Radius Health (RDUS) Q4 2021 Earnings Call Transcript

Radius Health (RDUS -2.22%)
Q4 2021 Earnings Call
Feb 24, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and welcome to the fourth quarter Radius Health Inc. earnings conference call. [Operator instructions] I would now like to turn the call over to Ethan Holdaway, head of investor relations. You may begin.

Ethan Holdaway -- Head of Investor Relations

Thank you. Hello, everyone, and thanks for joining us today. A press release and presentation that we will use to guide the discussion can be found in the investor relations section of our website. A replay will also be available on our website following the call.

Before we begin, I'd like to remind everyone of our safe harbor statement on Page 2. This presentation includes forward-looking statements and non-GAAP financial measures. You can find the reconciliation of GAAP to non-GAAP at the end of the presentation. Our most recently filed 10-K and subsequent filings identify factors that could cause our actual results to differ materially from those indicated by the forward looking statements.

Any forward-looking statements represent our views as of today only. Kelly Martin, president and CEO, will kick off the call with his opening comments. Steve Helwig, principal finance and accounting officer, will then provide a financial update. Bob Valentine, head of business intelligence and digital, will follow with a commercial update.

Chhaya Shah, senior vice president of abaloparatide and elacestrant, will provide an update on abaloparatide and elacestrant progress. And Cole Ikkala, head of neuroscience business operations will finish up with a neuroscience update. From there, we'll open up the call for questions. And I would now like to turn it over to Kelly.

Kelly Martin -- President and Chief Executive Officer

Thanks, Ethan. Welcome, everybody, to our call, which is both Q4 and full year '21 and some discussion on full year '22. Obviously, unusual giving an earnings call during a outbreak of a European war, but we'll all do our jobs. And hopefully, everything winds up in the right place for all concerned.

As Ethan said, a few of the senior team of Radius will be speaking today: Steve, Bob, Chhaya, and Cole. They represent an outstanding leadership team for the company, some of whom you've heard from, some of whom you'll hear from in the future. It's part of the 2020 and 2021 remake of the company to move leaders into the right seats and to our recruit people and vastly improve the opportunity to create value for shareholders. Next slide.

In the release, which was rather exhaustive, there's a fairly long quote from myself. Some of you know me well, some of you don't know me at all. I rarely have quotes in there. This is a doozy.

It's pretty long. There's lots of things that we could talk about. What I tried to do in the quote was frame out those things that are most important, at least to me and my seat. There's dozens of other relevant and important items to be aware of and for us to share over the course of the year.

From a progression of the company point of view, as I say in my quote, 2022 is absolutely a year to pivot the company. The company went public in 2014. Now, I joined the company in the second quarter of 2020. We had a new chairman in the second quarter of 2020, and we've added three new board members since the second quarter of 2020.

From an approach and philosophy point of view, as you can see on the slide, number one, return of capital. Elacestrant was a critically important asset for the company. You'll hear more from Chhaya Shah later on it. We did a transaction, as many of you know, with Menarini.

We took all of the risk out of the future prospects of that molecule. We also saved future spend of somewhere between $100 million and $150 million. We're working exceptionally well with our partner, Menarini. As and when that asset gets clarity from a regulatory point of view and then into the commercial arena, we will return all of that capital of milestones and -- net milestones and royalties to shareholders.

And you'll hear more on that later. I've said dozens of times, our goal is to go from cash-burning to cash-generating. So, that's an underpinning philosophically of how we run the business and how we will continue to run the business. We have, over the years, accumulated $1.7 billion of NOLs.

The vast majority of those are federal NOLs, some of those are state NOLs. We will endeavor to crystallize those, as I say -- we say in the release, through either earnings or asset sales or some combination of those things. Some of us have a lot of experience with NOLs, and we look forward to utilizing those and crystalizing the value to shareholders. The TYMLOS business, you'll hear from Bob Valentine a bit more.

The team that we have in charge of that product, Bob, Danielle, and Chhaya, are outstanding in every way. We have an outstanding understanding of all the pieces of this business. It's a pretty complicated product, but I am highly confident and very constructive on the 2022 and '23 and beyond opportunities in that business. RAD011 is something that we have not spoken a lot about.

You'll hear from Cole Ikkala around that molecule, how we purchased it and what we've been doing to strengthen the molecule from a quality point of view. And as we said in the release, as and when it's appropriate in a gating way, we have plans to move forward and, in particular, plans to move forward in the seizure arena, orphan epilepsy space, which is one that the market seems to perceive as somewhere between very valuable and exceptionally valuable. We manage the assets as a portfolio between balance sheet liabilities and cash assets, be they commercial or financial from an elacestrant or clinical from a RAD point of view. Last but not least, particularly in this era, talent and culture is the only way to really sustain yourselves in the world of both hybrid and virtualization.

Having the right people in the right seats with the right culture is just paramount to any continued or intermediate term success, and we are working exceptionally hard on that. Next slide. Here are some of the key 2022 objectives. There are more, as I said, underneath all the different pieces of the puzzle.

