Radius Health, a biotech company in Cambridge, MA, has a lot hanging on its clinical trial of a new treatment for osteoporosis. Two weeks ago all the patients were enrolled in the study of the drug, which actually helps bones grow stronger again, rather than just slowing down their decay. As Xconomy has reported, passing this milestone gave the company $28.3 million in new financing from its existing investors.
Even more money might be on its way when the results of the study are ready in the end of 2008. Last September Radius signed an agreement that gives the big pharmaceutical company Novartis the first chance to license the new drug, called BA058. If the results are positive, and Novartis uses this option, it could give Radius more than half a billion dollars in total, depending on a number of milestones.
This would be breakthrough for the company, which launched in 2003 as Nuvios and has since raised more than $90 million. The firm’s founders—representing four different universities—together have a perfect pedigree for developing osteoporosis drugs. Harvard Medical School professor John Potts, for instance, is one of the leading researchers in calcium and bone metabolism the effects of hormones on those processes. Michael Rosenblatt, the dean of Tufts University School of Medicine, helped lead the development of one of the most widely used osteoporosis drugs, Fosamax from Merck. The startup changed its name to Radius in 2005, the same year as it licensed the current osteoporosis project from French specialty pharmaceutical company Ipsen.
The version of BA058 that Radius is currently testing is given as injections. But the next generation could some kind of patch that lets the active substance penetrate through the skin. That would increase the potential market value of the treatment. “For a subcutaneous solution we expect a market of 700 million dollars a year, for a viable alternative like a skin patch 1.4 billion,” says Radius Health CEO Richard Lyttle.
Indeed, the market for osteoporosis drugs is growing. Osteoporosis currently causes up to 1.5 million fractures per year in the U.S., mostly in the hip, spine, and wrist, according to the National Institutes of Health. The condition is more common among women, especially after menopause, and as the population ages the number of cases of osteoporosis is increasing.
In healthy bone, tissue is constantly being broken down and reconstructed at the same time—if it wasn’t, your skeleton couldn’t grow, and broken bones wouldn’t heal. But when people get older, this recycling starts to be less efficient, leading to osteoporosis, literally “porous bones,” and makes the skeleton more frail. Most osteoporosis drugs act by slowing the breakdown of the bone tissue. There is only one drug on the market that actually stimulates the growth.
One drawback of that drug, Eli Lilly’s Forteo, is that it increases the level of calcium in the blood, and that in its turn influences a number of vital body functions. As a result, Forteo can only be given in small doses, and the treatment may have to go on for up to two years. That’s a long time for a drug taken as daily injections.
Radius hopes that its new drug will work faster, and with fewer side effects than Forteo. “Our drug consists of a small protein. The only function of that protein in the body is to stimulate bone growth, so we get no hypercalcemia [increased calcium level],” says Lyttle. “As we can give a higher dose, our hypothesis is that we will have an effect in 6 months.”
Even if the outcome of the Phase 2 trails is positive, the drug must show that it is both safe and effective in a bigger Phase 3 study before it can be approved by the FDA. And to conquer the market, Radius and its probable licensee Novartis have to convince doctors and patients that the drug is better than the other new osteoporosis medicines under development.
Radius has hedged its bets though. The company has two other osteoporosis projects in its R&D pipeline; both are still in an early stage of development.
