Radius Health, Inc. (RDUS) on Q3 2021 Results - Earnings Call Transcript
Operator: Good day, and thank you for standing by. Welcome to the Radius Health, Inc. Third Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised, today's conference may be recorded. I'd now like to hand the conference over to your host today, Ethan Holdaway, Head of Investor Relations. Please go ahead.
Ethan Holdaway: Hello, everyone, and thank you for joining us today. A press release and presentation that we will use to guide the discussion can be found in the Investor Relations section of our website. A replay of the call will also be available on our website 3 hours afterwards. Before we begin, I'd like to remind everyone of our Safe Harbor statement on Page 2. This presentation includes forward-looking statements and non-GAAP financial measures. You can find the reconciliation of GAAP to non-GAAP at the end of the presentation. Our most recently filed 10-K and subsequent filings identify factors that could cause our actual results differ materially from those indicated by the forward-looking statements. Any forward-looking statements represent our views as of today only. On today's call, Kelly Martin, President and CEO will start with his opening comments. Steve Hellwig, our Finance and Accounting officer, will then provide a financial update. Chhaya Shah, Senior Vice President and clinical program lead will follow with an update on the and abaloparatide development progress and Bob Strategic Business Officer of abaloparatide will finish up by providing a commercial update. We will then open the call for questions and I would now like to turn it over to Kelly.
Kelly Martin : Thanks, Steve, and good morning, everybody. Thank you for spending a few minutes with us today to go through our third quarter earnings and some of the results of the business. It was a very busy quarter for us. We don't necessarily run the Company quarter-by-quarter, but the activity level is very high across all aspects of our business, and we'll share that with you this morning. I'd like to highlight a number of things, which we think are particularly important from the quarter. First and foremost, abaloparatide on the male study, we announced positive results from the pivotal trials several weeks ago, a great step forward for that molecule and an interesting opportunity in the marketplace. Secondly, for abaloparatide, we resubmitted into the European marketplace last week. We had indicated that that was our goal, second half of this year that we would resubmit into Europe, and we accomplished that. Third thing for abaloparatide is the TD pivotal readout remains on time for Q4 readout for this year. I know lots of people are focused and interested on that as we are as well. In the Alaska Stratton molecule, we announced that the pivotal trial delivered positive results. So, our partner Menarini Group and ourselves are very pleased with that. We will go through with you very specifically during this call, Steve Hellwig will outline the business relationship we have with Menarini. We also outlined that fairly explicitly in our earnings announcements. And Chhaya Shah we'll go through some of the highlights at the high level of that trial. clearly an important step forward in the space and an important step forward for Menarini and ourselves. For RAD011, the Prader-Willi syndrome pivotal trial is on time to start towards the end of this year or the very early part of next year. And importantly, we've completed our lifecycle planning with that molecule. And over the next few weeks, we will announce and roll-out additional indications that we will take forward with RAD011, all of which we're very excited about and looking forward to sharing that -- our thoughts and thinking with you in the very near term. Our near-term focus as a business and as a Company are multiple things and we highlighted a few. First and foremost, Tim loss commercial. We are focused on continuing from a growth point of view, a productivity point of view, and very specifically, a segment focus point of view. As we indicated in the earnings announcement, our productivity is up, our revenue is up. We would like to expand the denominator or the baseline of that business, and that's what Daniel and Bob Valentine are working on from a business point of view. From abaloparatide, our preparation in anticipation of introducing m ale indication to abaloparatide, it's an important piece of work, something that we have done some work on to date and we'll continue to emphasize over the next several months, again in anticipation of including the male indication in the U.S. for abaloparatide. We're also doing preparation as we have been doing on the transdermal system or TD. Important to us is what the actual data will say. That data will give us some definitive information with regard to pricing