Radius Recycling Inc (RDUS) 2014 Q4 法說會逐字稿

Greetings and welcome to the Radius Health fourth-quarter financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. (Operator Instructions)

As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Barbara Ryan, Investor Relations for Radius Health. Thank you. You may begin.

Thank you, Jesse, and welcome and thank you to those of you joining us on the line and on the webcast this morning for a review of Radius Health's fourth-quarter and full-year 2014 financial and operating results. I am Barbara Ryan, Radius Health's Investor Relations Officer, and with me this morning to discuss the results and update you on our progress are Robert Ward, President and Chief Executive Officer of Radius Health; Gary Hattersley, our Chief Scientific Officer, and Nick Harvey, our Chief Financial Officer.

Before we begin, I would like to remind you that any statements made during this call that are not historical are considered to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these statements as a result of various important factors, including those discussed in the Risk Factors section in our most recent quarterly report on Form 10-K filed with the Securities and Exchange Commission and our other reports filed with the SEC. Any forward-looking statements represent our views as of today, March 10, 2015 only.

A replay of this call will be available on the Company's website, www.radiuspharm.com, following this call. You can find the dial-in information for the replay in today's press release, as well as on the Company's website.

I will now turn the call over to Robert Ward, President and Chief Executive Officer of Radius Health.

Thanks, Barbara, and thank you to everyone who is joining us on our conference call and webcast this morning.

2014 was certainly an exciting year for Radius Health with the accomplishment of several transformational milestones. In June we completed our IPO, and that set the stage for the completion of our two successful follow-on offerings. In total, these have raised net proceeds of over $260 million. This funding is critical for enabling Radius to deliver on our milestones in 2014 and positions us to execute on our goals for 2015 and beyond.

I would like to take a moment and thank both our investors for their support and also our employees for working tirelessly to accomplish so much. Your efforts have made it possible for us to reach this point, and now, in 2015 and 2016, we are focused on moving Radius Health from a development stage company to a commercial entity.

In December 2014, we reported the positive topline results from our Phase 3 2400-patient ACTIVE clinical trial for our investigational drug, Abaloparatide-SC. Today, we are on track to complete the first six months of the ACTIVExtend study and then prepare and submit our new drug application to the FDA and in Europe our MAA in the second half of this year. Subject to positive regulatory review, we are anticipating our first commercial launch next year in 2016. To enable Abaloparatide to be available to patients outside of the US, we intend to enter into a global collaboration by the time of launch. Just last week, the results from the ACTIVE Phase 3 clinical trial were reported in a late breaker session at the Endocrine Society meeting.

And I would like to turn now to Gary Hattersley, our Chief Science Officer, to share with us an update from ENDO and our response from that. Gary?

Thank you, Bob. Yes. On March 5, 2015, Dr. Paul Miller, the Medical Director of the Colorado Center for Bone Research, presented the positive results of our Phase 3 ACTIVE clinical trial for the investigational drug, Abaloparatide-SC, in a late breaker session at the ENDO meeting in San Diego. This is the world's largest meeting of endocrinologists. Dr. Miller was a leading investigator in the ACTIVE trial and is internationally recognized as a leading authority on bone biology and the treatments for osteoporosis.

One of the clinical findings Dr. Miller highlighted in his presentation was related to bone turnover markets. These biomarkers are often used to understand how a drug may stimulate either bone resorption or bone formation. In his presentation, Dr. Miller showed that CTX levels, a marker of bone resorption, increased to a greater extent in the Forteo treatment group as compared to the Abaloparatide treatment group with a P value of less than 0.01. This difference in CTX between Abaloparatide and Forteo-treated patients widened over time from 46% at six months to 69% at 18 months.

One potential interpretation of these results is that the greater gains seen with Abaloparatide may be the results of lower bone resorption, a concept that appeared to be of particular interest to the physicians at the conference. Dr. Miller suggested that the lower rates of bone resorption for Abaloparatide may be an important contributing factor to a more favorable bone building activity observed with Abaloparatide. He reported the BMD responses for each of the groups in the trial, and noted that, as compared to placebo, there was a significant tibial fracture reduction for both the Abaloparatide and Forteo groups, as well as a significant reduction of 43% in non-tibial fractures and a significant 45% reduction in clinical fractures observed in the Abaloparatide-treated group.