Financially, our target for TYMLOS net revenue is specifically $232 million. It's a modest uptick from where we ended 2021. And we did that deliberately, frankly, to emphasize the operating leverage within the company, that with modest TYMLOS growth, we could significantly change the operating P&L of the company. We also have learned over the years, and we certainly learned last year, that this is a very seasonal business.

So, we're going to budget our business as 42% specifically for the first six months of the year in net revenue and 58% for the second half. We will be roughly a breakeven company, plus or minus, from a net loss or net profit point of view. Lots of pieces of that puzzle. You'll hear some from Steve as far as look-back in '21 and some discussion about '22.

Productivity is a very important piece of our puzzle as we manage the business. I'll talk about that in a second. But we have worked extremely hard to be more efficient. We don't run the company on headcount, but we run the company on how do we get the best people in the best seats, and what do we need actually functionally or organizationally to move things forward.

And last but not least, on the financial side, we want to grow the cash flow and increase the margins. We did significantly increase the abalo operating margin in 2021 despite the fact that our revenue -- our final revenue number was below our initial guidance. But we significantly improved the margin of abaloparatide, and we will continue to do that. On the asset side, it's -- it was a very busy '21.

It will then be a busy '22 to follow up on that. You'll hear a bit more from Chhaya later. Abaloparatide, the male indication output was outstanding from a statistical point of view. That's a very important indication for this molecule, and we plan on filing that sNDA in Q1 of 22.

Elacestrant is on target with our partner, Menarini, to file that NDA in the second quarter of '22. More on that later from Chhaya. The patch, the last time we had a conference call with people was in December about the patch. We said there were three important things for the patch to move forward.

I fully understand it's been the investment thesis of many investors since 2017 and '18. To move forward, we need clarity from the regulator, and we're in the process of securing a meeting to have that discussion. The second piece of the puzzle is to first fix the business construct that we have on the supply chain. Currently, that business construct is mostly redacted as far as the details.

But for my seat, the risk is asymmetric that Radius has a preponderance of the risk in that supply chain. It would have to be fixed in order for us to move that forward. And thirdly, we would need capital that's not Radius capital. We've spent enough on the patch.

We think it's very interesting. We think it's potentially strategically attractive. But from our shareholder and stakeholder point of view, we would need external capture in some project finance structure, some of which some of us have dozens of years of experience doing those things. From RAD011 point of view, you'll hear from Cole.

Liz Messersmith is on a well-deserved vacation. And so, we have Cole pitching in. He's not a clinician, but he's in charge of gluing that business together and all the various pieces. You've heard us talk about Prader-Willi in the past.

We had data from that when we purchased the asset. For the first time, we're going to talk about Angelman syndrome and infantile spasms. Why that is particularly relevant is both of those are in the families of seizures. And as you'll hear from Cole, there's a walk across from the botanical competitor in the seizure space, and it's a validated both mechanism and target for us to pursue on the synthetic side of things.

Before I turn it to Steve, I want to emphasize a couple of things -- a couple of additional things. The adjusted EBITDA in 2020, the company lost $54 million. In 2021, the negative was $24 million. Our target this year, our objective, is plus $35 million to plus $45 million.

So that's a swing of -- from 2020 when I started and we got a new chairman and three new board members, the swing is roughly $100 million. The swing from '21 is $60 million to $70 million. So we continue to make progress and are exceptionally focused on the P&L, the operating P&L, and the performance of the company. Secondly, productivity in the commercial space has been a spectacular success.

2020, the revenue per commercial employee was roughly $1.1 million. 2021, it was $1.6 million as we had in the release. And our objective for this year is $1.9 million. The uptick year over year in productivity for commercial is about a 50% increase, '21 versus objective, and the uptick in productivity from 2020 is 70% to 75%.

So we're doing way more with less. The salesforce we have is spectacularly talented. I have, even through COVID, met most of them. The RBD team that we have is spectacular.

I have definitely met all of them, and they have met me. We have a new head of sales with Danielle, and I, again, couldn't be more pleased on the salesforce, how they're focused, and their ability to grow productivity and grow net revenue. And you'll hear more from Bob Valentine, who has to piece all this together from a business analytics product marketing point of view shortly. Second -- lastly, in 2021, all-in, we burned about $3 million of cash.

There was many, many things that we did. We in-licensed and purchased RAD. We refiled abalo for the EU. We completed the mouse study.

We completed the infamous patch study. We completed mostly the second source for abalo because we only had a single source. We began to sort out the supply chain for RAD011. And we had modest growth in RAD.

So the operating infrastructure and the leverage we have is very significant. And despite all those ins and outs, we end the year with roughly the same amount of cash that we started from. And I would say, that bodes very well from an execution point of view and direction point of view for the company as we go into 2022. So with that, you're probably sick of listening to me.

I will now turn it to Steve Helwig, who's done a great job as our principal finance officer. And now, I'll turn it over to Steve.

