Radius Health's (RDUS) CEO Jesper Høiland on Q3 2017 Results - Earnings Call Transcript

Radius Health, Inc. (NASDAQ:RDUS) Q3 2017 Earnings Conference Call November 2, 2017 4:30 PM ET

Executives

Barbara Ryan - Investor & Media Relations

Jesper Høiland - President and Chief Executive Officer

David Snow - Chief Commercial Officer

Gary Hattersley - Chief Scientific Officer

Pepe Carmona - Chief Financial Officer

Bruce Mitlak - VP, Clinical Development

Analysts

Jessica Fye - JPMorgan

Salveen Richter - Goldman Sachs

Ying Huang - Bank of America Merrill Lynch

Chris Shibutani - Cowen & Co.

Eun Yang - Jefferies & Co.

Mara Goldstein - Cantor Fitzgerald

Operator

Good morning everyone and welcome to Radius Health's Third Quarter 2017 Results and Business Update. Today’s call is being recorded.

At this time I’d like to turn the call over to Alex Fudukidis of Radius Health, Investor & Media Relations team. Please begin.

Barbara Ryan

Thank you, Brian. Good afternoon, and thank you for joining us on the conference call and webcast for Radius's third quarter 2017 financial results and business update.

Joining me today are Jesper Høiland, President and Chief Executive Officer; David Snow, our Chief Commercial Officer; Gary Hattersley, our Chief Scientific Officer; and Pepe Carmona, our Chief Financial Officer. In addition Bruce Mitlak, Radius's Vice President of Clinical Development joins us for the Q&A portion of the call.

Before we begin, I would like to remind you that statements made during this call that are not historical facts 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 of the quarterly report on Form 10-Q for the period ended June 30, 2017 and other reports filed with the Securities and Exchange Commission. Any forward-looking statements represent our views as of today, November 2, 2017, only.

A replay of this webcast will be available on the company's Web site at www.radiuspharm.com. And you can find the dial-in information for the conference call replay in today's press release as well as on the company's Web site. Today’s agenda is intended to provide you with a review of TYMLOS launch, and our third quarter 2017 financials, and update on the development plans for our pipeline and upcoming corporate milestones.

I'd like to turn the call over to Jesper Høiland, Radius's President and Chief Executive Officer. Jesper?

Jesper Høiland

Thank you, Alex. Welcome everybody and thank you for joining us today. As many of you recall, I joined Radius in July, shortly after the launch of TYMLOS. During this time, I’ve spoken with many of our stakeholders and concluded that Radius is on its way to successfully penetrating the osteoporosis anabolic market with TYMLOS and its launch.

We are actively working on expanding our label and accelerating our pipeline towards registration and commensuration with our other assets. We have accomplished several important milestones in the third quarter, which is the first full quarter of TYMLOS sales since launch.

Today we're happy to report to you that we've gained access to around 200 million lives in the U.S and have started gaining market share. Capturing new patients on therapy is our focus as it will lead us to a stated sales growth. And we have also seen a stabilization of the anabolic market.

The response to TYMLOS from physicians, payers, and patients have been very positive. Throughout the launch process we have kept focus on KOLs and top prescribers where we’ve gained market share. David will discuss this in more detail later.

We’ve also started focusing on expanding the TYMLOS product label through lifecycle management activities. We met with the FDA and have agreed on a male osteoporosis clinical trial design. That, if successful, will breakthrough our subcutaneous data for the bone mineral density primary endpoint.

We expect to initiate this study in the first quarter of 2018. In September, we presented additional positive data at the ASBMR meeting for TYMLOS with the active extent trial and we are planning to submit a labeling submit -- supplement through the FDA in connection with these results before yearend.

I'm also very optimistic about our oncology franchise. For Elacestrant, we have received track -- Fast Track designation from the FDA. This is an important achievement by our R&D team as it supports our speed to market strategy in collaboration with the FDA.

We have initiated our RAD140 study and have enrolled our first patient in Phase 1 study. Gary will update you further on the TYMLOS male osteoporosis study, our progress in our oncology pipeline, as well as on our transdermal patch, where we are now scheduled meeting with the FDA to discuss the potential regulatory pathway.

During the quarter, we’ve also strengthened our balance sheet with a $305 million convertible debt financing. Our cash position now provide the necessary funds to drive TYMLOS commercialization and to advance the pipeline assets. Pepe will provide an update on third quarter 2017 financials later in the presentation.

I can say with confidence that we are on track to execute our key strategic priorities supported by a strong balance sheet. Our number one priority is to continue executing the launch of TYMLOS in the U.S., and to establish Radius as the market leader in the osteoporosis sector.

We are diligently working towards maximizing the TYMLOS opportunity through planned label expansion activities, including the potential transdermal patch in partnership with 3M. We are having an excellent partner Teijin Pharma, in Japan, which gives us access to the two largest anabolic markets which account for approximately 80% of worldwide markets.

