Q4 2014 Earnings Call Transcript

Published: 10 Mar 2015

[Operator:]

Greetings and welcome to the Radius Health Fourth Quarter Financial Results Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Ms. Barbara Ryan, Investor Relations for Radius Health. Thank you. You may begin.

[Barbara Ryan:]

Thank you, Jessie and welcome and thank you to those of you joining on the line and on the webcast this morning for a review of Radius Health’s fourth quarter and full year 2014 financial and operating results. I am Barbara Ryan, Radius Health’s Investor Relations Officer. And with me this morning to discuss the result and update you on our progress are Robert Ward, President and Chief Executive Officer of Radius Health; Gary Hattersley, our Chief Scientific Officer and Nick Harvey, our Chief Financial Officer. Before we begin I would like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the risk factors section in our most recent quarterly report on Form 10-K filed with the Securities and Exchange Commission and our other reports filed with the SEC. Any forward-looking statements represent our views as of today March 10, 2015 only. A replay of this call will be available on the company’s website, www.radiuspharm.com following this call. You can find the dial-in information for the replay in today’s press release as well as on the company’s website. I will now turn the call over to Robert Ward, President and Chief Executive Officer of Radius Health.

[Robert Ward:]

Thanks, Barbara and thank you to everyone who is joining us on our conference call and webcast this morning. 2014 was certainly an exciting year for Radius Health with the accomplishment of several transformational milestones. In June, we completed our IPO and that set the stage for the completion of our two successful follow-on offerings. In total these have raised net proceeds of over $260 million. This funding is critical for enabling Radius to deliver on our milestones in 2014 and positions us to execute on our goals for 2015 and beyond. I would like to take a moment and thank both our investors for their support and also our employees for working tirelessly to accomplish so much. Your efforts have made it possible for us to reach this point, and now in 2015 and 2016 we are focused on moving Radius Health from a development stage company to a commercial entity. In December 2014, we reported the positive top line results from our Phase 3 2,400 patient ACTIVE clinical trial for our investigational drug abaloparatide-subcu. Today, we are on-track to complete the first six months of the ACTIVExtend study and then prepare and submit our new drug application to the FDA and in Europe our MAA in the second half of this year. Subject to positive regulatory review we are anticipating our first commercial launch next year in 2016. To enable abaloparatide to be available to patients outside of the U.S. we intend enter into a global collaboration by the time of launch. Just last week the results from the ACTIVE Phase 3 clinical trial were reported in the late breaker session at the Endocrine Society Meeting. And I would like to turn now to Gary Hattersley our Chief Science Officer to share with us an update from ENDO and our response from that. Gary?

[Gary Hattersley:]

Thank you, Bob. Yes, on March 5, 2015 Dr. Paul Miller, the Medical Director of the Colorado Center for Bone Research presented the positive results of our Phase 3 ACTIVE clinical trial for the investigational drug abaloparatide subcu at a late breaker session at the ENDO Meeting in San Diego. This is the world’s largest meeting of endocrinologists. Dr. Miller was a leading investigator in the ACTIVE trial, and is internationally recognized as a leading authority on bone biology and the treatment of osteoporosis. One of the clinical findings Dr. Miller highlighted in his presentation was related to bone turnover markers. These biomarkers are often used to understand how a drug may stimulate either bone resorption or bone formation. In his presentation Dr. Miller showed the CTX levels, a marker of bone resorption increased to a greater extend in the Forteo treatment group as compared to the abaloparatide treatment group with a p value of less than 0.01. This difference in CTX between abaloparatide and Forteo treated patients widened over time from 46% at six months to 69% at 18 months. One potential interpretation of these results is that the greater BMD gain seen with abaloparatide may be the results of lower bone resorption, a concept that appears to be of particular interest to the physicians at the conference. Dr. Miller suggested that the lower rate of bone resorption for abaloparatide may be an important contributing factor to a more favorable bone building activity observed with abaloparatide. He reported the BMD responses for each of the groups in the trial and noted that as compared to placebo there was a significant vertebral fracture reduction for both the abaloparatide and Forteo groups as well as a significant in the 43% in non-vertebral fractures and a significant 45% reduction in clinical fractures observed in abaloparatide treated arm. Additionally Dr. Miller highlighted that abaloparatide demonstrated significantly less hypercalcemia as compared to Forteo in this trial. At ENDO we had the opportunity to speak to with a broad range of key opinion leaders who were encouraged by the positive feedback that we received in response to these data. This year we plan to present additional data at major bone metabolism conferences. I will be presenting at the Bank of America Small Midcap Conference in Boston on March 18th and I will look forward to updating you further at that time. I would now like to turn the call back to Bob.