Steve Helwig -- Principal Finance and Accounting Officer

Thank you, Kelly. First, I'll speak to the 2021 financial highlights. For fiscal year 2021, we had net product revenue of 219 million, or an increase of 5% versus 2020, which was primarily driven by volume. As Kelly just noted, we had ended the year with 112 million of cash and cash equivalents on the balance sheet, and we continue to make improvements with our commercial team that has led to increased productivity of 47% year on year.

Last, on a non-GAAP basis, we improved our adjusted EBITDA by 56% in 2021 versus 2020, driven by reductions in R&D due to the completion of our three pivotal trials, along with improved efficiencies and SG&A. On the next slide, some Q4 P&L metrics. In Q4, we had a record quarter of net product revenue of 65 million, excuse me, versus 60 million in Q4 2020. And this was a 9% increase, again, primarily driven by volume.

Our R&D expenses were 42 million compared to 36 million in Q4 of 2020. This was a 14% increase that was primarily driven by the abaloparatide transdermal system and timing on elacestrant. For SG&A, restructurings that took place in Q2 of 2021 led to expense reductions of 6 million or 16% versus Q4 of 2020. All of this led to a net loss of 15.6 million, a 5.8 million or 27% improvement versus Q4 of 2020.

For the full year P&L metrics, as previously mentioned, we ended the year with 219 million in net product revenue compared to 208 million in 2020. R&D expenses were 135 million versus 160 million in 2020, down 25 million or 16%, again, due to our three pivotal studies coming to an end. And with improved organizational efficiencies, we continue to reduce SG&A, which came in at 131 million versus 144 million or a 9% reduction. These driving factors resulted in a net loss of $70 million versus $109 million in 2020, which is a $39 million or 36% improvement year on year.

On the next slide, some balance sheet metrics. We came in, as Kelly had mentioned, at the end of the year with 112 million of cash and cash equivalents, nearly flat with 2020. And we just wanted to point out that our term loan can be refinanced without prepayment penalties beginning in March of 2022. The last slide, we have some commercial productivity.

And, you know, Kelly mentioned this earlier, but in -- through some efficiencies that we've continued to make over the years, in 2021, we ended with 1.6 million per head -- per commercial head versus 1.1 million in 2020, which is a 47% improvement. And with that, I'll turn it over to Bob for more of the commercial updates.

Bob Valentine -- Head of Business Intelligence and Digital

Thank you, Steve. Good morning, everyone. So I will provide an update on the TYMLOS commercial progress. I would like to start with a look at the mechanics of how we are monitoring and tracking.

So you'll recall, for 2021, we focused heavily on communicating about new patient starts. Indeed, this metric is important to the TYMLOS business. However, new patient starts is one piece of a more involved assessment of the business, a simplified version of which you're seeing on this page. It includes patients that are discontinuing therapy, the resultant active TYMLOS patients currently on therapy, and, of course, the conversion of those patients to TYMLOS pen volume.

So as you can see, for 2021, new patient enrollments improved by 14% over 2020, new patient starts improved by 11%, and the average monthly active patient number increased by 4%. These are all important numbers and together, as an example, indicates some room for improvement in conversion of patients to therapies. So finally, in summation, the business grew 5% year over year on a net revenue basis. And to reiterate, we will still track new patients over time, but we'll be -- we are monitoring and actioning on all of the levers that impact the business.

So looking ahead to 2022, we project 232 million in net revenue. This growth, we anticipate, will be driven primarily by growth in unit volume. And as Kelly hinted at, we anticipate the seasonality in the net revenues that we've seen and observed in years past, including in 2021. So 40% to 45% in the first half of the year and the balance in the back half of the year.

So turning our attention again to the levers of the business, we anticipate continued growth in patient enrollments over what we saw in 2021. And to support this, we focused the sales team's attention to current major prescribers to maintain and grow the business that we know is strong and then seek to find the new prescribers that we know are the right balance of endocrinologists, rheumatologists, and orthopedics. We also have strong tailwinds, from a promotion perspective, from the boxed warning removal and the mechanism of action update in the label, and both of those allow us to further differentiate TYMLOS in a positive way and give us significant momentum moving into 2022. So beyond driving enrollments, we're also dedicating particular attention to the later stages of the patient journey, specifically, improving conversion of enrolled patients to receiving therapy; and secondly, ensuring those patients stay on therapy for as close to the recommended duration as possible.

So these efforts will help grow the TYMLOS active patients and increase the average pens per patient over time. So together, we expect these efforts to translate into a 6% growth in net revenue over 2021. So with that, I'll hand it over to Chhaya Shah, who will take over and discuss abaloparatide development.

Chhaya Shah -- Senior Vice President of Abaloparatide and Elacestrant

Thanks, Bob. Good morning, everyone. I'll walk us through the development and regulatory progress for abaloparatide, as well as the update for TYMLOS labelling. As we announced last year, October 18th, we had positive top-line results for our male indication.

We're in the process of submitting an sNDA, which is a 10-month review. We'll do that in Quarter 1. We also have been approved for an oral presentation at the AACE meeting coming up in May, where we will present further detailed data. With transdermal program, the patch program, we announced last year that we didn't meet the noninferiority as compared to TYMLOS.

