Event – Radius hopes for big break with abaloparatide

Radius Health’s share price has been on the up in this year – and the rise is probably as much to do with takeover rumours as it is with high expectations for its lead compound, the osteoporosis project abaloparatide.

The parathyroid hormone analogue is due an FDA decision next March, and approval in Europe could come this year. But other dynamics at play in osteoporosis, including fierce competition from the likes of Amgen and the availability of cheap bisphosphonate drugs, could be holding back potential buyers.

Shire, Pfizer and Amgen have all been reported to be interested in the smaller group, although the rumours seem unfounded. Shire in particular seems an unlikely suitor as it has no osteoporosis therapies among its marketed drugs or in its pipeline. A spokesperson for Shire declined to comment and on the company’s second-quarter earnings call its chief executive, Flemming Ornskov, said the company was not focused on acquisitions but rather on paying down debt.

Company Radius Health
Project Abaloparatide SC
Market cap $2.45bn
Product NPV $1.15bn
% of market cap 47%
Event type EU/US approvals
Date Q4/March 30, 2017

Another potential bidder could be Lilly, which has not been linked with Radius but might want to shore up its osteoporosis franchise; its blockbuster Forteo is set to come off patent in 2018, and biosimilars are on the horizon.

Better Forteo?

Abaloparatide is essentially a Forteo me-too, which means that it could carry the same risk of osteosarcoma. But Radius’s project has shown a benefit over Forteo on bone mineral density measures in the phase III Active trial.

A Forteo biosimilar might be a blessing for Radius if it spurs Lilly into an acquisition, but it could also be a curse. A small physician survey by Jefferies analysts found that, although abaloparatide was generally seen as a modest improvement over Forteo, the vast majority – 85% – would first use a biosimilar version of Forteo if this were available.

Meanwhile, there are already cheap osteoporosis drugs in the form of bisphosphonates. Although these might appeal to payers, patient compliance is notoriously low owing to gastrointestinal side effects and a strict regimen that involves standing or sitting upright and not eating for 30 minutes after dosing.

So, although abaloparatide’s approval looks likely, the product would enter a crowded market. And that is without taking into account Amgen, whose Prolia is set to be the top osteoporosis drug in 2022 and already has a replacement in place. Romosozumab was filed with the FDA in July on the back of results from the Frame study (Romo in the approval Frame, but franchise won’t be built in a day, February 22, 2016). 

Top-five osteoporosis drugs in 2022
Product Company Mechanism Status 2022e sales ($m)
Prolia Amgen Anti-RANKL MAb Marketed 2,455
Romosozumab Amgen/Astellas Anti-sclerostin MAb Filed 640
Forteo Lilly Parathyroid hormone Marketed 532
Viviant Pfizer Selective oestrogen receptor modulator Marketed 489
Abaloparatide SC Radius Health Parathyroid hormone analogue Filed 467

In Radius’s favour are compelling data: subcutaneous abaloparatide seemed to perform better in its pivotal Active study than romosozumab did in Frame, specifically on the endpoint of preventing non-vertebral fractures, although caution is obviously needed when comparing across studies.

And romo has been linked with osteonecrosis of the jaw, a side effect not been seen with abaloparatide.

Radius has a trump card up its sleeve in the form of an abaloparatide transdermal patch in phase II. Such a patch, if approved, could increase abaloparatide use by 25-30%, according to the Jefferies’ doctor poll.

Abaloparatide could bring in $467m by 2022, according to EvaluatePharma sellside consensus, but much of this depends on Radius finding a partner at the very least – and one that is willing to go up against Amgen.

Radius, which had $400m in cash as of the end of June, has said it plans to market the drug in the US itself and is looking for a partner elsewhere. This quest is no doubt helping to fuel takeover speculation.

The company is relatively cheap and there is little else behind these agents in the osteoporosis pipeline. But without firmer evidence that abaloparatide can capture a valuable slice of the market, any bid approach is likely to remain an investor fantasy.

To contact the writer of this story email Madeleine Armstrong in London at madeleinea@epvantage.com or follow @medtech_ma on Twitter

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