reimbursement and the segment or segments that we believe will be most applicable for TD. Last but not least, in abaloparatide, we continue to expand the global footprint of this asset. As we, again, indicated in the earnings announcement, a lot of progress is being made in Canada. A lot of progress is also being made in Japan, which I remind folks is the largest anabolic market in the world. And we will look to expand the footprint in other countries and/or geographic regions as we conclude transactions. From an elacestrant point of view, again, our focus with Menarini Group is to prepare and accelerate, if possible, the regulatory pathway and discussions in both the U.S and Europe. It's something that the -- we have an integrated approach to, and it's a very big focus of ourselves and the Menarini Group with regard to this asset. RAD011, we will initiate the Prader-Willi trial, and we'll also, as I said before, share some life-cycle opportunities for this asset. When we purchased RAD011, we very specifically indicated that this was a pipeline within a molecule, and we look forward to sharing that with all of you in the next few weeks. The last thing I want to touch upon is something I've touched upon before but just wanted to remind and continued to emphasize, which is our approach and philosophy in running the business at Radius and the things that are very important to us as we build a distinctive Company. First and foremost, our culture. We continue to build a culture around exceptional people who are very team-oriented and we've made great strides in progress on that over the last 18 months and we'll continue to make more. It's kind of a never-ending goal and objective and one that we're very focused on. We're very focused on executing against plan in a very high-quality manner. In the last year or so, we completed the enrollment on 3 pivotal. Studies, we've had readouts on 2 of the 3, we're awaiting the third. We've resubmitted this asset into Europe. We're working closely with our partner in Japan on abaloparatide. We've in-licensed a synthetic CBD asset that has very broad applicability across neuro and neuro -behavioral and psychiatric indications. And last but not least, from business P&L and cash point of view, we're very resolute on managing all of those pieces together in a high-quality way. From my perspective point of view, we manage for short-term progress, but we also do that within an intermediate term map and road map. There are many things over the intermediate-term we would like to accomplish, but you can only accomplish those if you get things done in the short-term. And so, we balanced both short-term with an intermediate view of where we're going and how we intend to get there. Very importantly, we strive to be outstanding stewards of capital, people who provide us capital, whether it's debt equity cash. We want to make sure that we are managing that capital in a thoughtful manner. Once again, managing for the short-term, but balancing against intermediate term objectives. We look at the Company from a portfolio basis. We tried to consistently see where we can reduce risks. That risk maybe execution risk, it maybe partner risk, it may be competitive risk, it maybe pricing risk. Balance that risk with opportunity to create more on the upside, whether that's additional indications, additional geographies or additional partnerships. So, we continually look at our portfolio from a risk and return point of view and we try to manage the risk down and opportunity upside up. And last but not least, we will continue to be active in our own capital structure. not be passive participants in our capital structure. When we have opportunities to improve our capital structure, we will do that at the right time and for the right reasons. And I think that's an important aspect of this Company. As you look forward to now 3 different assets with potential for both -- with success, potential revenue, milestones, and growth. And so, using that capital -- perspective capital and return, part of the usage of that will be to be active on our own capital structure, and I think that's an important thing to emphasize. So, with that, as Ethan said, joining me on this call, we have some fantastic people. I'm going to turn the call to Steve Hellwig in a second. He's our Principle Finance Officer, he's done a -- he's doing a great job in that role. You'll hear from Chhaya about both elacestrant and abaloparatide in her role guiding those two assets from a development and regulatory and operational point of view. And last but certainly not least, you'll hear from Bob Valentine, on some of the core topics analysis within the commercial space. So, with that, I'm going to turn it over to the very capable hands of Steve Hellwig and he'll walk you through the key aspects of our financial performance for the quarter. Steve.
