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Edited Transcript of RDUS earnings conference call or presentation 7-May-20 8:45pm GMT

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Q1 2020 Radius Health Inc Earnings Call Cambridge Jun 10, 2020 (Thomson StreetEvents) -- Edited Transcript of Radius Health Inc earnings conference call or presentation Thursday, May 7, 2020 at 8:45:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Charles Q. Morris Radius Health, Inc. - Chief Medical Officer * Elhan Webb Radius Health, Inc. - Head of IR & External Communications * G. Kelly Martin Radius Health, Inc. - CEO, President & Director * Jesper Høiland Radius Health, Inc. - Senior Advisor * Jose Carmona Radius Health, Inc. - CFO, Senior VP & Treasurer * Joseph Kelly Radius Health, Inc. - SVP of Sales & Marketing * Sal Grausso Radius Health, Inc. - SVP of Market Access ================================================================================ Conference Call Participants ================================================================================ * Aliza Bram Seidenfeld Goldman Sachs Group Inc., Research Division - Research Analyst * Annabel Eva Samimy Stifel, Nicolaus & Company, Incorporated, Research Division - MD * Eun Kyung Yang Jefferies LLC, Research Division - MD & Senior Equity Research Analyst * Jessica Macomber Fye JP Morgan Chase & Co, Research Division - Analyst * Mohit Bansal Citigroup Inc, Research Division - VP and Analyst * Neil Puri SVB Leerink LLC, Research Division - Analyst * Vikram Purohit Morgan Stanley, Research Division - Equity Analyst ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Good afternoon, everyone, and welcome to Radius Health’s Q1 earnings webcast. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to turn the call over to Elhan Webb, Vice President, Investor Relations at Radius Health. Elhan, Please go ahead. -------------------------------------------------------------------------------- Elhan Webb, Radius Health, Inc. - Head of IR & External Communications [2] -------------------------------------------------------------------------------- Thank you. Hello, everybody. Thanks for joining us today. Our press release and presentation that we'll use to guide our discussion today can be found in the Investors Section on our website. A replay of the call will also be available on our company website 3 hours following this call. Before we begin, I'd like to remind you with our safe harbor slide that we'll have some forward-looking statements and include non-GAAP financial measures in our presentation today. You can find the reconciliation of GAAP to non-GAAP at the end of this presentation. Our 10-Q and subsequent filings identify factors that could cause our actual results to differ materially from those indicated by these forward-looking statements. Any forward-looking statements represent our views as of today only. Here is our agenda for today's call. Jesper will start with the Q1 highlights, Joe and Sal will provide a commercial update followed by Charlie reviewing our clinical programs. Lastly, Pepe will present our first quarter financial results and 2020 guidance. I'd like to now turn the call over to Jesper. -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [3] -------------------------------------------------------------------------------- Thank you, Elhan. Welcome, everybody, and thank you for joining us on the call today. In this challenging and unprecedented time, our first quarter performance reflects strong demand for TYMLOS, our continued clinical execution and the dedication of our employees. With the onset of the pandemic, we at Radius took the key measures to protect the health and safety of our employees, while also ensuring that our medicines continue to reach the patients we serve. We worked hard with our manufacturing suppliers and succeeded to assure undisrupted supply of TYMLOS. The majority of our clinical sites are open and we are making every efforts to ensure that patients currently enrolled in our clinical trials are able to receive their medication and continue their treatment. While the pandemic has led to a slowdown in enrollment and conditions are fluid, we continued to advance recruitment in our 3 Phase III studies. Assuming enrollment levels return to near-normal levels in the second half of the year, we are on the track to complete recruitment this year with expected data readout in the second half of next year as we guided. The fundamentals of our commercial business remain strong and our market share with TYMLOS continue to increase. In the first quarter of 2020, we achieved $48 million net sales for TYMLOS with a 61% growth year-over-year. However, since the start of the pandemic, there has been a decline in patients’ visits to physicians' offices, which led us to slightly revise down our 2020 TYMLOS revenue guidance. On a longer-term basis, we remain confident in our outlook for strong growth once the restrictions ease and the conditions return to normalized patterns. For me personally, it has been a tremendous privilege to serve as the CEO of Radius. I very much enjoyed interacting with all of you and will greatly miss these interactions. I remain enthusiastic about Radius' prospects and look forward to working with Kelly to make this transition as seamless and effective as possible. I will now turn the call over to Joe and Sal for a commercial update. -------------------------------------------------------------------------------- Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [4] -------------------------------------------------------------------------------- Thank you, Jesper, and good afternoon, everyone. On slide 7, you can see since the launch of TYMLOS, we have significantly increased market share within the