We continue to work with EMEA to have an approval in Europe and will actively engage with the other regulatory agencies to expand the TYMLOS footprint in the pharma emerging markets. We will seek partnerships outside of the U.S as we see this as the best way forward to maximize shareholder value.

Elacestrant's recent Fast Track designation is a strong validation of our speed to market strategy. For this potential breast cancer treatment, we are looking forward to our poster presentation at the upcoming San Antonio Breast Cancer Symposium here in December, which Gary will speak more about.

We will further assess the opportunity for Elacestrant's to drive its peak sales potential. And finally we continue to strengthen the organization to ensure flawless execution in all priorities mentioned above. I believe success in these efforts will drive sustainable growth for Radius, which in turn is beneficial for shareholders and of course for the patients we serve.

I will now turn the call over to David Snow, our Chief Commercial Officer.

David Snow

Thanks, Jesper. I’m pleased to provide the third quarter TYMLOS performance update covering the brand for the fifth month of market availability. Our commercial teams remain focused on achieving market leadership in the anabolic categories and today I will share updates against the key drivers of adoption we’ve shared with you previously that you see here on Slide 8.

In creating strong market share voice our sales teams continue to drive significant coverage with the top anabolic HCPs. The high reach in frequency coverage of these top 7,000 anabolic writers is translating into more than 80% of prescription volume flow today.

More recently, we saw a substantial increase in volume coming from the highest quintile of top 200 prescribers. The key expectation across all prescribers is assuring broad reimbursement coverage and we are pleased to continue progress in this area.

We've moved to around 200 million covered lives within the first six months of launch. That takes us to 87% coverage in commercial lives and 35% of total Medicare lives. We will continue to add to these totals, especially in near-term Medicare as we fully engage in the annual decision process that’s now underway.

I would also like to highlight the evolution of the anabolic payer market as you can see on the chart to the right. While Medicare remains the largest and most important segment, it's becoming more balanced against commercial segment. This represents near-term commercial opportunities for TYMLOS and sets us up well to maximize the exclusive status with express scripts that begins in January.

In reviewing HCP responses to the TYMLOS brand, we continue to see differentiation across a range of messages. Some of the most important messages being fast onset of action and the early effect on bone formation markers. There is also important class related messages in building bone and providing a low incidence of serious side effects more often associated with other osteoporosis therapies. These messages were not only helping to drive share growth, but we see these as contributing to important changes in anabolic class dynamics.

This next slide shows quarterly volume changes in the overall anabolic class. As I’ve mentioned before, the class has been on a slow decline over the past five years. What we are seeing more recently is a stabilization of class volume and more importantly over the past couple of quarters some actual growth quarter-over-quarter.

Since anabolic therapies have traditionally represented just 1% to 2% of total osteoporosis treatment volume, continued class growth represents a meaningful TYMLOS strategic opportunity as we add new patients and prescribers.

Now on the next slide, to further support expanding use in anabolic appropriate patients we're seeing some encouraging signs of adding anabolic prescribers. In reviewing the highest volume TYMLOS prescribers we find 90% or existing top tier anabolic writers and represent high new prescription shares on average.

What was encouraging with the remaining 10% or either new prescribers or returning prescribers who haven't written an anabolic in the past two years. More significantly when we look across all TYMLOS prescribing, we found these newer returning writers account for 20% of total -- TYMLOS volume to date. This is an encouraging early sign that TYMLOS can't bring new prescribers and expand the number of anabolic patients.

We are looking at prescription data from October. TYMLOS has reached double digits in new prescription share and almost 5% in TRFs. It's very encouraging to see the new to brand prescriptions here moving beyond 16%, an important leading indicator of the evolving HCP confidence. We expect to see continued share growth as we expand coverage and prescribers become increasingly familiar and comfortable with TYMLOS.

So in summary, we are focused on the key drivers of the adoption with good progress to date across sales team productivity, market access, prescription trends, and bringing new patients and prescribers to anabolic treatment. In the following quarters, we expect to grow share, especially an advantaged plans, as well as accelerate access in prescribing in the Medicare segment. Thank you.

I’d now like to turn the call over to Gary Hattersley for an update on our pipeline.

Gary Hattersley

Thanks, David. I'd like to start by providing a short update on lifecycle management with TYMLOS, which include bridging studies for both male osteoporosis and our transdermal patch. I will also provide an oncology development update on the Elacestrant program and on our second clinical stage oncology program with RAD140.

So as part of lifecycle management to support TYMLOS, we are planning to initiate a male osteoporosis study and we can now report that we recently met with the FDA to gain alignment on the bridging study, which will be a randomized, double-blind, placebo-controlled study that will enroll approximately 225 men with osteoporosis.

The primary endpoint will be the change in lumbar spine BMD compared to placebo at 12 months. And this study will also include a subset of patients who will undergo high-resolution CT imaging to provide information on both trabecular and cortical bone structure. We expect this study to be initiate in the first quarter of 2018 and without pending positive outcome from the study, this data would be the basis for a supplemental NDA submission to seek an expanded TYMLOS label.