[Robert Ward:]

Okay Gary. I’d like to update you now on our pipeline progress and review the highlights from this quarter. For abaloparatide we’re focused on completing the development activities necessary for our planned regulatory submissions later this year as well as completing the transdermal optimization necessary for initiating the next phase of human studies for abaloparatide transdermal. As we’ve previously discussed the patients for the abaloparatide subcu and placebo groups completed the 18 month ACTIVE Phase III trial. They’ve now continued into the ACTIVExtend in which they are receiving an approved alendronate therapy for osteoporosis management. We anticipate that the results from the first six months of the ACTIVExtend trial will be available in the second quarter of 2015. These results will be combined with the 18 month data from our Phase III ACTIVE clinical trial to obtain the 24 months of fracture data as requested by the Food and Drug Administration and the combined 24 month analysis will represent the basis for our regulatory submission. As I stated earlier we believe we’re on-track for submission of the NDA to the FDA, and also submission of the marketing authorization application or MAA in Europe in the second half of this year, with regulatory action on both the NDA and MAA that would lead to a commercial launch in 2016. Now as I mentioned we’re currently optimizing the transdermal patch to our primate studies and plan to initiate the next phase of human studies in the second half of this year. Now turning to our investigational drug RAD1901 which we’re developing at high doses of selective estrogen receptor degrader or SERD for the potential use in the treatment of metastatic breast cancer, as we discussed previously we are now screening patients for enrollment in our Phase 1 study multicenter, open-label, two-part dose escalation study of RAD1901, this is a U.S. study in postmenopausal women with advanced estrogen receptor positive HER2-negative metastatic breast cancer. The primary objective of the Phase I trial is to determine the recommended dose for a Phase 2 study and the study includes a preliminary evaluation of the potential anti-tumor effect of RAD1901. We expect to report progress on this study at ASCO in June and also to initiate an additional Phase 1 clinical trial in the EU in 2015. Yesterday we announced we concluded a favorable transaction with Esai and this has enabled us to acquire the rights for RAD1901 for Japan so that we now hold global development and commercialization right. We’re also very pleased to announce that on March 18th Dinesh Purandare will be joining Radius from Sanofi, where he was the Vice President and Project Head for Oncology. And Dinesh brings to us extensive experience in oncology across both development and commercialization and most importantly in breast cancer, he led the launch of Aromasin for Pharmacia. Now Dinesh represents a part of our commitment to accelerate and deepen our capabilities in oncology. Now Radius is also developing RAD1901 at lower doses as a SERM, for potential use in the treatment of vasomotor symptoms. You may recall we’ve previously reported in a Phase 2 proof-of-concept study, RAD1901 at lower doses demonstrated a reduction in both the frequency and severity of moderate and severe hot flashes. We intend to commence a Phase 2b clinical trial in vasomotor symptoms in the second half of 2015. Now as I mentioned in my earlier remarks Radius is now moving into an important new phase as we prepare for our first NDA and MAA submissions. In 2015 we’re seeking to engage a global commercial collaborator and subject to of course any regulatory approval, we're planning for our first commercial launch in 2016. We're taking all of the steps necessary to position Radius for success on these key initiatives. To that end in November 3, 2014 we announced the appointment of Dr. Will Dere to our Board of Directors. Dr. Dere was formally the Head of Global Development at Amgen where he lead the development program of Prolia and earlier in his career Dr. Dere led the development of Avista and Forteo at Eli Lilly. Will's experience is critical as we continue to advance the development of our lead investigational drug candidate abaloparatide as well as advancing RAD1901. I'm also delighted to announce again that in March 2nd we announced the appointment of Tony Rosenberg to our Board of Directors. Tony is a 35 year veteran of the pharmaceutical industry, recently retired from Novartis where we led corporate M&A and licensing and was responsible for the portfolio transformation transactions that were announced recently by Novartis and viewed as landmark deals in the industry. Now what I like to do is turn the call over to you, Nick our Chief Financial Officer to discuss our fourth quarter and full year 2014 results as well as give an update on our balance sheet.

