Radius Health's (RDUS) CEO Robert Ward on Q2 2016 Results - Earnings Call Transcript

| About: Radius Health, (RDUS)

Radius Health, Inc. (NASDAQ:RDUS)

Q2 2016 Earnings Conference Call

August 4, 2016 08:00 ET

Executives

Barbara Ryan - Investor Relations

Robert Ward - President and Chief Executive Officer

Dinesh Purandare - Head, Oncology

Nick Harvey - Chief Financial Officer

David Snow - Chief Commercial Officer

Lorraine Fitzpatrick - Chief Medical Officer

Analysts

Jessica Fye - JPMorgan

Ying Huang - Bank of America

Salveen Richter - Goldman Sachs

Mara Goldstein - Cantor Fitzgerald

John Newman - Canaccord Genuity

Chris Shibutani - Cowen and Company

Carol Werther - HC Wainwright

Operator

Greetings, and welcome to the Radius Health Second Quarter 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to Barbara Ryan, Investor Relations for Radius Health. Thank you, ma’ am. You may begin.

Barbara Ryan

Thank you, operator. Welcome, and thank you to those of you joining us on the line and the webcast this morning for a review of Radius Health’s second quarter 2016 financial and operating results. I’m Barbara Ryan, Radius Health’s Investor Relations Officer.

And with me this morning to discuss the results and update you on our progress are Robert Ward, President and Chief Executive Officer; Dinesh Purandare Head of Oncology and Nick Harvey, our Chief Financial Officer.

Before we begin, I’d like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in our most recent Annual Report on Form 10-K filed with the SEC and our other reports filed with the agency.

Any forward-looking statements represent our views as of today, August 4, 2016 only. A replay of this call will be available on the Company’s website, www.radiuspharm.com following this call. You can find the dial-in information for the replay in today’s press release as well as on the Company’s website.

I would now like to turn the call over to Robert Ward, President and Chief Executive Officer of Radius Health.

Robert Ward

Thanks Barbara and thank you to everyone who has joined us on our conference call and audio webcast this morning. The first half of 2016 has been an existing period for Radius Health and we have achieved a major milestone in the second quarter with the FDA’s acceptance of our NDA for abaloparatide subcu for the treatment of postmenopausal women with osteoporosis and we have been given a PDUFA date of March 30, 2017.

The next several quarters will be equally exciting for us as we continue the regulatory review process in Europe and the U.S. and continue our negotiations regarding partnerships. We have already made steady progress in preparing Radius for the launch of abaloparatide pending favorable regulatory review and we will continue to build on the momentum. We ended the second quarter 2016 with $400.9 million in cash and equivalent and are well funded to continue to develop our portfolio and launch abaloparatide with the partner.

Our Marketing Application Authorization or MAA for abaloparatide subcu was validated by the European Medicines Agency or EMA in December 2015, and we anticipate being notified in late 2016 or 2017 of the Committee for Medicinal Products for Human Use or CHMP scientific opinion for abaloparatide subcu. We are highly confident that abaloparatide has the potential to become an important medicine for the treatment of osteoporosis. This fall at the American Society for Bone and Mineral Research were extremely pleased to have been notified that four of our abstract for abaloparatide have been accepted for presentation in mid-September. Most importantly an abstract of result of the human replicative PK study of an optimized transdermal patch in postmenopausal women which we initiated in December of last year was accepted to be presented as an oral late breaker on September 19 at the meeting in Atlanta.

We plan to host an investor event to review the data and will update you on the details of that as we get closer. We will look forward to sharing the update with you at that time. Also in this quarter, we continued our ongoing trial of vasomotor symptoms. Now, I would like to turn your attention to substantial progress we’ve made with our oncology portfolio and I would like to introduce Dinesh Purandare, our Head of Global Oncology to share this important new oncology information with you.