Steve Helwig: Thank you, Kelly. For Q3 2021, TYMLOS net revenue was $56.8 million versus $50.4 million in Q3 of 2020 or 13% increase year-on-year. This third quarter increase was driven by an increase in unit volume as well as net price. The total net revenue for Q3 2021 was down $21 million or 27% versus Q3 of 2020. This was due to the 27.4 million upfront licensing payment we received in Q3 2020 related to our agreement with Menarini for the out-licensing of the Elacestrant asset. Moving onto the operating expenses on a non-GAAP basis, R&D decreased versus the prior year by $4 million due to the wind-down of our Phase 3 trials, and we expect the R&D expenses related to ATOM and trial to decline substantially in 2022. Our selling, general, and administrative expenses were up $2 million for the same quarter versus a year ago, and this is due to a one-time increase on professional fees, resulting from the implementation of Oracle, our new ERP system, offset by reductions in compensation from prior quarter reorganization. As a reminder, non-GAAP SGNA excludes stock-based compensation. This all resulted in total Company adjusted EBITDA of a loss of $10.9 million for Q3 of 2021, versus a positive $9.3 million in Q3 of 2020, just roughly $20 million swing. Again, it's primarily due to its $27.4 million upfront licensing revenue payment from Menarini in Q3 of 2020, partially offset by increased TYMLOS net revenue in 2021. Excluding the impact of the Menarini payment, the Company made material progress in the reduction and realignment of its cost base, which also contributed to EBITDA improvement. Moving onto the year-to-date income statement, the total net revenue was down 10.9 million. This is due to a decrease in licensing revenue of $16.4 million, which was comprised of $27.4 million mentioned previously for Menarini in 2020, offset by $11 million in 2021 mainly from the approval of Ostabaro in Japan. This decrease in license revenue was offset by an increase in our TYMLOS net revenue of $5.5 million, driven by an increase in both volume and price. For operating expenses on a non-GAAP basis, R&D decreased by $29 million. This is due to the fact that in 2021, all the EMERALD costs had been reimbursed by Menarini and additionally factors previously mentioned for Q3. Selling general and administrative costs are down $7.2 million and this is mainly due to savings in compensation resulting from reorganizations that took place earlier in 2021. We have made progress since transitioning our sales approach in our steel process and expect to make continued progress. However, due to lower-than-expected year-to-date TYMLOS revenue, we've adjusted our full-year 2021 TYMLOS revenue forecast to a range of $210 million to $220 million versus the previous forecast of $240 million. We also forecast total Company EBITDA to be in a range of $5 million to $15 million loss versus a previous forecast of a positive 10 million. Moving onto the next slide for cash flow trends. As of September 30th, 2021, we have a cash balance of $110 million. We had expected to be flat for the quarter with a cash balance of $100 million. This additional 10 is the result of timing on an expected payment that did not occur until shortly after the Q3 2021 close. Moving onto slide 11, here we framed out with the Elacestrant opportunity means for Radius. As part of the agreement with Menarini, we are eligible to receive up to 20 million in development and regulatory milestone payments, up to $300 million in sales milestone payments, and tiered net royalties up to 9%. The net royalty includes royalties Radius is eligible to receive from Menarini, as well as royalties Radius pays to ESI. The royalties and sales milestones are based on global net sales of elacestrant and include mono-therapy, combination therapies, as well as other potential therapeutic applications of elacestrant. On the next slide, we provide an overview of the asset’s intellectual property portfolio. Elacestrant currently has 3 issued patents. Composition of matter expiring in August of 2026 and subject to patent extension up to August of 2030, method of treatment expiring in October of 2034. Polymorph expiring in January of 2038, and then there are also additional patents that are pending. As a new chemical entity, elacestrant has the potential to receive regulatory exclusivity of 5 years in the U.S, 10 years in Europe, and 8 years with of generic competition in Japan, all of which are subject to regulatory approval. And with that, I'd like to turn it over to Chhaya to give an update on the elacestrant development. Chhaya?
Chhaya Shah: Thank you, Steve, and good morning, everyone. As Kelly mentioned, in October, we announced positive topline results for EMERALD trial, where elacestrant was evaluated as a monotherapy first as the standard care in metastatic breast cancer patient. The design of the Emerald study was a randomized open-label, active comparator study. This trial met both its primary endpoints. The last year's trend extended progression free survival in overall population as well as the ESR-1 mutation subgroup, this demonstrating superiority versus standard of care and all therapy. Based on these positive results, we are working in partnership with Menerini group on regulatory submissions for both U.S. and Europe. As a reminder, we will give detailed data and we'll be presented at the San Antonio Breast Cancer Symposium between December 7th and 9th. Menarini plans to further develop the Elacestrant asset, including the combo therapy trials, as well as other potential therapeutic applications. It is a pleasure in partnership with Menarini to be able to deliver positive top-line results for the first ever oral SERD for metastatic breast cancer. Moving on to the ATOM trial. We announced last month positive top-line results in evaluating TYMLOS and men with osteoporosis. ATOM was a placebo-controlled trial with 12-month duration. Men were randomized 2 to 1 while OSC with placebo. The trial results met primary endpoint and change in lumbar spine BMD at 12 months and p-value of less than 0.0001. The study also met secondary endpoints related to BMD for lumbar spine in 6 months, as well as hip neck at 12 months. The study demonstrated safety profile that's consistent with the abaloparatide study. And based on these positive results, we plan to submit a supplemental NDA in quarter 1 of 2022. This will be a 10-month review cycle. We'll also present detailed data, which will be published in first half of 2022, and we'll present at upcoming medical conference. So, on the next page, go through a little bit more of additional development activities for abaloparatide. So, with regards to TYMLOS label, in September, we announced an updated to our mechanism of action collection into most label. This was followed by our histo -data which showed TYMLOS stimulated new bone formation in humans. This label change allows us to clearly explain mechanism of our action to healthcare providers and patients. We also expect to hear from FDA on potential removal of the box warning from TYMLOS label by the year-end. And as communicated, we're on track for the wearable trial to receive top line readout before the end of the year. On the globalization front, on November 4, we submitted EMEA for potential approval in Europe. This is a -- this M&A is a full submission. It leverages in totality evidence data from pivotal study, real-world evidence, post-marketing surveillance data, and taking our Japanese partner phase 3 trial data. We are optimistic that this information will be -- provided will be a support of a favorable review. Our partners in Canada, Paladin Labs, plan on submitting regulatory application to help Canada in quarter 4, 2021, so by year-end. And we're discussing and progressing with additional ex-U.S. partners in various regions and countries. So, this summarizes our elacestrant development activities, as well as our abaloparatide activities. And I will hand this off to Bob for a TYMLOS commercial update.
