Source: Radius Health

What: After announcing a filing in the EU for approval of its postmenopausal osteoporosis therapy and updating its timeline for a filing for approval in the United States, shares in Radius Health (NASDAQ:RDUS) slumped over 12% today.

So what: Radius Health has filed for EU approval of abaloparatide-SC, a therapy to reduce bone fracture in women with osteoporosis, and it believes that it will have information necessary to support a filing for abaloparatide-SC in the U.S. by the end of Q1 2016, which would be a delay from prior expectations for a filing by year end.

If EU regulators approve abaloparatide-SC, a synthetic variation of a naturally-occurring bone-building protein, then it will be the first new bone-building drug approved in Europe since 2003. If the therapy wins the nod in both Europe and the U.S., then it could find a willing market on both sides of the pond.

According to the International Osteoporosis Foundation, an osteoporosis-related fracture occurs every three seconds worldwide. Meanwhile, according to Mayo Clinic research, hospitalization due to osteoporosis fracture lasts longer than many other major conditions, and therefore can be more costly.

Now what: In trials, abaloparatide-SC reduced the percentage of patients suffering fracture by up to 83% versus placebo.

Trials also studied Forteo, an Eli Lilly (NYSE:LLY) bone-growing drug, in a bid to help clarify potential efficacy and safety advantages. In those studies, Forteo reduced fracture by up to 78% and the occurrence of adverse events were mostly similar between the two drugs.

Those findings may suggest that abaloparatide-SC matches up well against Forteo and if so, then the fact that Forteo delivered $349 million in global sales to Eli Lilly's top-line last quarter, could suggest that an approval for abaloparatide-SC will be needle-moving for Radius Health.

Unfortunately, the delay in filing with the FDA pushes back any plans for commercialization in the U.S. and any potential insight into which company, if any, will partner up with Radius Health to help market it.

Radius Health has yet to say which company could license abaloparatide-SC, but it has said that discussions are ongoing and that it expects a deal will come ahead of a commercial launch.

Overall, the potential market opportunity for abaoloparatide-SC and the fact that an upcoming partnership could provide upfront cash may make Radius Health a name worth considering to buy -- especially given that shares are retreating. 

 

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.