Radius Health has been lukewarm about diving into the public markets over the past year. But since its inception in 2003, the Cambridge, MA-based biotech has been sure about one thing: it has no problem whatsoever raising cash from private financiers for its osteoporosis drug, as it proved once again on Thursday by lining up a new $43 million equity financing .
New investor F2 Biosciences III led the round, which included existing backers such as MPM Capital, Brookside Capital, and BB Biotech Ventures. F2 managing partner Morana Jovan-Embricos will get a board seat as part of the deal, as will former Brookside Capital director and current Intarcia Therapeutics chief business officer and head of corporate development Owen Hughes.
Prior to the financing, MPM Capital was by far Radius’ largest stockholder, with 38.8 percent of the company’s shares, according to regulatory filings posted in March.
The financing marks Radius’ fourth infusion of cash from private backers. Since it was formed ten years ago, Radius has bagged $240 million in total funding through four separate financing rounds.
Investors are clearly intrigued by the potential of Radius’ drug for osteoporosis, a degenerative bone condition that affects roughly 200 million women worldwide, according to the International Osteoporosis Foundation.
Osteoporosis is typically treated with bisphosphonates such as risedronate (Actonel, Warner Chilcott), ibandronate (Boniva, GlaxoSmithkline and Roche) and alendronate (Fosamax, Merck), many of which are already generic. Bisphosphonates work by preventing the bones from decaying further than they already have. But some patients who take them still suffer “infrequent but serious” events such as fractures, according to Radius, and about two million osteoporosis-related fractures occur in the U.S. every year.
Radius hopes to capitalize on this problem with BA058, a drug it acquired through a licensing deal with France’s Ipsen Pharma in 2005 (Ipsen still holds rights to sell BA058 in Japan).
BA058 is an anabolic drug designed to build up the bones rather than just stop them from weakening. The concept isn’t unheard of: Eli Lilly’s teriparatide (Forteo) is a drug requiring self-administered daily injections that works in a similar way, and Amgen (AMG-785) also has a potential competitor in the works. Radius, however, believes BA058 will prove the best of the bunch. It has been testing BA058 head-to-head with teriparatide in clinical trials as an injectable and also hopes to sell a transdermal patch that would free patients of the pain and inconvenience associated with injections. The payoff could be substantial. Teriparatide bought in $1.2 billion in sales in 2012.
“Osteoporosis is a large market,” said Radius CEO Michael Wyzga, the former CFO of Genzyme, in a statement. “Currently available treatments do not adequately serve the needs of patients, especially those at high risk of fracture.”
Radius will use its cash to move its BA058 clinical trials forward. The injectable compound is in a late-stage study Radius expects to wrap up in the fourth quarter of 2014. Radius completed enrollment for the 2,400-patient, 18-month study in March. The company also plans to unveil the data for the mid-stage study on its skin patch during the third quarter of 2013, according to regulatory filings.
While Radius has had little problem finding cash from venture firms, it has been more tepid about taking itself public. Radius merged with an unlisted shell company in 2011 so it could become an SEC-reporting entity and announced plans to go public and raise $86 million in February 2012. But after setting a range of $8.50 to $10.50 apiece for 6.5 million shares in October, Radius yanked the offering in November, citing “market conditions and volatility” and plans to raise cash in another way—a plan that came to fruition on Thursday.
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