Bob Valentine: Good morning, everyone. I will provide an update on the TYMLOS commercial projects progress. So, if we could go to Slide19. In the third quarter, our TYMLOS new patient shipments grew 10% year-over-year from the same quarter in 2020. And the 2021 quarters are collectively continuing to show year-over-year growth. building the patient cohorts for future contribution to revenue. From a strategic perspective, we are tracking some additional key indicators of our focus on the fracture patient as well as efforts towards expanding depth in key accounts. Our new patient contribution from the top 500 prescribers remains at 50% from Q2 to Q3. Our new patient growth within the top 50 prescribers grew 15% or more from Q2 to Q3, and our new patient growth among that same top 50 prescriber group accelerated faster in the ortho and spine segments than outside that segment. On the next page we are also turning appropriate attention to positioning TYMLOS for a future continued growth. So, beyond the depth over breadth focus of our field force, we have a few key forward-looking priority . We're working with some larger institutions to improve how postmenopausal osteoporosis patients are properly identified, and how to improve processes for getting these patients the proper care for their underlying bone disease and bone conditions. And as we know, so many patient's osteopetrosis goes undiagnosed, that it never gives them a chance to properly get on anabolic therapy. We're also preparing the organization for what are a potential future male indication, as well as a potential abaloparatide transdermal system product. So, this includes steepening our understanding of these opportunities, both broadly and in specific segments and patient populations. And it also means outlining market-building work that will need to be done in advance of launch. With that, I'll turn it back over for Q&A.
Operator: Our first question comes from Geoffrey Porges with SVB Leerink.
Geoffrey Porges: Thank you very much and I appreciate the color on the call. Couple of questions on TYMLOS and then one on Elacestrant. First, could you give us a sense of what proportion of the surgical osteoporosis -- female osteoporosis cases? are you -- are now getting an anabolic and then what your share of those stocks is right now? And then secondly, could you talk about the relative price and access dynamics versus the generic teriparatide and how that is trending, what your expectations are there? And then lastly, on Elacestrant, one of the big questions is relative tolerability, and I know the presentations coming at San Antonio. But do you consider tolerability to be the Achilles heel of Elacestrant compared to the other SERDs where we're starting to see data from pivotal trials as well?
Kelly Martin : Jeff, thanks for the questions. This is Kelly. I'll start with the last first. We're not going to comment on any of the data for Elacestrant. I would just say what we and Menarini put out in the announcement of the top-line data was we did not flag safety as an issue. And I think that would just leave that stand as is. I think that sort of speaks for itself with what we can see in our -- in the data for Elacestrant. I'll ask Bob to comment a little on a high level of how we're looking at the -- going back to abaloparatide, the fracture surgical market segments, and some of the dynamics on the generic side. And I will add some commentary as well after Bob 's comments.
Bob Valentine: Sure. I think we know that there's somewhere between 1.5 and 3 million fracture PMO patients in the United States and we can all do the math on how many of those patients are treated, though important to note that both -- part TYMLOS patients area mixture of patients who have had a fracture and are surgical patients and those who are -- who haven't. So won't try to point out exactly what our market share is, but I think that gives you a sense of the order of magnitude of the amount of patients and potential whitespace that there is for the entire market.