[Nick Harvey:]

Thank you Bob. Our cash, cash equivalents and marketable securities balance as of December 31, 2014 was $105.3 million, which does not include an additional $158.6 million net of underwriting discounts and offering expenses that Radius raised in a public offering of its common stock on January 28, 2015. We are now updating our guidance and our cash burn and expect that our cash, cash equivalents and marketable securities balance as of December 31, 2014, together with the proceeds from our recent stock offering will carry us into the fourth quarter of 2016 and through key milestones on the abaloparatide and 1901 programs that Bob will now highlight.

[Robert Ward:]

Thank you, Nick. Before we open the line for questions, I would like to just summarize our upcoming milestones. So we expect to complete the ACTIVExtend trail in the second quarter of 2015 and then we'll report the top line six months fracture data from ACTIVExtend as well as the analysis of the full 24 month fracture data for the combined ACTIVE and ACTIVExtend trails. We anticipate submitting an NDA in the U.S. and shortly thereafter an MAA in Europe for the investigational drug abaloparatide subcu in the second half of 2015. We're actively in discussions and anticipate engaging a commercial collaborator and subject to regulatory approval anticipate our first commercial sales next year in 2016. We are currently continuing the optimization of abaloparatide transdermal patch and we'll be initiating the next phase of human studies in the second half of 2015. For RAD1901 we plan to report our progress in the Phase I dose escalation study during ASCO meeting in June of this year and we expect to initiate the Phase I clinical trial in the EU in metastatic breast as well as a Phase 2b trail for low dose RAD1901 as a SERM for vasomotor symptoms in the second half of this year. We'll be presenting at several upcoming conferences. As Gary stated he'll be speaking at the Bank of America Merrill Lynch Small Mid Cap Conference here in Boston on March 18 and I'll be presenting at the Bank of America Merrill Lynch 2015 Healthcare Conference which will be held May 11, through the 14th in Las Vegas. Jessie we would now like to open up the line for questions from our audience. Thank you all.

[Operator:]

Absolutely at this time we'll be conducting the question-and-answer session. [Operator Instructions]. Our first question is coming from the line of Ying Wang [ph] with Bank of America Merrill Lynch. Please proceed with your question.

[Unidentified Analyst:]

Hi, everyone it's actually Catherine for Ying. Two questions, how aware do you think physicians are of abaloparatide right now? And what are you kind of planning to do over the next year to raise the awareness level? And then are you planning to conduct additional studies to evaluate why we're seeing the lower rate of resorption with abaloparatide versus Forteo? Thanks.

[Robert Ward:]

Well, thank you. Catherine, two terrific questions. If you think of the presentation at end of this past week it was the first time that the broader clinical scientific community had a chance to see and discuss the data in a clinical setting. So that level of scientific and clinical exchange is critical for awareness. As we move through this year I believe Gary mentioned we will have additional presentations at each of the major medical conferences where there is a focus on osteoporosis or bone metabolism. And as we continue into this early part of next year I think you will see that awareness around abaloparatide increases as the clinical data are digested and really discussed within the scientific community. Following ENDO, there were a number of groups who report on scientific meetings who highlighted the presentation and at the end of the meeting Cliff Rosen led a highlight of ENDO discussion where the abaloparatide trial was called out as an important clinical trial. Now we will of course be submitting the results for publication in a major medical journal and that publication we also view will be quite important as physicians and scientist evaluate our data. Now Gary, Catherine asked another question, part of its about ongoing clinical expansion because we will of course be doing some additional clinical trials to expand the label for abaloparatide but the question we will focus more in on as this highlight around differences in the anabolic window were discussed at ENDO scientifically will there be additional data that will become available, will we have to do additional trials, how will we help physicians and scientists better understand this observations that were reported at ENDO.

[Gary Hattersley:]

No, I think that’s a really good question and I think it really speaks to the mechanism of action of abaloparatide. So there were certainly some additional studies, I think will had a lot more information to our understanding of the mechanism of action. But it really comes back to the greater receptor confirmation selectivity that abaloparatide has relative to Forteo. So abaloparatide has a high affinity for an RG confirmation of the PTH1 receptor. This allows it to retain the bone anabolic drive that we see. But it has relatively a low affinity with PTH0 confirmation. This limits the amount of bone resorption stimulating activity calcium mobilization that’s seen with agents like Forteo. So it’s really that receptor selectivity that’s the molecular basis that provides this differential of widening of the anabolic window we see with abaloparatide.

