses slightly grew versus Q4 of 2017, achieved it to fund the preparation of the Abalo-patch study and the initiation of the Elacestrant Phase III trial. Last, SG&A continues to decrease as we have adjusted our investment related to the launch of TYMLOS and drove productivity initiatives in the back office.

On the next slide, we show the sequential growth in net sales of TYMLOS and the decrease of SG&A and R&D fixed costs or internal R&D. We expect to continue driving productivity along 2019 to manage expenses on these lines. The external related R&D is the investment to drive our pipeline, which went down as we wrap up our abaloparatide ACTIVExtend and Elacestrant Phase I trials. We expect to start growing external R&D as we initiate the Abalo-patch and Elacestrant Phase III programs. These expenses are mostly linked to startup costs for the trials, CMC investment and enrolling subjects in the studies. We expect at some point that the gross profit from our growing TYMLOS revenues will fully finance SG&A and internal R&D and start financing the pipeline.

Finally, I will share guidance for 2019. As you recall, we guided 2018 TYMLOS U.S. net sales to be in the range of $95 million to $98 million and that we would have over $220 million in cash, cash equivalents and investments at the end of the year. We exceeded the guidance with $99 million in net sales and $237 million in cash balance at 2018 year-end. We are confirming our financial guidance for 2019 and expect to deliver full year TYMLOS U.S. net sales in the range of $155 million to $175 million and end the year with a cash, cash equivalent and investment balance of over $100 million.

I would like to share our view on a few dynamics for year-over-year growth and seasonality that may help you understand the numbers as we go along the year. We expect the anabolic osteoporosis market to grow mid-single digit over 2018 driven by TYMLOS. It is important to reinforce the dynamic happening early in the year in which the market is usually smaller than the last quarter due to the impact of higher patient out-of-pocket costs, which is common in the industry. This typically happens until patients go through the planned deductibles and initial phases in both commercial and Part D segments. We expect our TRx share to continue growing and trending towards NBRx. As previously discussed, it takes up to 4 quarters for NBRx to become TRx market share.

TYMLOS full year net price, net of all rebates and discounts, is expected to slightly grow over 2018. The 5.9% price increase in January 2019 will be partially offset by higher Medicare Part D manufacturer payments during the coverage gap, up from 50% in 2018 to now 70% in 2019 and higher pull-through of Medicare Part D business and the formulary as previously shared by Joe.

On the expenses side, we expect to continue decreasing SG&A and internal R&D in 2019 driven by productivity initiatives we have already initiated, and we plan to invest more in our pipeline as we ramp up the Abalo-patch and Elacestrant Phase III trials. I would like to reinforce our confidence and continue driving TYMLOS growth and delivering on our financial guidance for 2019. I look forward to your questions at the end of the call. With that, I will pass the call back to Jesper for the closing remarks.

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Jesper Høiland, Radius Health, Inc. - President, CEO & Director [8]

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Thanks, Pepe. We are approaching the end of our presentation, and I would like to remind you with this slide about our most important goals and upcoming milestones in 2019. This year is truly a pivotal year for Radius. We are committed to grow our sales and expect a full year net sales of $155 million to $175 million. We are on track to initiate our Abalo-patch Phase III trial mid-2019 as previously guided. For oncology, our goal is to make significant progress in our recruitment for our Elacestrant monotherapy study and to enter a global codevelopment cocommercialization partnership for Elacestrant which will allow us to become a key player in hormonal treatment of breast cancer. Our goal is to deliver a strong balance sheet with more than $100 million in cash and investments on hand at year-end.

Thank you, everyone, for your time today. I would like to ask the moderator now to open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question or comment comes from the line of Jessica Fye from JPMorgan.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [2]

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I had a couple on the patch, just following up on some of the comments you made in prepared remarks and in the press release. I think you mentioned data showing that 5 minutes of patch administration has greater than 90% of the AUC of subcu TYMLOS. I think back in June the PK data suggested greater than 97% of the subcu AUC. Can you talk about your comfort level in terms of hitting on noninferiority if the AUC is not quite as high now? And then second, can you also elaborate on the evaluation underway to confirm that subjects will be able to correctly administer the patch?

