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Radius Health (RDUS) Posts Wider Loss in Q4

Zacks Equity Research

Radius Health, Inc. RDUS posted a loss of $1.22 per share in the fourth quarter of 2016, compared with a loss of 77 cents per share in the year-ago quarter and wider than the Zacks Consensus Estimate loss of $1.16. The year-over-year increase in net loss was attributable to an increase in research and development, and general and administrative expenses.

Radius’ share price increased 13.6% year to date compared with the Zacks classified Medical-Drugs industry’s gain of 5.9%.

With no approved product in its portfolio, the company has not generated any revenue yet. In this scenario, investors are expected to focus on pipeline updates by the company.

Quarter in Detail

Research and development expenses for the fourth quarter were $25.6 million, up 15.3% year over year primarily due to higher development costs associated with the development of its pipeline candidate RAD1901, to support a phase I study in metastatic breast cancer and a phase IIb study in postmenopausal vasomotor symptoms. Also, expenses were up on the back of higher compensation expense including stock-based compensation as a result of increased headcount.

General and administrative expenses for the reported quarter were $27.5 million, up 137.1%, significantly. The increase was primarily due to higher professional support costs, including costs associated with a rise in headcount and preparations for the potential commercialization of abaloparatide subcutaneous (abaloparatide-SC), assuming an approval.

2016 Update

The company posted a loss of $4.42 per share in 2016 compared with a net loss of $2.56 per share in 2015 and wider than the Zacks Consensus Estimate loss of $4.17.

Pipeline Update

Radius Health’s lead candidate, abaloparatide-SC, is being developed for the treatment of postmenopausal women with osteoporosis. The candidate is currently under review in both the U.S. and the EU. The company expects an opinion from the European Medicines Agency’s Committee for Medicinal Products for Human Use in 2017, while a response from the FDA is anticipated on Mar 30, 2017.

The company is also developing abaloparatide-transdermal as a short wear-time transdermal patch.

During the quarter, Radius Health reported encouraging results of its ongoing phase I studies of RAD1901 in advanced breast cancer. The company plans to file with regulatory agencies in order to take the next steps for the program in the first half of 2017, which would include the design of a phase II trial. Additionally, it anticipates to report results from its completed phase IIb trial in vasomotor symptoms in the first half of 2017.

Furthermore, the company submitted an investigational new drug application, to the FDA for RAD140, which is a selective androgen receptor modulator. Moving ahead, it expects to commence a first-in-human phase I study in women with hormone receptor positive breast cancer in 2017.
 

Radius Health, Inc. Price, Consensus and EPS Surprise

 

Radius Health, Inc. Price, Consensus and EPS Surprise | Radius Health, Inc. Quote

Zacks Rank & Stocks to Consider

Radius Health currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the health care sector include Sunesis Pharmaceuticals SNSS, Exelixis, Inc. EXEL, and GlaxoSmithKline plc GSK. While Sunesis carries a Zacks Rank #1 (Strong Buy), Exact Sciences and GlaxoSmithKline carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

Sunesis’ loss estimates narrowed by 5.06% and 8.80% for 2016 and 2017, respectively, over the past 30 days. The company recorded a positive earnings surprise in three of the last four quarters, the average being 0.54%.

GlaxoSmithKline’s earnings estimates increased from $2.66 to $2.76 for 2017 and from $2.80 to $2.85 for 2018 over the last 30 days. The company posted a positive earnings surprise in three of the four trailing quarters with an average beat of 11.03%. Its share price increased 4.4% year to date.

Exelixis’ loss estimates narrowed to 46 cents from 47 cents in the past seven days for 2016. The company recorded a positive earnings surprise in three of the last four quarters, the average being 38.52%.

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