[Unidentified Analyst:]

Great, just follow up on the submission for the publication, is there any broad range of when the publication maybe available.

[Robert Ward:]

Well we haven’t submitted yet. So at this moment in time it’s not really possible to have a timeline, because as you know what happens in peer review process is really an opportunity for experts in the field to weigh in and make comments or ask questions relating to data analysis. So I think at this point in time we are currently drafting the manuscript for submission and we will be happy to share with you feedback once we have the initial round of information from the journal suggesting that it’s on track for publication. Right now we haven’t submitted so we don’t have the info.

[Unidentified Analyst:]

Great, thank you guys.

[Operator:]

Thank you. Our next question is coming from the line of Eric Schmidt with Cowen & Company. Please proceed with your question.

[Eric Schmidt:]

Good morning, thanks for the update guys. Maybe first question is just on the ACTIVExtend portion of the abaloparatide Phase 3 trial. Is there anything you actually need to show in that remaining six months with all patients on alendronate or is it just essentially a formality?

[Robert Ward:]

Well, so the abaloparatide subcu in placebo arms, the patients finished the 18-month anabolic phase and then proceeded into the ACTIVExtend where both groups of patients are taking alendronate and of course the blind is maintained. So we are blinded at the patient level and the site level, until the completion of this first six month periods at which the trial would be unblinded at that point. So what happens are a couple of different things. There is some important key secondary endpoints, so vertebral fracture reduction at the end of the six months will be a regulatory endpoint. We will collect important information about BMD and patients safety and so the full 24 months of data would be reviewed by both the food and drug administration here and the European medicines agency in Europe. So as you said what are some of the things we would be looking for? Well in the PaTH trial which was which was a trial that Dennis Black was the lead author for in which patients were first treated with full length PTH and then followed into alendronate. In that trial, the group that was previously treated with the anabolic showed a greater BMD response than the group that went from placebo to bisphosphonate. So we’ll be looking to see whether we see that same pattern that the end of the abaloparatide treatment group do these patients show a different response when put on a bisphosphonate as compared to patients transitioning out of placebo. So we think this would be very important for physicians who right now are thinking about changes in osteoporosis. Historically, it would have been a market where the thought was to treat with [ph] bisphosphonates for life. Now that treatment paradigm is changing. More physicians or looking at this concept of build and maintain. How can I help my patients increased their BMD and then select an agent that allows them to maintain that BMD. And so our trial really is a build maintain design. So we think physicians will be very interested to see what happens in the bisphosphonate arm.

[Eric Schmidt:]

I guess for regulatory purposes, you would be looking at the entire 24 months of the study, not just the last six months. So abaloparatide obviously would start with a huge advantage over placebo in terms of the first 18 months?

[Robert Ward:]

Correct. So if you think of the analysis, so first there is the 18 months anabolic analysis. Then there is a six months bisphosphonate analysis and then from an umbrella perspective, it’s the question over the 24 months period, what’s been the difference from the patients treated during the entire 24 months period.

[Eric Schmidt:]

Thank you. Just switching to abaloparatide-TD, can you sort of map out or outline the path forward and discuss what might be required for regulatory approval?

[Robert Ward:]

Yes, so I’ll let Gary provide you with some of the details, but from a top line perspective, first step is to submit and successfully have approval for abaloparatide subcu, because our regulatory post the [ph] transdermal is to bridge to this approved product. So when we think about this concept for showing bio-equivalence, when you show bioequivalence to the approved product that’s an alternative form of delivery and successful demonstration of bioequivalence would mean that the line extension would carry the same label as the first approved product. And the demonstration of bioequivalence would be the core of that form of application. We may conduct a BMD study to allow physicians and patients greater experience with the patch. And we would of course in that scenario submit the BMD data as well and that would be either a 6 or 12 months study. But as we think about just specific trial design we would go and discuss with the regulatory agencies our proposals and solicit their feedback to make sure that the final design is one that met with acceptance at the regulators and we haven’t had that discussion yet. So right now, this is our plan we would go and actively engage with both FDA and EMEA to make sure that they agree with the way we’re thinking about development program. But Gary, could you just walk us through and remind everyone, what are the activities happening right now and what represent success in the primate studies that lays the ground work for doing that next phase of human studies in the latter half of this year?