Additionally, Dr. Miller highlighted that Abaloparatide demonstrated significantly less hypocalcemia as compared to Forteo in this trial.

At ENDO, we had the opportunity to speak with a broad range of key opinion leaders who were encouraged by the -- we were encouraged by the positive feedback that we received in response to these data. This year we plan to present additional data at major bone metabolism conferences.

I will be presenting at the Bank of America small midcap conference in Boston on March 18, and I will look forward to updating you further at that time.

I would now like to turn the call back to Bob.

Thank you, Gary. we would like to update you now on our pipeline progress and review the highlights from this quarter. For Abaloparatide, we are focused on completing the development activities necessary for our planned regulatory submissions later this year, as well as completing the transdermal optimization necessary for initiating the next phase of human studies with Abaloparatide Transdermal. As we have previously discussed, the patients with the Abaloparatide-SC and placebo groups completed the 18-month ACTIVE Phase 3 trial. They have now continued into the ACTIVExtend in which they are receiving an improved alendronate therapy for osteoporosis management.

We anticipate that the results from the first six months of the ACTIVExtend trial will be available in the second quarter of 2015. These results will be combined with the 18-month data from our Phase 3 ACTIVE clinical trial to obtain the 24 months of fracture datas requested by the Food and Drug Administration, and the combined 24-month analysis will represent the basis for our regulatory submission.

As I stated earlier, we believe we are on track for submission of the NDA to the FDA and also submitted submission of the marketing authorization application or MAA in Europe in the second half of this year with regulatory action on both the NDA and MAA that would lead to a commercial launch in 2016.

Now, as I mentioned, we are currently optimizing the transdermal patch through our primate studies and plan to initiate the next phase of human studies in the second half of this year.

Now turning to our investigational drug, RAD-1901, which we are developing at high doses of selective estrogen receptor degrader or SERD for the potential use in the treatment of metastatic breast cancer, as we discussed previously, we are now screening patients for enrollment in our Phase 1 multi-center, open-label, two-part dose escalation study of RAD-1901. This is a US study in postmenopausal women with advanced estrogen receptor positive HER2 negative metastatic breast cancer. The primary objective of the Phase 1 trial is to determine the recommended dose for a Phase 2 study, and the study includes a preliminary evaluation of the potential antitumor effect of RAD-1901. We expect to report progress on this study at ASCO in June and also to initiate an additional Phase 1 clinical trial in the EU in 2015.

Yesterday, we announced we concluded a favorable transaction with Eisai, and this has enabled us to acquire the rights for RAD-1901 for Japan so that we now hold global development and commercialization rights.

We are also very pleased to announce that on March 18, Dinesh Purandare will be joining Radius from Sanofi where he was the Vice President and Project Head for Oncology. Dinesh brings to us extensive experience in oncology across both development and commercialization. And, most importantly, in breast cancer, he led the launch of Aromasin for Pharmacia.

Now, Dinesh represents a part of our commitment to accelerate and deepen our capabilities in oncology.

Now Radius is also developing RAD-1901 at lower doses as a SERM for potential use in the treatment of vasomotor symptoms. You may recall we previously reported that our Phase 2 proof of concept study, RAD-1901 at lower doses, demonstrated reduction in both the frequency and severity of moderate and severe hot flashes. We intend to commence a Phase 2-b clinical trial in vasomotor symptoms in the second half of 2015.

Now, as I mentioned in my earlier remarks, Radius is now moving into an important new phase as we prepare for our first NDA and MAA submissions. In 2015, we are seeking to engage a global commercial collaborator and, subject to, of course, updating regulatory approval, we are planning for our first commercial launch in 2016. We are taking all of the steps necessary to position Radius for success on these key initiatives.

To that end, in November 3, 2014, we announced the appointment of Dr. Will Dere to our Board of Directors. Dr. Dere was formerly the head of global development at Amgen where he led the development program of Prolia, and earlier in his career, Dr. Dere led the development of Evista and Forteo at Eli Lilly. Will's experience is critical as we continue to advance the development of our lead investigational drug candidate, Abaloparatide, as well as advancing our RAD-1901.

