Radius Recycling, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Q4 full year 2020 RADIUS Health, Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to turn the call over to your speaker today, Mr. Martin. Thank you. Please go ahead, sir.

Thank you very much, operator. Good morning, everybody. Thank you for joining us this morning for our Q4 2020 and full year 2020 earnings call. And at the end, we'll be happy to take some questions. Slide-wise, first page that's important, obviously, is the safe harbor statement. I won't read the whole thing. It clearly refers to discussions and statements we make prospectively for the future or things that are subject to significant change. Importantly, though, for this particular presentation, because it's full year, we would highlight that there are certain gap and non-gap disclosures from a financial point of view, which we've included. in this deck for your reference. Next slide on the agenda. I'll just give a brief overview. Our principal finance officer, Jim Chopas, will go through the relevant and highlighted financial results from both Q4 and for the full year. And Sal Grosso will talk very specifically about our patient growth, which is the underlying fundamental to our Timmels SCUS business. And I will be happy, as I said, to answer questions that you may have. On the next slide, from an overview point of view, and I would say that these areas of focus are ones that we've tried to communicate with reasonable consistency over the last few months. But just to reiterate again, our focus from a company point of view is across these very important items. First and foremost, our focus, and Sal will speak about it later, is to grow our Tymlos SC franchise and business. We believe that the molecule, the valoparatide, is an outstanding molecule. The patient need remains broad and deep, and we are focused on growing that business. Secondly, A balaparatide is, as many people know, it's in a molecule that has two phase three readouts towards the end of this year, the second half of this year. One for male potential osteoporotic patients, and the other is for a transdermal system, aka patch. And both of those readouts will happen in the second half of this year. and important aspects and parts of the Avala Paratide underlying franchise and business opportunity. Thirdly, Avala Paratide on a global basis. We currently are up from a commercial point of view in the U.S., as you well know. We have a partner in Japan who are making progress regarding their own regulatory processes. We expect clarity on that in the first half of this year. It is a very large anabolic market, as many people know. We also did a deal towards the end of 2020 with Canada, an out-licensing from a commercial point of view with both SC and the transdermal system, and that partner is making initial steps towards regulatory pathways for Canada. In addition to those three current countries, which are U.S., Japan, and Canada, we have a goal of expanding the global footprint of the balaparatyde into other countries as we see fit and as we could find the right partner. The areas that we're looking in are economies that are reasonably good economies with aging populations. Southeast Asia is an interesting place to look. Australia is an interesting place to look. And we are also continuing to make progress on the regulatory side of the E.U., for future consideration in the EU. Fourth, we want to complete the Elastostrand Phase 3. That is on track. We hope to have that readout in the second half of this year, as previously communicated. It's important for both ourselves and our partner, Menorini Group, and we continue to work on progressing and finalizing that trial. Fifth, We in-licensed a very interesting asset, RAD011, synthetic CBD molecule. There's lots of things that we are doing behind the scenes on that space, but first and foremost, our focus and goal is to make advancements against an orphan indication called Prader-Willi syndrome, and we are in the process of developing engaging with a U.S. regulator on both a meeting and a pathway forward for that very important indication. And last but not least, as an overall business and an enterprise, our goal is squarely to be a cash flow positive company. As we move our business forward, that enables us to do many different things, and to manage our own business in a way that we believe can add value for both short-term and intermediate-term points of view. So it's a broad overview. Again, all of these things we've explained before, and I just wanted a chance to reiterate them on this call to all of you. So with that, I'm now going to turn it to Jim Chopas, our Principal Finance Officer, who will walk you through again, at a high-level relevant financial update for both Q4 and the full year of 2020. So, Jim, you take it from here.

Thanks, Kelly. I will briefly walk through the financial highlights of 2020, and afterwards I will share and confirm our financial guidance. On slide six, radius had a strong financial performance during 2020 with 20% stimulus revenue growth, the successful exit from oncology, and a reduction in cost which contributed to ending the year with $115 million in cash and investments. With a strong focus on new patient growth and specialists that treat osteoporotic-related fractures, we were able to complete the year with $208 million in product revenue, an increase of 20% over 2019, During Q3 2020, we successfully exited oncology through the license agreement for RAD1901 and the divestment of RAD140. During 2020, we realized and collected $30 million in licensing revenue for RAD1901. Additionally, we incurred reimbursable costs of $39 million in connection with RAD1901 services performed under the transition services agreement, which reduced our research and development costs. We also repositioned the company's overhead structure, resulting in a $13 million reduction in selling general and administrative expenses, excluding stock-based compensation. Slide 7 summarizes our Q4 2020 results. For the fourth quarter of 2020, we reported total revenue of $62.8 million. Importantly, we finished 2020 with strong momentum with $60 million in TMLOS revenue, which is a record quarter for RADIUS and represents an 8% increase versus the fourth quarter of 2019 and 19% sequential growth versus the third quarter of 2020. Sal Grosso will be discussing new patient growth later in the presentation. On a non-GAAP basis, R&D expenses increased by $3.7 million, primarily driven by $16 million in RAD 011 costs. and other R&D costs of $6.1 million, partially offset by an $18.4 million decrease in elastist rent costs. We reported a net loss of $21.4 million for the fourth quarter, which represents a net loss per share of $0.46 in comparison to a net loss of $24.7 million, and a net loss per share of $0.54 for the fourth quarter of 2019. Moving on to slide eight for our full-year results. On a four-year basis, TMLOS net sales of $208.4 million increased 20% versus the prior year. This was driven by a combination of price and sales volume. Research and development costs increased by $45.2 million on a non-GAAP basis. The increase was primarily a result of an increase of $39.9 million in program spending for the balloparotide transdermal program, an increase of $16 million in RAD 011 costs in connection with the purchase, The increases in spending are partially offset by an $11.9 million decrease in the Elastis grant program, which decreased as a result of reimbursable expenses. The company made significant progress in repositioning the selling general and administrative cost structure by reducing costs by $13.3 million or 10% on a non-GAAP basis. The reduction is mainly a result of decreases in compensation of $7.2 million and professional services of $6.3 million. The reductions in compensation are mainly due to the reduction in selling general and administrative company headcount in comparison to the prior year. The reductions in professional services are a result of increased commercial productivity. We reported a net loss of $109.2 million for 2020, which represents a net loss per share of $2.35 in comparison to to a net loss of $133 million and a net loss per share of $2.89 for 2019. Moving on to slide nine for our Q4 in historical net revenues. On slide nine, we show the trend in Q4 in historical net revenues. As discussed earlier, the fourth quarter of 2020 represented a record quarter and was a result of an increase in volume and seasonality of gross to net in comparison to the third quarter. The first quarter of each year is normally lower than the fourth quarter of the prior year, as noted in the first quarter of 2020 due to market and pricing seasonality. We expect similar seasonality and a decrease in sequential revenue in the first quarter of 2021. Slide 10 demonstrates improvement in our cash flow trend. On slide 10, as demonstrated in the trend, we have made progress in becoming a cash flow positive company. Through the exit of oncology and structural changes made during the year, we improved our cash outlook. As demonstrated on slide 11, we plan to be EBITDA positive in 2021. On slide 11, we reiterate our guidance of $250 million of product revenue and adjusted EBITDA of $10 million for 2021. We believe the continued strength in TMLO sales and profitability will fully fund our strategic investments in 2021. With that, I'd like to turn over the presentation to Sal to give an update on our commercial business.