Radius Health (NASDAQ:RDUS) Q4 2017 Earnings Conference Call March 1, 2018 4:30 PM ET
Executives
Elhan Webb – IR
Jesper Høiland – President and CEO
Joe Kelly – SVP, Sales and Marketing
Gary Hattersley – CSO
Pepe Carmona – CFO
Analysts
Jessica Fye – JP Morgan
Matthew Harrison – Morgan Stanley
Ying Huang – Bank of America Merrill Lynch
Kevin Patel – Goldman Sachs
Greg Harrison – Citi
Operator
Good day, ladies and gentlemen and welcome to the Radius Health fourth quarter and full year 2017 earnings conference call. [Operator Instructions] As a reminder, this conference call is being recorded.
I would now like to turn the conference over to Elhan Webb, Head of Investor Relations. Ma’am, you may begin.
Elhan Webb
Thank you, Shannon. Good evening, and thank you all for joining us on the conference call and webcast for Radius’s fourth quarter and full year 2017 financial results and business update.
Joining me today are Jesper Høiland, President and Chief Executive Officer; Joe Kelly, our Senior VP of Sales and Marketing; Gary Hattersley, our Chief Scientific Officer; and Pepe Carmona, our Chief Financial Officer.
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 in our annual report on Form 10-K for the period ended December 31, 2017 and other reports filed with the Securities and Exchange Commission. Any forward-looking statements represent our views as of today, March 1, 2018, only.
A replay of this call will be available on the company’s website, 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 website. Today’s agenda is intended to provide you with a review of what we accomplished in 2017, and update on the TYMLOS launch, our fourth quarter and full year 2017 financials, and update on our development plans for our abaloparatide patch, elacestrant and upcoming corporate milestones. At the end of the call, the management team will be available to answer questions.
I’d like to now turn the call over to Jesper Høiland, Radius’s President and Chief Executive Officer. Jesper?
Jesper Høiland
Thank you, Elhan. Welcome everybody and thank you for joining us today. As many of you may already know, we brought on Elhan Webb as our new Head of Investor Relationships and External Communications at the beginning of this year. She comes to us with a considerable global experience, working with both the sell side and buy side analysts as well as her experience as an investment portfolio manager. We are very happy to have Elhan on board.
On slide number 5, you will see that Radius achieved a lot in the year of 2017. It has been a transformational year for Radius Health, becoming a fully integrated commercial biopharmaceutical company, committed to bone health and oncology through innovative therapies. A few of our most significant achievements were the FDA approval and subsequent the US commercialization of abaloparatide subcutaneously, named TYMLOS, a bone building agent for the treatment of post-menopausal women with osteoporosis at high risk of fracture.
The initiation of our Phase 1 clinical trial for RAD140, a SARM for the potential treatment of hormone receptor positive breast cancer and the FDA fast track designation granted for elacestrant, an oral investigational search for the treatment of women in metastatic breast cancer. Further, we ended the year with 430 million in cash and the balance sheet strength to support our future growth and plans. We have also built a strong commercial organization to establish TYMLOS leadership.
Finally, our successes will not have been possible without the passion and dedication of our talented employees and of course the strong support of our investors and I want to take this opportunity to thank all of you for your commitment and support. With our new management team in place, we will continue to build on the momentum with several key initiatives underway to accelerate the advancement of our pipeline, establish a strong foundation to maximize our commercial potential and to continue to build shareholder value.
Slide number 6. As you can see, we are well on the way to successfully penetrating the osteoporosis anabolic segment to become the number one leader in the market. Our intention here is to expand further geographically by partnering outside of the US, while we focus our commercial efforts in the US market. We are actively working on expanding and differentiating the TYMLOS label so that we can reach a leadership position in the osteoporosis market. We expect the TYMLOS patch to disrupt and significantly expand the anabolic osteoporosis market as well. Today, we’re announcing our path forward for the development of the abaloparatide-patch after the alignment meeting with FDA and our strategic partnership with 3M Company. Gary and I will discuss this more in detail later on in the presentation.
In oncology, Radius continued to gain a foothold in breast cancer through Elacestrant, a potential backbone hormone therapy. Our focus is to initiate a study in third-line therapy and engage in collaboration agreements for the developer in earlier lines of therapy. We will be focused on the commercialization in the US, while partnering outside of the US. Additionally, we will continue to fuel our breast cancer pipeline with RAD140. Today, we are also announcing that based on the feedback from FDA and EMA, we have decided to initiate the comparator Phase 2 trial potentially a pivotal study to support global registration. We believe Elacestrant is the leading SERD in the development and has the potential to maximize its value for the global clinical and regulatory pathway.