However, the data for the bone mineral density, the BMD increase was clinically meaningful. Due to the clinical benefit, we have now requested a meeting with the FDA to figure out a regulatory path forward. As Bob noted, we've made great strides with regards to enhancing our label and adding the mechanism of action correction in our label. And now, we can state that TYMLOS is an anabolic agent that helps build bone.

FDA approved this update in 2021 after reviewing the excellent histomorphometry study that showed TYMLOS stimulate bone formulation in humans. Additionally, FDA approved the removal of boxed warning from our label. This further clarifies our safety profile for TYMLOS as an anabolic agent. So overall, really good development and regulatory progress for our abalo product.

I will now turn -- talk about elacestrant. As Kelly mentioned earlier in the opening remarks, we view elacestrant as a financial output. A hundred percent of cash received will go directly to Radius creditors and shareholders. The mechanism of cash return is a debt paydown, share buybacks, and/or dividends.

From a regulatory perspective, based on the positive top-line results for EMERALD trial, where elacestrant was evaluated as the monotherapy versus standard care in metastatic breast cancer patients that are HR-positive HER2-negative. We are progressing toward the U.S. NDA submission in the second quarter of this year. Menarini will also be submitting E.U.

submission also in the second quarter of this year. Our partner, Menarini Group, plans to also test elacestrant in early treatment lines, including adjunct study, as well as one or more combinations with elacestrant. Menarini is making great progress in phase 2 combination trial for metastatic breast cancer that has metastasized to the brain. So all of this is really good lifecycle management programs that they've got going on, and we're certainly partnering with them.

It's truly a pleasure in partnership with Menarini to be able to develop our first ever oral SERD for metastatic breast cancer. On the next page, on the slide, we're showing two illustrative monotherapy net revenue scenarios and associated cash to Radius from the net royalty and milestone payments. We assume a five-year peak in this illustrative model, loss of exclusivity is way out there in 2038, and peak sales that fall within range of our sell-side analyst estimates. So the key assumptions are noted here.

And as you see on the graph, those are our cash to Radius by 2038 illustratively. Other relevant facts that I want to point out here is the intellectual property. On this slide, we've shown that we currently have three issued patents for elacestrant, and they're listed here. Additionally, we've also framed out elacestrant opportunity and what it means to Radius.

As part of the agreement with Menarini we are eligible to receive 20 million in development and regulatory milestone payments and up to 300 million in sales milestone payments and a tiered net royalty up to 9%. The royalties and sale milestones are based on global net sales of elacestrant and includes, as I mentioned before, the monotherapy, the combination therapy that Menarini is working on, as well as any other potential therapeutic applications for elacestrant. So all of that together, that amounts to all the royalties and the sale milestones. So with that, I will now turn and hand it over to Cole Ikkala to cover neuroscience.

Cole Ikkala -- Head of Neuroscience Business Operations

Thank you, Chhaya. Starting on Slide 17. And as a reminder, in January of 2021, we acquired RAD011 from modest terms from Benuvia Therapeutics, a company formed to acquire the distressed CBD assets out of the Insys Therapeutics bankruptcy. This opportunity was both identified and sourced by the Radius team.

And over the course of a four-month period, an extensive diligence process was completed, resulting in what we view as an opportunistic and disciplined transaction for several reasons. It had the necessary data package to advance directly into orphan pivotal programs, and with further data generation and success, additional disease areas and disorders of interest. Importantly, existing clinical proof of concept data is available in seizure reduction, established by a botanical CBD asset, Epidiolex, validating a path forward in other epilepsy syndromes. And finally, RAD011 is differentiated as a synthetic CBD oral solution and, among other things, contains no THC or alcohol, an important consideration for the pediatric neurodevelopmental disorders we are targeting.

Since the acquisition, the team has significantly enhanced the underlying asset quality, detail which we will walk through on the next slide. Transitioning into Slide 18, this slide highlights the extensive progress the team has made in standing up RAD011 as a core asset for Radius. From a clinical perspective, our team has done a tremendous job with input from global patient-facing advocacy groups and key opinion leaders, developing clinical protocols for three programs that Kelly referenced: a seamless phase 2-3 in Prader-Willi syndrome with the primary goal of hyperphagia reduction, a phase 3 in Angelman syndrome with the primary goal of seizure reduction, and a phase 3 in infantile spasms with the primary goal of spasm resolution. We intend to share further detail around the respective disorders and pivotal programs during an upcoming R&D day in the second quarter.

From a regulatory perspective, we are actively pursuing protocol feedback and orphan designation from both the FDA and EMA. To highlight a few key points, we have recently received very constructive and thoughtful feedback from the FDA on our PWS protocol. And this month also, we're granted orphan drug designation in the U.S. for Angelman syndrome.

