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Radius (RDUS) Q3 Loss Wider Than Expected, Stock Declines

·4 min read

Shares of Radius Health, Inc. RDUS were down 10.29% after the company reported weaker-than-expected third-quarter results and lowered its annual revenue guidance.

The company incurred a loss of 47 cents per share in the third quarter, wider than the Zacks Consensus Estimate of a loss of 27 cents and the year-ago quarter’s loss of 14 cents due to lower revenues.

The company reported revenues of $56.8 million, which missed the Zacks Consensus Estimate of $61 and declined from $77.8 million in the year-ago quarter. Revenues came in from the sales of the lead drug, Tymlos (abaloparatide-SC) injection, which is approved for the treatment of postmenopausal women with osteoporosis at high risk of fracture.

Shares of the company have gained 9.4% in the year so far against the industry’s decline of 13.2%.

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Quarter in Detail

Tymlos revenues in the quarter came in $56.8 million, up from $50.4 million in the year-ago quarter. The company generated $27.4 million of license revenues in the year-ago quarter.

The company also added 4,461 new Tymlos patients in the quarter.

Research & development expenses in the reported quarter were $34.7 million, down from $39.5 million in the year-ago quarter, driven by a decrease in abaloparatide-TD program cost. Selling, general & administrative expenses increased to $34.3 million from $33.7 million.

Pipeline Updates

Radius is evaluating Tymlos for additional indications. In October 2021, the company announced positive top-line results from its phase III ATOM study of Tymlos for the treatment of osteoporosis in men. ATOM study met the primary endpoint of change in lumbar spine bone mineral density at 12 months. The study also met secondary endpoints relating to bone mineral density changes in the lumbar spine at six months as well as at the hip and femoral neck at 12 months. The company plans to submit a supplemental new drug application (sNDA) in the first quarter of 2022.

It is also developing an abaloparatide transdermal system (“abaloparatide-TD”) for potential use in the treatment of postmenopausal women with osteoporosis.
In November 2021, Radius resubmitted its Marketing Authorization Application to the European Medicines Agency for abaloparatide-SC.

Earlier, Radius entered into an exclusive global license agreement with Menarini Group for the development and commercialization of elacestrant.

Last month, Radius along with its partner the Menarini Group announced that EMERALD, a pivotal study evaluating elacestrant in breast cancer, was positive for monotherapy versus the standard of care for patients with ER+/HER2- advanced or metastatic breast cancer (mBC), including those with the Estrogen Receptor Mutation (ESR1). The study met both primary endpoints for the overall population as well as the ESR1 mutation subgroup. Both the companies are working toward regulatory submission in the United States and Europe in 2022.

It is also developing RAD011, a pharmaceutical-grade synthetic cannabidiol oral solution, manufactured utilizing traditional pharmaceutical manufacturing processes. Based on feedback received from the Type C meeting with the FDA in June 2021, it plans to move forward with a pivotal phase II/III study for the treatment of hyperphagia-related behavior in patients with Prader-Willi Syndrome. The seamless pivotal trial (SCOUT) is expected to commence in the fourth quarter or the early first quarter.

Guidance Update

Due to lower-than-expected year-to-date Tymlos net revenues, the company has lowered its annual guidance. Tymlos revenues are now expected to be $210 million to $220 million, down from the earlier projection of $240 million.

Radius Health, Inc. Price, Consensus and EPS Surprise

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

Radius Health, Inc. price-consensus-eps-surprise-chart | Radius Health, Inc. Quote

Our Take

Radius reported a wider loss in the third quarter and sales lagged estimates. The cut in guidance was disappointing as well. Tymlos’ revenues in the year so far have not matched expectations.

Competition is stiff for Tymlos 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 Regeneron Pharmaceuticals REGN, which currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings estimates for Regeneron Pharmaceuticals have moved up $1.65 for 2021 in the past 30 days. The stock is up 28.9% year to date.

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Regeneron Pharmaceuticals, Inc. (REGN) : Free Stock Analysis Report

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