Dinesh Purandare

Thank you, Bob. As of end of July the expansion cohort for RAD1901 in advanced breast cancer has enrolled 19 out of 20 patients at 400 mg dose and we expect to enroll the final patient in this Phase 1 Part B expansion cohort shortly. We believe that the results from this expansion cohort will enable us to accelerate our overall development planning for Phase 2. At this time, we are not enrolling patients in the Part A dose-escalation cohort. We also continue to enroll patient in the European Phase 1 FES-PET trial, the first dosing cohort is enrolled and all patients are continuing on drug.

We are pleased with the progress across these trials and we expect to provide an update on RAD1901 program at an upcoming scientific meeting. We believe that oral selective estrogen receptor degraders like RAD1901 are uniquely suited to potentially become the backbone oral agent of combination therapy for hormone-driven or hormone-resistant advanced breast cancer. Some of the exciting clinical advances in advanced ER positive breast cancer therapy have come from the use of combination of SERDs like faslodex with CDK 4/6 inhibition. We guided that we plan to enter into clinical collaboration agreements in addition to the one we have with Novartis to explore combinations of RAD 1901 with other agents including CDK 4/6s, PI-3 kinase inhibitors, mTORC inhibitors and PARP.

Today, I’m pleased to announce that we have initiated a very important preclinical collaboration with Takeda that will study RAD1901 in combination with the promising mTORC 1/2 inhibitor. Also in this quarter, we have made substantial progress with RAD140, a pre-clinical selective androgen receptor modulator. A unique receptor modulator profile of RAD140 has demonstrated potent tumor growth inhibition in breast cancer xenograft models as both a single agent and in combination with CDK 4/6 inhibition. We are particularly interested in RAD140’s activity in up regulating tumor suppression pathways that are unaffected by traditional SERM/cert [ph] agents. This characteristic may translate to a unique clinical utility for RAD140 in breast cancer.

Today, we are planning a clinical trials application to enable initiation of Phase 1 studies with RAD140 and the anticipated sharing additional information at scientific meetings this fall. The progress with RAD1901 and the recent discoveries around RAD140 provide us with two very promising opportunities to expand our research and development efforts in breast cancer. Over to you, Bob.

Robert Ward

Thank you, Dinesh. I would now like to ask Nick Harvey, our Chief Financial Officer to discuss our second quarter and provide an update on our balance sheet.

Nick Harvey

Thank you, Bob. For the three months ended June 30, 2016 we reported a net loss of $43 million or $1.01 per share as compared to a net loss of $23 million or $0.61 per share for the three months ended June 30, 2015. The increase in net loss from the 2015 period to the 2016 period included an increase in non-cash stock based compensation expense and was primarily attributable to the growth of the organization to continue and our pipeline development and to repair for the potential commercial launch of abaloparatide subcu.

Following acceptance of the company’s NDA submission for review by the FDA, the company made a milestone payment of €3 million to Ipsen which was expensed during the three months ended June 30, 2016. We have experienced substantial growth in our headcount which currently stands at 160 as Radius continues to advance towards the first commercial sale of abaloparatide subcu, we expect to continue to expand our headcount to make further investment in launch preparation.

Our cash, cash equivalents and marketable securities balance as of June 30, 2016 was $400.9 million. We believe that our cash, cash equivalents and marketable securities balance prior to the consideration of revenue from the potential future sales of any of our investigational products or proceeds from partnership activities sufficient to fund our development plan, U.S. commercial scale up and other operational activities into 2019.

I will turn the call back over to Bob.

Robert Ward

Thank you, Nick. Before, we open the line for your questions, I would like to summarize our upcoming milestones for the remainder of the year. The next nine months will continue to be exciting for Radius as we look forward to executing on a number of substantial milestones and prepared to become a commercial company. Our NAA [ph] is under active review in Europe and we expect to receive a CHMP opinion in late 2016 or 2017 and the FDA has granted a PDUFA on March 30, 2017 for our NDA. We are actively engaged in partnering negotiations and expect to enter in a collaboration by the time of our first commercial launch. At the same time we are busy building our internal marketing organization and the launch cost are already funded on our balance sheet. We look forward to reporting data from our transdermal patch crossover PK study in postmenopausal women on September 19 at ASBMR and the results of this pilot study will be important for designing a formal bioequivalent study for regulatory submission for this potential line extension. We believe that abaloparatide is the greatest value unpartnered late stage assay in the Biopharm industry and we are continuing our productive partnering discussions.