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Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [3]

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So for the PK, it's clearly very much in the same range as it has been in the past. We would just report on what we've seen in the most recent. I think what we know from previous experience and with the look at prototypes, there's a very good correlation between AUC and bone mineral density. And we are -- and as we said before, it's greater than 90% and you know, we're very comfortable. That gives us a very good shot at the noninferiority criteria that we were looking at. And I apologize, I've forgotten what the second question was.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [4]

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Just the evaluation that you mentioned about how you get comfortable that subjects will be able to correctly administer the patch?

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Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [5]

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Yes. I mean we're just doing a little bit of work ensuring that we're coming up with instructions for use where we just want to be sure that people are able to make use, follow the instructions that we have and ensure that we don't have to amend anything about those instructions for use prior to getting in. Because obviously most our experience to date has been in very controlled settings with a clinical pharmacology unit-like setting, whereas in the future it could be in a home setting. And we're just ensuring that the instructions we give are readily followed.

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Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [6]

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Okay. Understood. And maybe just a last one on TYMLOS and the anabolic market. When we think about the mid-single-digit volume growth you've outlined as your expectation for 2019, does that include the introduction of a generic in the back half of the year? And does that assumption even impact the expected growth rate for the market?

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Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [7]

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Yes. It includes a variety of scenarios. So the range is reasonably comprehensive of what can happen. Now just to repeat, this has been asked in the past, we don't believe that the generic teriparatide will have a major impact in TYMLOS. We're pretty confident with our growth and how we are taking the lead in the market.

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Operator [8]

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Our next question or comment comes from the line of Ying Huang from BAML.

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Alec Warren Stranahan, BofA Merrill Lynch, Research Division - Research Analyst [9]

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This is Alec on for Ying. First on Elacestrant, how is enrollment going in Emerald? And looking forward to potential combinations based on preclinical and clinical data you've seen to date, what would you say is the ideal combination strategy? For example, do you think there could be a benefit in administrating Elacestrant concomitantly with CDK 4/6 inhibitors in earlier lines of therapy?

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Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [10]

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We are not currently going to be getting into giving updates on recruitment, especially in the early stages of the study where the sites come onboard at variable rates. Obviously we are tracking that very closely against our projections and have given ourselves aggressive objectives for the year. And we will keep you posted as to numbers being on track. In terms of combinations, we absolutely see CDK 4/6 inhibitors as being the key player particularly in the first-line setting and that's -- we have preclinical data showing or implying that there could be benefits [of different] combination. We certainly see better data from combinations preclinically than with the single agents. And so that's a major piece of what we would hope to be able to fund in terms of a partnership.

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Alec Warren Stranahan, BofA Merrill Lynch, Research Division - Research Analyst [11]

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Great. And one more from me if I may. As you look towards expanded Medicare Part D coverage, I was wondering if you could remind us which major Medicare Part D insurers you're still in discussions with and when you might be able to ballpark expecting additional coverage under Part D?

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Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [12]

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Alec, this is Joe. We're always talking to these folks and right now we are negotiating with some of the few remaining that we haven't been able to get on formulary with. But one of the major ones is Humana Part D. So as we have updates, we'll be certain to let you know as new news comes about. So we're, I don't want to say, content or happy with the current level, but certainly with 283 million lives covered across the board, we feel that certainly we have a very good chance of finishing well within our guidance for '19.

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Jesper Høiland, Radius Health, Inc. - President, CEO & Director [13]

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And just remember, we increased from 44% last year to 67% this year. So we are very pleased with the progress that we have made and have 93% of total coverage is really amazing, I think.

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Operator [14]

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Our next question or comment comes from the line of Geoffrey Porges from SVB Leerink.

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Geoffrey Craig Porges, SVB Leerink LLC, Research Division - Director of Therapeutics Research, MD & Senior Biotechnology Analyst [15]

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Just a couple of questions if I may. First, could you confirm that the partnership for Elacestrant is not in your current guidance, and then give us some sort of indication of what sort of scope, scale, or type of partnership you could be contemplating? And is that something we could still hear about by midyear? And then secondly, could you talk a little bit more about the pivotal trial for the patch, specifically give us a sense of what will be required to establish the equivalent efficacy for the patch compared to current TYMLOS?

