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What happened

Investors of Radius Health (NASDAQ:RDUS) may be a bit confused Thursday after the company reported positive data in two phase 1 trials of a clinical asset aimed at treating breast cancer, but its shares fell 12%. What the heck?

So what

As is usually the case, the devil is in the details. The trials met their endpoints as designed, but the results were underwhelming if Radius Health wants to make a splash in the difficult-to-crack breast cancer treatment market. The investigational drug, RAD1901, simply didn't seem that effective. Of the 20 heavily pretreated patients with estrogen receptor positive and HER2- (two genetic mutations) advanced breast cancer who received the 400 mg dose, only two showed a partial response. Another phase 1 study being conducted in Europe saw three patients at the 400 mg dose, but only one had a partial response.

Investors aren't considering the results to be healthy news for the ambitions of Radius Health or the future of RAD1901 in oncology. The selective estrogen receptor degrader (SERD) was considered to be a novel potential treatment for breast cancers given certain preclinical activity, but that doesn't appear to be the case thus far. Or, not as a stand-alone therapy, anyway.

Management now looks to additional studies considering RAD1901 in combination therapy for treating ER+ breast cancer. Biology is a complex thing, and it could be possible for the clinical stage drug to make existing treatments more effective than they would be alone, but that may be wishful thinking at this point.

Now what

While the good news is that the drug was not linked to any toxicities that would limit treatment, investors need to await more early stage data before jumping to conclusions. At this point, it doesn't look very promising. Considering that Radius Health is a pre-revenue company with a relatively healthy but quickly dwindling cash pile, these results certainly increase the risk surrounding an investment.

Maxx Chatsko has no position in any stocks mentioned. Follow him on Twitter to keep up with developments in engineered biology and materials science.

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