Radius Health Churns Through 3 CEOs, as Osteoporosis Drug Delayed

Xconomy Boston — 

Radius Health’s skin patch for osteoporosis appears to have fallen short of expectations in a mid-stage clinical trial, leading to a roughly two-year delay in development and what’s been a revolving door of four CEOs over the past month, Xconomy has learned.

The Cambridge, MA-based company, which tried to go public last year, but ultimately withdrew its IPO application, has pinned much of its hope on a skin patch treatment for osteoporosis that could be an alternative to regular injections. The key test of this technology came this year in a 250-patient clinical trial that ended in August, and yielded data for the company before the end of September.

Radius hasn’t publicly released detailed results from that study. But, the company did say in a footnote of its quarterly filing with the Securities and Exchange Commission on Nov. 14 that the results “support the continued development of an injection-free delivery system.” Radius stopped short of saying, however, whether BA058-TD, its lead skin patch candidate, will be the product to go forward.

Radius noted that some patients developed immune system antibodies against the drug, although it said they were found in low concentrations, and didn’t appear to cause a safety problem. Still, antibody formation against any new drug can be a worrisome sign.

Radius executives, in an interview with Xconomy this week, now say they expect to file a new drug application for its injection-free technology in mid-2019. Nick Harvey, the chief financial officer of Radius, said the company originally expected to reach that milestone in 2017.

“We feel that there’s strong proof of concept in this initial patch formulation, and the company’s plan is to optimize the patch, just make it better, so the timeline stretched a little bit,” Harvey says. “We’re very pleased with the results.”

Radius hasn’t said whether it plans to present the data from the Phase II study of BA058-TD in a peer-reviewed journal or a scientific meeting. Radius executives said this week they are planning to issue a press release soon to summarize the results, as soon as they can get clearance from a partner.

One other thing appears in the Radius quarterly filing with the SEC that hasn’t been disclosed elsewhere—it’s changed CEOs three times since Nov. 11. One of the short-term CEOs, former Clinical Data leader Drew Fromkin, declined to comment on his exit, other than to say it was a “personal decision.” Radius chairman Kurt Graves didn’t respond to a request for comment this week on the executive changes.

Radius started up in 2003. It was originally known as Nuvios, but changed its name in 2005, the same year it acquired an osteoporosis drug—what’s now known as BA058—from France’s Ipsen. The draw was that BA058 is an anabolic drug that is supposed to build up bones, rather than just stop them from decaying further than they already have, like the generic bisphosphonates that women with osteoporosis are typically first prescribed. Radius has raised $240 million from investors like MPM Capital, BB Biotech Ventures, Brookside Capital and others to finance the effort. It merged with an unlisted shell company in 2011, and has reported publicly with the SEC since.

Still, this is the same approach that Eli Lilly used when it developed teriparatide (Forteo), another anabolic drug delivered via a self-administered injection. That product generated around $1.2 billion in 2012. So Radius’ plan, in the past, has been trying to do two things: first, prove that an injection of BA058 just under the skin is better than teriparatide in head-to-head studies. The drug showed signs that it might be in a Phase II study, and Radius is trying to reproduce those results in a big 2,400-patient, 18-month Phase III program that completed enrollment in March and is expected to produce data next year.

Radius, however, has also been developing BA058-TD, a skin patch that would alleviate the inconvenience of an injection—a clear differentiator among current therapies. When I spoke with former CEO Michael Wyzga in May, he mentioned the skin patch more than anything else in Radius’ portfolio, moreso than Radius’ more advanced, injectable drug: “We think BA058 subcutaneous is great, but you take all that and you put it on an easy to use 5-minute wear time patch and it is spectacular,” he said at the time.

Things have changed since. In the same quarterly SEC filing where it disclosed the clinical results, Radius reported that Wyzga and chief business officer Michael Franken resigned. Wyzga was replaced by Fromkin, who resigned less than two weeks after he was hired, and was then succeeded by Richard Lyttle, one of the company’s founders, the chairman of its scientific advisory board, and the CEO until Wyzga was hired in 2011.

Then, on Tuesday, Radius reported in a press release that Robert Ward, 56, most recently an AstraZeneca executive, has taken over for Lyttle.