And here on slide number 7, you’re going to see that we recently announced our commercial leadership changes with the appointment of Joe Kelly as Senior Vice President of Sales and Marketing and the promotion of Amanda Mott to Senior Vice President of Market Access. Those two will drive the execution of our sales and marketing strategy to best position TYMLOS as the market leader.
Joe has over 20 years of experience in sales and marketing in the US, a proven track record in growing billion dollar businesses and successfully launched several products that achieved market leadership. With more than 25 years of industry experience in the US, Amanda has demonstrated her tremendous knowledge of the payer landscape and expertise in setting and executing on our market access strategy. She has managed several portfolios, including pharmaceutical companies and achieved number one market access positions in the US. We hope, we will have the opportunity to introduce both of them personally to you in the near future.
I will now turn over the call to Joe Kelly to give you a commercial update. Joe?
Joe Kelly
Thank you, Jesper. And I’m pleased to provide the full year 2017 TYMLOS performance update, covering the brand in its ninth month of market availability. Our commercial teams remain focused on achieving anabolic market share leadership and throughout the launch process, we kept a strong focus on key opinion leaders and top prescribers in the osteoporosis space where we have gained most of our market share to date.
On slide 9, the response to TYMLOS from physicians, payers and patients has been very positive. Since launching TYMLOS in May of 2017, we’ve been collecting feedback from anabolic prescribers to gauge their perceptions of the product as compared to other treatment options. As part of our customer surveys, which tracks awareness, trial and usage of TYMLOS amongst targeted physicians, we’ve learned that current prescribers highlight key attributes of the product, which they perceive as being meaningful and differentiated from other available therapies. These include rapid onset of action and convenience for patients due to carry and storage.
On the next slide, I’m also pleased to share that we continue to see growth in managed market access across all segments as coverage increased to 259 million total covered lives. Since the launch of TYMLOS, we see a shifting of the anabolic patient mix towards commercial where TYMLOS coverage in nine months exceeds Forteo’s after 15 years on the market. For Medicare Part D, products approved after the second quarter are not part of the standard Part D bidding process and require off cycle reviews. We are pleased to report that TYMLOS is already covered for 41% of lives through these off cycle reviews due to its clinical profile combined with savings for patients and this includes coverage on United Healthcare, the nation’s largest Medicare Part D insurance plan. We are actively working with our managed care customers on Part D coverage in both off cycle reviews and the 2019 standard bidding process. We look forward to sharing more wins once contracts are finalized.
On slide 11, in addition to the exclusive win at ESI that went into effect January 1, TYMLOS is now the preferred anabolic agent on Aetna, Prime and Healthcare Services Corporation also known as HCSC, each having TYMLOS listed as their preferred anabolic for new patients also as of January 1 of this year. Because of these decisions, TYMLOS is now preferred for approximately 30% of the total anabolic volume in commercial. Performance wise, we are capturing patients with the ESI book a business in alignment with expectations and seen growth in the non-ESI and Medicare Part D plans. For 2018, we’ll continue to be focused on market share growth across all segments of business.
On the next slide, our top TYMLOS prescribers are coming from our most important customers in the top 200 and tier 1 segments, which make up about 7000 providers. With our strong focus on consistently calling on the highest potential health care providers in osteoporosis, results have been that 88% of TYMLOS business to date is coming from this important tier. We’ve also built out our promotional speakers’ bureau from 50 key opinion leaders to over 70 who have local, regional and national influence within the osteoporosis space.
Slide 13 shows that prior to the second quarter of 2017, the anabolic class has been in decline for five years. What we see now is quarterly volume growth from 3% to 6% over the last three individual quarters. With our efforts across the commercial team and promoting TYMLOS, we are playing a significant part in the growth of the anabolic segment. Also important is when we look across the TYMLOS prescribers, we’ve found new or returning writers account for 12% of total TYMLOS volume today. Since we are in the early stages of launch, it’s too soon to project market and new prescriber growth, but we do see this as encouraging signs of market potential.