Our Phase 1 dose escalation study and FES-PET study for RAD1901 in MEF [ph] ER positive metastatic breast cancer or ongoing and we plan to report the results as well as an update on the program in a scientific meeting. This fall, we will also be sharing new preclinical data on the RAD140 program and our plans to initiate first in human studies. These two programs establish a significant presence for Radius Health and the search for new treatment options for patients with advanced ER positive breast cancer. We will also be making presentations at three investor conferences over the upcoming weeks, the Canaccord Annual Growth Conference here in Boston on August 10, The Citi Biotech Conference in September on the 7th and 8th as well as the Rodman & Renshaw Global Investment Conference on September 13. Thank you for your attention.

We would now like to open up the call for your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Our first question comes from Jessica Fye with JPMorgan. Please proceed with your question.

Jessica Fye

Good morning, thanks for taking my question. I was hoping you could talk a little bit – more about 1901 with the expansion cohort almost fully enrolled here. If can you tell us what dose you went up to in the Part A dost escalation, when ended up being [indiscernible] anything and I am just curious with 400 being a started dose in the ongoing those two thank you at this time we conduct the question and position if you FES-PET study, it would almost in case you might have expected to higher. Can you talk about your confidence in 400 being the right dose and will the upcoming medical meeting for the 1901 update be in 2016? Thank you.

Robert Ward

Thank you, Jess. Those are great questions, you know. So think about the 1901 program, when we spoke last, we were in the dose escalation phase which was designed to start at 200 and go up to 1,000 mg. In the 3 plus 3 design, one of the key questions is tolerability for programs for the patients who are enrolled. The 400 mg dose had the best combination of tolerability and activity and that’s why the 400 mg dose was taken forward and to the Part B safety expansion cohort of which 19 of 20 are currently enrolled. On the FES-PET program, the FES-PET program also initiated at 400 mg and so the cohort there was still that 400 as well. Now both of those trial designs are on clinicaltrials.gov so if you are interested in looking at greater detail, they can find a description of both trials at that site. And yes just, as we think about t scientific meetings particularly in oncology abstract submission typically about six months in advance of when the meetings take place, so we have submitted abstracts to scientific meetings on both 1901 and RAD140 as we have greater information back from the conference organizers, of course we will share that with the Street.

Jessica Fye

Got it, thank you.

Operator

Thank you. Our next question comes from Ying Huang with Bank of America. Please proceed with your question.

Ying Huang

Hi, good morning. Thanks for taking my question. So Bob, maybe I wanted to probe a little bit more on the [indiscernible] for RAD1901. So far based on the party of the Phase 1 trial here from different dose you tested, do those data correspond to what you thought in the preclinical test or not because I remember you went all the way to 1000 mg before that. And then second question is that you guys will have a oral late breaker ASBMR, I mean, it’s a silly question but still I assume this usually pertains that it’s a positive dataset right at ASBMR. And then maybe lastly, can you remind us if there are any non-commercial drugs out there or drugs in clinical trials that are using the 3M patch technology here, thank you.

Robert Ward

Sure, Ying, great question. I will just take them in reverse order since the third question was the easy question. For 3M, we are the most advanced clinical program and Dr. Headley [ph] will be giving the oral presentation at ASBMR. And Dr. Headley to-date if you think of the number of administrations both in the original 2A approved to clinical exposure date, can you just remind us of what is the clinical experience of Radius with transdermal patch?

Nick Harvey

So at this point, we completed three Phase 1 clinical studies and the Phase 2 and between those four clinical studies, we have applied over 36,000 individual patch applications. So at this point, we have a lot of experience with this patch technology and very encouraged by the emerging profile.