We also intend to initiate a short-term clinical bone histomorphometry study in the first half of 2018, as we believe this will provide important information to enhance our understanding of the early anabolic effects of TYMLOS, and the relative contribution of bone modeling and remodeling to its bone anabolic activity.

As outlined on Slide 18, we are continuing to make significant progress with our Transdermal Patch program, which is a key component to extend the TYMLOS franchise and expand globally. And importantly, we believe the patch can extend exclusivity to 2037.

Our strategy is to bridge the transdermal patch to our approved TYMLOS products. To support the strategy, we’ve continued to make significant progress and while the core patch technology and formulation excipients remain unchanged, we further optimize the release and delivery of abaloparatide through fine tuning on both dose and formulation.

Additionally, we've made some important enhancements to delivery, consistency of delivery, and patient experience through the introduction of a new patch applicator. We are also continuing our focus on CMC related activities that are needed to establish appropriate commercial scale manufacturing.

And finally, we’ve scheduled a meeting with the FDA in January to align on the pivotal and supportive studies that will be required to bridge the patch to our Sub-Q products, and we anticipate providing an update soon thereafter.

At this point, I'd like to share some highlights from our recent five presentations at the AMCP Nexus Conference in October, on the need for awareness of osteoporosis as well as the cost-effectiveness data on treatment with TYMLOS. As expected from an aging population, the number of osteoporotic fractures continues to escalate with over 2 million occurring in 2015 causing the healthcare system over $50 billion.

Of these fractures in women account for almost three-quarters of the associated costs, with nonvertebral fractures representing over 80% of all fractures. There continues to be concerning lack of awareness and management when 96% of women with the first fracture did not recall being told by their physician that their fracture might be related to osteoporosis. And over half were not aware that a fracture is a risk for future fractures. Notably, a third of women are not preferred for follow-up visit after diagnosis of an osteoporotic fracture.

In a comparison of the cost-effectiveness of TYMLOS for the treatment of postmenopausal osteoporosis compared to Forteo, it was concluded that TYMLOS was more cost-effective by 72% compared with Forteo. And when projected across a 10-year period, suggested that patients treated with TYMLOS expected lower incremental costs and provide evidence of better health outcomes.

As outlined on Slide 20, we are also making progress with our oncology pipeline. As we recently announced, we received Fast Track designation for Elacestrant. We believe this is significant because it means the agency agrees that Elacestrant has the potential to fill an unmet medical need in a patient population with a serious condition. It also provides Radius an opportunity to have more frequent engagement with the agency to support an expedite review including a rolling review of the NDA.

As a reminder, Fast Track designation is typically based on early clinical data, but does not preclude other programs which recognize and support expedited or accelerated approval. As we updated during our last quarterly call, we gained important alignment with the FDA in June on the development path for Elacestrant.

We plan to initiate the Phase 2 study in early 2018, which will be a single-arm monotherapy study in women with advanced or metastatic estrogen receptor positive, HER2 negative, breast cancer, which would enroll up to 200 patients with the primary endpoint will be response rate coupled with duration of response and pending the results and review of the totality of the data by the agency, this Phase 2 study could be considered pivotal to support accelerated approval, provided the confirmatory study is ongoing at the time of NDA submission.

At the upcoming San Antonio Breast Cancer Symposium in December, there will be five Elacestrant poster presentations. Two are clinical posters, which provide an update on our ongoing Phase 1 studies, which are the 005 dose escalation and expansion study and the 106 FES-PET imaging study.

We will also be presenting three preclinical posters including new data on the mechanism of Elacestrant action activity in the context of endocrine resistance and the antitumor efficacy of Elacestrant in combination with a PI3K inhibitor. We continue to be very encouraged by the progress of the Elacestrant development program and we will provide more details on the Phase 2 study when its initiated, which we expect to occur early in 2018.

I’d now like to provide an update on the second asset in our oncology pipeline RAD140, for which we’ve recently initiated a Phase 1 clinical study in postmenopausal women with locally advanced metastatic hormone receptor positive breast cancer, which we will enroll up to 40 patients.

The objectives of the study is to evaluate safety, the maximum tolerated dose, pharmacokinetics, and a preliminary evaluation of tumor response. We believe there is significant potential for RAD140 based on its mechanism of action, which is differentiated from both SERDs and SARMs where it activates androgen receptor-mediated signaling together with downstream suppression of estrogen receptor signaling.

And based on encouraging preclinical data, we see potential in the context of endocrine resistance including in genetically defined subpopulations that are resistant to current therapies.

I’d now like to pass the call over to Pepe to provide a financial updates on the quarter.