On slide 14, we’re also seeing an acceleration in our ability to acquire new patients as reflected by our NBRx trend, which has more than doubled since the beginning of November of last year. With NBRx being a lead indicator, we expect to see continued anabolic share growth as we improve coverage and get more time with healthcare providers who are active in treating their patients with osteoporosis. In summary, our number one priority is to continue executing the launch of TYMLOS in the US and to establish Radius as the market leader in the anabolic osteoporosis space. We will continue our focus on strong execution by the commercial team and drive TYMLOS market share growth where we have formulary coverage with key commercial and Part D payers. We believe successful in these efforts will drive sustainable growth for the organization, which in turn is beneficial for shareholders and of course the patients we serve.
So, thank you. Now, I would like to turn over the call to Pepe Carmona to go over the fourth quarter and 2017 financials.
Pepe Carmona
Thank you, Joe. This is our second quarter full quarter reporting TYMLOS sales. The three months ended December 31, 2017, Radius reported net sales of $7.7 million dollars and a loss of $71 million or $1.59 per share as compared to a net loss of $53 million or $1.22 per share for the three months ended December 31, 2016. The $7.7 million sales figure represents three months of shipments discounted by gross to net adjustments. Our revenue recognition policy is in line with US GAAP and it is described in our Form 10-K
On the right side of the slide, we show the figures on non-US 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-US GAAP basis for the same period reported a net loss of $61 million or $1.38 per share as compared to a net loss of $45 million or $1.05 per share for the three months ended December 31, 2016.
I would like to highlight three points. First, our gross margin was reported at 92%, which includes 5% of royalties. Second, the slight decline in RD expenses versus Q4 of 2016 is driven by the reduction of the abaloparatide SC study expenses. Last, the SGA increase is driven by the ramp up in support of TYMLOS commercialization and some back office support functions. We’re now a fully staffed commercial company with over 200 sales reps working in the field and approximately 20 MSAs, all working to support TYMLOS. As we have said to you before, we’re allocating resources in accordance with our strategy, which is to drive TYMLOS growth and continue advancing our pipeline.
Turning to slide 17, we show our cash, cash equivalents and marketable securities balance as of December 31, 2017, which was $430 million. In the fourth quarter, we reduced our cash balance by $38 million. Most of the uses of cash was for the TYMLOS commercialization and RD external expenses related to the ramp-up of the products in our pipeline. We have cash inflows from TYMLOS revenues and from the Teijin deal, from which we recognized the license revenues in Q3 2017, but the actual cash was collected this quarter. Finally, I would like to leave you with a thought that at the end of 2017, Radius is in a strong financial position. We have sufficient capital to fund our key development plans, US commercial and other operational activities.
Moving to slide 18, let me quickly show you how we transformed the company throughout the quarters in 2017. You can see that in Q1, we hired most of the commercial organization, which had a full quarter impact into Q2. Then in Q2 of 2017, we launched TYMLOS and started to invest in promotional material, which was fully ramped up by Q3. Then in Q3 of 2017, we started buying material and pay our CRO to prepare the elacestrant phase 2 study. And finally, in Q4, we initiated investments to prepare the male OP study and had some one-off legal IP and swing item costs. We have a fully staffed organization, so you can see that our personnel costs are relatively stable in the last two quarters of the year. I look forward to your questions at the end of the call.
With that, I will pass the call to Gary for the update on the clinical pipeline.
Gary Hattersley
Thank you, Pepe. As shown on slide 20, we are continuing to support both lifecycle management for TYMLOS and our oncology programs for elacestrant and RAD140. For TYMLOS, as we’ve previously guided, we continue to expect a CHMP opinion on our MAA submission in the first half of 2018. We are initiating a male osteoporosis bridging study in the first quarter of 2018, which will be a randomized double-blind placebo-controlled study that would enroll approximately 225 men with osteoporosis.
The primary endpoint will be change in lumbar spine BMD at 12 months and pending positive outcome from this study, this data would be the basis for a supplemental NDA submission to seek an expanded TYMLOS label. We are also initiating a short term [indiscernible] clinical study in the first half of 2018 and believe this study will provide important information to enhance our understanding of the early anabolic effects of TYMLOS and the relative contribution of bone remodeling and modeling to its anabolic bone building activity. And today, we will provide a significant update on the development of the abaloparatide patch, following alignment with the FDA and completion of a collaboration and supply agreement with 3M.