Robert Ward

Terrific and when we think about patches, some of the areas that folks look at are both in the FDA has online guidance which is around bioequivalents that describe how bioequivalents is accessed and the PK parameters associated with that. And then also on the FDA website, if one does search on transdermal patches, you will see that the generic division where quite frequently patches have been used, they describe also the dermal’s tolerability profile. So on the FDA website there is a number of guidances or other materials that they provide that gives a good insight into how the agency looks at transdermal patch technology.

Dinesh, coming back to 1901, I know that one of the question was in an original healthy volunteer study, we started at 200 mg and went up to 1000 mg, and then we conducted with healthy volunteers, a FES-PET imaging of both 200 mg and 400 mg. Now in the expansion cohort that’s currently ongoing, 19 of 20 enroll, could you talk a little bit more about what will be assessing in that trial?

Dinesh Purandare

Sure, so we are in – this trial is progressing nicely. We are genotyping the patients and know that there are several mutations in the estrogen receptor mutations. We are also evaluating the circulating tumor cells at baseline and at the end of the treatment and data till date shows the decrease in circulating ESR-1 mutant, our DNA suggesting a decrease in number of mutation bearing tumor cells. So this is pretty encouraging and in this trial I just want to remind you that we will be using RECIST criteria to evaluate patient outcomes which include clinical benefit, duration of stable disease as well as assessing tumors for partial or complete responses. And last but not least, I mean we believe that this expansion cohort will enable us to move faster in our planning for our Phase 2 and we hope to be back with more on this trial at an upcoming meeting.

Robert Ward

I believe you had a second question which I might have missed. Was there a second question there?

Ying Huang

Yes, I was talking about the oral late breaker at ASBMR, so many investors think since you’ve got the oral later breaker, it probably means that it’s a pretty positive data set?

Robert Ward

You know, I think we are fortunate that the organizers of ASBMR, they make scientific judgment of what is the content that they find meaningful for the membership and I think there is a high level of interest in transdermal patch and so we are very much looking forward to both the oral presentation and back in the inventory event that we will have around the time of ASBMR.

Ying Huang

Great, thank you for the color.

Operator

Thank you, our next question comes from Salveen Richter with Goldman Sachs. Please proceed with your question.

Salveen Richter

Thanks for taking my questions. Just wondering given that the CHMP opinion

opinion is a few months away for abalo, maybe you could just walk us through or provide an update here on the progress of discussion with potential ex-U.S. partners and is there any chance that you could delay the ex-U.S. launch here and then with regard to the transdermal patch data at ASBMR, could you maybe explain to us what you want to see and what sufficient to kind of inform the bioequivalent trial in terms of next steps?

Robert Ward

So why don’t I take those in a reverse order, Salveen. So first of all, with bioequivalents, in the FDA guidance to bioequivalents, you will see that they provide a description of what would be a pilot PK program as well as a formal PK program and the guidance is I think pretty illustrative of the type of information that are required. When we look at a program, the first thing we do is check with the FDA in terms of what is their expectations and then design a program to address really the questions that they have outlined in those guidances. With regards to overall preparation for abaloparatide, we don’t comment on ongoing regulatory matters as we are under active review both in Europe and here in the U.S. We are very pleased with the progress today and I would ask David Snow who is our Chief Commercial Officer to give us an update, David on the preparations and then as we think about becoming the potential for abaloparatide as a global brand, how are we prepared for that as well?

David Snow

Thank Bob, very pleased to say we continue to advance our abaloparatide subcu launch preparations overall. We still see an incredibly attractive market in the U.S. and abroad, you know best way to describe that as we see that the market has low competitive intensity but highly promotionally sensitive. There is just two players in the market, you saw Amgen’s recent results suggesting a 30% year-over-year growth that’s pretty impressive, expected that product will be over $1 billion this year in the U.S. alone. Lilly continues to grow at a 29% growth rate overall. I think this is a great indication that globally and especially in the U.S. physicians are increasingly comfortable with injectables in osteoporosis. I would also mention that Merck also has made some progress on their oral agents. It targets a different patient set. However, we think that we see there is a complementary mechanism to abaloparatide. As far as partnerships, we continue to have a productive partnership discussions ex U.S. and our goal is to have us in place by the time of launch. We obviously are looking for partners who have specialty launch experience. They have a great footprint within Europe and we’re continuing those discussions. The net result is to position abaloparatide to become a global brand and provide us with the greatest optionality to achieve the overall best outcome for Radius.