Two great milestones for the team. And finally, from an operational perspective, and in order to support and execute these late-stage clinical programs, we have built a stellar team with neuro, orphan, and cannabinoid experience; strengthened our global CBD oral liquid formulation patent estate; and are building out our global supply chain to support both global clinical development, and eventually commercialization, with success. And with an internal team of experts, we have also identified and are engaged in opportunities for both therapeutic and global expansion. Moving on to Slide 19, why are we pursuing seizures and why are we pursuing seizures in Angelman syndrome? In addition to the CBD clinical and commercial validation from Epidiolex and the drive to address the high unmet need for a novel, efficacious, convenient, and safe drug for these patients, from a market value perspective, there are a few recent data points highlighted on the screen.

On the left hand of the slide, Takeda's acquisition of the remaining 15% stake of soticlestat from Ovid and UCB's recent acquisition of Zogenix. Both of which tell us that a late-stage rare epilepsy asset can possess significant value, the underlying value of both of these in the $2 billion range. To wrap it up, and on Slide 20, we have summarized our guiding clinical framework. We have designed our two lead pivotal programs in Prader-Willi and Angelman with robust endpoints to generate valuable data across a range of symptomologies.

First, focusing on the red PWS circle on the left hand of the slide, success with hyperphagia, the primary endpoint of our pivotal study, could inform advancement into other obesity disorders, where hyperphagia is a prominent feature. And moving to the Angelman circle on the right hand of the slide, seizure reduction, the primary endpoint of the study, has been clinically and commercially validated. And success with Angelman syndrome could lead to development in other rare genetic epilepsy syndromes or broader epilepsies. Then together, the irritability, behavioral sleep, and other data we collected from these pivotal studies in a range of secondary and other endpoints and scales could inform the advancement into other neuropsychiatric or neurodevelopmental disorders highlighted in the center of the slide.

So we view the opportunity with RAD011 as robust, we will progress it in a gated fashion, and we will continue to follow the data as we strategically advance the molecule. With that, I will turn it back over to Kelly for any closing remarks and Q&A.

Kelly Martin -- President and Chief Executive Officer

Thanks, Cole. And thanks for everybody who contributed today from the Radius team. Again, you'll hear from others as we move forward. Just some concluding comments, I wrote parts of my quote several some time ago, didn't necessarily realize that my comments about the disruption and challenge in the sector and in the markets would be somewhat long-lasting.

Obviously, the tape is very challenging in lots of different ways. We think in particular in the biopharmaceutical biotech space, there's incredible dislocation. We tracked, on any given day or week or month, you know, 100 or 200 companies that have some similarities to us. And many, many of those are trading either at or below cash, or at two-year lows or three-year lows.

Very few of them are cash flow positive. So our objective here in positioning Radius is, as I articulated, to generate cash, to have long-term cash flows, and to provide in a prudent way and a gated way potentially some very interesting optionality on very late-stage pivotal pipeline in a manner that allows us to continue to grow cash, grow margin, and strengthen the company. So we look forward to sharing additional progress over the course of '22. And, operator, now, we're happy to open it up for any questions that the analysts may have.

Thank you.

Questions & Answers:

Operator

[Operator instructions] Our first question comes from Corinne Jenkins with Goldman Sachs. Your line is open.

Corinne Jenkins -- Goldman Sachs -- Analyst

Hey, good morning, everyone. Maybe just to start. I'm curious as you've recently updated the label both for the black box warning and the mechanism of action, if there's any feedback you can highlight from the field in terms of the response you're getting as you promote to most with those updates.

Bob Valentine -- Head of Business Intelligence and Digital

Yeah, sure. Hi, Corinne. So we're in the process of, you know, updating all of our promotional assets to reflect the boxed warning, as well as the mechanism of action. But I can tell you that already we're hearing that the fact that the boxed warning has been removed is news, good news.

That's getting our field in the door. And the mechanism of action update has enabled us now to explicitly state, as Chhaya mentioned, TYMLOS is an anabolic agent that helps form new bone. That message is pretty powerful and simple. And so it enables us to kind of really simplify the message.

And that's really helpful for our sales team, and it's definitely a place we're going to be emphasizing in '22.

Corinne Jenkins -- Goldman Sachs -- Analyst

That's helpful. Thanks. And then maybe with respect to Angelman syndrome and infantile spasms that you announced recently, can you just provide a little bit more detail on what the specific preclinical or translational work you did to assess RAD011 in these additional indications, and maybe when we could expect to see or if you plan to provide publicly some of that work?

Kelly Martin -- President and Chief Executive Officer

I'll allow -- Cole will comment shortly. But I just want to emphasize, Corinne, and thanks for the question, that we will have a very extensive R&D session in the second quarter because there's obviously been a tremendous amount of work done on the underlying science, target mechanism, and data. But, Cole, you want to comment on anything?

Cole Ikkala -- Head of Neuroscience Business Operations

Yeah, sure. Thanks for the question. So Rupert Haynes and Jon Foster really led a long and diligent process last year to identify these two seizure populations. Angelman syndrome is particularly attractive due to the prevalence, the prevalence of seizures within the population and the similarity of these seizures to Epidiolex's approved indications in LGS and Dravet.