But first some updates on the clinical development plan for elacestrant. At the recent San Antonio Breast Cancer Symposium in December, we provided a significant update on our ongoing Phase 1 study with elacestrant. In this study, which enrolled a heavily pretreated patient population, we reported a 27% ORR, a 47% CBR and a 5.4 month PFS. Importantly, responses we’re seeing patients to the previously received fulvestrant, CDK4/6 inhibitors and in patients with ESR1 mutations. Elacestrant was generally well tolerated with the most common adverse events of low grade nausea, dyspepsia and vomiting. We believe this data continues to be strongly supportive of the advancement of elacestrant to potentially pivotal phase 2 study.
Before providing details of this study, it’s important to provide some further context for our data as shown on slide 22. When we look at response rates to hormonal agents in the late line setting, for example with Fulvestrant in the BELLE-3 study, which represents a third line patient population, it was a 2.1% response rate and even in a second line population, in studies like PALOMA-3 and SOFEA, the response rate was less than 10%.
Similarly, for PFS, as shown on slide 23, Fulvestrant in the third line setting achieved a 1.8 months PFS and in the second line population, the PFS was less than five months. So based on our five Phase 1 updates at San Antonio in December, we remain very encouraged by the potential for elacestrant.
As is typical in clinical development programs, we have recently had further engagement with the FDA around potential pathways to registration and while a single arm study together with a confirmatory study remains an option, our strategy has been to have a pathway that supports both global approval. So we instead intend to conduct a randomized comparator controlled study. This is a well-established part that could support registration for elacestrant as a third line monotherapy. We’ve also engaged the EMA and received feedback for the comparator study may also support EU registration.
This study would enroll approximately 300 patients with estrogen-receptor-positive, HER2 negative advanced for metastatic breast cancer that will be randomized to receive either elacestrant or investigator’s choice to form with PFS as the primary endpoint. We will provide more details on the Phase 2 study when it’s initiated, which we expect to occur in the second half of 2018. Based on the emerging clinical and preclinical profile for elacestrant, we see significant opportunities not only in the third line setting, but also in earlier lines of therapy, either as a monotherapy or in combination with other targeted use, a path we intend to pursue through strategic collaboration agreements.
At this point, I’d like to switch focus and provide an update on the abaloparatide-patch. We’re pleased to report significant progress with our short wear time patch program, which is a key component to extended TYMLOS franchise, which could provide an alternative to self-injection and the potential to enhance patient convenience. Our strategy is to bridge the patch to our proved TYMLOS products based on the BMD study. This is an established pathway to registration in osteoporosis and one that provides important pharmacodynamics, long-term safety and patient experience data for the patch. It’s also worth noting that the time line to NDA submission is similar for either a BMD or PK bioequivalent strategy. We’ve aligned with the FDA on the pathway to support bridging and we have also completed a collaboration to supply agreement with 3M and Jesper will provide more details on this agreement later during this call.
So in January, we met with the FDA to discuss the development pathway for the patch. Those agreements on a single, pivotal BMD non-inferiority study, which will be a two arm study with one to one randomization of patients to receive either abaloparatide subcu or the patch and the primary endpoint would be change in lumbar spine BMD at 12 months. Importantly, we have aligned on study power, sample size, and non-inferiority margin as well as on the supportive clinical and non-clinical studies required for NDA submission. We expect this pivotal study to initiate in mid-2019.
The non-inferiority margin is based on preserving 75% of the treatment effect of the active comparator based on the lower bound of the 95% confidence interval. So using our Phase 3 active dataset as an example, where the mean change in lumbar spine BMD at 12 months was 9% with a lower bound of 8.5% to preserve 75% of the subcu treatment effect, the BMD 95% confidence interval with a patch would need to be greater than 6.4% to achieve non-inferiority.
Our recent focus has been on the continued optimization of the patch to achieve comparability to subcu. As previously reported, our first prototype patch established the suitability and tolerability of this patch technology with over 36,000 individual patch applications made to over 250 patients, but due to the highly positive pharmacokinetic profile of this patch, BMD efficacy was suboptimal compared to subcu. Our second prototype patch introduced formulation technology, which was able to significantly enhance the pharmacokinetic profile with delayed Tmax, extended half-life and increased exposure. We have now completed optimization of the patch, which has been achieved through finalization of the formulation, process optimization, selection of dose and introduction of a new applicator.
As shown on slide 31, this optimized patch achieves the target profile by further increasing half-life and exposure relative to earlier prototype patches. And importantly, as shown in the summary of clinical data in the table now achieves the same exposure as subcu.
