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Radius (RDUS) Q2 Earnings Beat Estimates, Tymlos Sales Solid

Zacks Equity Research

Radius Health, Inc. RDUS reported encouraging results for the second quarter of 2019, wherein loss was narrower than expected and sales surpassed estimates. Shares are up in pre-market trading.

Shares of Radius have surged 40.8% in the year so far, outperforming the industry’s growth of 7.5%.


The company incurred a loss of 55 cents per share in the second quarter, narrower than the year-ago quarter’s loss of 98 cents. Including one-time items, loss came in at 77 cents, which was narrower than the Zacks Consensus Estimate of a loss of 85 cents. The year-over-year improvement was backed by an increase in revenues.

The company reported Tymlos’ sales of $41 million, surpassing the Zacks Consensus Estimate by 0.64% and increasing from $22.6 million in the year-ago quarter.

Quarter in Detail

We remind investors that Radius obtained the FDA approval for Tymlos (abaloparatide) injection in April 2017 for the treatment of postmenopausal women with osteoporosis at high risk of fracture. The company began shipments of the drug to wholesalers at the end of May 2017.

The anabolic market grew 4% year over year in the first half of 2019. During the reported quarter, Tymlos continued to increase its market share and captured, on average, 35% of the U.S. anabolic osteoporosis market (based on Patient Months on Therapy, TRx PMOT) and 46% of new anabolic patient starts (NBRx).

Research & development expenses for the reported quarter were $27.2 million, up 3% year over year due to higher abaloparatide-SC project costs. General & administrative expenses decreased 17% to $40.1 million.

Pipeline Updates

The pipeline includes abaloparatide injection for potential use in the treatment of men with osteoporosis, abaloparatide patch for potential use in osteoporosis and elacestrant (RAD1901) for potential use in hormone receptor-positive breast cancer.

In July 2019, Radius obtained preliminary results from the abaloparatide-transdermal patch (abaloparatide-patch) patient assessment study, which evaluated self-administration of abaloparatide-patch over 29 days in 22 postmenopausal women with low bone density. The top-line results showed that patients were able to follow the instructions for use (IFU) and applied the patches with a 99.7% success rate.

Earlier this month, the first patient was randomized in the phase III wearABLe clinical trial, assessing the safety and efficacy of abaloparatide-patch for the treatment of postmenopausal patients with osteoporosis at high risk for fracture.  The study is a pivotal, randomized, open-label, active-controlled, bone mineral density (“BMD”) non-inferiority bridging study that will evaluate the efficacy and safety of abaloparatide-patch versus Tymlos (abaloparatide injection) in approximately 470 patients with postmenopausal osteoporosis at high risk of fracture. The study is currently open for enrollment at multiple clinical sites. Radius plans to complete patient enrollment in this study by the end of 2019.

2019 Sales Guidance Updated

Radius expects Tymlos net revenues to be $165-$170 million (previous guidance was $160-$170 million) for 2019.

Our Take

The narrower-than-expected loss in the second quarter was encouraging as Tymlos continued to gain traction. In the second half of 2019, Radius expects the drug to become the NBRx anabolic market leader by achieving more than 50% of new patient starts.

Although the osteoporosis market in the United States has great potential, Tymlos is expected to face significant competition from Eli Lilly & Co's LLY Forteo and Amgen's AMGN Prolia.

Zacks Rank & A Stock to Consider

Radius currently carries a Zacks Rank #3 (Hold).

A better-ranked stock in the healthcare sector is Roche RHHBY, which sports a Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Roche’s earnings per share estimates have increased from $2.41 to $2.50 for 2019 in the past 60 days.

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