Pepe Carmona

Thank you, Gary. This is our first full quarter reporting TYMLOS sales. For the three months ended September 30, 2017, Radius reported net sales of $3.5 million and a loss of $58 million or $1.31 per share as compared to a net loss of $46 million or $1.07 per share for the three months ended September 30, 2016. The $3.5 million sales figure represents three months of shipment discounted by gross to net adjustments.

Our revenue recognition policy is in line with U.S GAAP and it is described in our quarterly report on Form 10-Q that we filed today.

On the right side, we show the figures on non-U.S GAAP basis, which excludes share based compensation, intangible asset amortization, and non-cash interest from the convertible note. You can see the reconciliation between GAAP and non-GAAP in the appendix.

Radius on a non-U.S GAAP basis, reported a net loss of $48 million or $1.09 per share as compared to a net loss of $38 million or $0.88 per share for the three months ended September 30, 2016.

I’d like to highlight three points. First, the license revenue is related to the paging deal up from milestone. Second, our R&D expense decreased versus the third quarter in 2016, driven by a wind down of the Elacestrant and TYMLOS SC [ph] programs. Last, the SG&A increase is driven by the ramp up of headcount [indiscernible] support of TYMLOS commercialization.

We are now a fully staffed commercial company with over 200 sales reps working in the field and approximately 20 MSLs all working to support TYMLOS. We are allocating resources in accordance with our strategy, which is to drive TYMLOS growth and continue advancing our pipeline.

On Slide 24, we show that our cash, cash equivalent and marketable securities balance as of September 30, 2017, was $468 million. In the third quarter, we increased cash by $253 million versus Q2 and in cash balance driven by the $296 million net proceeds from our senior convertible note priced in August 2017.

We show $3 million cash inflows from the gross profits on TYMLOS sales, while we invested in support of the TYMLOS launch advancing our pipeline and for general purposes. We have $15 million of cash inflows from employee options received and other changes in net working capital.

On Slide 25, Radius show that we have a -- we continue to strength its value proposition. We operate in large and financially attractive categories. In osteoporosis we have access to the two largest anabolic markets in the world. In oncology, Elacestrant is an attractive opportunity in a large metastatic breast cancer market.

The TYMLOS ACTIVExtend program provides further differentiation for TYMLOS, and as you heard from David, the initial feedback from healthcare practitioners is encouraging, showing how the product attributes are motivating them to prescribe the product. We're extremely excited about Elacestrant and the recent Fast Track designation from the FDA. We look forward to SABCS in December to show farther progress in the program.

Finally, we have a strong financial structure. Our gross margin in TYMLOS is north of 90% and we have a lean and stable cost structure. Radius balance sheet is strong. It has over $0.5 billion of operating loss carry forward to offset future taxable income.

After the expected CHMP opinion in December and SABCS, we will assess strategic alternatives for abaloparatide outside of the U.S and the best approaches for developing Elacestrant in earlier lines of therapy.

I will now turn the call over to Jesper to provide final remarks.

Jesper Høiland

With one full commercial quarter behind us now, we have achieved many major value creation inflection points that position Radius for future growth. The TYMLOS U.S commercial launch, coupled with a positive active extend data presented at the ASBMR meeting, our deal in Japan with Teijin, the initiation of our Phase 1 RAD140 clinical trial in hormone receptor positive breast cancer, and the FDA Fast Track designation for Elacestrant, are all critical milestones that Radius has delivered in 2017.

We expect to submit a labeling supplement seeking to update the TYMLOS label with the ACTIVExtend 43 months data before the yearend. We also expect to have a CHMP opinion for our MAA for abaloparatide subcutaneous named Eladynos in Europe by yearend, at which point of time, we will focus on partnership opportunities outside of the U.S.

We have scheduled a meeting in January of 2018 with the FDA to discuss the regulatory pathway for the abalo patch. After the meeting and after aligning the commercial manufacturing discussions with 3M, we will share the potential regulatory pathway for this program. We expect to update the market on ongoing Elacestrant clinical program at the San Antonio Breast Cancer Symposium and we plan to initiate our Phase 2 single-arm monotherapy trial for Elacestrant in early 2018.

We will focus on executing with excellence, investing in clinical programs in our pipeline and delivering results for the company shareholders. We are also announcing today that Dr. Ansbert Gadicke has resigned from the Board of Directors for other company effective November 8, 2017, after having served the Board of Directors for the company and its predecessor since 2003. Following Dr. Gadicke's resignation, we expect to reduce the size of the Board from 10 to 9 members.

On behalf of Radius and its employees, I would like to take the opportunity to thank Dr. Gadicke for his many years of service, advice, and support to the company as it progresses from an early start-up to a fully integrated commercial biopharmaceutical company that we are today.

Finally, I’d like to thank you all for the support to Radius Health and I would like to ask that we open the call for questions now.

Question-and-Answer Session

Operator

Thank you, sir. [Operator Instructions] Our first question will come from the line of Jessica Fye with JPMorgan. Please proceed.

