Staff Writer

Six months after starting a Phase II osteoporosis trial with BA058, Radius Health Inc. granted an option to Novartis AG for exclusive, worldwide rights to the drug outside of Japan.

Novartis will decide whether to exercise its option after seeing Phase II data on BA058, according to Richard Lyttle, president and CEO of Cambridge, Mass.-based Radius. Data from the ongoing Phase II trial are expected around the end of 2008.

If Novartis does decide to move forward, Radius would receive an option-exercise payment as well as potential development, regulatory and commercial milestone payments that could together bring in $500 million. Up to $125 million of that would be turned over to Paris-based Ipsen SA, from which Radius licensed BA058 back in December 2005. Radius' license included worldwide rights to the drug outside of Japan, where Ipsen already had licensed it to Tokyo-based Teijin Ltd.

Radius also would receive royalties from Novartis, some of which would also be shared with Ipsen. Novartis would assume responsibility and costs for global clinical development, manufacturing and marketing of all formulations of BA058 outside of Japan, with the possible exception of some marketing in the U.S., where Radius retained a co-promotion option.

In a separate but related deal, the MPM Bio IV NVS Strategic Fund LP, a venture fund managed by MPM Capital on behalf of Novartis, purchased $10 million of Series C preferred stock in Radius.

In April, Radius closed a Series C round worth up to $57.5 million. MPM Capital co-led the round with The Wellcome Trust, while HealthCare Ventures, Oxford Bioscience Partners, BB Biotech Ventures and Scottish Widows Investment Partnership also participated. (See BioWorld Today, April 3, 2007.)

At the time, Radius had obtained $29 million in Series C funding and had milestone-based commitments for the remaining $28.5 million. Lyttle said the BA058 option deal was not one of those milestones and the new $10 million investment was in addition to the original $57.5 million.

BA058 is an analogue of human parathyroid hormone-related protein (PTHrP), a peptide that promotes new bone formation. Most marketed osteoporosis treatments, such as Fosamax (alendronate sodium, Merck & Co. Inc.), slow down the resorption of bone rather than building new bone. The exception is Forteo (teriparatide, Eli Lilly and Co.), a recombinant form of human parathyroid hormone (PTH), which both slows down resorption and builds new bone.

Yet, noted Nick Harvey, Radius' senior vice president and chief financial officer, dosing of Forteo is limited by a side effect called hypercalcemia, an increase in calcium due to the fact that PTH regulates both bone resorption and calcium homeostasis. BA058, on the other hand, only builds bone - it "won't slow down resorption or cause hypercalcemia," Lyttle said.

In a Phase Ib trial, Radius dosed BA058 at 80 mcg without inducing hypercalcemia, while the recommended dose for Forteo is 20 mcg. The ongoing Phase II trial is evaluating multiple doses of BA058 alongside placebo and Forteo in 225 postmenopausal women with osteoporosis. The trial will measure bone formation, resorption and mineral density.

Lyttle said he hopes the data will result in Novartis deciding to exercise its option and proceeding to Phase III trials.

Other late-stage osteoporosis drugs in development include Amgen Inc.'s monoclonal antibody denosumab, which targets the RANK ligand and has increased bone mineral density in a Phase III trial, and NPS Pharmaceuticals Inc.'s PTH compound Preos, which received an approvable letter last year due to hypercalcemia concerns. (See BioWorld Today, March 13, 2006, and May 4, 2006.)

Alternate bone-building approaches are earlier in development, such as CardioVascular BioTherapeutics Inc.'s human fibroblast growth factor, which the company said in July was almost 20-fold more potent, on a weight basis, than PTH in stimulating bone formation in mice.

Radius also has another approach to bone building in early stage development: a class of selective androgen receptor modulators (SARMs) licensed last year from Karo Bio AB. In preclinical studies, the small molecules demonstrated high bone- and muscle-building activity, and Lyttle said the company is "making progress in identifying a lead series." (See BioWorld Today, Sept. 13, 2006.)

Also in preclinical development is a class of selective estrogen receptor modulators (SERMs), which Radius licensed from Eisai Co. Ltd. for hot flashes and osteoporosis, and several classes of estrogen receptor-beta-selective compounds, which were licensed from the University of Illinois for use in endometriosis and other inflammatory diseases. Lyttle said the lead compound in the SERM program, RAD-1901, is slated for an investigational new drug application filing by the end of the year.