Robert Ward

Yes so if you think of the team we have put in place David, they have addressed not just what would be necessary for commercialization here but really some of the key elements around the world. I mean in Europe for example health economics plays a very important role and preparing the health economic dossier preparing for reimbursement is certainly critical to enable a timely global launch, could you tell more about some of the people that are working on the brand tonight?

David Snow

You are absolutely right, that’s a critical component for every, for launches everywhere especially in Europe where you need to have a very strong overall health economics outcome and we’ve engaged several top key opinion leaders that are engaged with us to do a market level e-com analysis helping us with the overall program and I am very pleased to be working with Lorraine Fitzpatrick on this. We have a very strong team behind us thus making sure that we translate this great – this active dataset we’ve got into very practical decision based tools for payers in Europe and also in other markets.

Robert Ward

So Lorie with ASBMR and also with the medical science liaison group that you have put together, I believe today we have largest medical science liaison group in the field of bone. Perhaps you could talk about the type of candidates we are attracting and how is scientific or medical communication progressing?

Lorraine Fitzpatrick

Thank Bob. Actually, our MSL team is not only one of the largest, it’s one of the best is actually skimming the cream off of the top that we say. And really have some great people who we recruited who have deep and extensive experience in the field of bone. So we are very pleased with the way that that’s shaped up and we are looking forward to continuing to recruit topnotch people. Regarding ASBMR, we are really lucky that we have abstracts on abaloparatide subcutaneous and we are very excited about that and we look forward to showing that to everyone in September. In addition, we have a lot of exciting preclinical and clinical data in review right now and we will have pivotal data published very soon.

Robert Ward

Excellent, we will look forward to that. Thank you, Salveen.

Salveen Richter

Thank you.

Operator

Thank you. Our next question comes from i would next question comes from Mara Goldstein with Cantor Fitzgerald. Please proceed with your question.

Mara Goldstein

Thank you very much. I had a question as it relates to the commercial plan and the patch, I believe last year there were around discussion around the opportunity for the patch, one of the things that the company said was that it might look to partner them separately and as we are approaching what would appear to be some unfairly pivotal data for the patch that I am wondering, if the thought on the commercial prospect and how that product goes to market have changed at all?

Robert Ward

I think, you know Mara, you asked a very good question. You know when we look at the market today, I think David shared just a moment ago that injectable represent the bulk of the current sales and osteoporosis of branded products, But if we look at the total number of physicians treating patients with osteoporosis, there is a substantially larger number of physicians prescribing oral agents than the number prescribing injectable agents. For many of those physicians who are really using only oral agents, they have not previously accessed anabolic therapy for their patient population. Now when we think of other markets that are on analog, once upon a time the TNF market was really an oral market and the penetration of injectables was minor element of how treatment was managed. Today, I think many of us would say injectable products are first-line and the rheumatoid arthritis or the associated indications for the anti TNFs.

We anticipate that we’ll see a similar evolution in osteoporosis. The pipeline has never been richer. This is a revolution where for the first time there’s a number of new molecules in late stage development that offers the opportunity to change the treatment paradigm. For physicians, who are not routinely training patients on the use of injectables or are not managing the injectable practice, patch becomes an accessible way to easily introduce into their practice the potential access to anabolic therapies. So we do believe that patch will find a place in the market that’s different than the areas where physicians will continue to prefer the use of subcutaneous injectable agents and we do think that therefore the marketing for patch is somewhat different than it would be for a injectable product.