[Gary Hattersley:]

Yeah, thanks Bob. So right now, we have ongoing the optimization of this transdermal patch with the goal of achieving a pharmacokinetic profile for the patch that’s equivalent to the subcutaneous injection. So that optimization activity is currently ongoing and our plan is to initiate clinical studies later this year, a Phase I clinical study later this year that will allow the pharmacokinetic profile of the transdermal patch to be compared to subcutaneous injections in humans.

[Eric Schmidt:]

And Gary, are you allowed to start the bioequivalence study in humans to bridge to transdermal patch study before approval or do you need to wait till approval even to begin that trial?

[Gary Hattersley:]

No, remember that we’ve already conducted a number of clinical trials with our original abaloparatide transdermal patch that consisted of a series of Phase I studies that explore a variety parameters of the patch, pharmacokinetic as well as tolerance and a proof of concept six month BMD study that was completed, that demonstrated statistically significant increases in BMD at both the spine and the total hip. So we have already had quite of a lot clinical development that’s gone on around our original transdermal patch and our plan will be to take this optimized transdermal patch back into the clinic later this year.

[Eric Schmidt:]

You can get sort of the FDA green light go ahead to start up a registrationally [ph] directed bioequivalent study with the new transdermal patch prior to getting full approval for abaloparatide type subcu. You don’t have to wait until the drug is approved in order to execute on this bridge to the transdermal study, is that right?

[Robert Ward:]

That is correct. We would like to engage with the agency once we have the next round of clinical data to discuss what the details of that registration package will be.

[Eric Schmidt:]

Okay, thanks. And just last question, on 1901, maybe you can give us some flavor of what we might see, is it going to be too early at ASCO to have patients evaluated for response on the drug?

[Robert Ward:]

Yeah, I think Eric the way to frame it would be we are enthusiastic; we have a lot of expectation. So the trial really started screening this calendar year. The abstract that we have submitted is called ongoing trails where typically it’s a poster that describes the trial design where the main intent is to make investors aware that the trial was open for enrollment and that it is possible for new sites to be added. So that is the section to which we have submitted. We will include in our presentation an update on enrollment. You know when you start a trail like this where the main goal is try to identify the dose or Phase 2. We would love to think that there are might be interesting clinical data but yes, it will be early so we have modest expectations.

[Eric Schmidt:]

Thanks for taking the questions.

[Robert Ward:]

Sure.

[Operator:]

Thank you. Our next question is coming from the line of Mara Goldstein with Cantor Fitzgerald. Please proceed with your question.

[Mara Goldstein:]

Thanks very much. I was hoping we could talk a little bit about the idea for global relationship and is that extended to your marketing partner in the U.S. or is that really predominantly ex-U.S. territories?

[Robert Ward:]

So for abaloparatide, anticipating positive regulatory outcome and a launch in 2016, we do not today believe that we will be committed to build commercial infrastructure. So we think outside the U.S. so we think that next year products that become the most important medicines, launch in the largest number of countries within the first year of approval and add new indications at the fastest rate. So if you think of really maximizing the clinical usefulness of abaloparatide we will have a [ph] local partner who has successfully commercialized products in osteoporosis before, has existing commercial infrastructure who would work with us for the ex-U.S. launch of abaloparatide-subcu.

[Mara Goldstein:]

Okay.

[Robert Ward:]

Here in the U.S. because the market has matured and there is an established segment of physicians who routinely use drugs like Forteo and Prolia, that means that the commercialization can focus on an existing high-user base which is ideal for a biotech, right size addressable market so, yes, we believe in the U.S. we can successfully start the launch of abaloparatide subcu into the high prescriber market.

[Mara Goldstein:]

And is it your anticipation that an ex-U.S. partner would include Japan, now you have those rights back or would you look to do that in different transactions?

[Robert Ward:]

So remember for abaloparatide subcu, in Japan TGen is the partner that has rights for subcu.

[Mara Goldstein:]

Okay.

