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Analyst: Radius Health Could Advance 50% With Osteoporosis Treatment, Breast Cancer Pipeline

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Analyst: Radius Health Could Advance 50% With Osteoporosis Treatment, Breast Cancer Pipeline

Radius Health Inc (NASDAQ: RDUS) has multiple catalysts that could drive near-term upside in the shares of the company, according to Morgan Stanley. 

Radius Health is an integrated biopharma company that specializes in therapies for osteoporosis, oncology and endocrine diseases.

The Analyst

Morgan Stanley analyst Matthew Harrison initiated coverage of the company with an Overweight rating and a $57 price target.

The Thesis

Radius is set to launch Tymlos, a bone builder for women with osteoporosis, Harrison said in a Monday note.

Despite Eli Lilly and Co (NYSE: LLY)'s presence in the market with Forteo, which fetched the company $1 billion in sales and is exposed to generic competition in 2019, Harrison said Tymlos' pricing is 40 percent lower than Forteo's — and convenience could help it grab share.

"Key factors such as formulary wins with Express Scripts Holding Company (NASDAQ: ESRX) (9-12 percent of the market) and growing Medicare coverage (39 percent moving to 50-percent-plus in 2018) will accelerate the launch into 2H18," the analyst said.

Unlike the prevalent injectable therapies, the Radius patch could drive market growth, Harrison said. He estimates Radius could achieve 50 percent market share at peak, with $1 billion in peak sales in the late 2020s.

If the patch form of Tymlos succeeds, the analyst said the company can achieve $2 billion in peak sales, driving almost a four-fold potential return on Radius.

The consensus estimates for Radius have yet to account for the potential of elacestrant, a new agent for women who have not found success with prior breast cancer treatment, Harrison said. 

The Price Action

Radius Health shares are down over 10 percent over the past year. Shares were up 3.07 percent at the time of publication Monday at $39.93. 

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Latest Ratings for RDUS

DateFirmActionFromTo
May 2019AssumesNeutral
May 2019UpgradesNeutralBuy
Feb 2019Initiates Coverage OnNeutral

View More Analyst Ratings for RDUS
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Posted-In: breast cancerAnalyst Color Biotech Health Care Price Target Initiation Analyst Ratings General Best of Benzinga

 

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