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Why Radius Health Is Soaring Today

By Brian Feroldi - Nov 1, 2018 at 3:24PM

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Shares push hire after the company reports earnings. Here's what investors need to know.

What happened

In response to reporting third-quarter results, Radius Health (RDUS -2.19%), a commercial-stage biotech focused on osteoporosis and cancer, saw its shares jump 10% as of 3:10 p.m. EDT on Thursday.

So what

Here's a look at the headline numbers from the period:

  • Revenue jumped 22% sequentially to $27.6 million thanks to strong sales growth in Tymlos, which is the company's approved treatment for osteoporosis. By contrast, Wall Street was only expecting $25.5 million in revenue, so this was a solid beat.
  • Net loss was $49.8 million, or $1.09 per share. On an adjusted basis, net loss was $0.85 per share. That was far lower than the $1.27 loss that market watchers were expecting.

Moving on to the guidance, here's what management expects in the near future:

  • In 2018, revenue for Tymlos in the U.S. is forecast to land between $95 million and $98 million. The year-end cash balance is expected to exceed $220 million. For context, Wall Street is currently projecting $94.7 million in full-year revenue.
  • In 2019, Tymlos U.S. net revenue is projected to land between $155 million and $175 million. The cash balance at the end of the year is expected to exceed $100 million. This midpoint of this range is roughly in line with expectations.
BEn Franklin on hundred dollar bill surrounded by pills

Image source: Getty Images.

When combining the better-than-expected results with the fact that Radius Health's stock had fallen more than 40% since the start of the year, it isn't hard to figure out why traders are cheering today.

Now what

Radius also had a number of nonfinancial updates to share with investors:

  • The Food and Drug Administration recently approved a label expansion claim for Tymlos. 
  • Starting in 2019, Tymlos will be covered by approximately 274 million U.S. insured lives.
  • A phase 3 study for elacestrant -- an exciting compound that is designed to treat breast cancer -- will kick off before the end of the year.

In total, Radius Health provided investors with numerous reasons to be optimistic today, so it's great to see shareholders finally have a great day.

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