[Robert Ward:]

But now we think about transdermal patch. With transdermal patch being a line extension after subcu we will go back and look for approval of transdermal patch. That opens a broader market, both in the U.S. and globally of physicians who have not really been prescribers of Forteo or Prolia. Now one of the barriers for adoption is that patients have to be trained on how to use the auto injector, after they are used to working in practice where injectable drugs are used. There is a large number of physicians who routinely use to treat osteoporosis but they have not really been adopters of injectable therapies. Transdermal patch opens the door to that new market segment and since there is five or six times as many physicians in that market segment we may talk with our global partner about why a different structure around transdermal patch makes sense and since transdermal patch is a global asset for Radius, yes we would be looking for ways to work with our partner on a global basis around that.

[Mara Goldstein:]

Okay. And just if I might ask another question before I get back in the queue, what is the expectation around the review time for abaloparatide subcu.

[Robert Ward:]

Well as we think about it from a base case we look at standardized review time. In January of 2014 we submitted a request for breakthrough designation for abaloparatide. The agency wrote back to us that substantial improvement on fracture or substantial improvement on safety would be the keys for their consideration of breakthrough. Well as we look at the data today we believe we have a compelling argument of why abaloparatide represents a very important advance on both fracture reduction and with the improvements in safety. So we will, at our phase, end of phase III pre-NDA discussion with the FDA talk to them about what is that makes the more sense. Typically breakthrough designations happens with earlier programs because there is a rolling submission. The FDA scientific team works with you. So there is a number of reasons why breakthrough is very important of improving access to the agents and really been able to work collaboratively with them. We think that's a huge value. So even though we are a later stage program we will ask as the late stage program are you - do you feel like breakthrough is the appropriate designation. Now there are other accelerated review paths and we will ask the agency what is it that makes the best sense and of course we'll apply for it, and it will be the agency's determination if the data meets their threshold for accelerated review.

[Mara Goldstein:]

Okay. And that end of Phase III meeting is just pending the extension, a six month extension, correct?

[Robert Ward:]

Correct, as soon as that's done then we are ready to schedule that meeting and go in and talk to them.

[Mara Goldstein:]

All right, thank very much, I'll hop in the queue, back in the queue thanks.

[Robert Ward:]

Thanks Mara.

[Operator:]

Thank you. [Operator Instructions]. Our next question is coming from the line of Eun Yang with Jefferies. Please proceed with your question.

[Eun K. Yang:]

Thank you. Question on RAD1901, beyond the current phase I study when you think about the future development for initial registration trail, do you expect comparing 1901 to [indiscernible] or would you go after [indiscernible] refractory patients or maybe more ambitious so that you can go into first line therapy adding the product on top of aromatase inhibitor and CDK-inhibitor.

[Robert Ward:]

Eun, that's a terrific question, because if we said there is really kind of three different potential uses for RAD1901. The new adjuvant market is one where single agent trail, those trials tend to faster, it's a little bit more focused. Same with RAD1901 would be used when the adjuvant is really dependent on demonstration of tumor regression because again in the new adjuvant setting the idea is to shrink the tumor size and advance surgery. So depending on the profile that we see in Phase I it would open the door to new adjuvants. The adjuvant market is really largest market but of course those trials are lengthy and expensive. Adjuvant success is really based on tolerability in many ways because these are patients who may have had curative surgery and they're looking to prevent a recurrence that we believe based on what we now about the tolerance profile today that RAD1901 looks like a drug that would have a significant potential in adjuvant. If we go down the adjuvant path, that's also the most competitive area in the markets and we'd look to do that with a partner that has an established presence in the breast cancer market. Now for metastatic therapy there is a number of reasons to believe that, that will always be a combination market because in patients that have advanced breast cancer the tumors are heterogeneous. We could go after a [indiscernible] refractory market but again remember because that's an injectable agent; it’s typically used as a second or third line choice. As an oral agent it gives an opportunity for physicians to consider using RAD1901 earlier in treatment. So depending on what we've learned about the drug, as we go through Phase I replacing aromatase inhibitors, we're placing oral serums, that might be a market that's a more addressable for RAD1901 and that's an area where [indiscernible] because it's an injectable hasn't really been used in that way. So we believe that RAD1901 may be used a little earlier in the metastatic setting in combination with other modalities because of the tolerability profile. Now remember in our maximum tolerated dose study to-date we’ve not seen the diarrhea that’s been reported with other agents. To-date we haven’t seen any diarrhea, so that would suggest that our ability to be used in combos maybe an advantage but again we’re just doing the Phase I trial now and those data would really inform us quite a bit as to which of those three options is the best one to pursue.