I am also delighted to announce again that in March 2, we announced the appointment of Tony Rosenberg to our Board of Directors. Tony is a 35-year veteran in the pharmaceutical industry, recently retired from Novartis, where he led corporate M&A and licensing and was responsible for the portfolio transformation transactions that were announced recently by Novartis, and viewed as landmark deals in the industry.

Now what I would like to do is turn the call over to you, Nick, our Chief Financial Officer, to discuss our fourth-quarter and full-year 2014 results, as well as give an update on our balance sheet.

Thank you, Bob. Our cash, cash equivalents and marketable securities balance as of December 31, 2014, was $105.3 million, which does not include an additional $158.6 million net of underwriting discounts and operating expenses that Radius raised in a public offering of its common stock on January 28, 2015.

We are now updating our guidance on our cash burn and expect that our cash, cash equivalents, and marketable securities balance as of December 31, 2014, together with the proceeds from our recent stock offering, will carry us into the fourth quarter of 2016 and through key milestones on the Abaloparatide and 1901 programs that Bob will now highlight.

Thank you, Nick. Before we open the line for questions, I would like to just summarize our upcoming milestones. So we expect to complete the ACTIVExtend trial in the second quarter of 2015. And, then, we will report the top-line six-month fracture data from ACTIVExtend, as well as the analysis of the four 24-month fracture data for the combined ACTIVE and ACTIVExtend trials.

We anticipate submitting an NDA in the US and, shortly thereafter, an MAA in Europe for the investigational drug of Abaloparatide-SC in the second half of 2015. We are actively in discussions and anticipate engaging a commercial collaborator and subject to regular regulatory approval anticipate our first commercial sales next year in 2016. We are currently continuing the optimization of Abaloparatide Transdermal Patch and will be initiating the next phase of human studies in the second half of 2015.

For RAD-1901, we plan to report our progress in the Phase 1 dose escalation study during the ASCO meeting in June of this year, and we expect to initiate the Phase 1 clinical trial in the EU in metastatic breast, as well as a Phase 2b trial for low-dose RAD-1901 as a SERM for vasomotor symptoms in the second half of this year.

We will be presenting at several upcoming conferences. As Gary stated, he will be speaking at the Bank of America Merrill Lynch Small Mid-Cap Conference here in Boston on March 18, and I will be presenting at the Bank of America Merrill Lynch 2015 Healthcare Conference, which will be held May 11th through the 14th in Las Vegas.

Jesse, we would now like to open up the call line for questions from our audience. Thank you all.

(Operator Instructions) Yin Wong, Bank of America Merrill Lynch.

It is actually Catherine for Yin. Two questions. How aware do you think physicians are of Abaloparatide right now, and what are you planning to do over the next year to raise the awareness level?

And, then, are you planning to conduct additional studies to evaluate why we are seeing the lower rate of resorption with Abaloparatide versus Forteo? Thanks.

Thank you, Catherine. Two terrific questions. If you think of the presentation at ENDO this past week, it was the first time that the broader clinical scientific community had a chance to see and discuss the data in a clinical setting. So that level of scientific and clinical exchange is critical for awareness.

As we move through this year, I believe Gary mentioned, we will have additional presentations at each of the major medical conferences where there is a focus on osteoporosis or bone metabolism. And, as we continue into this early part of next year, I think you will see that awareness around Abaloparatide increases as the clinical data are digested and really discussed within the scientific community.

You know, following ENDO, there were a number of groups who report on scientific mediums who highlighted the presentation, and at the end of the meeting, Cliff Rosen led a highlight of ENDO discussion where the Abaloparatide trial was called out as an important clinical trial.

Now, we will, of course, be submitting the results for publication in a major medical journal, and that publication, we also view, will be quite important as physicians and scientists evaluate our data.

Now, Gary, Catherine asked another question. A part of it is about ongoing clinical expansion because we will, of course, be doing some additional clinical trials to expand the label for Abaloparatide, but the question was focused more on as highlight around differences in the anabolic window were discussed at ENDO. Scientifically, will there be additional data that will become available? Will we have to do additional trials? How will we help physicians and scientists better understand those observations that were reported at ENDO?

