[Corrected 10/24, 9:00 am. See below.] Radius Health, which raised a stunning $91 million in venture funding last December, has set the price range for its planned IPO, aiming to cash in on both the strong IPO market for Boston-area biotechs and the world’s aging population. The Cambridge, MA-based company , in the midst of a late-stage trial for an osteoporosis drug, says it plans to offer 6.5 million shares between $8.50 and $10.50 a share, traded on the Nasdaq under the symbol RDUS. The IPO would raise almost $62 million at the mid-range price.
Radius first announced its plans for an IPO in February, with the goal of raising $86 million. The IPO will be underwritten by UBS Investment Bank and Leerink Swann, and co-managed by Cowen and Company and Rodman & Renshaw.
Radius is one of the more promising startups operating in the Massachusetts biotech world right now, having raised almost $200 million in funding since it was founded in 2003. The company has been developing BA058, an injectable drug for osteoporosis, under Michael S. Wyzga, the former Genzyme CFO who was named CEO last December. Unlike most of the treatments on the market for this degenerative bone disease, BA058 builds up bone rather than prevents it from decaying. Radius began a Phase 3 study of the drug in April that is intended to show that BA058 can prevent new vertebrae fractures better than a placebo and the company says it expects to report results in the first half of 2014. It is also developing a transdermal patch version of the drug in partnership with 3M (NYSE: MMM). [In an earlier version of this paragraph, the name of the drug was erroneously given as BA508.]
The startup is targeting a very rich market. Osteoporosis is most common in women over age 65, one of the fastest growing demographics in the U.S. and in Asia. Transparency Market Research issued a report in February estimating that the market for osteoporosis drugs in the U.S. alone will reach $11.4 billion in 2015 from $7.3 billion five years earlier, a compound annual growth rate of 9.2%.
Radius has yet to establish its business—in its S-1 filing announcing the IPO the company said it is not generating revenue and had a $24.4 million net loss in 2011. But if its fellow Boston biotechs are bellwethers, its offering could still do well. As Xconomy colleague Luke Timmerman reported in August, “the biotech IPO class of 2012 has made money for investors, while tech’s most glamorous up-and-comers have been stumbling…By my count, there have been nine biotech IPOs so far this year, compared with 12 in all of 2011.”
Three of those newbies are in the Boston area: Cambridge, MA based Verastem (NASDAQ: VSTM), which went public in January, raising $55 million; Merrimack Pharmaceuticals (NASDAQ: MACK), also in Cambridge, which raised $100 million in its March IPO, and Tesaro (NASDAQ: TSRO) in Waltham, MA, with an $81 million haul in June. Where are they now? Verastem went public at $10 a share and closed on Oct 22 at $7.99; Merrimack went from $7 to $6.65, and Tesaro is up slightly at $14.90 from a $13.50 initial price.
Not that shabby. As Luke said in another story in April, the Boston biotech market is most definitely showing signs of life.