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Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [16]

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Thanks for the question. I will answer to the partnership and then Charlie will answer to the second one. So there are 3, 3 subquestions on the partnership. So one is that there's no milestones that are on the financial guidance provided. So the $100 million, the over $100 million in cash balance by the end of the year doesn't include anything related to partnership. On the type of partnership, we're looking for a codevelopment and cocommercialization partnership which means a codevelop would be more for the combination trial, so to help us on that. Obviously the entire drug will be partnership but that's what we're looking for. And on the commercialization front, we're expecting to have a cocommercialization in the U.S. We'll have feet on the ground here. But from outside the U.S. we're expecting that to be monetized a bit more, the asset, with milestones and royalties. So I'd say -- and we're looking for a global oncology player so that's the type of company that we're looking at. Obviously the biggest interest there is to getting to early lines of therapy as Charlie remarked in the previous questions. And the last, from a time perspective, we were preparing all this by the end of last year, preparing databases or data room and getting the asset ready for discussions. And but we really kicked off the process at JPMorgan at the beginning of this year in San Francisco. And the process is ongoing right now. Normally, you could expect a process like that to take about 3 quarters, like that's kind of normal timelines in a partnership like this. It's a bit beyond the middle of the year. Now if things go progress pretty fast, you can do it earlier and if negotiation can, you can slip a little bit. We're confident that we will get it done in 2019. Charlie?

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Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [17]

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In terms of the Phase III, you remember that the primary end point that we're going to look at is for bridging from the subcu to the patch will be bone mineral density at -- by dex or after 12 months of therapy. The intent there is to show noninferiority against that. What we've previously guided is that that would mean that we had to retain at least 75% of the effect of the subcu. And we are finalizing all elements of the protocol and getting ready to implement in the near future.

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Operator [18]

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Our next question or comment comes from the line of Salveen Richter from Goldman Sachs.

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Maryana Ilya Breitman, Goldman Sachs Group Inc., Research Division - Research Analyst [19]

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Yes. It's Maryana Breitman for Salveen. I had a quick one. I was wondering about the safety of the patch and whether or not you expect it to continue being clean, and [I have a lot].

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Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [20]

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Yes. We certainly don't have any reason to believe that there will be any meaningful changes. You've heard we're happy to be going forward with a relatively short wear time, so any contact is for a recently short period of time. Tolerability to date has been within what we would have hoped for and expected, and obviously it will -- but it will be a critical part of the study to monitor that as we go forward. But we're certainly comfortable with the device that we have now settled on, has the capability to deliver both safety and efficacy.

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Maryana Ilya Breitman, Goldman Sachs Group Inc., Research Division - Research Analyst [21]

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Got it. And a quick question on Elacestrant, are you thinking about some kind of interim analysis or basically like we will be just looking for the end of trial, and that's when we're going to get the data?

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Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [22]

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We're not -- we don't have any plan in there for an interim efficacy analysis at this stage.

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Operator [23]

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Our next question or comment comes from the line of Chris Shibutani from Cowen.

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Christopher John Zopf, Cowen and Company, LLC, Research Division - Associate [24]

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This is CJ on for Chris tonight. I was wondering if you can share your views on romosozumab as a potential competitor. What type and portion of patients would be potentially up for competition? And if you view this as sort of an addition, expanding the market, would those new patients potentially be the same patients that you expect the patch to expand into? Or would this be an additional, separate population on top of that?

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Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [25]

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CJ, this is Joe. So first, I'll start by saying, regardless of the competitive landscape that we may be dealing with, we'll continue to be confident in the clinical profile of TYMLOS, our competitive price point, and the investments that we're making in our resources related to TYMLOS growth. Now when it comes to a potential approval of romo, we feel that it's okay, that there will be more people talking about the benefits of bone-building agents, sequential therapy. But back to the clinical side, our nonvertebral fracture data and our safety profile, we feel will stand out on its own. And again, we'll be able to compete in that environment. Obviously as we all know, there are some open regulatory questions about romo, and if again, it gets approved, it will be somewhat of a narrow patient type that they'll be able to go after. So overall, we're confident and we'll just be waiting, but regardless we'll continue to see growth with our asset.