Yes. I think that is actually a really good question, and I think it really speaks to the mechanism of action of Abaloparatide. So there are certainly some additional studies, I think, will add a lot more information to our understanding of the mechanism of action. But it really comes back to the greater receptor confirmation selectivity that Abaloparatide has relative to Forteo.

So Abaloparatide has a high affinity for an RG confirmation of the PTH-1 receptor. This allows it to retain about anabolic drive that we see, but it has relatively a low affinity for the PTH-O confirmation. This limits the amount of bone resorption stimulating activity, calcium mobilization that is seen with agents like Forteo. So it is really that receptor selectivity that is the molecular basis that provides this differential widening of the anabolic window we see with Abaloparatide.

Great. Just to follow-up on the submission for the publication, is there any broad range of when the publication may be available?

Well, we haven't submitted yet. So at this moment in time, it is not really possible to have a timeline. Because, as you know, what happens in peer review process is really an opportunity for experts in the field to weigh in and make comments or ask questions relating to data analysis.

So I think at this point in time, we are currently drafting the manuscript for submission, and we will be happy to share with you feedback once we have had the initial round of information from the Journal suggesting that it is on track for publication. Right now, we haven't submitted, so we don't have the info.

Eric Schmidt, Cowen and Company.

Thanks for the update. Maybe, Bob, first question is just on the ACTIVExtend portion of the Abaloparatide Phase 3 trial. Is there anything you actually need to show in that remaining six months with all patients on alendronate, or is this just essentially a formality?

So the Abaloparatide-SC in placebo arms, the patient's finished the 18-month anabolic phase and then proceeded into the ACTIVExtend where both groups of patients are taking alendronate. And, of course, the blind is maintained, so we are blinded at the patient level and the site level until the completion of this first six-month period, which the trial would be unblinded at that point.

So what happens are a couple of different things, Eric. There are some important key secondary endpoints. So tibial fracture reduction at the end of the six months will be a regulatory endpoint. We will collect important information about BMD, patient safety. And so the full 24 months of data would be reviewed by both the food and drug administration here and the European Medicines Agency in Europe.

So, as we've said, what are some of the things we would be looking for? Well, in the past trial, which was a trial that Dennis Black was the lead author for, in which patients were first treated with full-length PTH and then followed into alendronate. In that trial, the group that was previously treated with the anabolic showed a greater BMD response than the group that went from placebo to bisphosphonate. So we will be looking to see whether we see that same pattern at the end of the Abaloparatide treatment group. Do these patients show a different response when put on a bisphosphonate as compared to patients transitioning off of placebo?

So we think this will be very important for physicians who, right now, are thinking about changes in osteoporosis. Historically, it would have been a market where the thought was treat with oral bisphosphonate, quote, for life. Now that that treatment paradigm is changing, more physicians are looking at this concept of build and maintain; how can I help my patients increase their BMD, and then select an agent that allows them to maintain that BMD. And so our trial really is build, maintain, design. So we think physicians will be very interested to see what happens in the bisphosphonate arm.

I guess for regulatory purposes you would be looking at the entire 24 months for this study, not just the last six months. So Abaloparatide obviously would start with a huge advantage over placebo in terms of the first 18 months.

Correct. So, if you think of the type analysis, so first there is the 18-month anabolic analysis. Then there is a six-month bisphosphonate analysis, and then from an on umbrella perspective, it is the question over the 24-month period. What has been the difference for the patients treated during the entire 24-month period?

Thank you. Just switching to Abaloparatide-TD, can you sort of map out or outline the path forward and discuss what might be required for regulatory approval?

Yes. So I will let Gary provide you with some of the details, but, from a topline perspective, the first step is to submit and successfully have approval for Abaloparatide-SC because our regulatory portrait of transdermal is to bridge to this approved product.