anabolic space from an NBRx and TRx standpoint. As we continue to grow by adding new patients to TYMLOS, we are confident that this will translate to an overall anabolic market leadership position during the second half of this year, which will be an important milestone for our first commercialized product. Also as leaders in the anabolic space, we want to continue adding new to TYMLOS prescribers as we shape the market and then look to disrupt the treatment of osteoporosis with the potential introduction of our innovative abaloparatide patch. On the next slide, I want to update you on the actions we have taken in view of COVID-19 highlighting the fact that we quickly established processes and systems to distribute TYMLOS samples, savings cards and educational resources back in mid-March. Also, since the beginning of the pandemic, the entire field sales force has been able to support and promote to their customers virtually, based on a rapid implementation of our platform for virtual engagements while still being sensitive to the challenges our customers and patients are facing during this time. In this current environment, we are seeing a decline in patient office visits, leading to a delay in the initiation of treatment for new patients and there are concerns related to out-of-pocket costs as unemployment rates rise. However, we do expect new patient volumes to increase again as states begin to reopen and use of our online TYMLOS savings card can help reduce out-of-pocket cost for patients. Also the benefit of TYMLOS being in at home administered product and all patients having the ability for TYMLOS to be delivered to their homes, gives us confidence that patients can safely receive and administer our product in this current environment, unlike in-office administered products for the treatment of osteoporosis. Finally, because of the work that's been done by our tech ops team, we have successfully ensured uninterrupted TYMLOS inventory and supply for patients through at least December of this year. Thank you all and I will now hand it over to Sal talk about market access. -------------------------------------------------------------------------------- Sal Grausso, Radius Health, Inc. - SVP of Market Access [5] -------------------------------------------------------------------------------- Thank you, Joe, and good afternoon. As part of this commercial update, we wanted to take the opportunity to discuss milestones achieved during Q1 2020 that further strengthen the long-term patient access profile of TYMLOS. We continue to have strong collaborations with payers regarding TYMLOS formulary coverage. TYMLOS coverage has increased to 83% of Medicare Part D enrollees in Q1, achieving critical mass, which will further strengthen healthcare provider perceptions and intent to prescribe. We are actively engaged with plan sponsors to extend this coverage through 2021. Furthermore, we've been signing multi-year contracts to secure our 99% commercial coverage for the foreseeable future. We also executed a transition of the TYMLOS distribution model from full line wholesalers to special distributors and direct to specialty pharmacies in Q1. The purpose of this initiative was to further improve patient care through a network of specialty pharmacies and ensure that all patients will continue to have the option to receive TYMLOS via home delivery. The streamlining of the distribution footprint is leading to sustainable cost efficiencies and sets a strong specialty distribution capability for future Radius products. This transition will have a positive impact to gross to net for the remainder of 2020 and beyond. Thank you. I will now hand the call over to Charlie for an R&D review. -------------------------------------------------------------------------------- Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [6] -------------------------------------------------------------------------------- Thank you, Sal, and good afternoon, everyone. On slide 11, we provide a high-level view of the considerations and mitigations for our clinical trials during the COVID-19 pandemic. As you know, we have 3 Phase III clinical trials ongoing and we have continued to screen and enroll patients into all 3 trials. At the same time, we have worked to ensure the safety as patients investigate some of their staff, as well as our own employees and those of our CROs. All of our actions have been consistent with national and state-level guidances and those issued by our research hospitals, clinics and IRBs. The safety of study patients is paramount, but if patients are unable or unwilling to have in-person study visits, we have supported and acceptance safety assessments made through virtual or telehealth means. To enable retention of patients already randomized on our studies, investigators are using virtual study visits and home visits and we have engaged a home healthcare agency for further home visits. In addition, we are allowing patients' assessments to be conducted locally to minimize travel and inconvenience. Investigational product supply is in sufficient quantity to ensure continuity of treatment for all patients. And a courier service has been engaged for shipping product directly to patients at the patient’s request and well allowed by regulations. Data integrity and quality are also important concerns. And all of our actions outlined so far, our adherence to regulatory guidance issued by both FDA and EMA and our prioritization of key efficacy assessments will support the quality of the data, while ensuring we have appropriate data for our key efficacy analyses. Where sites are able to screen and enroll patients, we continue to support those efforts to ensure continued enrollment. On slide 12, you see the progress we have made with our