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Operator [26]

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(Operator Instructions) Our next question or comment comes from the line of Robyn Karnauskas from Citi.

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Nicole Germino, Citigroup Inc, Research Division - Senior Research Associate [27]

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This is Nicole on for Robyn. For TYMLOS, what are you hearing from doctors in terms of compliance and discontinuations? And how does that compared to Forteo?

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Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [28]

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It's still somewhat early to measure compliance at this point, having that we've been in the market now for 18 months. But we would expect in the next quarter or two that we'll have some data related to that specific metric. But the uptake -- I'm sorry, go ahead?

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Nicole Germino, Citigroup Inc, Research Division - Senior Research Associate [29]

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Actually, just another quick thought to my question. Is there anything that you can do to improve compliance, if there are any issues?

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Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [30]

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Sure. So we've made additional investments last year into a clinical educator program. I mentioned the price point, so in some cases there are benefits from an out-of-pocket cost standpoint for patients that are on TYMLOS. So once we do get adherence compliance metrics, we would expect the outcomes to be positive. But stay tuned and as soon as we get data we'll be sure to share that with you.

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Operator [31]

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Our next question or comment comes from the line of Kyung Yang from Jefferies.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [32]

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So Elacestrant, when does the composition of matter patent expire in Europe, maybe outside the U.S.? And when does the FASLODEX going generic and how do those play into your discussion for global partnerships?

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Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [33]

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So thanks, Kyung, for the question. Outside the U.S., for a composition of matter it's 2026 plus extensions. And then -- but we have also the Duke patent that get is up to 2034, so that -- we feel it's a very strong patent to stay in. From a partnership perspective, that's what the process is. We're going to go through the process and expect that by -- in the latter part of this year to probably update the market.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [34]

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When does FASLODEX going generic to you? I might have missed it.

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Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [35]

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FASLODEX going generic in Europe or in the U.S.?

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [36]

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In Europe. Europe.

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Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [37]

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In Europe it's already -- that's already a few generic there. There's 2 to 3 countries that are already with generic competition.

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [38]

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Okay. And then a quick question on TYMLOS, what percent of patients, new patients getting on TYMLOS have prior experience with Prolia?

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Jesper Høiland, Radius Health, Inc. - President, CEO & Director [39]

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I don't think we know that exactly how many patients that have been using -- that's your question, how many patients have been using Prolia prior to getting on TYMLOS therapy?

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Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [40]

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Yes.

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Jesper Høiland, Radius Health, Inc. - President, CEO & Director [41]

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I don't recall having seen any statistics on that.

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Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [42]

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Yes. We're currently sourcing now where we are getting TYMLOS business from. We do know that most of it is coming from patients that are naïve to therapy when having osteoporosis. Obviously we can get business from bisphosphonates and of course from denosumab. But as far as, you know, the latter two, we're not clear yet on those numbers.

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Jesper Høiland, Radius Health, Inc. - President, CEO & Director [43]

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And our view is, of course, to use TYMLOS as early as possible to get the maximum benefit. So also on the basis of the active extend trial, first you start out with TYMLOS, then add on alendronate. So we see a treatment paradigm where we are shifting it from late stage to early stage. That's basically what happens as we are speaking, and that's also why we see a strong uptake in the marketplace in terms of market growth.

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Operator [44]

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I'm showing no additional questions in the queue at this time. I would like to turn the conference back over to Mr. Jesper Hoiland for any closing remarks.

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Jesper Høiland, Radius Health, Inc. - President, CEO & Director [45]

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So thank you, everyone, for listening in. We have finished off 2018 with very, very strong data not only on the financials but certainly also on our market share penetration. As you will recall, over 48% new patients, 28% fourth quarter, in terms of TRx also very, very encouraging. And of course, that is giving us a strong confidence on the trajectory for what this year is going to look like.

So again, guidance of $155 million to $175 million for this year with a cash balance including investments of over $100 million. So all in all, a very, very strong year for Radius coming out of and also anticipated for this year. And once again, thanks for your support. I look forward to meet you in the marketplace. Thank you, everyone.

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Operator [46]

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Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone have a wonderful day.