Jessica Fye

Great. Thanks for taking my question. First one is within the $3.5 million of third quarter TYMLOS revenue, how much if any of that was related to increases in wholesaler inventory? It also looks like you're making progress in government pay access. How should we think about the proportion of Part D lives that will have coverage for TYMLOS in 2018? So where we can go from that 35% today next year? And then follow-up to that -- to these, I wanted to clarify one of the comments you made in prepared remarks around the patch. I think you said the PK profile of an optimized patch was successfully modified. Does that mean that you ran a subsequent PK study and that the near match you presented at ASBMR last year is now a bioequivalent match or is that comment more about the PK being modified as of ASBMR relative to the old patch? And sort of related to that, I think in the patch you talked about both the bioequivalent study and the BMD study perhaps. Could a BMD study for patch potentially bridge to the TYMLOS data similar to how you’re doing with male osteoporosis or does it not work like that? I think you also mentioned something about pivotal and supportive studies. So I just want to make sure I understand whether BMD or bioequivalent is likely to be pivotal and which would be supportive? Thanks.

Jesper Høiland

Thank you very much, Jessica. I will send the questions a little around. I would ask Pepe to respond to the inventory situation and what we're doing there. I'd ask David Snow to comment on the market access for Part D. And then, Gary, is going to comment on the patch, may be supported by Bruce Mitlak that we have with us here. So, Pepe, if you will be so kind to start out.

Pepe Carmona

Yes. Hi, Jessica. Thanks for the question. So, basically as we articulated in 10-Q we’re recognizing sales based on shipments to wholesalers. And we are not giving any incentive to create inventories there. There is going to be a normal inventory build that as demand increases, but there is nothing material that I could highlight from that ankle. Obviously, in the -- in Q2, when we first filled the pipe, there was a bigger portion of sales there, because each wholesaler have to retain a certain level of [indiscernible]. I’m going to pass now the second question related to Part D to David.

David Snow

Sure. Thanks, Jessica for the question. We are really pleased with where we are from a payer standpoint. You see we crossed over $200 million. 87% in the commercial side, 35% in the Med Part D. We expect to build both of those. Obviously, we would expect to be north of 50% early in 2018 on the Med Part D side. These plans are now working through a lot of their 19 decisions and what once they make those decisions and they will think about revising their 2018 opportunities. So that’s pretty much the way we are looking at it right now.

Jesper Høiland

Thank you. Gary?

Gary Hattersley

Hi, Jessica. Thank you for the questions. So I think I captured them all. So your first question about the profile -- optimization of the profile. We see that the greatest technical hurdle that we had this programs so far was that Initial shift in the pharmacokinetic profile from a very pulsatile profile to one that was comparable to subcutaneous injection. And that was really the introduction of the excipient that we reported at ASBMR in 2016. On that point, we’ve really been focusing on fine tuning of some of the characteristics not just with the profile, but of the entire delivery system. So, for example, we refer to the introduction of a new applicator that’s important for a number of different reasons. It's important from a consistency of delivery, optimization of delivery, but also equally important is the patient's experience. We want to be able to provide a delivery system that’s easily used by our intended patient population. So that’s really an important step. You are correct in terms of the -- there are several difference -- there is couple of different options for reaching for these types of studies, the FDA guidance does speak to both pharmacokinetic equivalence as well as pharmacodynamic equivalence and I think you refer to the BMD study which will fall into pharmacodynamic equivalence category. We -- with the male study as being an example, we can -- we believe that there is a significant value in pharmacodynamic bridging strategy that provides real world information on the benefits the patients could -- can achieve. In terms of comments on the pivotal and supportive studies, as with any development program, there are both pivotal studies as well as a series of supportive studies that are required. I can give you some examples. An example based on guidance from the agency for this type of -- this route of administration, there is typically requirement for dermal tolerability study. And so that's a study that we are anticipating to conduct to provide some dermal safety assessments of this delivery system. And so really our engagement with the FDA which is coming up in January is to talk about all of these components of the entire development program, so that we have had an appropriate engagement with the FDA and conversation and alignment around of their expectations of what an entire program would look like. So thanks for the question.

Jessica Fye

Okay, great. And just to make sure I understand the improvement -- has there been a subsequent PK study after what we saw, I think it was you presented at ASBMR?

Jesper Høiland

So -- yes, there was been a series of PK studies. We have found that conducting human pharmacokinetics studies, single-dose pharmacokinetic studies is actually the best way to assess some of the modifications that have been made both in terms of performance of the applicator as well as some of those what we have considered to be incremental fine-tuning of the profile, particularly around the dose question. So that's really driven by a clinical data which we think is the most relevant and really what should be guiding our program.

Jessica Fye

Jesper, thank you.

Jesper Høiland

Thanks, Jessica.

Operator

Thank you. [Operator Instructions] Our next question will come from the line of Salveen Richter with Goldman Sachs. Please proceed.