trials. First, let's look at wearABLe, the Phase III study for abaloparatide patch. In January through March, we were pleased with progress with our enrollment ahead of our internal projections, driven by a lower screen failure rate that we encountered at the beginning of the study and by an increase in site screening activity. As you would expect, as the impact of COVID-19 was felt, screening and enrollment slowed in April and we anticipate this will remain the case in May. There are, however, signs of renewed activity in sites who previously had reduced or no activity. We have pressed ahead with regulatory submissions in several European countries, and we are on track to have our first initiation of ex-U. S. sites in this quarter. As a result of the ongoing and renewed activities in the U.S. and the upcoming addition of EU sites, we are targeting completion of recruitment of wearABLe later in the third quarter with intended data readout in the second half of 2021. Our other Phase III for abaloparatide is our ATOM study in male osteoporosis. With the help of our plans and mitigation, we have now enrolled around 90% of our targeted 225 patients, and we continue to expect to report top line data in the second half of 2021. Finally, for abaloparatide, we recently obtained top line data from our bone histomorphometry study. This study looked at the early effect of abaloparatide on indices of bone formation and resorption in iliac bone biopsies obtained from 19 postmenopausal women with osteoporosis after 3 months of therapy. I'm pleased to say that the study achieved its primary endpoint, demonstrating a significant increase in mineralizing surface in the cancellous bone envelope providing histological evidence of an early anabolic effect of abaloparatide in patients. We plan to share full data at a medical conference later this year. The EMERALD study for elacestrant in advanced breast cancer also enrolled ahead of expectations from January through to late March, but likely abaloparatide studies show a slowdown of screening and enrollment activities in April because of COVID-19 considerations. Current screening numbers suggest enrollment in May will also be impacted, however, we anticipate improved screening activity as sites in many of the seventeen countries involved begin to reopen. As a result of the slowdown, we anticipate that completion of enrollment will now be in fourth quarter, but we continue to expect data readout in 2021. With that, I'd like to hand over to Pepe for the financials. -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [7] -------------------------------------------------------------------------------- Thanks, Charlie. Slide 14 shows our revenue bridge versus the same quarter of 2019. TYMLOS in Q1 delivered $48 million in net sales, which represents a growth of 61% versus prior year. This is in the upper side of the guidance range we provided for Q1, which was between $45 million to $48 million. The revenue growth was driven primarily by our continued market share increases, which is now at 44% as previously noted by Joe. As explained in the past, our revenue is highly predicted from our new patient starts, which now stand at 53% a share. So market share growth contributed with $13 million to net sales versus prior year. Importantly, you can also see that our net price improved versus prior year contributing an additional $5 million in net sales. The execution of the change in our go-to-market strategy, which was explained by Sal allowed us to maximize our WAC price increase and provide significant efficiency in our gross to net deductions. This net price improvement enabled us to hit the higher side of the revenue guidance. We're very confident on the mid to long-term growth prospects of TYMLOS and our ability to achieve market leadership with an optimized go-to-market strategy, which should provide sustainable growth in the years to come. In the appendix, you will also be able to see a bridge of revenues comparing Q1 2020 versus Q4 2019. In Slide 15, I will walk through the income statement. But to better explain the dynamics, I will focus on the right side of the slide that shows the figures on a non-GAAP basis. You can see the reconciliation between our GAAP and non-GAAP measures in the appendix. Radius on a non-GAAP basis for Q1 2020 had an adjusted net loss of $27.4 million or $0.59 per share as compared to an adjusted net loss of $31.8 million or $0.70 per share for Q1 2019. Key points on the income statements are, first, our gross margin has slightly increased to 92% driven by efficiencies in our manufacturing and net price. Second, R&D expenses grew as we continue to enroll patients in the 3 Phase III trials and prepare the abaloparatide patch manufacturing site at Thermo Fisher. We're very pleased with the progress on the site preparation and excited to see the installation of the isolator in the facility, which you can see pictures in the appendix. Last, SG&A decreased as we have been diligently driving productivity initiatives, mostly in support functions. On slide 16, we show the cash and cash equivalent balance reconciliation from $161 million by the end of Q4 2019 to $139 million by the end of Q1 2020. TYMLOS continues to fund SG&A of the company and partially the investment on our clinical programs. As explained before, we expect to continue to drive stimulus growth and our investment in the clinical trials will peak this year and wind down as we get into 2021. There were a few other one-offs in the quarter, which include the drawdown of the first tranche of the term loan for $10 million. There were 2 major offsetting items. First, we had an increase of $7 million in A/R as we changed our distribution model in March and most of the revenues in the pipeline from those new