So when we think about this concept of showing bioequivalence, when you show bioequivalence to the approved product, then it is an alternative form of delivery, and successful demonstration of bioequivalence would mean that the line extension would carry the same label as the first approved product. And the demonstration of bioequivalence would be the core of that form of application. We may conduct a BMD study to allow physicians and patients to get greater experience with the patch, and we would, of course, under that scenario, submit the BMD data as well. And that would be either a six- or 12-months study.

But, as we think about specific trial design, we would go and discuss with the regulatory agencies our proposals and solicit their feedback to make sure that the final design is one that met with acceptance of the regulators. And we haven't had that discussion yet.

So right now this is our plan that we would go and actively engage with both FDA and EMEA to make sure that they agreed with the way we are thinking about the development program.

But, Gary, could you just walk us through and remind everyone what are the activities happening right now and what represents success in the primate studies that lays the groundwork for doing that next phase of human studies in the latter half of this year?

Yes. Thanks, Bob. So right now, we have ongoing the optimization of this transdermal patch with the goal of achieving a pharmacokinetic profile for the patch that is equivalent to the subcutaneous injection. So that optimization activity is currently ongoing, and our plan is to initiate a clinical study later this year -- a Phase 1 clinical study later this year that will allow the pharmacokinetic profile of the transdermal patch to be compared to subcutaneous injections in humans.

Gary, are you allowed to start the bioequivalence study in humans to bridge to transdermal patch study before approval, or do you need to wait until approval even to begin that trial?

No. Remember that we have already conducted a number of clinical trials with our original Abaloparatide Transdermal Patch. That consisted of a series of Phase 1 studies and explored the variety of parameters of the patch pharmacokinetics as well as tolerance and a proof of concept six-month BMD study that was completed that demonstrated statistically significant increases in BMD of both spine and the total hip.

So we have already had quite a lot of clinical development that has gone on around our original transdermal patch, and our plan will be to take this optimized transdermal patch back into the clinic later this year.

But you can get the FDA green light go ahead to start a registration-led directed bioequivalence study with the new transdermal patch prior to getting full approval for Abaloparatide-SC. You don't have to wait until the drug is approved in order to execute on this bridge to the transdermal study. Is that right?

That is correct. We would like to engage with the agency once we have the next round of clinical data to discuss what the details of that registration package will be.

Okay. Thanks. And just last question on 1901, maybe you could give us some flavor, Bob, of what we might see? Is it going to be too early at ASCO to have patients evaluated for response on the drug?

Yes, I think, Eric, the way to frame it would be we are enthusiastic, but we have a lot of expectations. So the trial really started screening this calendar year. The abstract that we have submitted is called ongoing trials where, typically, it is a poster that describes the trial design where the main intent is to make investigators aware that the trial is open for enrollment and that it is possible for new sites to be added. So that is the section to which we have submitted.

We will include in our presentation an update in enrollment. When you start a trial like this where the main goal is to identify the dose for Phase 2, we would like to think that there might be interesting clinical data. But, yes, it will be early so we have modest expectations.

Maria Goldstein, Cantor Fitzgerald.

I was hoping we could talk a little bit about the idea of a global relationship, and does that extend to a marketing partner in the US, or is that really predominantly ex-US territories?

So for Abaloparatide anticipating positive regular outcome and a launch in 2016, we do not today believe that we will be committed to build commercial infrastructure. So when we think about outside the US, so we think of next year, products that become the most important medicines launch in the largest number of countries within the first year of approval and add new indications at the fastest rate.

So, if you think of really maximizing the clinical usefulness of Abaloparatide, we work with a full (multiple speakers) partner who successfully commercialized products in osteoporosis before as existing commercial infrastructure who would work with us for the ex-US launch of Abaloparatide-SC.

Okay.

Here in the US, because the market has matured and there is an established segment of physicians who routinely use drugs like Forteo and Prolia, that means that the commercialization can focus on an existing high user base, which is ideal for a biotech and a bite-size addressable market. So yes, we believe, in the US we can successfully start launch of Abaloparatide-SC into the high prescriber market.

And is it your anticipation that an ex-US partner would include Japan now that you have those rights back, or would you look to do that in different transactions?

Well, remember, for Abaloparatide-SC in Japan, [Atigen] is the partner that has rights for SC.

Okay.

