What: Radius Health (NASDAQ:RDUS), a biopharmaceutical company focused on developing products that treat osteoporosis and other endocrine-mediated diseases, had a rough January. The company's shares lost 45% of their value during the month, according to data from S&P Capital IQ.
So what: Despite the huge share price swoon, Radius actually had some good news to share with investors during the month. Two news items, in particular, are worth highlighting:
- First, Radius Health presented at the J.P. Morgan Healthcare conference, where it gave investors an update on what they should expect from the company in 2016. Radius confirmed that it has already submitted abaloparatide SC, its compound for treating osteoporosis, for regulatory approval in Europe, and management remains committed to having the drug in the FDA's hands by the end of this quarter. The company also confirmed that it is still actively looking for a partner as it prepares for a commercial launch.
- Second, Radius announced that it has entered into a worldwide clinical collaboration with pharma giant Novartis (NYSE:NVS) to evaluate its potential cancer compound RAD1901 for use alongside Novartis' investigational drug LEE011. The companies will study the two compounds' ability to treat breast cancer. The terms of the agreement: Both Radius and Novartis will contribute resources and supply compound material necessary for the studies to be conducted, and they will share third-party out-of-pocket research and development expenses.
Now what: Investors who are bullish on abaloparatide SC's market potential should do their best to ignore the stock's seemingly arbitrary huge price drop and focus on Radius Health's long-term potential. It's estimated that two million osteoporosis-related bone fractures happen each year in the U.S. alone, which is a huge market opportunity. Mixing in the news about its new collaboration deal with Novartis should only add additional upside potential to the company's future, so investors with a strong stomach for risk might want to give this name a closer look.