distributors were collected in April. Importantly, our net inventory position was stable at around 2 weeks. So it is just a phasing-in. Second, we had the annual bonus for employees for $6 million, which was paid in March. In the next slide, I will share our updated guidance for 2020. Based on COVID-19 impact to new patient starts and aligned with the explanation that Joe presented we expect the reduction in new patient starts to impact revenues in 2020. Our expectation is starting the second half of 2020, the business will come back to near normal levels. As a result, we expect to deliver TYMLOS U.S. net sales in the range of $190 million to $220 million. We continue to expect TYMLOS to become market leader by crossing the 50% market share in the second half of 2020 and continue growing our share of new patient starts. This will provide strong momentum going into 2021. Our revised revenue guidance will have an impact on gross profit. So our guidance for cash burn in 2020 is to be below $100 million. We will continue to drive productivity and be laser focused on investing in TYMLOS growth and executing the 3 Phase III trials. It is important to reiterate that we have access to non-dilutive financing and the cash burn guidance doesn't include related cash influence. By the end of this year, we expect to have access to tranches 2 and 3 for $30 million on top of the $10 million from the first tranche withdrawal in January 2020. And on top, we have access to the working capital revolver for up to $20 million and $20 million accordion option. We have a strong balance sheet to be able to drive business growth and execute the development of our pipeline. On slide 18, we provide the milestones for 2020. This is a transformative year for Radius and we continue progressing to achieve our corporate goals. We expect this year to finish as the anabolic market leader and with all 3 Phase III trials fully enrolled, while continuing to drive revenue growth and maintaining a strong balance sheet. The fundamentals are strong for TYMLOS to continue growing in the years to come. And by the end of 2020, we will have 3 clinical programs expected to read data in the next year, which has the potential to transform the company. We continue to be in late-stage discussions for elacestrant regarding potential partnership and hope to update you in the near future. I look forward to your questions at the end of the call. With that, I will pass the call to Kelly for closing remarks. -------------------------------------------------------------------------------- G. Kelly Martin, Radius Health, Inc. - CEO, President & Director [8] -------------------------------------------------------------------------------- Thank you, Pepe. I just have a few comments before we turn it to questions and I'll focus on 3 things. Firstly on a personal basis, I'm thrilled to be part of this organization. I have known of Radius 4 years past and I'm delighted with the opportunity to join this team, work with the board and the employees on the business and moving forward. So I'm very thrilled to be here. Secondly, in my first 10 days of being associated with the company, I would give 2 very simple observations. First and foremost the business is well run, if not very well run. Secondly, the team is an exceptionally good team across the board, across the various functions as I've gotten to know them. It's a very well run business by a very good group of people. The 3rd of my comments is about Jesper. I have known of Jesper in the past. I have never worked closely with him. I've had an opportunity in the last few weeks to do so. I would share with all of you 3 things. One is, he is an exceptionally good business executive. He has built and created here at Radius an excellent company. Secondly, I think even more importantly, he is an exceptional person, his character and integrity are beyond reproach and he and I have worked very well together. He's made it exceptionally easy for me to get acquainted to Radius. And last but not least, I think I speak for all of us that we wish him nothing of the best of success in Denmark. He has invited all of us to visit at a moment's notice, but we wish you Jesper, all the best in the world and we thank you for leaving this company in excellent shape. -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [9] -------------------------------------------------------------------------------- Thank you very much. Kelly and team, thank you very much. -------------------------------------------------------------------------------- G. Kelly Martin, Radius Health, Inc. - CEO, President & Director [10] -------------------------------------------------------------------------------- So with that operator, we'll now open it up for questions, and the team will be delighted to answer the questions. I will say that we're doing this Q&A session virtually given the COVID situation. So we'll do our best to make sure based on specific questions that the right people answer at the right time. So operator, if you can open it up for questions. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question comes from Jessica Fye with JPMorgan. -------------------------------------------------------------------------------- Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [2] -------------------------------------------------------------------------------- Can you hear me all right? -------------------------------------------------------------------------------- Elhan Webb, Radius Health, Inc. - Head of IR & External Communications [3] -------------------------------------------------------------------------------- Yes, we can. -------------------------------------------------------------------------------- Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [4] -------------------------------------------------------------------------------- Okay, great. You talked about having TYMLOS coverage for 83% of Part D lives through 2021 and working on multi-year contracts to maintain your high level of commercial coverage. Can you elaborate on how long those contracts are on the commercial side? And what that means to you in terms of the potential future availability of Forteo generics? -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [5] -------------------------------------------------------------------------------- Sal, do you want to answer that one? -------------------------------------------------------------------------------- Sal Grausso, Radius Health, Inc. - SVP of Market Access [6] -------------------------------------------------------------------------------- Sure. Thanks for the question. Yes, for the commercial contracts, we typically have contracts in place that go to 2 to 3 years. We've been very pleased with our discussions with the payers, they definitely see the value in TYMLOS irrespective of what happens with the teriparatide molecule. So we are in good position and we feel strong and confident about our coverage going forward. -------------------------------------------------------------------------------- Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [7] -------------------------------------------------------------------------------- Okay, great. I just want to make sure I understand some of the kind of pushes and pulls around net price this year. Can you quantify the positive gross to net impact of moving to a specialty distribution system? What does that mean for kind of the year-over-year net price in 2020 relative to 2019, all else equal, just thinking about that change? -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [8] -------------------------------------------------------------------------------- Yes. This is Pepe, Jessica. Thanks for the question. If you see the reconciliation of Q1 versus last year, you see a $5 million improvement just from net price improvements. And that net price improvement include the net effect of the price increase that we took of 7.9% which a portion of that was the net price. And the rest is basically improvements in the efficiencies that we have gained through the change in the distribution model. We see that this is something that is going to impact this year, but it's going to be sustainable through years to come. We're not guiding exactly how it is, but definitely before we were guiding to have a net price to be flat from $19 million to $20 million, we are expecting a net price increase now. -------------------------------------------------------------------------------- Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [9] -------------------------------------------------------------------------------- Okay. So that was actually my follow-up. So this shift was not contemplated in the prior 2020 guidance? -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [10] -------------------------------------------------------------------------------- That's correct. -------------------------------------------------------------------------------- Jessica Macomber Fye, JP Morgan Chase & Co, Research Division - Analyst [11] -------------------------------------------------------------------------------- Okay. And I guess also related to the guidance. When you referenced the potential challenges in patients' ability to pay were you suggesting a potential volume hit as patients maybe assess their ability to cover co-pays? Or were you talking about perhaps higher gross to nets as there is a mix shift towards Medicaid? -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [12] -------------------------------------------------------------------------------- Let me take that one. The ability to pay is more about the people that are unemployed and how they're going to continue to pay for the medication. We expect that some of those people are going to stay through COBRA or are they all going to Medicaid and that could have an impact into our gross to net. Now, we believe that the net effect of all that is still going to see a net price increase year-over-year. And by the way obviously, as you know when we have said in the past for all patients in the commercial space we're providing vouchers and other mechanism in order to make them pay 0 dollar out of pocket. So we are helping patients as we go through the process. -------------------------------------------------------------------------------- Operator [13] -------------------------------------------------------------------------------- Our next question comes from Mohit Bansal with Citi. -------------------------------------------------------------------------------- Mohit Bansal, Citigroup Inc, Research Division - VP and Analyst [14] -------------------------------------------------------------------------------- Mohit. Congrats on the progress. My first question was really just about what you're seeing in terms of average months on drug. I know the label recommends 18 months but we've gotten feedback that doctors are pushing it out to something closer to 24. Is there any color that you could provide or feedback on average months on drug? -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [15] -------------------------------------------------------------------------------- Joe, do you want to answer that one? -------------------------------------------------------------------------------- Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [16] -------------------------------------------------------------------------------- Yes, sure. So yes, we haven't given any guidance as far as adherence or months on TYMLOS is concerned, but certainly, it's something