Radius Rises After Safety Of Amgen Osteoporosis Drug Questioned

Shares of Radius Health (RDUS) are trading higher after Amgen (AMGN) and UCB (UCBJY) reported that 2.5% of patients taking the drug Evenity, or romosozumab, experienced serious cardiovascular toxicity in a Phase 3 trial. Amgen's drug, if approved, would compete with Radius Health's recently approved osteoporosis treatment Tymlos.

WHAT'S NEW: Amgen announced that the Evenity "ARCH" study met both primary endpoints and the key secondary endpoint but an imbalance in positively adjudicated cardiovascular serious adverse events was observed as a new safety signal, at 2.5% Evenity versus 1.9% alendronate at 12 months. The safety concerns make a 2017 approval of the drug unlikely, the company said. "Amgen has agreed with the FDA that the ARCH data should be considered in the regulatory review prior to the initial marketing authorization, and as a result the company does not expect approval of Evenity in the U.S. to occur in 2017," the company noted. The Prescription Drug User Fee Act action date for Evenity is July 19.

ANALYST REACTION: Leerink analyst Geoffrey Porges said the announcement suggests a delayed timeline for the drug and may result in a possible end of the program. Porges lowered his price target for Amgen shares to $159 from $160, while retaining a Market Perform rating. JPMorgan analyst Jessica Fye said the imbalance is a "clear positive" for Radius Health as approval for Evenity is delayed and Tymlos is already approved with a clean clinical safety profile. She has rated Radius Overweight with a $74 price target as she continues to believe Tymlos is well positioned for a launch into the large market opportunity of postmenopausal women with osteoporosis at high risk of fracture and expects a "positive shift in sentiment" around shares. Canaccord analyst John Newman said the cardiovascular events "may kill romosozumab development," cutting down on competition for Radius. He retained a Buy rating and his $85 price target on Radius. He added that results of the study suggest Tymlos' efficacy is "much better" than romosozumab and he believes doctors will consider Tymlos "the most potent drug available" to reduce fracture risks in high-risk osteoporosis patients.

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Disclosure: None. 


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