But now when we think about transdermal patch, with transdermal patch be a line extension after trial of SC, we will go back and look for approval of transdermal patch. That opens a broader market, both in the US and globally, of physicians who have not really been prescribed prescribers of Forteo or Prolia.

Now, one of the barriers for adoption is that patients have to be trained on how to use the autoinjector or patients have to be used to a working in a practice where injectable drugs are used.

There is a large number of physicians who routinely use -- treat osteoporosis, but they have not really been adopters of injectable therapies. Transdermal Patch opens the door to that new market segment, and since there is five or six times as many physicians in that market segment, we may talk with our global partner about why a different structure around Transdermal Patch makes sense. And since Transdermal Patch is a global asset for Radius, yes, we would be looking for ways to work with our partner on a global basis around patch.

Okay. And if I might ask another question before I get back in the queue, what is the expectation around the review time for Abaloparatide-SC?

Well, as we think about it from a base case, we look at standardized review times. Now, January of 2014, we submitted a request for breakthrough designation for Abaloparatide-SC.

Right.

The agency wrote back to us that substantial improvement on fracture or substantial improvement on safety would be the keys for their consideration of breakthrough.

Well, as we look at the data today, we believe we have a compelling argument of why Abaloparatide represents a very important advance on both fracture reduction and with improvements in safety.

So we will at our end Phase 3 pre-NDA discussion with the FDA talk to them about what is it that makes the most sense. Typically, breakthrough designation happens with earlier programs because there is a rolling submission. The FDA assigned a team to work with you. So there is a number of reasons why breakthrough is very important of improving access to the agency and really being able to work collaboratively with them.

We think that is a huge value. So even though we are a later stage program, we will ask, as a late stage program, are you -- do you feel like breakthrough is the appropriate designation? Now, there are other accelerator review paths, and we will ask the agency what is it that makes the best sense. And, of course, we will apply for it. And it would be the agency's determination if the data meet their threshold for accelerated (multiple speakers).

Okay. And that indication meeting is just pending the extension -- the six-month extension, correct?

Correct. As soon as that is done, then we are ready to schedule that meeting, go in and talk to them.

(Operator Instructions) Eun Yang, Jefferies.

Question on RAD-1901. Beyond the current Phase 1 study, when you think about future development, for initial registration trials, do you expect to compare 1901 to [Forvetrent], or would you go after Forvetrent refractory patients, or maybe more ambitious so that you can go into first-line therapy, adding the product on top of imitating inhibitor and aromatase inhibitor?

That is a terrific question because if we said there is really kind of three different potential uses for RAD-1901, the new adjuvant market is one where a single agent trial -- the trials tend to be faster. It is little bit more focused. Saying that RAD-1901 would be useful in the neoadjuvant is really dependent on demonstration of tumor regression. Because, again, in the neoadjuvant setting, the idea is to shrink the tumor size in advance of surgery.

So depending on the profile that we see in Phase 1, it would open the door to neoadjuvant. The adjuvant market is really the largest market, but, of course, those trials are lengthy and expensive.

Adjuvant success is really based on tolerability in many ways because these are patients who may have had curative surgery, and they are looking to prevent a recurrence. We believe, based on what we know about the tolerance profile today, that RAD-1901 like a drug that would have a significant potential in adjuvant.

If we go down the adjuvant path, that is also the most competitive area in the market, and we would look to do that with a partner that has an established presence in the breast cancer market.

Now, for metastatic therapy, there is a number of reasons to believe that that will always be a combination market because in patients that have advanced breast cancer, the tumors are heterogeneous. We could go after a full refractory market, but, again, remember, because that is an injectable agent, it is typically used as a second- or third-line choice.

As an oral agent, it gives an opportunity for physicians to consider using RAD-1901 earlier in treatment. So depending on what we would learn about the drug as we go through Phase 1, replacing aromatase inhibitors or replacing oral SERMs, that would might be a market that is more addressable for RAD-1901, and that is an area where full strength, because it is an injectable, hasn't really been used in that way.

So we believe that RAD-1901 may be used a little earlier in the metastatic setting in combination with other modalities because of the tolerability profile.