Kelly Martin : And I would just add, Jeff. I mean, our overall market share or the overall market share remains about -- remains relatively low, sort of frustratingly low on a broad basis. As you know, well, now our focus has been -- let's do a lot more with fewer and that's working. And so, Bob and Daniel are working to expand those numbers. If you look at our top 10 clients or top 15 clients or top 20 clients, the preponderance of all of that business is fracture patients. And therefore, that gives us opportunity to continue to expand that. But if you look at the overall business, it's still extremely small percentage of both treated patients and fracture patients. And again, we're not trying to be -- get over our skis as far as breadth, but if we look at depth and continuing to add another 10 and another 10 and another 10, there's lots of opportunity there for anabolic s in general and TYMLOS specifically.
Geoffrey Porges: Sorry. The question on the generic and your share of stats now?
Kelly Martin : When we look at the generic activity, it's an infinitesimal part of the business relative to us. If there's some slight growth there at very, very low numbers, but nothing that is really on our radar screen relative to scripts and patients. We track it, we look at it, it's very low-single-digit numbers and that hasn't moved that much. It's slightly ticked up, Geoff, in the last few months, but nothing that has given us pause that something fundamental has changed, at least from what we have seen to date.
Geoffrey Porges: Great. Thanks, Kelly.
Kelly Martin: Thanks, Geoff.
Operator: Our next question comes. I'm Corinne Jenkins with Goldman Sachs.
Corinne Jenkins: Yeah. Good morning. So just maybe as you think about the change in guidance over the course of the year, can you just help us understand what were the factors that drove that disconnect between what we expected and then what played out, whether maybe it's new patient growth for systems or some other factor?
Kelly Martin : Thanks, Corinne. It's Kelly. I'll comment, and then Bob can add comments. But I think there's two main factors. One is the conversion of patients, our new patients, i.e., defined as those with TYMLOS scripts continues to grow nicely, if not very nicely. But for any variety of reasons, and there's several of them, the conversion of those -- if you took a 100% of the script patients, there's a meaningful number of patients that for a variety of reasons didn't convert from script to drug. That's 1 bucket. And then the second bucket as you said is persistence. The average time on drug for a patient is something that we're very focused on and between Bob and Danielle and Sal Grausso, that is a big focus of ours. We're adding patients and we're adding patients in some depth in new fracture-oriented practices, but we frankly need to do a better job on converting those scripts to drug and then extending the persistence in the appropriate manner. I don't know, Bob, do you want to add anything to that?
Bob Valentine: Yeah. I think that covers it pretty well. I'd just say throughout the year, you cover the backend stuff. And throughout the year and inclusive of the third quarter, we've made efforts as well to continue better aligning our sales approach to the focus on the fracture patient. So, we, of course, expect to see long-term impact in a positive direction on those efforts as well, and fixing some of the inherent pieces around conversion of patients and time on therapy will just continue to add to that.
Kelly Martin : So, it's an area, Corinne. We're not terribly pleased with the top line where it is. We -- even though we've grown year-over-year, we -- there's more to do there and there's more we have to get better at. And I think those two areas, conversion and length on drug, are two very specific things that we're focused on.
Corinne Jenkins: Okay, that's helpful. And then maybe can you just help us understand the cadence of milestone payments related to elacestrant over the next year? And of the $20 million in development and regulatory milestones, how much of that is attributed to the monotherapy versus maybe other combinations, etc.?
Kelly Martin : The development milestones are So, all related to the monotherapy progress. The royalties and the sales milestones are related to any -- in layman's terms, any utilization of the molecule, whether it's mono or combo, a combo in any number of combinations. We haven't outlined the milestone payments from a market point of view as of yet. I do realize that at some point we need to figure how to frame that out with even more detail. But for now, it's something that between Menarini and us is still part of a confidential arrangement. The amplitude -- let's put it this way: the amplitude of the sales milestones is split between approximately half up to a certain level and the other half above that. So, there's big chunky payments there depending on where the molecule goes. I think this will become more important and more relevant once the data is released and once Menarini and ourselves come forth with additional regulatory filing approaches.
Corinne Jenkins: Alright. Thank you.
Operator: Our next question comes from Annabel Samimy with Stifle.