Infantile spasms is a area that we have historical data on that we analyzed, tore apart. I spoke with many KOLs and believe we have designed a new study going forward that would be fairly attractive. The Angelman study, which we'll share more detail on at the R&D day, is a phase 3 study, which, in summary, will look a lot similar to previous studies performed by Epidiolex. And in infantile spasms, similarly, we'll share more detail later.

But two attractive indications that we spent a lot of time assessing.

Kelly Martin -- President and Chief Executive Officer

Yeah, and I would just reemphasize or emphasize that with the seizure cluster, there is a tremendous amount of read across from Epidiolex which we can utilize, and we do utilize and have utilized pretty, pretty aggressively. And as Cole said, we've had extensive discussions with the clinicians that specialize clearly in these areas and have gone through with them under CDA all the various details, the safety issues -- safety -- any safety data, efficacy data. And so we would be most interested and excited to lay out all the pieces of RAD, you know, when we have our R&D update.

Corinne Jenkins -- Goldman Sachs -- Analyst

Thank you.

Operator

Our next question comes from Jessica Fye with J.P. Morgan. Your line is open.

Unknown speaker -- J.P. Morgan -- Analyst

Hi, this is Nick on for Jessica. Thanks for taking our questions. First one, when you talk about significantly improving TYMLOS margins in 2021, can you provide specifics about how you accomplish that? And kind of maybe looking forward, how do you see the total osteoporosis market, in particular, anabolic market growing over the next one or three years? And if so, what do you see driving that growth?

Kelly Martin -- President and Chief Executive Officer

Well, those are like three different zip code questions. Peter Schwartzman, who's our head of corporate finance, he will go through the margin details for our product. I can give you some comments on anabolics for what that's worth, if we don't think as much, but we will comment, you know, so --

Peter Schwartzman -- Head of Corporate Finance

Thanks for the question. So as Kelly pointed out, we've substantially improved the footprint and the productivity of the salesforce, as well as taking out costs that were unnecessary to both sales growth and development, which enabled us -- if you look at our prior disclosures, we're not going to comment today on the segments. But we were able to almost entirely offset our change in guidance to the reported 2020 to achieve a segment earnings level that is about the same. So we increased the margin several hundred basis points.

And we think that in 2022, we'll be able to expand that even further. And at the EBITDA line for TYMLOS, we'll bring more dollars as sales grow to that line, which will increase the company's operating flexibility.

Kelly Martin -- President and Chief Executive Officer

That's great. And I don't know, Bob, if you would like to comment on the anabolic or you want me to comment on the anabolic specifically. You want me to?

Bob Valentine -- Head of Business Intelligence and Digital

Sure.

Kelly Martin -- President and Chief Executive Officer

So the anabolic market, you know, the way that's measured is it shows that, you know, Forteo is somewhat declining. We are marginally increasing in that small bucket, you know, versus Forteo. And we obviously look at the anabolic components of the space. But we don't look at the market opportunity as what's an anabolic and what's not an anabolic.

We look at the opportunity as -- you know, and there's these very large numbers that you've all heard before, you know, 10-plus million osteoporosis patients, which is interesting. But what's really interesting for us is to focus on those patients with fractures, of which is 1 million to 2 million. Just to highlight, we just -- we will be filing the male indication. We think the male indication is another growth area, no pun intended.

And particularly, if you look at some of the secondary endpoints of the male trial and the intersection with metabolic disease, particularly diabetes, another very interesting place to go. So -- and I know historically, the market kind of looked at anabolics market share, Forteo versus our product, and that was the whole way to look at it. I understand that. I can appreciate that.

But I think that only a small way to look at the underlying opportunity. The underlying opportunity is broader than just who is or is not on anabolic. Hopefully, that roughly answers your question.

Unknown speaker -- J.P. Morgan -- Analyst

Nope, it does. Thanks so much.

Kelly Martin -- President and Chief Executive Officer

Thank you.

Operator

Our next question comes from Greg Harrison with Bank of America. Your line is open.

Mary Kate Davis -- Bank of America Merrill Lynch -- Analyst

Good morning, this is Mary Kate on for Greg. Thank you for taking our question. Maybe regarding elacestrant, how does the increasingly competitive sort of development landscape impact your expectations for elacestrant moving forward?

Kelly Martin -- President and Chief Executive Officer

I can give you some comments and Chhaya can kind of add whatever she would like. The competitive information so far is mostly blinded and unknown. There's lots of noise, there's lots of articles, there's lots of research, but there's no data. And so we don't really -- not to be flippant at all, but we don't really have a view of how does elacestrant compare to the Sanofi molecule or the AC molecule because we have some previous data, but we don't have the pivotal data.

We or Menarini don't have the pivotal data. We work very closely with Menarini. We have been fortunate to listen into and have lots of discussions with clinicians who actually would be utilizing therapeutics. I would only characterize those as very constructive vis-a-vis elacestrant.

And as the first oral SERD, as Chhaya mentioned, and this is monotherapy, the data, you know, I think not to speak at all on behalf of Menarini, but I would understate that they think that the patient need and the commercial opportunity is rather significant with where we stand today. But, Chhaya, would you like to add anything?

