Osteoporosis drug developer Radius Health braves chilly IPO market

After burning through more than $122 million, the late-stage osteoporosis drug developer Radius Health is filing to go public in the hope of raising up to $86 million. Radius is betting that it can whet the appetite of investors with the prospects for its pivotal trial for BA058. But over the past three years investors have been quick to pass on such offerings, put off by the heavy risk of failure that dogs every drug program.

Radius Health in-licensed BA058 from Ipsen and has been studying the treatment's ability to build bones in osteoporosis patients. As FierceBiotech noted in December, when the Cambridge, MA-based biotech drew down another tranche of its last $91 million venture round, Radius believes that it can significantly improve on current treatments, which are designed to slow bone loss and reduce pain in patients. Radius is also partnered with Eisai on a midstage treatment for hot flashes without the side effects associated with hormone therapy.

Radius, which is helmed by former Genzyme CFO Michael Wyzga, plans to list on Nasdaq under the RDUS symbol. The biotech did not list the number of shares it plans to offer or a price range.

Biotech IPOs have generally received rough handling on Wall Street. With the help of its backers, Christoph Westphal pulled off a successful initial offering for Verastem ($VSTM) recently. But Cempra's experience last week is more common. The company had to cut its share price in half and boost the number of shares sold to raise $50 million. Merrimack, a Boston biotech with five programs, recently pulled its IPO, citing market conditions.

A successful IPO here would be a coup for Radius' investors: MPM Capital, BB Biotech Ventures, MPM Bio IV NVS Strategic Fund, The Wellcome Trust, HealthCare Ventures and Scottish Widows Investment Partnership.

- here's the S-1 form on file at the SEC
- read the story from the Boston Business Journal

Special Report: The 10 biotech IPOs of 2011