Neither Ward nor Harvey would explain why Wyzga resigned, or give any details behind the reason for all of the leadership upheaval of the past several weeks.

Instead, Ward sought to emphasize the fact that Radius has a Phase III injectable osteoporosis drug that will produce data in 2014. “That’s the transformational event,” he said, referring to the skin patch trial as an “early-stage development.” He also emphasized that Radius has another drug candidate called RAD1901 that was originally being developed for menopausal hot flashes but is now being tested pre-clinically as a cancer drug.

“We think that as we look over the next 12 months you’ll see a remarkably different Radius than perhaps you might be thinking about,” he said. “The portfolio story is the real story.”

That’s not the story Wyzga told about Radius in May, when asked about the company’s portfolio: “We also have some other drugs in the pipeline—we’re focusing 99.9 percent of our time on BA058 both the subcutaneous which is in Phase III, and the patch which is in Phase II. Anything beyond that—I’ve been around the block on this a couple of times—is almost like the death knell of a lot of small companies. You start focusing on other drugs, we can’t. It’s bearing down on BA058 and doing what we’re doing.”

So what gives? Radius did say that patients on the skin patch, at each dose, had increased bone mineral density in their lumbar spine when compared to a placebo. The difference was statistically significant—meaning it was unlikely to be due to chance, according to the footnote in the Radius quarterly filing. But Ward wouldn’t discuss whether the increases in bone mineral density were clinically meaningful for patients. The highest dose of the skin patch produced a 2.9 percent increase in bone mineral density in the lumbar spine after six months, and a 1.5 percent increase in the hip. Patients on the placebo basically saw no improvement, according to the Radius filing.

When asked if the results fell short of Radius’s expectations, Ward didn’t answer directly. He did say the drug demonstrated a proof of concept, and that he had just spoken with one of the investigators, Paul Miller (the medical director for the Colorado Center for Bone Research) and was planning the next steps in development.

Miller didn’t return calls seeking comment about the study.

“If you ask the question of can you achieve delivery transdermally such that you can show a dose-related increase in [bone mineral density], that’s the proof of concept that’s been achieved,” Ward said.

Osteoperosis drugs are typically approved by the FDA based on two measures: a statistically significant increase in bone mineral density (essentially, the strength of one’s bones), and a reduction in bone fracturing.

Although it’s always difficult to compare one study to another, the results Radius saw with its patch are modest compared with Lilly’s billion-dollar drug teraparatide. The Lilly drug was approved based on a study showing increases of 9.7 percent and 2.6 percent in bone mineral density of the lumbar spine and hip, respectively, over the course of 18 months. Harvey points out that the patch is tracking ahead of Eli Lilly’s drug in terms of hip bone strength if it were to continue forward on the same trajectory in a longer-term study. Radius hasn’t said how its drug performed at lower doses, and also hasn’t disclosed any information regarding the fracture rates of the patients in its study.

Radius also appears to have gotten the data in September, and didn’t disclose anything about it for two months, until the Nov. 14 quarterly filing.

“We were collecting the totality of the data. The data comes in batches,” Harvey says. “We are a reporting company so we had to make reference to it in our 10-Q, but…now we’ve had more time to clean [the data], analyze it, and interpret it.”

In sum, here’s the timeline of events at Radius this year:

March 12: Radius completes enrolling patients in a, 2,400-patient, 18-month late-stage clinical trial of BA058, an injectable anabolic drug for osteoporosis.

April 25: Radius raises $43 million from a group of investors led by F2 Biosciences III. That put the total amount the company has raised since inception at about $240 million.

May 13: Michael Wyzga says that Radius’ value could swing significantly upwards if the skin patch succeeds in a mid-stage trial. The data are expected in September, he says.

Nov. 11: Wyzga resigns, along with chief business officer Michael Franken (Wyzga agrees to stay on in an advisory role for six months).

Nov. 12: Fromkin is named president and CEO.

Nov. 14: Radius releases a 10-Q that reveals the first and only information about the study released so far. Here are the details.

Nov. 22: Fromkin resigns.

Nov. 26: Lyttle is named interim president and CEO.

Dec. 17: First press release since April 25. Ward is named president and CEO, succeeding Lyttle.