Chhaya Shah -- Senior Vice President of Abaloparatide and Elacestrant

Just -- thanks, Kelly. Just to add that at the San Antonio Breast Cancer, Dr. Bardia gave an excellent presentation on the SERD and firs oral SERD. And I think we're focused on that versus worrying about our competitors and getting this to the market for our patients.

And it was well-received by other physicians, KOLs. And I think that's what we continue to stay focused on. Like, other data's blinded, so we're right there and we're pushing forward to the NDA submission.

Peter Schwartzman -- Head of Corporate Finance

We would also comment that the trials among the oral SERDs had somewhat different patient bases and are somewhat differently designed. We're entirely focused on getting our molecule through the process into the hands of patients as soon as possible. And over the course of time, we'll see what the different SERDs are.

Kelly Martin -- President and Chief Executive Officer

And I would just, lastly, the slides that Chhaya went through, you know, our own analysts of which we have some great ones, some of those numbers, 400 and 800 kind of back into what they -- that's a range of what they think. There are other analysts who follow the broader space. There's lots of other numbers. Net-net, you know, breast cancer is one of the top three cancers, unfortunately, from a mortality point of view still, today.

The intersection of genetics is even more important. And as we outlined, Menarini has quite aggressive plans and activities underway for both combination adjuvant and other indications, particularly potential metastasis into the brain. So it's a powerful molecule. And I think the application in the oncology setting is -- that's a story that will unfold and to be told over time.

From our point of view, the return of the cash generation to us, depending on what the full net revenue is over time, is meaningful and possibly extremely significant.

Mary Kate Davis -- Bank of America Merrill Lynch -- Analyst

Absolutely, thank you.

Operator

Our next question comes from Jack Padovano with Stifel. Your line is open.

Jack Padovano -- Stifel Financial Corp. -- Analyst

Hi, this is Jack calling in for Annabel Samimy. Thanks for taking our question. I know you mentioned that RAD011 is going to become a major upcoming focus in the pipeline, but could you maybe offer any additional insight into whether you're looking to pursue any additional near-term business development at this time? And if so, how will you balance that with your profitability and cash flow positive goals? Thanks.

Kelly Martin -- President and Chief Executive Officer

Anything -- this is Kelly. Thanks for the question, Jack. Anything that we do on the BD side, whether that's incoming or outgoing or structure traits, we will do nothing to change the cash flow generation, the margin extension of the company, i.e., anything that we do that's opportunistic would have to fit into the improvement, the radical improvement of the P&L over the last 18 months. We're not going to slide back.

So as good companies would be and as, you know, I've mentioned it because of the dislocation in the market, there's dozens and multiple dozens and dozens of companies that don't have cash. They can't fund their programs, and they have no way forward. That's unfortunate for them. We're not sort of the lifeline to that.

But opportunistically, if we can add something and continue to keep the growth in cash flow and improvement in P&L, and it makes sense strategically, then we would think about it. But I think that we have our hands fairly full as we sit here today between RAD and abalo, and all the pieces of abalo, and the elacestrant piece, and also the globalness of the abaloparatide asset, which we've been working on. So I guess the overriding theme would be, we're not going to do anything to change the amplitude and improvement of the operating cash flow of the company.

Jack Padovano -- Stifel Financial Corp. -- Analyst

Thank you.

Kelly Martin -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from Vikram Purohit with Morgan Stanley. Your line is open.

Gospel Asonye -- Morgan Stanley -- Analyst

Good morning. This is Gospel on for Vikram Purohit, and thanks for taking our question. My question is this. For your 2022 U.S.

TYMLOS sales guidance, how much contribution, if any, is expected from the male osteoporosis population? Thank you.

Kelly Martin -- President and Chief Executive Officer

Zero because we would launch it toward the very end of '22 at best. So, say, December, but -- right? Approximately?

Chhaya Shah -- Senior Vice President of Abaloparatide and Elacestrant

23 months.

Kelly Martin -- President and Chief Executive Officer

Yeah, so it's really '23 where you would start to look at male. And as I indicated, and Chhaya and Danielle and Bob are working on, the interest in male seems to be pretty interesting for us. And reminding people of entities not approved for male. Obviously, Forteo and now, we are.

And we have some interesting secondary endpoints. And the black box warning, you know, removal is interesting. So I think the male population is one that, if you talk to docs, which I have, unfortunately, males that have osteoporosis that suffer a fracture, and this is a broad statement, will tend to decline much faster and more severely than female. So the ongoing therapeutic need for male osteoporotic patients with fractures is pretty high, and that's fairly well known by treating physicians.

Gospel Asonye -- Morgan Stanley -- Analyst

All right. Thank you very much.

Kelly Martin -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from Eun Yang with Jefferies. Your line is open.

Unknown speaker -- J.P. Morgan -- Analyst

Hi, this is [Inaudible] on Eun. Thank you for taking the question. Could you please talk a little bit about what pricing points would be reasonable for elacestrant based on the PFS data compared to, you know, Faslodex of about $19,000 per year? Thank you very much.