that we've been focusing on since launch. But we do have strategies and resources in place that can certainly help that particular metric, but nothing that we're going to share now or probably even in the future. -------------------------------------------------------------------------------- Mohit Bansal, Citigroup Inc, Research Division - VP and Analyst [17] -------------------------------------------------------------------------------- Okay, great. And then my follow-up is just given the pandemic and what it's doing to your distribution channel and then looking towards the patch, is there any color you could share in terms of shelf life expectations or storage requirements? Sorry for the patch versus TYMLOS as it is now? -------------------------------------------------------------------------------- Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [18] -------------------------------------------------------------------------------- Yes, we don't expect many changes between them. There is a process from our -- that you need to follow with the FDA. You normally start with 24 months and then [we have] expanded but no major changes between the products. -------------------------------------------------------------------------------- Mohit Bansal, Citigroup Inc, Research Division - VP and Analyst [19] -------------------------------------------------------------------------------- No big differences. Okay and then just last one, in terms of business development. Previous comments suggest that you were waiting until the elacestrant divestiture to really make any big moves. Is that still the case and should we expect that move to be towards endocrinology? -------------------------------------------------------------------------------- G. Kelly Martin, Radius Health, Inc. - CEO, President & Director [20] -------------------------------------------------------------------------------- Mohit, this Kelly. You should absolutely expect us to first focus on completion of a business development transaction. And in parallel to that the company has already been looking at a number of interesting things, the majority of which are in endocrinology. But we'll be very disciplined in our approach and will focus on completing the -- completing a transaction and working on completing a transaction as is currently under way. -------------------------------------------------------------------------------- Operator [21] -------------------------------------------------------------------------------- Our next question comes from Vikram Purohit with Morgan Stanley. -------------------------------------------------------------------------------- Vikram Purohit, Morgan Stanley, Research Division - Equity Analyst [22] -------------------------------------------------------------------------------- So I had one on the Phase III wearABLe study. So you mentioned that you're still targeting completion of enrollment by the third quarter with data in the second half of 2021. And I was curious what kind of view regarding an economic reopening and normalization in the U.S. and EU is that timeline predicated on? So in other words, how much risk do you think there is to this timeline and eventual data in the second half of 2021 if the impacts of COVID-19 sustain for considerably longer than whatever your base case of use is, U.S.? That's my first question. -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [23] -------------------------------------------------------------------------------- Charlie? -------------------------------------------------------------------------------- Charles Q. Morris, Radius Health, Inc. - Chief Medical Officer [24] -------------------------------------------------------------------------------- Thank you, Vikram. I think we've sort of used the same general assumptions as Joe has talked about on the commercial front. We had great momentum in the first quarter of this year. Obviously that's now slowed down, we are anticipating the world reopening towards the end of this quarter and into the next quarter. And we also have the add of the ex U.S. sites coming on board with a lot of the recovery having already begun in many of those countries. So obviously -- so the internal aspects of it are fine. We have our assumptions and those are assumptions what drive our view that this could be -- should be done in third quarter. But other factors COVID continuation we'll just have to -- we're going to wait and see. We can only -- we had to use a plan we think it's realistic based on everything that we're hearing so that's really how we came to feeling comfortable this can be delivered in the third quarter. -------------------------------------------------------------------------------- Vikram Purohit, Morgan Stanley, Research Division - Equity Analyst [25] -------------------------------------------------------------------------------- Okay, understood. And then I had a follow-up on elacestrant. So you mentioned that you were in late-stage discussions for a potential partner. Just to the extent you can, could you characterize for us kind of what some of the push/pull drivers of those discussions have been, but what you can say around that would be helpful? -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [26] -------------------------------------------------------------------------------- Yes. As we have commented in the past, Vikram, is you need 2 to tango. And obviously, the discussions are more on the economic terms, we're not going to provide details of those discussions, but that's usually the essence of it. -------------------------------------------------------------------------------- Operator [27] -------------------------------------------------------------------------------- Our next question comes from Paul Choi