Now, remember, in our maximum tolerated dose study to date, we have not seen the diarrhea that has been reported with other agents. To date, we haven't seen any diarrhea. So that would suggest that our ability to be used in combos may be an advantage. But, again, we are just doing the Phase 1 trial now, and those data will really inform us quite a bit as to which of those three options is the best one to pursue.

Okay. And, then, my understanding is that there are two competition with (inaudible) patents for 1901 expiring towards the end of 2023. Any additional patents that extended the patent life?

Yes. Nick, do you want to talk about composition matter for RAD-1901 and also remind us of the extent of the patent filing in terms of second-generation molecules as well?

Yes. Sure, Bob. So there are multiple composition in matter patents. So probably the more significant one has an expiration of 2026, which is just its natural term without extension.

And so during the clinical developments, there would be an opportunity to get a patent term extension up to a of term maximum of five years, depending on the length of the program. Basically you get one day for every two days of IND time and then day for day during the approval time.

So we would expect that the composition of matter patent would be extended beyond 2026. That patent is actually 900 pages in length and has a substantial number of related compounds and analogs that would be potential second-generation molecules to take forward.

In addition, we filed a number of new applications around the oncology program that would extend beyond the patents that I've spoken about.

Is that helpful to you?

Yes. Is the second-generation product, follow-on product, what stage is it in?

At this point in time, we haven't initiated any additional chemistry activities around second-generation. But we do within the scope of our composition of matter claim a variety of related families of compounds in which we think we have the opportunity to go back to.

Right now, our main focus is advancing RAD-1901. As the molecule moves forward, we would look to start some earlier stage development. But if you think about typical IP that we would find in the space, as we continue to explore the utility of RAD-1901, there will be opportunities for us to file additional patents whether it is around formulations, whether it is about treatment of high unmet medical need patient subpopulations, all of the secondary types of IP that file as you go through the development process.

So we do think that the composition matter patent that you mentioned, the one that is expiring in 2026, will be a very important key holding. We do anticipate we will continue to file IP as the program progresses. And then, as we get our clinical program advanced to a later stage, yes, we will go back and start the second-generation work, which, today, has not begun.

Okay. Can I ask you one more question?

Sure.

In the press release, your cash position was sufficient into fourth-quarter 2016, and I am assuming that includes building your commercial infrastructure for Abaloparatide in the US. How many sales reps would there be included in that assumption?

Well, as we think about what will be the next major financing event for Radius Health, it really will be entering into our commercial partnership for Abaloparatide-SC. And as part of the discussions with our partner, there is really a couple of different things that happens during the partnering process.

We have made a substantial R&D investment to date, and we anticipate our partner would share with us of helping us realize the value of our R&D investment. There will be no indications where we will talk about how we will cost share; how we will expand advance the program to expand its use across other indications, whether it is male osteoporosis, glucocorticoid-induced osteoporosis, which is the second-largest indication; or it is advancing Transdermal Patch and thinking about new uses for both the transdermal and SC. That is an important part of the partnering discussion. And then, the commercialization phase, there is a variety of ways for us to think about how we optimize the investment we will make, as well as our partner's existing commercial infrastructure. It will make a big impact on how we think about our finances as we go through and look towards commercial launch in 2016.

I think we've shared that, as we looked at the top prescribers in the US for Forteo and for Prolia, it is less than 10,000 physicians that represent the bulk of prescribing in that market, and when we run a typical sales force sizing model. It would suggest that a sales force of about 150 sales reps would be sufficient to call on that number of physicians. But, as we move through this year and bring in additional commercial expertise, some of the questions we will be thinking through is, how many of those individuals are really the medical science liaison -- the individual with an advanced degree, Pharm.D., M.D., PhD -- who really operates in that world of peer-to-peer communication, thinking about to develop the program up clinically.

And then this second group would be the more traditional sales representative who might be a Master's Degree or Bachelor's Degree individual who really works on sharing some of the more promotional information in the field. That ratio will be something that we will be looking at as we move through this year.

Jason McCarthy, Maxim.

Sounds like everything is going very well. It is very exciting. I have a question that is one medical and one commercial.