Nick: Morning. This is Nick on for Annabel. Thanks for taking our questions and congrats on all the clinical success. As you look to increase the fracture surgical market, what are you doing in terms of building a clinical database around the orthopedics opportunity and how are you currently positioning sales calls? And then switching to PWS, is there anything that you learned in the most recent negative AdComm for Levo Therapeutics that could have any impact on how you design the SCOUT trial and or how you think about its efficacy safety expectations. Thank you.
Kelly Martin : That's great. Bob, you want to take the first and then I'll talk about Prader-Willi?
Bob Valentine: Yes. So, I think the way to frame this up is we -- to just mention, we kind of remain very committed to the fracture patient’s strategy and the -- what you're referring to is a surgical patient. And while the focus on fracture patients, first and foremost is consistent, we're continuing to identify opportunities to refine where along the patient journey we're actually intersecting with these fracture patients, and then how we message to the healthcare providers on those calls about TYMLOS as part of that journey. So, I think what we're doing is we're using data to identify the positions in the patient journey that are the best places to find those patients and communicate with the HCP s about the TYMLOS value prop there.
Kelly Martin : And with regard to frame, really -- thanks for asking that question. It's a great question. To cut to the chase, we have learned and continue to learn an absolute ton from the other trials. First and foremost, we applaud both effort in the space, as you know, a tough indication. We have gotten to know some of the patient advocacy organizations very well in the last year. Let's applaud them. They are super-focused on their job bringing forth potential therapeutic solutions to these patients. But we've learned by looking at and examining even before the FDA meeting last year, all of the Levo detail and Seleno detail, it's been exceptionally instructive to us on things that would appear to be the right way to structure things. Patient behavior, it's a behavior -- in addition to genetic issue, it's a behavioral disease, so anticipating behavioral actions, the differences between ages, very important where behaviors may change based on age. Physiologically, also many of these patients as they grow from 10 to 12 years old through teenage years, through young adulthood, obviously there's a lot of physiological changes going on. This is eating disorder. So, think about your metabolism, your body weight, your body mass, etc., etc., etc. So again, we certainly in no way, shape or form wish any of our competitors to fail. That's not our objective. But we have learned an enormous amount in detail about a way to construct our trial using RAD011 in the most effective risk-managed way, and we are highly constructive on moving forward with a pivotal Prader-Willi trial. More to come on that and our team has done an exceptionally good job on preparing our pivotal trial in this space and where we can't wait to get started.
Nick: Awesome. Thank you.
Operator: Our next question comes from Jessica Fye with JPMorgan.
Jessica Fye: Hey, guys. Good morning. Thanks for taking my questions. First one is, can you talk about the commercial strategy for abalo-patch, how will you position that product relative to TYMLOS?
Kelly Martin : Well, I think we put in the -- Jessica, it's Kelly, thanks. Part of it's going to depend on the data. And again, I'll let Bob talk a little bit about some of his thoughts with Danielle and then I'll comment as well, but -- Bob, do you want to add some thoughts?
Bob Valentine: Yes. I'll just preface by saying we're continuing to tap into the market and market research and understand how this product will be perceived and incorporated. But as you think about what the transdermal system is, I think there's a pretty clear and obvious set of patients that this would serve those current options are not serving and those are the needle-averse patients. That's the clear and obvious segment, but we need to understand a little bit better beyond that segment for the current patients that we currently target with TYMLOS. Where do we position the transdermal system relative to those patients, as well as relative to patients that aren't currently on TYMLOS, maybe on competitors who aren't on anabolic therapy at all. So, we see more work to be done. We have some insights into some of the patient segments that are very clear and obvious, and then more work to do to understand the other areas of opportunity.
Kelly Martin : And we've refreshed -- there was a lot of work done previously on market -- intelligence market segments, market information, and the team has begun to refresh some of that. And I would say that from a fresh pair of eyes point-of-view, for myself, the feedback is more constructive and positive against certain segments. Particularly in the most obvious of people who, for any variety of reasons don't want to have a needle there's a pretty good range of how big that market is, and any of the numbers are pretty big from a denominator point of view. So, I would say, and Bob, and Danielle, and Sal have done a good job on refreshing, but there's a lot of constructive optimism for segments of the market with the transdermal. And again, we look forward to getting the data and then moving forward from there.
Jessica Fye: Great. And can you also talk about how you think about the commercial opportunity associated with TYMLOS in Europe including how you think about pricing in that market?