Salveen Richter

Thanks for taking my question. Just wonder if you can comment on the formulary positioning here. How is pricing playing a role and are any change is expected as we head into 2018?

Jesper Høiland

Thank you, Salveen. David, will you take that?

A - David Snowa

I think, well, when we look at the commercial side of the question, we're in pretty good shape at 87%. So I would assume there might be a few more that are out there, mostly a lot of the PBMs who have picked it up, that will be downstream decisions that they will have to make and some of those independent decisions they make within that we would expect to go our way and we will see that flow through. I think that -- obviously, there are many big players within the Medicare Part D side or rather not get into some of the specifics there, but we have got a number of those in place, we expect to have more of those coming out as they make their 2019 decisions and we will see that flow through. But again we would expect to be north of 50% early in the year on the Medicare Part D side.

Salveen Richter

Great. And then as we think about the launch here, can you help us understand or help us think about how to take captured market share, payer coverage in where you stand and translate that to some kind of patient uptick trajectory. I mean, how should we think about those two factors?

David Snow

Yes. That's a great question. And I think we spend a lot of time looking at that, but I think we have always talked about the fact that this is a new patient market. It's really critical to follow. Patients that are coming in and so that's why we have shown you this MDRx. Physicians, these are specialty type therapies, they’re in high-risk patients, they have -- they want confidence that they can get reimbursement, so again they must have reimbursement ahead of that. And then it's a question of can you capture more of the patients who are coming on for therapy. And again, we were very encouraged by the fact that we're starting to see some prescribers who haven't really prescribed anabolics previously and we think some of that is due to the coverage we have got with the payers, the responsible pricing strategy we have, and basically bringing in a new product and talking about these patients who are at risk. So there are a number of drivers there, but I would say that MDRx is probably the best signal of the trajectory of the brand where we can go.

Jesper Høiland

And Salveen, if I may add, you should remind yourself that there is very little switches in this segment, that's one of the peculiarities of the osteoporosis market. So really what you should use the MDRx probably as an indicator for a market share which is going to be in 12 to 18 months from now.

Salveen Richter

Thank you.

Operator

Thank you. Our next question will come from the line of Ying Huang with Bank of America Merrill Lynch. Please proceed.

Ying Huang

Hi. Good afternoon. Thanks for taking my question. Just to follow-up on the last question, you have a preferred status with express scripts. Are you going to sign up with any other major PBM or large insurance company for 2018 to give you the preferred status over Forteo? And then, on the EMA process, I don’t know if you guys were invited to RO hearing. It sounds like you had a formal discussion, but any color you can provide to help us understand the outcome for the CHMP decision? Thank you.

Jesper Høiland

David is going to take the first and I'm going to take the latter question. Thank you for the question, Ying Huang.

David Snow

Ying, I think we are pleased with the decision that ESI made. That was an independent decision on their part, looking at our clinical profile and where they thought it was best for their downstream and their clients. I think we certainly were pleased with that. I think that when you look at the specialty market, and the prior authorization structure around it, it was not our expectation that we would see a lot of that. I think we're really pleased to get our placement to get it quickly. So I don't have a huge expectation out there, but clearly there are going to be some other plans and there have been that will put us into a preferred position and I expect to see a bit more of that going into 2018.

Jesper Høiland

And this is Jesper here speaking. In respect to EMEA, just to give you a little bit of historical background, we have had a chance to talk with the reporters [ph]. On the basis of that we're now reworking some of the statistics of what we have agreed to with them and then we are resubmitting as you may recall. We had stopped meeting that we had near 180 days. So the timeline looking forward is that we anticipate by mid December to hear back from the CHMP and beyond the agenda for that meeting. So that's when we anticipate to get news in that respect.

Ying Huang

Thank you.

Operator

Thank you. [Operator Instructions] Our next question will come from the line of Chris Shibutani with Cowen & Co. Please proceed.

Chris Shibutani

Yes. I apologize, if you had provided some of this information previously, but on Elacestrant, could you tell us in terms of incremental information that will get at San Antonio relative to ASCO and the timing by which you think we are going to get some results on the Phase 2 trial that you will begin in 2018?

Jesper Høiland

Thank you, Chris. I'll pass it over to Gary, who gladly will answer.

Gary Hattersley

Yes, thanks for the question, Chris. So, yes, we will be -- we have five presentations related to Elacestrant at the upcoming SABCS meeting. Two of those are clinical. Three of them are preclinical. As you may recall, during our last quarterly call, we talked about the update we provided at ASCO in June. At that point, the data cover was based upon a --- an April data cover. At that time, we had 15 patients who remained on treatment. Of -- at San Antonio, one of the two clinical update posters will be reporting some additional data from that ongoing U.S Phase 1 study. One of the other clinical process we will report, some further data from our European FES-PET imaging study. And as I mentioned there will be three additional preclinical posters.

Chris Shibutani

And then as far as the Phase 2, I think you’ve identified 200 patients. What would be a fair range of timeline for thinking how long that study would require to enroll?