To evaluate the potential for this optimized patch to achieve BMD non-inferiority, we work with a third-party PKPD modeling and simulation company to develop an exposure response relationship model using our extensive Phase 3 active BMD and PK dataset. This approach established a clear relationship between BMD and exposure. So together with our optimized patch data, this allows an estimation of BMD gains and thereby enables an estimation of the probability to achieve non-inferiority.
Slide 33 shows the time course of predicted BMD gains at the lumbar spine for subcu in orange and for the optimized patch in green, with both mean and 95% confidence interval values shown. Also shown on the figure is the BMD non-inferiority bar at the 12-month time point. We believe this analysis predicts a high probability of success for the patch to achieve non-inferiority in a 12-month BMD study.
At this point, we are continuing to focus on commercial manufacturing scale-up activities for both the patch and the applicator together with the supportive clinical and non-clinical activities in preparation for the pivotal study and NDA. CMC preparation and manufacturing of clinical supplies are now key activities to support the initiation of the pivotal Phase 3 study, which we expect to occur in mid-2019 with study completion in 2020.
At this point, I’d like to pass the call over to Jesper to provide comments on the patch opportunity and the collaboration agreements.
Jesper Høiland
Thank you, Gary. I’m sure you can appreciate the excitement we at Radius for the development of the patch. We believe it has the potential to disrupt and grow the anabolic market. On slide 35, we like to share with you some of the qualitative research we have performed with patients, physicians and payers. We have received consistent responses that needle avoidance is a significant issue. This limits initiation and continuation of the anabolic therapy.
There’s a strong preference for pets versus an injection. Patients don’t just fear injections per se, they fear by the injections represented, which is a serious illness. Patients would be much more willing to use a non-injectable and anabolic treatment because they feel less sickness and they are willing to confront their condition rather than deny severity. Some physicians notably DCPs who don’t currently prescribe injectable anabolics indicated their willingness to prescribe a patch rather than referring the patients to specialists. They felt by providing the option of a patch versus an injection, they would be able to convince many of the high risk osteoporosis patients to start and stay on anabolic therapy and receive bone building benefits.
And on slide 36, you can see why we believe the abaloparatide patch, if approved, can change the treatment paradigm and expand the anabolic market significantly. We see a large opportunity to expand the treatment for osteoporosis patients with anabolic therapy, not only to the patients with prior fracture, but also to patients who are at high risk of fracture, all have failed, all become intolerant to other available osteoporosis therapies. For physicians, our analysis reveals that the current — only 17,000 physicians prescribing anabolics with the majority being specialists.
With the introduction of the patch, we will be able to capture high volume osteoporosis prescribers and substantially expand our prescriber base. As you can see on the right side of the slide, anabolics is not the major expenses for the payers. Based on feedback from payers, the patch would be a valuable as it has the potential to improve patient compliance, outcomes and defray practice costs. Patch provides an opportunity to bring innovation and to be appropriately valued in the market. The osteoporosis market is valued at almost $3 billion.
We are currently very excited to announce that we have recently entered into the worldwide partnership agreement with 3M for the exclusive manufacturing and supply of the abaloparatide patches and the key terms for the agreement are shown here on slide 37. In collaboration, we will cover certain capital expenditures ensured by 3M to set up the commercial manufacturing facility. After launch, 3M will supply us with coated patches at cost plus basis in a tiered pricing structure and will be entitled to a mid to low single digit royalty on worldwide net sales of the abaloparatide patch.
So, to conclude, we are extremely excited to be moving forward with the development of our abaloparatide patch, having achieved an alignment with the regulatory path with FDA and collaboration agreement with 3M, the applied science leading innovator. The abaloparatide patch, if approved, has the potential to provide benefits of bone building therapy to many more osteoporosis patients. We see the patch as an important value driver for Radius, expanding the anabolic market and extending the abaloparatide franchise potentially up to 2037.
As you can see on slide 40, we anticipate many inflection points that will significantly impact Radius going forward. So we expect 2018 to be very exciting for Radius with TYMLOS progressing towards market leadership and further advancing our pipeline.
I would like to thank you all for your interest and support in Radius Health and I will like to ask that we open for calls now.
Question-And-Answer Session
Operator
[Operator Instructions] Our first question comes from Jessica Fye with JP Morgan.
Jessica Fye
I wanted to ask a couple about the elacestrant study. Specifically, can you help us think about what you expect the mix of dealer’s choice and the current therapies to be in that trial? I’m thinking of patients seen in Aromatase inhibitor early on, potentially a third and the second line, what do you expect them to be randomized to in the control arm of your study? And in addition, I think you mentioned an interim look in that one. Can you talk about when you project that might occur from a timing standpoint or what number of patients or progression of events would be triggered — would trigger that interim?