You know, when we talk to folks in the market today about what are the products where physicians feel that their introduction has been particularly successful. We hear time and time again that with Humira, the way they’ve developed training programs, patient support programs, physician education is really viewed as top notch and has set a real standard for how that is one, provide not just for therapeutic or the clinical trial but then t provide the ways to make that accessible for physicians and patients as a real requirement in the market. And we do think transdermal patch will have a different use in physician practices and the support around it is different than it is for daily subcutaneous, self administered product as well. So we do think that the way that will be commercialized will be different and yes, as we talk with partners about the long-term vision for the brand, launches especially biologic and in positive regulator approval and then grow out into primary care, still within the high unmet medical need of patient population. Different partners have different capabilities and different views of how they want to participate you know regionally, globally, so we are looking for how to maximize shareholder value.

Mara Goldstein

Okay and if I could also ask, pivot for a second on to the oncology program and just broadly speaking, I mean given the complexity in breast cancer trials, and the say that here today, I am just curious as to what your thoughts on how best to pursue future development and later stage studies which can be you know large and complex and will they – are you thinking that that this will be optimally served via collaboration, are you still planning to you know do these trials on a solo basis?

Robert Ward

Well right now Mara, we have initiated some clinical collaborations and we are also doing some work independently because at this moment in time we think it’s a very important efficacy data will be available in the long term that really makes a real decision how you you ideally develop an agent. If you think of abaloparatide, I think there is two lessons we would learn from that, first was that the clinical data of that combination was significant enough that from a regulatory perspective, it was really stand to the marketplace because of the potential for patient benefit. So accelerated approval based on efficacy is the key element. But if you said the CDK 4/6s are optimizing that part of the combination, the second arm, this question of what’s the best-in-class served is what we think will be the next major discussion point in breast cancer. How do we now optimize both the hormonal therapy arm, I mean Dinesh shared us earlier that these patients are being genotype because of the fact that for the estrogen receptor there are mutant patient that show resistance too many a week apparently available agent.

So that represents the patient population where we think there is extensive high end medical need. Now remember the androgen receptor also plays an important role in modulating the estrogen response pathway. So whether its addressing the estrogen receptor, the progesterone receptor, or the androgen receptor, we think that hormonal therapy will as an important steps forward, as we go through the upcoming months and years. And that will help us identify how do you addressed the greatest unmet medical need so as the combination is developed, the patients who have the greatest potential for clinical benefit are addressed them to trial. So the progress we made today particularly since this patient population will include patients who previously been exposed to pomocyclin [ph], exposed to FES-PET [ph] or exposed in combination many of whom have ESR-1 mutants really give us real insight as to the patients who have a potential to respond to a new either mono or combination therapy that in the past may not have had access to the efficacy that they need.

Mara Goldstein

Okay, alright, thank you very much, I appreciate it.

Operator

Thank you, our next question comes from John Newman with Canaccord. Please proceed with your question.

John Newman

Hi guys, good morning, thanks for taking the question and congrats on all the progress moving forward here. My question is just regarding this whole question of whether or not there will be a generic Forteo at some point and you know I just wondered, Bob, if you could kind of walk people to the various points in terms of that debate. I think there’s a lot of moving parts, I was curious if we get your view on that, thanks.

Robert Ward

Well John, we look at the question of how would the regulatory agency address a complex product like Forteo. We do know its approved as an NDA drug. The FDA has determined that for peptide of 50 amino acids or less they are regulated on the NDA drug application. And if we look for an analogy and ask well in the past for complex products that have been approved by an NDA, how would the FDA address the approval process. It was generally in the case of human growth hormones with 505(b)2 so when Xanax announced that they were submitting a 505(b)2 around Forteo, if I recollect correctly their press announcement said that the application would include not just Bioglucanase but also comparative immunogenicity. We think that the approval process and the commercialization process is very different than when people think about what has traditionally been you know replacement of oral agents with generic drug. I mentioned a moment ago of Humira, that you know when we talk with physicians in the anti-TNF space about lessons learned and what has been important for their practice. Time-and-time again we hear people talking about back that the Humira patient has the ability to call a hotline if they have a problem, they have a way to get questions, a way to be trained and physicians really value the patient support that goes into enabling patients to use what today is a whole new range of more complex therapeutics.