Gary Hattersley

Yes, so we expect that study to start early in 2018 and at this point we have not provided guidance on when we expect enrollment to be completed.

Chris Shibutani

Okay. Well, look forward to that. Thank you.

Pepe Carmona

Thank you.

Gary Hattersley

Thanks, Chris.

Operator

Thank you. And our next question will come from the line of Eun Yang with Jefferies. Please proceed.

Eun Yang

Thank you. So Eli Lilly said they’re expecting expiry of Forteo in 2019 in the U.S., EU., and Japan. So I want to ask you with the potential generic entry, how are you guys preparing to compete in the marketplace. And my second question is now that TYMLOS is generating revenue, do you -- can you give us some guidance on when do you expect Radius to be breakeven financially? Thank you.

Jesper Høiland

I think that's a good question for Pepe. Thanks.

David Snow

Yes. I will throw in on the biosimilars real quick and status with the Eli Lilly. We obviously have been following what's been going on with [indiscernible] for quite a while. But you need to recognize that, well, this is an injectable market, it's a specialty market, there is lot of support which required working through specialty pharmacies and patients who are on therapy. So first it's not your traditional loss of exclusivity market. I think the second thing that -- I think Lilly was talking about sometime in '19 perhaps, so there is quite a bit of time in terms of which we have to establish the profile, the unique profile of TYMLOS, and where we are in terms of the market. And finally we have thought about this market quite deeply and if you look at the responsible pricing that we put out there, really I think that serves as well in terms of gaining both share and confidence with the part of patients and physicians that would set this up quite independently from anything that might happen with [indiscernible]. So I think we feel really good about where we are regard to what happens to their exclusivity.

Jesper Høiland

And if I may add, we think that it will not be interchangeable and as a consequence of that I think the market that you should look for if you want to mimic what happens is really the growth hormone market where a number of different players including biosimilars and if you look at that market they have had very little chance to penetrate the market. So overall, what we are doing is we're focusing our self of becoming market leader and keep focusing on that and then we will take it from there when they comes to the market and in respect to the financing, Pepe?

Pepe Carmona

Yes. So, the -- in the last offering we were able to finance several programs that we have been discussing today. So we have financed a customer batch program some lifecycle management for TYMLOS like the male study and the Elacestrant Phase 2 program which they are -- potentially a pivotal study as well as a RAD140 1a study. So we have basically -- our pipeline is fully funded. As we see TYMLOS to continue to have a strong penetration in the market, we have a view that we'd have a good line of sight for cash breakeven with our current management [ph].

Eun Yang

Can you give us a timing when you expect to be breakeven?

Pepe Carmona

No, we haven't provided a timeline. But I think if you see the cash burn, the cash in the bank, and put a straight line of where sales are going, I think that you can probably -- get roughly where things are going to breakeven.

Eun Yang

Thank you.

Operator

Thank you. Our next question will come from the line of Mara Goldstein with Cantor Fitzgerald. Please proceed.

Mara Goldstein

Hey, thank you very much for taking the question. Can you just talk a little bit about the patient experience for actually receiving TYMLOS from the time the physician makes decision to provide a prescription for TYMLOS for a patient and what that process is like and how long and sort of what the goals are in terms of getting drug into patient's hands?

Jesper Høiland

Thank you, Mara. David will respond to that and I will also give a little color at the end. So …

Mara Goldstein

Thank you.

David Snow

Thanks, Mara. This is really important topic for us, because we have seen previously that it can take some months for patients to be able to get themselves on to anabolic therapy. So what we have been really pleased with is our early results have been encouraging through our own call centre that the patients have been able to go through that transition process of the prescription, going to the reimbursement, getting information about whether the drug will be approved and then being able to access it. As you know, we got a network of specialty pharmacies, so that timeline will vary a bit that’s going through there, but we are working diligently to try and reduce the time in which getting that reimbursement decision process and one of the things that our payer team has worked really hard on is trying to align the actual approval and reimbursement, the utilization management to our label which will make it more simplified for physicians to actually get that medical approval. That's something we are going to continue work on. So instead of months, we would be saying, we are talking about weeks versus months in terms of being able to get that approval process.

Mara Goldstein

And do you think that by the time we reach sort of the end of the first of next year, you will be in that position?

David Snow

I will think that -- yes, I think that we’re -- we got our strong network of specialty pharmacies in place right now and as they gain experience and again as these plans and downstream plans get their listing in-place then it will become more routine and doctors office will be more comfortable with that process as well. So I would think that in the next two or three months we will start to get to a more positive equilibrium on what that should look like.

Mara Goldstein

Okay. And how much -- when the product was approved there was a discussion around funding of the foundations that help with patient assistance for co-pays and things like that and I think the decision at the time was not to do that until there was greater clarification on what the rules might change to be. And so, I'm curious as to what your thoughts are on that, particularly as we enter into a new period, a new essentially co-pay starting back at zero, if you will, for all those individuals for 2018?