Jesper Høiland
Thank you, Jessica. I will have Gary to answer.
Gary Hattersley
At this point, we’re not providing guidance on the details of the study. That’s just something that we will do once the study is initiated in the second half of this year. But certainly when we look at the types of hormonal agents that are used in the late line setting, there are relatively small number of options and of course as I think we tried to highlight with some of the data here and at San Antonio, when we look at the response rates and the PFS for those hormonal agents in a late line setting, I think we have a very good handle on how they perform and I think it makes us very encouraged that elacestrant really has the potential to perform very well against comparator, but again, we’ll provide more details when the study is initiated. We have guided that we are intending to perform an interim analysis. At this point, we’re not providing any further detail around when that information may be available.
Jessica Fye
And maybe just following up on that, is there a call in your Phase 1 that patients had seen a number of prior therapies, including multiple different undercurrent therapies, but should we expect the idea that these patients may have already seen multiple undercurrent therapies to pose any enrollment challenges if an investigator might say, I’d love for you to enter China, but not sure you should be trying another product that you might have already failed on for example.
Gary Hattersley
That’s a very good question. We know in this late line setting, as you described, many of these patients will have progressed through several hormonal therapies earlier in treatments. It’s not uncommon for hormonal agents to be reintroduced in a late line. Obviously, these patients have relatively few treatment options. Certainly, I think when we think about how elacestrant can perform in this late line setting or how we’ve seen it perform in our ongoing phase 1 study, again, against patients that have previously received these endocrine agents, I think we feel very encouraged by Elacestrant’s potential.
Jessica Fye
And maybe just last one on the patch study. Can you talk about your assumptions for enrolment? I just want to make sure I understand, as you’re starting the study in mid-19 and expect to see data on a 12-month endpoint in 2020. Is it fair to imply you expect to get 500 patients enrolled in six months?
Gary Hattersley
Obviously, we’re not providing specific guidance around enrolment. Certainly, Radius has a long history of conducting many BMD studies through the course of development for abaloparatide. So, I think we have a very good handle on what it would take to enroll these patients, how many sites that we would expect to be able to enroll these patients quickly. We certainly think with the study design in which patients are going to receive either the subcutaneous injection or the abaloparatide patch that this could be quite a — study of patients may be enthusiastic about taking part in.
Jessica Fye
Forgive me, but just one more on the patch, can you just talk a little bit more about how you got comfortable or convinced that the BMD effect is really AUC driven and not affected by the shape of the curve, now that it looks like you’re very close on AUC but have moved away on Tmax and Tmax.
Gary Hattersley
Yeah. So the Tmax is the same — within the target for subcutaneous injection, but it’s really heavily driven by our experience with our active Phase 3 dataset. That is a very rich dataset in which we have several thousand PK data points as well as we have BMD values from a large number of patients across multiple time points. That’s really been a data set that’s allowed us to construct this exposure response model to be able to look at multiple PK parameters and I think our analysis, where we inputs the transdermal patch data into that model gives us a very high degree of confidence. The patch we have right now is optimized patch, has the profile that it needs to be able to achieve the BMD endpoints and to be successful in a non-inferiority BMD study.
Operator
Our next question comes from Matthew Harrison with Morgan Stanley.
Matthew Harrison
I think maybe two from me. So first on the SERD. Can you just talk about, when you think about registration timelines in the US and the EU, I think we focused a little bit less on the EU. How this strategy will accelerate your timeline in the EU and how quickly if you can use the study, you might be able to get registered in the EU as well?
Gary Hattersley
Yeah. I think that’s an important part of our strategy is to, we see elacestrant as having important global value and so this comparator study, we believe, could be sufficient to support registration, both in the US and EU. So we believe that’s actually one of the potential values for the study. Of course comparing to hormonal comparator as well, I think we’ll provide some very compelling information to understand the potential benefits of elacestrant.
Jesper Høiland
Matthew, this is Jesper speaking. Just to add on to it, when we discussed with potential partners, we’ve got the insight that they sincerely wanted us to go this way for us to create a partnership so that we took into consideration and when we learned back from EMA, we decided that this was the best way forward to create maximum value.
Matthew Harrison
And then second, you mentioned some non-clinical supportive studies that you need to run with the patch, maybe, could you just be a little bit more specific about what those studies are? And then I guess from a manufacturing standpoint, what sort of data and stability you need to provide to the FDA.
