Biopharma firm Radius Health is going private in an $890M M&A deal
Radius Health, a biopharmaceutical company that has commercialized an osteoporosis drug and is developing new medicines for cancer and rare diseases, has reached an agreement to be acquired by two private equity firms in an $890 million deal.
According to financial terms announced Thursday, Gurnet Point Capital and Patient Square Capital will acquire all Radius shares for $10 each. That price is a 12.2% premium to Radius’s closing stock price on Wednesday and a 45% premium over the stock’s average price over the past 30 days. For context, Radius went public in 2014 at $8 per share. The stock price reached its high point in 2015 at just over $78.
Radius shareholders could earn more from the acquisition. The deal comes with a contingent value right, an extra payment tied to some future event. In this case, that right is an extra $1 per share payable if Radius’s osteoporosis drug Tymlos reaches $300 million in net sales in a 12-month period before the end of 2025. The upfront payment, plus the contingent value right if fully paid, totals $547 million in cash. In addition to those payments, the private equity firms have agreed to assume the debt of Boston-based Radius. That brings the total transaction value to $890 million.
Speaking during a Thursday morning conference call, Owen Hughes, chairman of Radius’s board, said that the acquisition is the culmination of a strategic review conducted over the last nine months with the goal of maximizing shareholder value.
“We are confident that this transaction delivers immediate value and liquidity to Radius shareholders in the context of a volatile market, and specifically a volatile biotech market, and provides the clearest path forward for Radius,” Hughes said.
The transaction has been unanimously approved by Radius’s board but Hughes said the company will not be answering any questions until documents have been filed with regulators.
Tymlos, given as a once-daily injection, is a peptide drug that treats osteoporosis by targeting a pathway involved in bone formation. In clinical trials, the drug led to an increase in bone mineral density and a reduction in fractures. The FDA approved Tymlos in 2017, making it Radius’s first (and so far, only) product approval. In 2021, the drug accounted for $218.9 million in sales, a 5% increase over the prior year. Radius had tried to develop a more convenient version of the drug that can be given with a transdermal system. But late last year, the company reported that this formulation did not meet the main or secondary goals of a Phase 3 clinical trial.
The osteoporosis drug market is competitive, which could make it difficult for Tymlos to achieve the sales target to trigger the contingent value right. Eli Lilly drug Forteo (Forsteo outside the U.S.), won its FDA approval in 2002. That drug accounted for $801.9 million in 2021 sales, a 23% decline from the prior year as competitors take market share. Prolia, an Amgen antibody drug approved by the FDA in 2010, is a blockbuster seller at more than $3.2 billion in global sales last year. Amgen added another antibody osteoporosis drug with the 2019 approval of Evenity. That drug generated $530 million in global sales last year, according to Amgen’s financial reports.
Radius may have the chance to add another revenue-generating product to its portfolio soon. On Wednesday, Radius and partner Menarini Group submitted a new drug application to the FDA for elacestrant, a drug developed for patients with advanced or metastatic breast cancer that is ER positive and HER2 negative. The small molecule is what’s called a selective estrogen receptor degrader (SERD). AstraZeneca’s fulvestrant, an injectable drug, is the dominant SERD product available, but comes with side effects. Radius and other SERD developers are aiming to offer an oral alternative with potentially better efficacy. In 2020, Radius licensed global elacestrant’s rights to Florence, Italy-based Menarini Group.
Hughes said the Radius acquisition is expected to close in the third quarter of this year. The deal is not subject to any financing conditions. OrbiMed Advisors is providing debt financing to Gurnet Point and Patient Square.
Cancer biotech F-star Therapeutics to be acquired in $161M deal
Invox Pharma, a subsidiary of Hong Kong-based Sino Biopharmaceutical Limited, has reached a deal to acquire clinical-stage cancer drug developer F-star Therapeutics for $7.12 per share. That price is a nearly 79% premium to the biotech’s closing stock price on Wednesday. The deal values F-star at $161 million
Cambridge, U.K.-based F-star is developing bispecific antibodies, drugs that go after two targets simultaneously. Four of the biotech’s programs have reached the clinic. The most advanced one, FS118, is designed to block two “checkpoint” proteins, LAG-3 and PD-L1. That drug is currently in Phase 2 testing in patients with head and neck cancer that has acquired resistance to PD-1 inhibitors. It’s also in Phase 2 testing in patients with non-small cell lung cancer and diffuse large B-cell lymphoma that has not been previously treated with a checkpoint inhibitor.
The boards of directors of both companies have approved the transaction, which is expected to close in the second half of this year.
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