When you think of Forteo, you know it is cold chain distribution and patients keep the product in the refrigerator. For a physician who has been prescribing that product for 10 years, I’m sure the patient also says they have a question about the pen. The physician in this fab all know that pen because they have been working with it for over a decade in many cases. So I think there is some elements around patient management and patient treatment that are very important so that physician field are able to effectively ensure that the patients get the therapy they are prescribed, they are trained on how to use the pen. And if the patient in the course of treatment has a question, they have to have the ability to have a place to go to get that question answered, so that they can experience the best clinical outcome.

So when we think of 505(b)2 products and growth hormone, we saw Teva launched TEV-TROPIN, Novartis launched Omnitrope. There were five branded products on the market at the time and I think many years later, the order of entry predicted really the market shares in many cases and we saw that Novo Nordisk had continued to be the leader in human growth hormone and when we ask physicians why did they see such a high prevalence for Novo Nordisk offerings, they mentioned that Novo Nordisk has been an innovator in pen technology, the types of pens they have introduced have been helpful for patients. So again it’s not as a simple as perhaps you know oral agents that to generic might be. Is that helpful John?

John Newman

Yes great, thank you.

Operator

Thank you, our next question comes from Chris Shibutani, with Cowen and Company. Please proceed with your question.

Chris Shibutani

Thank you, on the TD patch, the bioequivalent studies, can you just help us understand if there are any quantitative parameters or thresholds. I know you referred to the FDA guidance, but when we see the presentation at ASBMR, how will we be able to interpret what is good data. Can you help us understand that a little bit?

Robert Ward

Yes, Chris, the reason why the guidance is so helpful is it talks about the rules for bioequivalence, and when you think of our previous presentations of our Phase 2a study remember that was a six month comparative BMD study where in that trial, we look not just at pen performance or PK parameters but also measure BMD increase and you recall, we showed dose proportionate increase in BMD. But since that PK profile was not bioequivalence to subcu we did not see comparable BMD as to the subcu. Now when we shift over to really asking the question of how do you establish bioequivalence, it’s all about the comparability of the PK profile and that’s well described in the guidance. So some of the things that we look for as the consistency of response and a crossover study, it means that a patient has been exposed to both a subcutaneous product and to the transdermal patch and so the PK data is derived from the same individual to enable those comparisons. But we will look forward to sharing those data at ASBMR in September.

Chris Shibutani

And then if we were to think about moving forward, what would the pivotal study look like and what might be some timelines perhaps based upon your experience with enrollment of this pilot study, the comparability. Help us get a sense for what the next steps will look like and what the cloud will look like, will that include a comparison verus placebo will it be kind of like in a specific approval trial for TD as a product or is it again more comparability alone?

Robert Ward

Well I think if you looked at Corium’s website, CORIUM, they recently put a press announcement out about a Aricept program where they were taking Aricept into a transdermal patch and they shared publicly that in their discussions with agency, and that the agency had confirmed for them that bioequivalence would be the basis of approval for their transdermal patch. We similarly believe that bioequivalence will be the key regulatory evaluation and in the bioequivalence study, Chris, I would again really encourage folks to feel comfortable reading the FDA guidance because the FDA guidance talks about doing a pilot PK study.

And what the pilot PK study does is that informs you on the variability of the different comparators and enable [ph] want to design the formal study. So most of the stages where it is right now is around this pilot PK work that enables design and will be the formal bioequivalence of the guidance lays out how the one helps and form the second. But we do believe that bioequivalence to be the key parameter. But I would also encourage folks that if you just do – put in a Google search for transdermal patch on the FDA website, the the generic drug division has also written a fair amount about transdermal patches that they have approved and some of the areas that they look at related to dermal tolerability. And they do have some descriptions of what are the types of data they look for an assess. So as Gerry [ph] had mentioned earlier because of the substantial experience we’ve had with patch over series of trials of a number of administrations, we feel that we have a good understanding of the tolerability profile and we are looking forward to continuing to advance on what we had stated was our goal of demonstrating bioequivalence.