The medical question is, in speaking to an oncology colleague, he has some of his patients in ovarian cancer who are sort of near terminal taking Forteo to help bone building. Do you see a market for Abaloparatide in cancer-induced osteoporosis, which would be almost a larger addressable population that you would have now switching people over from -- who are currently taking Forteo?

Well, Jason, in many ways, some of the data suggests that agents that lock up bone turnover, for example, Prolia/Xgeva, has shown that their ability to change bone turnover inhibits metastatic disease. And also for bisphosphonate, there is some data that suggests, because they lower the bone turnover states, there have been successful of reducing the spread of cancers to the bone.

Right now, as we think about Abaloparatide, we are very much focused on primarily osteoporosis. Beyond that, we think there are some very important applications in orthopedic medicine, and then there are some orphan indications such as osteogenesis and imperfecta where it may turn out that Abaloparatide offers an advantage for patients in those areas. And the orphan indication is not really a major commercial opportunity, but we think because of the high unmet medical need there may be an opportunity for patients to gain a benefit from Abaloparatide that is worth exploring, even though it is not a major commercial opportunity medically that would be important.

So, if you said focused on osteoporosis, think about ways to advance Abaloparatide in orthopedics, I think those would be some of the key areas that we are really focusing on today. As those programs mature, it is very common that we will have medical or scientific advisory groups who will talk about other areas where they think that Abaloparatide could have the ability, and it may be through those discussions applications such as the one you have talked about become prioritized. Today, they are not yet on our list of the things we will be doing in the short-term.

Great. And, in terms of commercializing Abaloparatide-SC next year, with the commercial partnership, are you looking for a royalty structure, or what is the -- I have got the reimbursement strategy that the Company is seeking.

That is a great question, Jason. So, if we think about partnerships, one of the keys is asking how do we solve the access question? Last year, in America, 2 million patients suffered from osteoporotic fracture. Only 600,000, according to the US Surgeon General's report, only 600,000 of those patients were diagnosed and offered a treatment for osteoporosis. So, if you said 2 million osteoporotic fractures and 1.4 million patients, we are not diagnosed, or we are not prescribed a product that would help them to deal with their disease state. It suggests that there is a couple of different parts of osteoporosis that we would want to solve from a public health perspective, improving the rate at which patients are diagnosed, making sure that when physicians see that there is a therapy that is important for those patients, that access is provided to them.

Now, we are fortunate that both Amgen and Eli Lilly have done a terrific job of putting in place access programs so that patients who may not be financially able to pay for their therapies, both programs -- companies have provided very thoughtful programs to make it possible for them to be treated, even if they are not economically able. And then, groups like the National Osteoporosis Foundation and the Bone Health Alliance have worked closely with providers to create fracture liaison programs or other ways to help improve the diagnosis and treatment rates.

So when we talk to a partner who has experience in osteoporosis and has previously commercialized brands that have been important drugs in osteoporosis, we would expect to learn from their experience ways we can accelerate uptake for Abaloparatide.

Now, that process has already begun. Nice in the UK reached out to us last year to request information for a preliminary health economic assessment. So we know that on their side, they are continuing to evaluate Abaloparatide, and we will share more information as we go forward.

So access is very important in the partnering process. The ability to work with a partner who knows how to execute on clinical development to expand the relationship is important. A global scale is important, and when you think about does that mean there will be a royalty in the relationship, yes, we would anticipate that is typically a part of the partnering that in markets where we are not selling, we would expect that we would have a royalty in those markets. And in markets where we are selling, we may be the only commercial entity in those markets or our partner may have a presence as well, and then we balance that out in a number of different ways, depending on the final way that the partnership is organized.

Is that helpful?

Great. That is perfect. Thank you so much.

Ladies and gentlemen, it appears we have no further questions at this time. I would like to turn the floor back over to Mr. Ward for any additional concluding comments.

Well, thanks to all of you for participating today as we talk about the important activities in the last quarter but also our full-year 2014 results, and we will look forward to sharing an update with you again on our next quarterly call.

Thank you. Ladies and gentlemen, this concludes today's conference. We thank you for your participation, and you may disconnect your lines at this time.