Benzinga | Jan 6, 2021 06:02AM EST

Radius Health, Inc. Announces Acquisition Of Benuvia Therapeutics Inc.'s RAD011 Cannabidiol Oral Solution For $12.5M With Additional $15M To Be Paid Contingent On The Successful Conclusion Of PWS Development Milestones

* RAD011 is a pivotal-trial ready synthetic cannabidiol oral solution with potential utilization in multiple endocrine and metabolic orphan diseases

* Prader-Willi syndrome ("PWS") will be the initial indication, which has been granted Orphan Drug and Fast Track Designation by the FDA

* Acquisition and associated PWS trial costs to be funded from existing operations

* Management to host conference call and webcast this morning at 8:15 a.m. ET

BOSTON, Jan. 06, 2021 (GLOBE NEWSWIRE) -- Radius Health, Inc. ("Radius" or the "Company") (NASDAQ:RDUS) today announced a definitive agreement to acquire the global development and commercialization rights to Benuvia Therapeutics Inc.'s ("Benuvia") synthetic cannabidiol oral solution ("RAD011"). The Company plans to initiate a pivotal Phase 2/3 study for patients with Prader-Willi syndrome ("PWS") in the second half of 2021 pending regulatory discussion with the U.S. Food and Drug Administration ("FDA").

Under the terms of the agreement, Radius acquired RAD011 for $12.5 million, with an additional $15 million to be paid contingent on the successful conclusion of PWS development milestones. For the next three indications, any or all of which can be pursued at Radius' discretion, the Company may pay up to $45 million in development milestones. In addition, Radius may pay sales-based milestone payments and a tiered, high single-digit effective royalty.

The Company has financed the acquisition through cash on hand and the utilization of $15 million from an existing debt facility, resulting in no equity dilution to Radius shareholders. On an operating basis, the Company believes the combination of a rationalized cost structure and expected ongoing growth in TYMLOS(r) net revenue will fully fund the development of RAD011 through the top line readout in 2023 with minimal impact on near term cashflow generation. As part of this transaction, the Company expects to take a one-time charge of up to $16 million in the fourth quarter of 2020.

"This acquisition advances our business across several dimensions. It increases the optionality to the Company's value proposition, leverages our endocrine expertise and adds a late-stage pivotal trial-ready orphan disease product to the existing Phase 3 programs for abaloparatide and elacestrant," said Radius Chief Executive Officer, Kelly Martin. "RAD011 has the potential for broad clinical applicability. We intend to use PWS as the anchor indication and will further investigate additional orphan disease opportunities in due course."

"Benuvia is excited to partner with the leadership of Radius Health to progress the late-stage development and commercialization of our synthetic cannabidiol oral solution for the treatment of rare and underserved diseases. We look forward to supporting Radius through our U.S. based contract manufacturing business, Benuvia Manufacturing, which has significant chemistry and formulation capabilities, including manufacturing our FDA-approved cannabinoid drug, SYNDROS(r)," said Todd C. Davis, executive chairman of Benuvia.