Kelly Martin : Pricing is a challenge, as you know well. It's across the board. The -- that would be an asset, and I think I've referred to this before, but just to be transparent and highlight it again, it would be -- we would not build up a sales force in Europe. We would partner that asset. We've had a number of reverse inquiries coming in from European existing infrastructures. The only way obviously to generate value is from a portfolio basis. So, somebody else who has an infrastructure who has a portfolio could add this. Again, part of it's -- part of the pricing is again based on data as you know, based on competition and it's something that we're exploring. We will take a BD route in Europe. And again, we've had multiple people interested and we're in early stages of that discussion. But now that we've filed, I think those discussions will become more tangible over the next few months.
Jessica Fye: Great. Thank you.
Kelly Martin : Thanks a lot.
Operator: Our next question comes from Vikram Purohit with Morgan Stanley.
Casper: Good morning and thank you for taking my call. This is Casper on for Vikram. My question is, your release mentioned that you intend to use 50% of LSA trend milestone to strengthen your capital structure. Could you provide some detail on what this could look like?
Kelly Martin : This could look like as and/or when we ever receive sales milestones that we will be active in our outstanding debt. Should we have any? Or outstanding convertibles? Should we have any? Or presumably our outstanding equity which we have. We will be using those payments to address all 3 -- any part of our capital structure which broadly define the covers, all of those things, plus any other thing that we have, so we could use it to purchase debt, purchase converts. In the first instance, refinance debt, refinance converts, and/or as we get through all of that at some point in time purchase equity. So, we would use it as a financial tool to strengthen the capital structure across the board.
Vikram Purohit: Thank you very much.
Kelly Martin : You're welcome.
Operator: Our next question comes from Douglas Tsao with H.C. Wainwright.
Douglas Tsao: Hi, good morning. Thanks for taking the questions. I think one of the things that you identified as sort of the key for jumpstarting the TYMLOS franchise is increasing or improving patient persistence. I'm just curious what you see as the key levers to doing that. And what are the drivers for patient not going through their full course of treatment? Thank you.
Kelly Martin : Doug, it's Kelly. Thanks for the question. Again, I'll have Bob comment, and I'll give you my view as well, if it's helpful.
Bob Valentine: Sure. Yeah. There's going to be a variety of reasons in any therapeutic area, but specifically in specialty pharma, whereas the daily injectable for patients to maintain consistency with therapy, right? I think a lot of what we can do is around communication both to the healthcare provider as well as the patient, around the importance of compliance and adherence to therapy, and that's an area that we'll be able to continue to focus on. And I think there's things we can do mechanistically back-office perspective to make sure that those access kind of hurdles are minimized. So, between communication and minimizing some of the -- those sorts of administrative hurdles, I think our area is where we can certainly focus and I think we'll have a lot of traction with respect to persistence on therapy.
Kelly Martin : I think more generally, Doug, persistence for any therapy is a challenge across many indications. This is no different. I think this is particularly challenging when 80% of the people are asymptomatic, and that's why the more percentage of fracture patients we can have in our portfolio, the higher the probability is, that we can extend persistency. And the more serious the fracture, pelvic or back versus wrist, then again, you can extend it even further. So, part of us improving in persistency is to continue to migrate our patient population from asymptomatic patients to fracture patients. That takes time and it takes focus but that's what we believe would give us the stickiest invest business as it relates to patient care and patient need relative to an anabolic like TYMLOS.
Douglas Tsao: And I'm just curious, in terms of the comments around things to help from an administrative standpoint or do you anticipate or -- what's the current push to patients from the specialty pharmacy in terms of reminding them, and is it just to -- when you say some of the administrative, is it just reimbursement or is it just patients not getting their script refilled themselves?
Kelly Martin : I said -- well, the answer to that is -- so we work with the specialty pharma companies, and we have put in place a number of programs with the specialty pharma companies with regards to follow-up with patients. I think the reality is, we're a one-product Company, and we're a spin the ocean to most of these big pharma distributors. So, we have to do a better job internally. We have to take resources internally. We have to own it. We can't just assume that the specialty pharma people are going to walk in and saying, "What can I do to help Radius and TYMLOS today? " And although while we get pretty good standard support and interaction from them, I think, this is an area that we have to own and put the resources around. And again, that's what Sal, Bob and Danielle are doing. These are patients either on TYMLOS or should be on TYMLOS because they have a script. Their HCP has made that determination. And we own that. It's most important to us. And so, we're putting some resources to provide an appropriate follow-up with those patients as best we can so we can convert more of them. Again, with the distributors, we have good relationships and the pharmacies, but we're a one-product Company currently and we're just not big enough to demand gold-plated service. And we get good service, but we need to do better.