[Eun K. Yang:]

Okay and then, so my understanding is that there are two composition of matter patents for 1901, expiring towards the end of 2023, any additional patents that extend the patent life?

[Robert Ward:]

Yeah, Nick do you want to talk about composition of matter for RAD1901 and also remind us of the extent of the patent filing in terms of second generation molecules as well.

[Nick Harvey:]

Yeah, sure Bob. So there are multiple composition amounts of patents, so probably the more significant one has an expiration of 2026 which is just its natural term without extension. And so during the clinical development there would be an opportunity to get a patent term extension up to a maximum of five years depending on the length of the program. Basically you get one day for every two days of IND time and then day for day during the approval time. So we would expect that the composition of matter patent would be extended beyond 2026. That patent is actually 900 pages in length and has a substantial number of related compounds and analogs that would be potential second generation molecules to take forward. In addition, we filed a number of new applications around the oncology program that would extend beyond the patents that I’ve spoken about.

[Eun K. Yang:]

Yeah, the second generation product, follow on product what stage it’s in?

[Robert Ward:]

At this point in time, we haven’t initiated any medicinal chemistry activities around second generation. But we do within the scope of our composition of matter claim a variety of related families of compounds in which we think we have the opportunity to go back to. Right now our focus is advancing RAD1901. As the molecule moves forward we would look to start some earlier stage developments. But if you think about typical IP that we find in this space, as we continue to explore the utility of RAD1901 there will be opportunities for us to file additional patents whether through our formulations, whether it’s about treatment of high unmet medical need patients sub populations, all of the secondary types of IP that’s filed as you go through the development process. So we do think that the composition of matter patent that you mentioned, one that’s expiring in 2026 will be a very important key holding. We do anticipate we’ll continue to file IP as the program progresses and then as we get our clinical program advanced to a later stage yes we’ll go back and start second generation work which today has not begun.

[Eun K. Yang:]

Okay, can I ask you one more question?

[Robert Ward:]

Sure.

[Eun K. Yang:]

So in the press release your cash position will be sufficient into fourth quarter 2016 and I'm assuming that, that includes building your commercial infrastructure for abaloparatide in the U.S. How many sales reps would be included in that assumption?

[Robert Ward:]

Well Eun, as we think about the next, what will be the next major financing event for Radius Health, and really believe entering into commercial partnership for abaloparatide subcu and as a part of discussions with our partner, there is really a couple of different things that happens during the partnering process. We’ve made a substantial R&D investment today and we anticipate there our partner would share with us, helping us realize the value of our R&D investment. There will be new indications where we’ll talk about how we’ll cost share, how we’ll advance the program to expand its use across other indications, whether it is male osteoporosis, gluco-corticoid induced osteoporosis which is the second largest indication or its advancing transdermal patch and thinking about new uses for both the transdermal and subcu. That’s an important part of the partnering discussion. And then the commercialization phase there is a variety of ways for us to think about how we optimize the investment, we will make as well as our partners’ existing commercial infrastructure. It will make a big impact on how we think about our finances as we go through and look towards commercial launch in 2016. I think we shared that as we looked at the top prescribers in the U.S. for Forteo and for Prolia it’s less than 10,000 physicians that represent the bulk of prescribing in that market. And when we run a typical sales force sizing model it’s suggest that a sales force of about a 150 sales reps would be sufficient to call on that number of physicians. But as we move through this year and bring in additional commercial expertise, some of the questions we will be think through Eun is how many of those individuals are really the medical science lays on the individual with an advance degree, Pharm D., MD, PhD who really operates in that world of peer-to-peer communication thinking about how to develop the program clinically and then there is second group would be on the more traditional sales representative who might be a Master’s degree or Bachelor’s degree individual who really works on sharing some of the more promotional information in the field. That ratio will be something that we will be looking at as we move through this year.

[Eun K. Yang:]

Okay, thanks very much.

[Operator:]

Thank you. Our next question is coming from the line of Jason McCarthy with Maxim. Please proceed with your question.

