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Radius enters the IPO circle, seeks $86M for bone anabolic

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By Marie Powers
Staff Writer

Radius Health Inc. expanded the circle of biotech initial public offerings (IPOs), filing to raise up to $86.25 million. In its preliminary prospectus, the Cambridge, Mass.-based company took a different angle than most recent biotech IPOs, becoming one of the first – perhaps the only – since the passage of the Jumpstart Our Business Startups Act of 2012 that did not file as an emerging growth company.

And with good reason. In May 2011, Radius merged with MPM Acquisition Corp., an unlisted public reporting shell company. The maneuver set up Radius to become a public company after registering its private stock for resale with the SEC.

At the time of its reverse merger, Radius raised $91 million, including $66 million in equity financing from new investors BB Biotech AG, Brookside Capital, Saints Capital, Nordic Bioscience and Ipsen Pharma SAS and existing investors MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, the Wellcome Trust, HealthCare Ventures and Scottish Widows Investment Partnership. Radius also closed a $25 million term loan facility with GE Capital, Healthcare Financial Services and Oxford Finance LLC. The company drew down half of the credit facility in 2011 and the remaining $12.5 million in May 2012. (See BioWorld Today, May 25, 2011.)

Radius initially filed its S-1 in February 2012, seeking funds to complete a pivotal phase III study of anabolic bone builder BA058 (abaloparatide) to treat osteoporosis. (See BioWorld Today, Feb. 8, 2012.)

Radius voluntarily withdrew its earlier S-1 statement in November 2012, citing “market conditions and volatility.”

Instead, in April 2013, the company pulled in an equity round of $43 million to advance BA058, not only in the phase III trial in a subcutaneous formulation but also in a phase II study as a “short-wear” patch.

The company’s cash on hand, combined with the financing “should take us neatly through the patch data, and then we’ll make a decision on what the next steps are,” Michael Wyzga, then-president and CEO, told BioWorld Today at the time. (See BioWorld Today, April 26, 2013.)

The company is in in a quiet period following its new S-1 filing.

Radius is targeting Eli Lilly and Co.’s Forteo (teraparatide) with BA058, a synthetic peptide analogue of human parathyroid hormone-related protein BA058. Clinical findings suggest BA058 works better and longer than Forteo because the compounds bind to the same target but in different ways. Radius’ therapy also seems more effective in large, heavy bones, such as hips, which often fracture in osteoporosis patients.

The new S-1 indicated proceeds will be used to continue clinical development of BA058, with findings from the phase III trial evaluating safety and efficacy expected to report by year-end. According to Thomson Reuters Cortellis Clinical Trials Intelligence (CTI), in March 2013 the randomized, double-blind, placebo-controlled, multicenter study was fully enrolled, comparing BA058 head-to-head with Forteo in 2,400 healthy postmenopausal women.

In January 2013, the earliest enrolling patients completed the primary 18-month treatment phase and enrolled into a six-month extension study. At that time, an interim safety analysis performed by the independent data safety monitoring board reported that the blinded arm showed a lower nonvertebral fracture rate (1.2 percent) than the Forteo arm (1.9 percent).

Secondary measures include a comparison of hypercalcemic events between women in both arms at the end of treatment. Investigators also are assessing bone mineral density of lumbar spine, hip and femoral neck and nonvertebral fractures in both arms at the end of treatment, according to Cortellis CTI.

Provided the findings are positive, Radius indicated in its filing that it will submit a new drug application to the FDA and a marketing authorization application to the European Medicines Agency in mid-2015. The company, which holds global commercialization rights to the subcutaneous formulation of BA058 outside Japan, predicted commercial sales could begin in 2016.

The company’s pipeline also includes RAD1901, a selective estrogen receptor down-regulator in development at higher doses to treat breast cancer brain metastases (BCBM) and at lower doses as a selective estrogen-receptor modulator to treat vasomotor symptoms, such as hot flashes. In 2010, Radius completed a successful phase II trial to treat vasomotor symptoms. The company plans to initiate a phase I study in BCBM this year.

In its filing, Radius reported cash, equivalents and marketable securities of $12.3 million and an accumulated deficit of $277 million as of Dec. 31. The company reported 40.6 million common shares outstanding as of Dec. 31, and said another 9 million shares were issuable on the exercise of stock options, outstanding warrants and equity incentives, along with an undisclosed amount of convertible preferred stock.

Radius plans to list on Nasdaq as RDUS. Jefferies and Cowen and Co. are joint bookrunners on the deal, which is not yet priced.