Douglas Tsao: Okay. Great. Thank you so much, Kelly.
Kelly Martin : You're welcome.
Operator: Our next question comes from Eun Yang with Jefferies.
Eun Yang: Thank you very much for taking my question. Just a quick follow-up to Jessica's question, could you please perhaps quantify what percentage of anabolic eligible patients are currently not on therapy due to injection fear? Thank you very much.
Kelly Martin : We can give you a broad range -- I mean, it's a big number.
Bob Valentine: Yeah. I think our best estimate's somewhere between 10% to 20% of patients who get to the point where a physician would recommend an anabolic therapy and hasn't already discounted them for being needle phobic. 10% to 20% is what we're hearing so far as -- of those patients would refuse on the premise alone of not wanting the daily injection.
Kelly Martin : If you take for -- as Bob said, to follow-on, Nolan, you have 1 to 1.5 to 2 million fracture patients and 10% to 20% of those are needle phobic, your denominator is that number, it's 200 to 400 thousand potential patients. They're not going to all jump on the patch. But at least from a fertile market point of view and a market segment point of view, those 2 lines intersecting is obviously a pretty good bulls-eye for a different administration of the drug.
Eun Yang: Got it. And just a quick follow-up to that, how many -- could you maybe quantify how many percent are currently on TYMLOS and you would expect them to be interested in switching to the patch? Thank you.
Kelly Martin : The current penetration of TYMLOS for fracture patients is small, low -- very low percentage, and that's for anabolic as a class, not just TYMLOS. We're not looking at the transdermal system as necessarily a switching opportunity. By definition, if you're already on the drug and you're on the injectable, you're probably comfortable with that, and presumably or we would hope it has a positive impact on your bone health. So, we don't necessarily look at the launch of the patch as a switching opportunity, we look at it as an additive opportunity to the underlying patients. Anything you want to add to that.
Bob Valentine: Yeah. And maybe the other angle of the question is for patients who would -- who are about to become on therapy and who would have otherwise chosen to go on therapy with a daily injection, how many of those patients would choose the transdermal system? I think, the answer to that question right now is that the feedback on the transdermal system from a healthcare provider perspective is extremely positive. They view the system as it's quite novel. And so, I think we can anticipate that the transdermal system will be viewed as a very viable alternative or option in the options set that includes TYMLOS subcutaneous. And so, some combination of healthcare provider and patient choice will ultimately decide which patients end up on subcutaneous versus transdermal. So, I think that's another way to talk about that question.
Eun Yang: Very helpful, thank you very much.
Kelly Martin : Thank you.
Operator: I'm showing no further questions in queue at this time. I would like to turn the call back to Kelly Martin for closing remarks.
Kelly Martin : Thank you, and thank you all for your time. I just wanted to highlight a couple of things. I would point you very specifically to our announcement detailing the elacestrant business relationship. There are many important parts to that. I'll highlight several. One is the IP. look closely at the IP and the runway in the already issued IP. That's number 1. Number 2. With regard to an elacestrant trend, we worked extremely closely with Menarini on all aspects of this program in this molecule, Chhaya taking the lead on the molecule itself and the clinical development and the operationalization of the molecule. We also have dialog with them on the future prospects of how to utilize the molecule. And that's a great open dialogue about many things. So, I would point to the fact that our milestones and royalties traveled. They traveled geographically, they traveled with combinations, and they traveled with indications. If you add that it's possibly the IP runway, the opportunity for us as a financial asset is not insignificant or as opposed to 2 double negatives, it is significant. And so, I would just emphasize those things. We appreciate your time. We've had as pre -advertised, our second half of '21 was so, very full. It has remains very full. Third quarter as half of that was very busy with two pivotal readouts. We have 1 more to go in the fourth quarter. We look forward to sharing that data when we have it. We look forward to sharing with Menarini the elacestrant data in December. And we look forward to advancing the RAD011 asset with more transparency with all of you in the near future. So, with that, Operator, we thank everyone for their time and have a great day. We look forward to continuing our updates. Thank you.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