[Jason McCarthy:]

Hi guys. Sounds like everything is going very well, it’s very exciting. I have a question that’s one medical and one commercial. The medical question is, in speaking to an oncology colleague he has some of his patients in ovarian cancer who are sort of near terminal, taking Forteo to help bone building. Do you see a market for abaloparatide in cancer induced osteoporosis which would be almost a larger addressable population than you would have now switching people over from who are currently taking Forteo?

[Robert Ward:]

Well, Jason in many ways some of the data suggests that agents that lock up bone turnover [ph] for example Prolia as Xgeva has shown that their ability to change bone turnover inhibits metastatic disease and also for Bisphosphonates there is some data that suggests because they lower the bone turnover states, they have been successful of reducing the spread of cancers to the bone. Right now as we think about abaloparatide we are very much focused on primarily osteoporosis. Beyond that we think there is some very important applications in orthopedic medicine and then there is some orphan indication such as osteogenesis imperfecta where it may turn out that abaloparatide offers an advantage for patients in those areas and the orphan indication is not really a major commercial opportunity, but we think because of the high unmet medical need there may be an opportunity for patients to gain a benefit from abaloparatide that’s worth exploring even though it’s not a major commercial opportunity medically, that would be important. So if you said - focused on osteo process, think about ways to advance abaloparatide in orthopedics I think those would be some of the key areas that we are really focusing on today. As those programs mature it’s very common that we will have medical or scientific advisory groups who will talk about other areas where they think abaloparatide could have ability and it may be through those discussions, applications such as the one you have talked about become prioritized. Today they are not yet on our list of the things we will be doing in the short-term.

[Jason McCarthy:]

Great. And in terms of commercializing abaloparatide subcutaneous next year, is it with your commercial - with the commercial partnership are you looking for a royalty structure or what is the, I guess the reimbursement strategy that the company is seeking?

[Robert Ward:]

That’s a great question, Jason. As we think about partnerships one of the key is asking how do we solve the access question. Last year in America 2 million patients suffered from an osteoporotic fracture. Only 600,000 according to U.S. Surgeon General’s report only 600,000 of those patients were diagnosed and offered a treatment for osteoporosis. So if you said 2 million osteoporotic fractures in 1.4 million patients were not diagnosed or were not prescribed a product that would help them to deal with their disease state, it suggests that there is a couple of different parts of osteoporosis process that we want to solve from a public health perspective, improving the rate at which patients are diagnosed, making sure that when physicians see that there is a therapy, that's important for those patients that access is provided to them. Now we're fortunate that both Amgen and Eli Lilly have done a terrific job of putting in place access programs so that patients who may not be financially able to pay for their therapies both programs - companies have provide very thoughtful programs to make it possible for them to be treated even if they're not economically able. And then groups like the National Osteoporosis Foundation and the Bone Health Alliance have worked closely with providers to create fracture liaison programs or other ways to help improve the diagnosis and treatment rates. So when we talk to a partner who has experience in osteoporosis and has previously commercialized brands that have been important drugs in osteoporosis we would expect to learn from their experience, ways we can accelerate uptick for abaloparatide. Now that process has already begun, NICE in the UK reached out to us last year to request information for a preliminary health economic assessment. So we know that on their side they're continuing to evaluate abaloparatide and we’ll share more information as we go forward. So access is very important in the partnering process. The ability to work with a partner who knows how to execute on clinical development to expand the relationship is important, global scale is important. And then when you think about does that mean there will be a royalty in the relationship yes, we would anticipate that's typically a part of partnering, that end markets where we're not selling, we would expect that we would have a royalty in those markets. And in markets where we're selling, we may be the only commercial entity in those markets or our partner may have a presence as well as then we balance that out in a number of different ways depending on the final way that the partnership is organized. Is that helpful?

[Jason McCarthy:]

Great, that's perfect. Thank you so much.

[Robert Ward:]

Thanks for being on the call today.

[Jason McCarthy:]

Thank you.

[Operator:]

Thank you. Ladies and gentlemen it appears we have no further questions at this time. I would like to turn the floor back to Mr. Ward for any additional concluding comments.

[Robert Ward:]

Well, thank you to all of you for participating today as we talk about the important activities in the last quarter, but also our full year 2014 results. And we'll look forward to sharing an update with you again on our next quarterly call.

[Operator:]

Thank you. Ladies and gentlemen this does conclude today's teleconference. We thank you for your participation and you may disconnect your lines at this time.