After a month's postponement, Radius Health Inc. scooted through the initial public offering window on its second attempt, pricing, as expected, an offering of 6.5 million shares at $8 apiece for gross proceeds of $52 million.
Shares of the Cambridge, Mass.-based company, which has a late-stage program for osteoporosis, entered the market quietly Friday morning, opening a mere 3 cents above pricing. Shares (NASDAQ:RDUS) closed at $8.01.
Probably not exactly the reception the company was hoping for when it filed a second S-1 in February. It later set a proposed range of $14 to $16, but the moody spring marketplace prompted the company to delay pricing in early May. (See BioWorld Today, Feb. 28, 2014.)
Unfavorable market conditions also led Radius to withdraw a 2012 IPO filing, in which it aimed to raise funds for completing its phase III program testing osteoporosis candidate Abaloparatide-SC, a subcutaneous formulation of a synthetic peptide analogue of parathyroid hormone-related protein that Radius hopes will stack up well against Eli Lilly and Co.'s blockbuster Forteo (teriparatide).
Radius has had better luck in the private markets. In April 2013, it added $43 million in a round led by F2 Biosciences III LP, with participation from existing investors Biotech Growth NV, MPM Capital, Brookside Capital, MPM Bio IV NVS Strategic Fund and BB Biotech Ventures, most of whom had participated in a $66 million equity round in 2011 when Radius merged with MPM Acquisition Corp., an unlisted public reporting shell company.
According to its recent SEC filing, stockholders BB Biotech, Brookside Capital Partners and F2 Capital Partners agreed to purchase up to $19 million in the IPO.
Net proceeds from the offering are expected to total about $48.4 million, with most of those funds earmarked for regulatory activities around Abaloparatide-SC. Radius expects top-line data from the phase III program late this year and, assuming data are positive, plans for a mid-2015 new drug application and marketing authorization filing.
Abaloparatide-SC, formerly known as BA058, is an anabolic osteoporosis treatment that is being tested head-to-head against Forteo, a drug that already has proved an ability to increase bone mineral density (BMD) and reduce the risk of fracture. Radius has said its product offers greater potential for increasing BMD and bone quality at a faster rate compared to other drugs.
The primary endpoint is the prevention of new vertebral fractures over 18 months of treatment. According to Thomson Reuters Cortellis Clinical Trials Intelligence, in March 2013 the study was fully enrolled, with 2,400 healthy postmenopausal women.
Last month, Radius requested breakthrough therapy designation of Abaloparatide-SC for treatment of postmenopausal osteoporosis.
Remaining funds from the IPO would go toward further development of a transdermal patch formulation of the drug, Abaloparatide-TD, which is in phase II, and for phase I studies of RAD1901, a selective estrogen receptor down-regulator/degrader, in development for breast cancer brain metastases.
Should underwriters, including bookrunners Jefferies and Cowen & Co., exercise their full 975,000-share overallotment option, Radius' offering could bring in another $7.8 million in gross proceeds. The company ended March 31 with about $29.6 million in cash. About 28.9 million shares will be outstanding after the offering – 29.9 million with overallotments.
Radius marks the 34th biopharma to price an IPO on U.S. markets this year. According to BioWorld Snapshots, a total of 22 other firms are in the queue, including Pfenex Inc., while filed its S-1 Thursday. (See story this issue.)