Kelly Martin -- President and Chief Executive Officer

Yeah, that would be in the hands of Menarini. We -- and Chhaya should comment, we work with them on all the pieces, but that's not -- that's -- since we sold them the asset, that would clearly be in the intersection of their commercial strategy reimbursement team, etc. Chhaya, do you want to add anything to that?

Chhaya Shah -- Senior Vice President of Abaloparatide and Elacestrant

Yeah, they're just working through those pieces. And again, like Kelly said, it's in the hands of Menarini. And they've hired some good commercial folks as well as pricing folks to evaluate all of the market.

Kelly Martin -- President and Chief Executive Officer

I can add editorially that pricing is not something that we -- we, collectively speaking, again, not for Menarini, but maybe representing a little bit of the thinking, that pricing is something that we're not overly concerned about relative -- on a relative basis or an absolute basis.

Unknown speaker -- J.P. Morgan -- Analyst

Got it. Thank you.

Kelly Martin -- President and Chief Executive Officer

You're welcome.

Operator

Our next question comes from Doug Tsao with H.C. Wainwright. Your line is open.

Chris Bialas -- H.C. Wainwright -- Analyst

Good morning, everyone. Chris Bialas here on for Doug. So two from us. So you know that patient conversion and keeping them on therapy are the weaker links in the patient journey.

So how do you find and improve these? And is there any update on the depot formulation? And when can we expect an update or any potential human studies? Thank you.

Bob Valentine -- Head of Business Intelligence and Digital

Yeah. Thanks, Chris. This is Bob. So one area of clarification as well, is that at least we still believe that the sort of the lion's share of growth will emanate from sort of the top of the funnel and enrollments.

But there's definitely leverage to be found, in those areas, you mentioned conversion of patients to therapy and then duration of therapy. So we're taking a very deep dive into the process by which we onboard patients and that they're treated during the onboard process. It's very administrative, so how can we streamline some of that work, and make sure that sort of some of the administrative pieces don't get in the way of the patient with a script getting on therapy. From the perspective of duration of therapy as well, I'd say this is -- maybe particularly more cross-functional across the board from the way we message to physicians to the way we interact, either we or our partners, interact with patients while they're on therapy after their first time.

It's important to make sure that the patient understands the criticality of staying on therapy for the recommended duration, that, again, the administrative issues do not get in the way of them refilling their pens. And that they're sort of aware of the benefits of staying on therapy for longer periods of time. So we're taking a very, very detailed in-depth look at all of this. We're dedicating a lot of attention to it.

And we anticipate we'll be able to incrementally improve both of those items.

Chhaya Shah -- Senior Vice President of Abaloparatide and Elacestrant

I'll take the depot question, the second part of your question. Yeah, great question. It's one of our lifecycle management processes that we're working through. By the end of the first quarter, in the next month or in half or so, we'll have a bit of, from a lab and a scientific perspective, a go-no-go decision on the depot formulation.

We're working with some fantastic scientists who are really experts in long-acting peptide science. And we're, you know, working through, again, that -- those pieces. Next step, if it's a go, will be the animal studies, and then we'll progress through the future preclinical phases as we want to. But everything looks, you known, as we wanted to for timeline, and we'll get some go-no-go decisions in the next month, month and a half.

Chris Bialas -- H.C. Wainwright -- Analyst

Awesome. Thank you very much.

Chhaya Shah -- Senior Vice President of Abaloparatide and Elacestrant

Yeah. Welcome.

Operator

There are no further questions. I have to turn the call back over to Kelly Martin for any closing remarks.

Kelly Martin -- President and Chief Executive Officer

Well, thank you all very much for your questions, give us an -- giving us an opportunity to explain a lot of progress from '21 and our main areas of focus for '22. I'd just recognize, the whole Radius team, top to bottom, is doing a great job. And in this market volatility, which I'm sure will extend now for some time, we will continue to -- try to differentiate ourselves, generate cash, be exceptionally disciplined, increase the margin, and selectively advance our products, whether it's abalo, or elacestrant with Menarini, or RAD. So thank you very much for your time, and I look forward to sharing more as the year progresses.

Operator

[Operator signoff]

Duration: 57 minutes

Call participants:

Ethan Holdaway -- Head of Investor Relations

Kelly Martin -- President and Chief Executive Officer

Steve Helwig -- Principal Finance and Accounting Officer

Bob Valentine -- Head of Business Intelligence and Digital

Chhaya Shah -- Senior Vice President of Abaloparatide and Elacestrant

Cole Ikkala -- Head of Neuroscience Business Operations

Corinne Jenkins -- Goldman Sachs -- Analyst

Unknown speaker -- J.P. Morgan -- Analyst

Peter Schwartzman -- Head of Corporate Finance

Mary Kate Davis -- Bank of America Merrill Lynch -- Analyst

Jack Padovano -- Stifel Financial Corp. -- Analyst

Gospel Asonye -- Morgan Stanley -- Analyst

Chris Bialas -- H.C. Wainwright -- Analyst

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