A month has gone by since the last earnings report for Radius Health (RDUS). Shares have added about 5.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Radius Health due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Radius Posts Narrower Q4 Loss, Tymlos Sales Pick Up
Radius reported a loss of $0.66 per share in the quarter, narrower than both the Zacks Consensus Estimate of a loss of $0.82 and the year-ago period’s loss of $1.36. Increase in revenues led to the narrower-than-anticipated loss on a year-over-year basis.
The company reported Tymlos’ sales of $34.4 million, marginally surpassing the Zacks Consensus Estimate of $34 million.
Quarter in Detail
Tymlos’ sales also increased 25% sequentially. We remind investors that Radius Health 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. Hence, revenues recorded in the year-ago quarter were $7.7 million only.
Tymlos captured, on average, 20% of the U.S. anabolic osteoporosis market (based on Patient Months on Therapy, TRx PMOT) in 2018. During the fourth quarter of 2018, Tymlos’ average U.S. anabolic market share grew to 26% and achieved a 39% share of new anabolic patient starts.
In October 2018, the FDA approved a labeling supplement for Tymlos to include additional information from the ACTIVExtend study. The labeling now reflects that after 24 months of open-label alendronate therapy, the vertebral fracture risk reduction achieved with Tymlos therapy was maintained.
As of Jan 1, 2019, Tymlos was covered for approximately 283 million U.S. insured lives, representing approximately 99% of U.S. commercial, 67% of Medicare and 96% Medicaid/Other insured lives.
Research and development expenses for the reported quarter were $23.9 million, up 4% year over year, driven by increases in elacestrant project costs and abaloparatide-patch project costs. General and administrative expenses decreased 13% to $43.9 million due to decreases in compensation and travel related expenses, and professional fees.
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.
The company is developing two formulations — abaloparatide-Subcutaneous (SC) and abaloparatide-transdermal patch. Radius Health is on track with its preparations for the phase III trial on abaloparatide patch and expects to start the study in mid-2019.
Radius Health initiated the phase III EMERALD study of elacestrant late November 2018. This is the first phase III study to prospectively evaluate treatment benefit for second- and third-line breast cancer patients following CDK 4/6 inhibitor therapy as well as to prospectively compare outcomes in patients whose tumors harbor estrogen receptor 1 gene (ESR1) mutations. The study is open to enrollment with a planned recruitment period of 18-21 months and potential data read-out in 2021.
In December 2017, the company reported mature data from its multiple-part phase I dose-escalation and expansion study of elacestrant in postmenopausal women with ER-positive and HER2-negative advanced breast cancer. These results showed that elacestrant was well-tolerated with the most commonly reported adverse events being low grade nausea, dyspepsia and vomiting.
A phase I study, evaluating the safety and maximum tolerated dose of RAD140 in patients with hormone receptor-positive, locally advanced or metastatic breast cancer, is currently enrolling patients and expected to continue through the first quarter of 2019. A provisional maximum tolerated dose (MTD) was identified and an additional cohort has been opened to further confirm tolerability, pharmacokinetics, and on-treatment pharmacodynamics effects of RAD140 at that dose.
2019 Sales Guidance
Radius Health expects Tymlos net revenues around $155-$175 million in 2019.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions. The consensus estimate has shifted 6.54% due to these changes.
Currently, Radius Health has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. However, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Radius Health has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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