with Goldman Sachs. -------------------------------------------------------------------------------- Aliza Bram Seidenfeld, Goldman Sachs Group Inc., Research Division - Research Analyst [28] -------------------------------------------------------------------------------- This is Aliza on for Paul Choi. I guess just to start off, can you guys characterize a bit on how sales and doctors are identifying new patients and what you've seen previously? -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [29] -------------------------------------------------------------------------------- Joe? -------------------------------------------------------------------------------- Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [30] -------------------------------------------------------------------------------- Yes, thanks. So yes, they’re identifying patients for TYMLOS the same way they would pre-pandemic. And overall as mentioned during the presentation, we've seen a slight decline in NBRx volume due to the situation that we're in. And the question that we're asking is whether this is lost or just delayed business and we feel it's delayed. And we do expect a return to normal volumes for TYMLOS from a new patient standpoint during the second half of this year as states do open back up. So we're confident. We’re staying in touch with all of our HCPs, we're providing them additional reasons to use TYMLOS for the right patient types and obviously the resources required to initiate these patients on our product. -------------------------------------------------------------------------------- Operator [31] -------------------------------------------------------------------------------- Our next question comes from Geoffrey Porges with SVB Leerink. -------------------------------------------------------------------------------- Neil Puri, SVB Leerink LLC, Research Division - Analyst [32] -------------------------------------------------------------------------------- This is Neil filling in for Geoff. Congrats on the quarter and the transition. Kelly, I had a question for you just on a higher level. As you begin your tenure, what do you see as the greatest opportunities for Radius and the greatest challenges? And how is the tenor of what you might seek to do impacted by the current balance sheet? -------------------------------------------------------------------------------- G. Kelly Martin, Radius Health, Inc. - CEO, President & Director [33] -------------------------------------------------------------------------------- Thanks for the question. The in sight nearest and biggest opportunity is the osteoporosis market which is a, significant; b, somewhat underserved; and c, something that we are -- we have built an excellent reputation and brand. So a natural extension to that with the patch opportunity and that drug delivery technology is clearly a very significant opportunity that's line in sight. I don't view the balance sheet as any particular challenge at all. There's lots of ways to move forward over time, but as I answered previously, our first focus is on the business development side with elacestrant and that's our current focus. Somewhere down the road with completion of that transaction in some way, shape or form, we will then assess opportunities that we have with the balance sheet that we have. But there's enormous amount of things out there that are potentially of interest to us, but we'll take a very disciplined measured approach in evaluating all of those things, some of which that activity is currently going on. -------------------------------------------------------------------------------- Operator [34] -------------------------------------------------------------------------------- (Operator Instructions) Our next question comes from Annabel Samimy with Stifel. -------------------------------------------------------------------------------- Annabel Eva Samimy, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [35] -------------------------------------------------------------------------------- Just had a couple. First, can you tell us if you saw during the first quarter any accelerated buy-in of TYMLOS? We did see that with a lot of other drugs. I'm just wondering if you can quantify that, if there was some. And then the second question I have has to do with, I guess, your longer-term guidance of 20% CAGR. I think part of that has to do with broader market growth and doesn't -- looks like it was still pretty flat this quarter. So have your expectations for 20% CAGR changed and have your market growth expectations changed? -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [36] -------------------------------------------------------------------------------- Joe, do you want to answer the first one? -------------------------------------------------------------------------------- Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [37] -------------------------------------------------------------------------------- Yes. Sure. Yes, the buy-in or stockpiling, I hear some people calling it, it did occur in some parts of the industry, but was mainly limited to retail products. And since TYMLOS is in the specialty space this dynamic did not occur for us in Q1, and these were expected TYMLOS growth trends for the quarter. So hopefully that answers your question. -------------------------------------------------------------------------------- Annabel Eva Samimy, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [38] -------------------------------------------------------------------------------- Yes, it does. -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [39] -------------------------------------------------------------------------------- Annabel, so -- and the second question I think referring back