Jesper Høiland

So, Mara, this is Jesper speaking. We now have our own patients assistance program. And basically its initial phase is now up and running and we of course anticipate that that will gain momentum. So just to say that we are doing whatever we can to make TYMLOS available to the women for treatment.

Mara Goldstein

Okay.

David Snow

The only thing I would add to that is, Mara, we often -- we are always looking at that to see where patients are and it's really important to take a note of you can see the mix changing a bit between the commercial side, the Med Part D Side, so we -- all we take that into consideration to make sure that we're trying to balance that and provide as much access for these patients as possible. So I think that program will evolve over time.

Mara Goldstein

All right. Thank you very much. I appreciate it.

Operator

Thank you. Our next question will come from [indiscernible] with Bloomberg Intelligence. Please proceed.

Unidentified Analyst

Hi, everyone. Thanks for taking my question and I had some technical difficulties earlier, so I apologize if it's been already answered. In the last quarter's call, you said it was a little bit too early to talk to us about the growth around TYMLOS. I just wonder if you could give us a little bit of detail about that now? Then on marketing effort, I was wondering if you could give me a little bit more detail on how sales reps are able to articulate the benefit of TYMLOS effectively, especially given that Forteo data is not in the label, maybe some sort of -- some sense of how often reps have to engage a prescriber to be able to connect them with MSL? And then, lastly, can you maybe give us some details on the -- on a DTC campaign, it's something on the cards, when are you able to do it and when do you plan on doing this? Thank you.

Jesper Høiland

So, we will start up with Pepe, then David, and then I will finish off with the DTC. So, Pepe, if you …?

Pepe Carmona

Yes. The gross net adjustment is not something that we’re providing in guidance of clarity right now. And the reason is very simple, it's going to be a bit volatile at the beginning [technical difficulty] like in any new [technical difficulty]. We expect to start providing guidance more in the second quarter of next year and that’s when we will start giving more guidance not only on gross net, but then in other metrics. What I can say is that we’ve a pricing that we took. We have been able to get access to formularies without having the need to make any major rebate strategy. So, so far it's just been a pretty successful market access play.

Jesper Høiland

David -- well its now to David.

David Snow

Yes. I think we have been really pleased with the initial response out of clinicians, those that are familiar with anabolics, some of the feedback that they gave us is they appreciate the early onset of the fact that they see the strong risk profile in terms of reducing fractures that they see across vertebral and non-vertebral. The fact that it's a shorter overall duration of treatment with TYMLOS, all of those have been really positive in feeding back to us. I think that as you might expect early on there has been over 15 years experience with Forteo, and so it does take multiple calls in terms of being able to work that through the process of reimbursement and understanding and the commitment obviously physicians want to have confidence when they prescribe that, that they will actually get their prescription filled. So I think there has been a component of this process over the first six months of getting confidence in terms of reimbursement first so that physicians don't have to go back multiple times to the patients. But as far as a clinical profile itself, we have got very positive responses of the intention. To treat information that we have got has been very encouraging to us. We have seen that going up week over week and I think we're in a really strong position in terms of where we're taking the brand.

Jesper Høiland

And if I should just comment on direct-to-consumer, you should not anticipate that we will be in television advertising sort of thing, because, of course, we remind ourselves that we are looking at a target audience of less than 50,000 women and therefore that is certainly not beneficial. Of course, we're doing our job at the net and wherever we can in order to engage and we feel that we have a very, very good interaction on Facebook homepage. Our Facebook site has really good interactions, more than 14,000 members, something to be very, very proud of. Its different dynamics that you're seeing here. If you’re thinking at it from a cost point of view, think of marketing cost where it is right now, it is also where we anticipate to see going forward. We do not anticipate further spendings and increases in this respect. And then, finally, we are very, very pleased with the takeoff in the performance that we’ve had in the marketplace MDRx of 16.6%, four months into the launch, I think is really, really good. And then, of course, one should also keep in mind that for direct-to-consumer there is a black box warning that we are having and that is also making it more complicated to do so. All in all, we think the marketing mix that we are providing and David's team is doing is really bringing us in the right place and we are very pleased with the performance that we are seeing for the first four months commercially.

Unidentified Analyst

Great. Thank you for the details.

Operator

Thank you. And I'm showing no further questions at this time. So now it's my pleasure to hand the conference back to Mr. Jesper Høiland, President and Chief Executive Officer, for closing comments or remarks. Sir?

Jesper Høiland

Thank you very much. Thank you for everyone to listening in. I hope that you find it interesting. We really look forward to see you next time around, I was about to say, but talk to you in three months from now. That's really going to be exciting, because we feel that we are off to a very good start and we will have a very good story also to tell next quarter. So thank you to everyone. Thanks for listening in.

Operator

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude the program. You may all disconnect. Everybody have a wonderful day.