Gary Hattersley
Yeah. Absolutely. So the supportive clinical and clinical study has really fallen to category of being sort of routine part of drug development. So, there are some additional preclinical dermal tolerance studies that we expect to conduct. Certainly, very routine studies, very clear guidance on what is expected for those studies. They’re absolutely not rate limiting for our development path.
I’m sorry, you had a second part to the question. Oh, stability. So we expect, as is typical to have to have 12 months of stability from our commercial line to be available at the time of NDA submission.
Matthew Harrison
And then sorry one other follow-up that I just wanted to ask, can you just detail in terms of PK data that you have on slide 31, how many patients – what was the sample size that you had to generate the AUC exposure, can you have any arrow bars on here, how variable was the response and how confident do you feel in patch to patch variability.
Gary Hattersley
That’s actually a great and actually a very important question. So the dataset you’re looking at on that slide is derived from 20 patients with our optimized patch. And so from a PK perspective, that’s actually quite a rich dataset that does actually give us a very good handle on what the variability of the patch is and I think we’re very encouraged to see that that patch variability is in line with what we see with subcutaneous injection and that’s even a prepay experience with our prototypes as well. And also that, when we’ve conducted this exposure response analysis, putting this transdermal PK data into that model, one of the things that it looks at is also the inherent variability. So when you see the estimated mean and 95% confidence intervals for the BMD change on I think slide 32, you’re actually seeing the integrated effects of variability in that model as well again, which I think gives us high degree of confidence that we have a patch that is suitable to go into the pivotal study with a great probability of success.
Operator
Our next question comes from Ying Huang with Bank of America Merrill Lynch.
Ying Huang
I have also a couple of quick ones on the patch. First, can you tell us a little bit more about the 20 patient study? Are they all on the patch therefore, you’re not comparing directly to any patients on the subcu in the same trial? And secondly besides that AUC, what other PK or PD parameters are you collecting, so that you feel confident about the bioequivalent between the subcu and the patch formulation? Lastly, how confident are you that you will be able to enroll 500 patients in a relatively short period of time so that you can stick to your timeline of 2020 NDA preparation?
Gary Hattersley
Let me take the last question first. As I think I mentioned a couple of minutes ago, Radius does have a lot of experience in conducting osteoporosis studies, some based on BMD endpoints, some based on fracture end points. So this is a study population that we understand well. We’ve conducted many studies. So, I think we have a very good handle on the enrolment times, the number of sites that we will need, the kinds of sites and the kinds of geographies that we would want to go into. So we have confidence in our ability to conduct this study as quickly as we reasonably can.
Your other question was really related to how much PK data have we collected. Really over the last almost 18 months, we’ve conducted many PK clinical Phase 1 PK studies with multiple iterations and multiple variations with the transdermal patch. There have been many variables that have been assessed and so we’ve actually had patients that have cycled through several different patch prototypes. We have included periodically subcu injection arms within those studies. So we continue to capture subcu data as part of that. And so when we look at all of that information, I think we’re really able to get a good handle on the profile of subcu of course as well as the profile of the optimized patch and it’s really let us to a point where we are actually extremely comfortable with the patch that we have, its ability to deliver the profile that we needed to and again it’s a patch that we’re very, very enthusiastic about seeing moving into a pivotal study.
Ying Huang
Just a quick follow-up. So you had more than 20 patients on this current patch formulation in the Phase 1 trials?
Gary Hattersley
The dataset you are seeing is derived from 20 patients. There have been a lot more different variations, a number of different iterations of this patch that have been evaluated over the course of the last 18 months.
Operator
[Operator Instructions] Our next question comes from Salveen Richter with Goldman Sachs.
Kevin Patel
This is Kevin Patel on for Salveen. First question is for the elacestrant compare and controlled study. How long will it take to data? And then the second one is for TYMLOS, you have exclusive status to Express Scripts, so what percentage of Express Scripts patients are you tracking over the quarter and how are you thinking about compliance?
Gary Hattersley
I will take the elacestrant questions and I think maybe Joe will take the other one. So, at this point, we’re actually not guiding in terms of how long it will take us to enroll the elacestrant study. We’re guiding to when the study would be initiated, which is the first half of — I’m sorry, second half of 2018. Obviously, it’s a high priority for us, we’re looking to execute this study as quickly as possible and to enroll as quickly as reasonably possible.
