Radius Health looks to catch the IPO wave with $86M pitch

The biotech IPO window is open, and Radius Health is preparing to see if it can make the leap and land on Wall Street with about $86 million in hand.

The Cambridge, MA-based biotech has a late-stage osteoporosis drug in Phase III right now, with top-line data due out toward the end of this year. If all goes according to plan, and the subcutaneous bone-builder works better than Eli Lilly's ($LLY) rival blockbuster Forteo, Radius says it will be in a position to launch the drug itself in the U.S. in 2015. And there's a follow-up program in mid-stage development along with a patch-delivered version of its lead drug that can add to and extend their commercialization efforts--which can be augmented by ex-U.S. partners.

Of course, if the lead drug fails to deliver, that business plan will amount to little more than a pipe dream, but such is the stuff of the high-risk biotech IPO market today. The company has also had frequent turnover at the top, recruiting AstraZeneca vet Robert Ward as its new CEO at the end of last year. 

Radius has had solid venture support for its work. Last April F2 Biosciences III stepped up to lead a $43 million round for Radius. According to its S-1, the biotech has burned through $277 million to get to where it is today. And now it's hoping that it can sell its business model to investors, who have shown a big appetite for risk in a select group of drug developers that have triggered an unprecedented IPO boom.

Radius' fate is closely tied to the bone-building compound BA058, now dubbed abaloparatide. It's a synthetic peptide analog of parathyroid hormone-related protein which has been through two mid-stage studies, including one that read out a little more than a month ago. Enrollment in Phase III ended some months ago and Radius is fervently wishing that the drug can prove more effective than Forteo in preventing fractures. The market for osteoporosis runs in the millions of patients, putting little Radius within shooting distance of a major market opportunity.

The IPO boom got started with a bang back in the second quarter of 2013, delivering about $3.5 billion in new money last year to an industry that had long been starved of investors' cash. And despite fears that the boom may have turned into a bubble, risking a sudden collapse, the wave of offerings has continued with the biggest single wave of new IPOs ever seen before. Some of the biotechs have done very well, reaping a stock price over their projected range. Now Radius will join Achaogen, Akebia, Versartis and others lining up to take their own shot--before the window slams shut.

- here's the S-1

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