August 12, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Waltham, Massachusetts-based Radius Health is once again rumored to be an acquisition target.
Shire is one of the potential buyers, with the company just having closed on its acquisition of Baxalta and now involved in $700 million worth of job cuts and consolidations. Other potential suitors include Pfizer (PFE), Amgen and Eli Lilly and Co. .
The appeal of Radius is primarily its pipeline product abaloparatide to treat osteoporosis. On May 31, the company announced that the U.S. Food and Drug Administration (FDA) had accepted its New Drug Application (NDA) for the drug. In November 2015, it submitted a Centralised Marketing Authorisation Application (MAA) for the drug in the European Union, which was validated by the European Medicines Agency (EMA) in December. The company is expecting European regulators to make a decision late this year or early in 2017.
The company has other products in its pipeline, including abaloparatide-transdermal (as compared to abasloparatide-SC, which is a different formulation. The company’s NDA in the U.S. has been accepted and has a PDUFA date of March 30, 2017. It also has RAD1901, which is in a Phase I clinical trial for advanced breast cancer, and RAD140 for breast cancer.
In July, Radius inked a preclinical deal with Takeda Pharmaceutical Company to study RAD1901 with TAK-288 in a Phase IIb trial of breast, endometrial and renal cancer.
Financially, Radius doesn’t make any money and for the second quarter reported a net loss of $43.4 million, compared to the same period in 2015, when it reported a net loss of $23 million. Research-and-development costs for the quarter were $26.9 million, up from $16.3 million in the second quarter of 2015. General and administrative expenses for the quarter were $17.2 million, up from $6 million in the same period last year. As of the end of the quarter, the company had $400.9 million in cash, cash equivalents and marketable securities. It projects it has enough money to pay for its development plans, commercial activities in the U.S. and operational activities into 2018.
The company’s chief executive officer, Robert Ward, indicated last month that Radius might be looking for a marketing partner in Europe for abaloparatide. As TheStreet writes, “Ireland-based Shire, which is reportedly looking for ways to expand beyond its primary product, a treatment for ADHD, might fit that profile.”
In late 2015, investors rumored that Shire was preparing a $90 per share bid for Radius. At the time the company stock was trading for about $56 per share. Radius is currently trading for $51.59.
On Aug. 4, Maxim Group downgraded Radius to “sell” and gave it a price target of $24. A consensus of eight analysts gave it an Average Earnings estimate of $-1.03 per share, with a low estimate of $01.18 per share and a high of $10.68 per share. The eight analysts gave it an average price target of $55.75, with a low of $24 and a high of $85.