Joe Kelly
So when you look at what ESI represents from a commercial standpoint in the anabolic space, it’s about 18%. Looking at total number of lives, there’s about 57 million, of which 24 million, we do have preferred status with TYMLOS and right now, we are meeting expectations as far as what we’ve set as a goal to be at from a market share standpoint and also the goal that we agreed upon with Express Scripts, but we’ll be sure to update you on the next call that we have together, it’s a bit early in the game as far as accurate data at the point, but I can say that both sides are satisfied with where we are right now.
Kevin Patel
Just one follow-up, based off of the trends you’re seeing now, do you still expect to provide guidance on the 1Q call?
Pepe Carmona
This is Pepe speaking. So the expectation is that at the end of — when we present the Q1 earnings call, we will give guidance in certain KPI aspects of the business for full year 2018.
Gary Hattersley
So the answer is yes.
Operator
And our next question comes from Robyn Karnauskas with Citi.
Greg Harrison
This is Greg Harrison on for Robyn. Thanks for taking my question. With regards to the TYMLOS price increase, what proportion of that increase do you expect to realize and what is your strategy with respect to balancing the price that reflects the value of the drug with also having — keeping the lower price in Forteo and trying to use that to grow the market to where it had been previously.
Pepe Carmona
This is Pepe speaking. So in terms of what portion of 5.9% goes to net, we haven’t guided specifically on that, but we do expect a large portion of it to be reflected in net sales. As always when you have price increases like this and you have contracts with multiple players, you have administration fees, a few things that kick in. So it’s going to be a portion of that, but it’s the larger majority of it. From a pricing strategy perspective, we believe that we will continue to take price increases that are responsible to the market. We need to recall we’re obviously cost — this cost increase is from salaries to FDA fees to other things that we will continue to ensure that those are recovered of the business. We are still about far distance from our competitor on reporting to the market. So we don’t see this as diminishing the potential of TYMLOS to continue penetrating and becoming market leader.
Jesper Høiland
So Greg, if I may add to it, just because price is of my sincere interest and the price differentiation that you have seen is of course also, you need to think about the potential entry of a biosimilar by end of 2019. So we have put ourselves as a point where we feel we can very much compete with whoever comes into the space at that point of time, because the typical way forward for the biosimilars is of course being to take a 20% to 30% price decrease of the whack and thereby going in and within 180 days skim the market if you will.
We are taking a very different price approach because if that’s what the biosimilars are going to do, then they will still be in the 30,000 when we are in the early 20,000. So as far as I’m concerned, we are in a very, very strong position going forward with the price point that we have provided on here. So all in all, we will navigate in the space, we have got the market access that we wanted, that’s also a very important component of course within 9 months to have 259 million lives to be covered I think speaks for itself and that’s of course a part of the pricing strategy that we set up with in the very initial phase.
Greg Harrison
Just one more if I can on the patch trial. So if you were to hit the non-inferiority margin statistically, but still being numerically below subcutaneous, would that be a problem clinically for doctors and for marketing to patients?
Jesper Høiland
We are debating it. We should answer it.
Pepe Carmona
At the end of the day, the bridging studies that was agreed with the FDA for BMD is if we keep that number within that range, so above that threshold, we will have an approved product and obviously it will apply the TYMLOS label to it. Competitive wise, I think those are different questions. I think that’s — we will have a better understanding of how we’re going to commercialize it later on.
Jesper Høiland
And just think about the timelines that we’ve been up with the patch is very indicative of what — should be indicative of what will be the thinking for the potential biosimilars entering into the market because we will, with the price point that we have come up with, have strongly indicated that we’re going to change the name of the game coming out with a patch. And we’re very, very encouraged with the signature of 3M, which happened earlier this week. So all in all, we feel that we are on the right way forward for Radius Health.
Operator
I’m showing no further questions at this time. I’d like to turn the call back over to Jesper Høiland for closing remarks.
Jesper Høiland
So thank you very much for your interest in Radius Health. We came out of 2017 with a strong performance. We are continuing with it as far as we are concerned, both with TYMLOS, but certainly also with our way forward for our pipeline. With the signature from 3M and us, we have secured that we have a very strong path going forward to do the Phase 3 clinical trials and we look really forward to report more as the year progresses. So thank you to all of you for your interest and look forward to see you all out there in the front line.
Operator
Ladies and gentlemen, this concludes today’s conference. Thanks for your participation. Have a wonderful day.
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