Chris Shibutani

So from start to a finish, a pivotal 12 month timeframe is realistic, 18 months in this environment?

Robert Ward

Yes generally bioequivalent studies are considered relatively quick in the world of drug research and they provide us a great deal of flexibility of determining what’s the right time to start the trial and also to make sure that we have our submission in a timely fashion as well.

Operator

Our next question comes from Carol Werther with HC Wainwright. Please proceed with your question.

Carol Werther

Thanks for taking the question. Can you just discuss a little bit more since the launch in the U.S. is possibly nine months away? How many people you might be hiring and how, what monies you are setting aside for the launch? Thanks.

Robert Ward

Yes, Carol, that’s a terrific question. Some of the details around that come into the area of various competition and stage and so we do want to make sure that we are balancing out how we maintain our competitive advantage as we look at the marketplace. But I do believe there is a fair amount of information available about products that are currently marketed in the space and as David mentioned is very promotionally positive and based on what was the intake. So David when you look at the overall commercial requirements here in the U.S. to be successful, can you give us some guidance of how we should expense?

David Snow

Yes, I think we had guided previously to a sales force size between 150 and 250. When we look at the market again there is generally two players in the market, this is a market that is heavily dominated by a couple of key specialties in endocrinology and rheumatology and there is really a tight affinity of between 20,000 and 30,000 physicians who really do the majority of prescribing in this area especially with the injectable. We see that as a very reachable market. We got great data, we are doing lots of market research in this area about who are these physicians who would be amenable to using injectable agents and so we are well down the path of being prepared to reach that market.

Robert Ward

Yes a very good point. You know if we think of why Amgen has been successful of Prolia. One of the elements has been bringing new prescribers of Prolia into the osteoporosis market, so we see a increase in the number of prescribers. But it is interesting when you compare the Forteo prescribing base to the Prolia prescribing base, they overlap partially but not completely. So it’s really interesting how market will be targeting in many ways will be unique. But in both cases Carol, the size of the physician prescribing really fits what is typically considered a specialty biological launch with a highly concentrated number of prescribers is able to be covered with really a specialty biologic sales force.

Carol Werther

Okay that’s really helpful and do you have any plans for social media?

Robert Ward

You know I think when we look at the marketing mix today, social media plays a much more important role than it has historically and there is a compliment of social media you know whether it’s in our recorded comments today being available online or how marketing goes about but, David when you think about the, here when we are under regulatory review and then once we anticipate positive regulatory outcome, once you have an approved product, can you just talk to us about how we then interact to the regulatory agency on determining what can be communicated to different markets or different groups?

David Snow

And I’m sure a lot of people are familiar with the fact that there is tight affinity with the FDA in terms of putting in your promotional materials getting approval there prior to starting that promotional activities. Once we get an approved label, you can talk to that label and provide that information to physicians and we will have a robust overall marketing approach and multiple channels to make sure we are reaching there. I would say what’s really important as well is we got a really good device and so this technology in this area really being able to support the patient through that diagnosis being able to get them the information that they need quickly and effectively. And also having a really well-designed device that makes it easy for them to use is really a critical component of this particular category. Thanks.

Carol Werther

Thank you.

Operator

Thank you, at this time, I would like to turn the call back over to management for closing comments.

Robert Ward

Well we thank everyone for joining us on this quarter. We think this is a very important time for Radius. We have seen an acceleration now in the clinical developments on oncology, so we will be coming back with update of what what would be the next step trial for 1901. We’ve guided that with 140 now, our next step would be first in human studies again targeting breast cancer and with ASBMR right around the corner, we will look forward to continuing to engage around the emerging profile for abaloparatide, so thank you very much for your time today. We look forward time with you on the next quarter.

Operator

Thank you, this does conclude today’s teleconference. You may disconnect your lines at this time and thank you for your participation and have a great day.

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