to what Kelly just said. This is a large market that is underserved and has low penetration and -- so the opportunity is there, it is not changing because of COVID-19 and so we're not changing our 3-year guidance for the company. We will continue to assess the pandemic and any potential impact it may have in our business, but the opportunity is there. And we believe we are what we have done and it's a great job to take the market leadership in the category. -------------------------------------------------------------------------------- Annabel Eva Samimy, Stifel, Nicolaus & Company, Incorporated, Research Division - MD [40] -------------------------------------------------------------------------------- Okay. Can I just ask one more follow-up. I mean it looks like you have some decent continuity of treatment or opportunity for a decent continuity of treatment with patients unlike some other physician-administered drugs out there. So have you seen any uptick from physicians who are opting for your treatment, because it's simple, mail order, self-administered over other self-injected treatments or have all-new patient starts halted altogether? -------------------------------------------------------------------------------- Jesper Høiland, Radius Health, Inc. - Senior Advisor [41] -------------------------------------------------------------------------------- Back to you, Joe. -------------------------------------------------------------------------------- Joseph Kelly, Radius Health, Inc. - SVP of Sales & Marketing [42] -------------------------------------------------------------------------------- Yes. I'll answer your last question, Annabel. By no means have new patient starts gone to 0. We're still seeing that business continue. As far as your question is the type of maybe new prescribers we’re adding on, yes, those are continuing too even in this remote environment. And with the fact that TYMLOS can be administered at home and delivered to their home by the SP or via mail order from a PBM, that is certainly something that's been attractive to the HCPs that we're talking to, and for the patients of course. -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [43] -------------------------------------------------------------------------------- So just let me see if I complement there. So there is a product that’s administered at home versus a product that is administered in the office, but those products are having [a match via] talent. So it's an opportunity for us that we're taking advantage. Yes. -------------------------------------------------------------------------------- Operator [44] -------------------------------------------------------------------------------- Our next question comes from Eun Yang with Jefferies. -------------------------------------------------------------------------------- Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [45] -------------------------------------------------------------------------------- For TYMLOS, you have an agreement with Teijin in Japan. So are you expecting some work to revenue at some point? -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [46] -------------------------------------------------------------------------------- Good question and good to hear you again. The -- in the deal offer with Teijin, we're not allowed to comment on the progress. So we're expecting them to make an announcement and we will keep you apprised of that. And now, as you know, they have been running since 2017 a Phase III bridging study I guess (inaudible). -------------------------------------------------------------------------------- Eun Kyung Yang, Jefferies LLC, Research Division - MD & Senior Equity Research Analyst [47] -------------------------------------------------------------------------------- Right. Okay. And then TYMLOS competitional matter of patent expired in 2016 and you have (inaudible) extension, is that into 2021? And do you expect generic challenge around the time? -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [48] -------------------------------------------------------------------------------- Well, we believe we have a very strong patent on methods and we expect that the patent for the SC get us to 2031 and then the patent for the patch give us to 2036. So we are in a very comfortable position. Thank you for the question. -------------------------------------------------------------------------------- Operator [49] -------------------------------------------------------------------------------- And I'm showing no further questions at this time. I'd like to turn the call back over to Kelly Martin for any closing remarks. -------------------------------------------------------------------------------- G. Kelly Martin, Radius Health, Inc. - CEO, President & Director [50] -------------------------------------------------------------------------------- We want to thank everybody for participating in our call. We want to wish Jesper all the luck in the world and he has kindly agreed to remain an advisor to both myself and the Board and the company and we will certainly take advantage of his good gesture. And we look forward to continuing to provide updates as the business progresses. So everybody stay safe and we will keep you all posted on our progress. Thank you very much. -------------------------------------------------------------------------------- Operator [51] -------------------------------------------------------------------------------- Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. -------------------------------------------------------------------------------- Jose Carmona, Radius Health, Inc. - CFO, Senior VP & Treasurer [52] -------------------------------------------------------------------------------- Thank you. Okay.