Early Monday, Cambridge, Massachusetts-based pharmaceutical company Radius Health said it granted an option to obtain an exclusive worldwide license, except Japan, to Swiss drug maker Novartis AG (NVS). Under the license, Novartis will develop and commercialize all formulations of BA058, Radius’ osteoporosis drug candidate. The payments under the contracts could total more than $500 million, part of which will be paid to Ipsen S.A. (IPSNY.PK), from which Radius licensed BA058 in 2005. In a different agreement, the MPM Bio IV NVS Strategic Fund L.P. has purchased $10 million of Series C preferred stock of Radius. Radius noted that BA058, a proprietary analog of human parathyroid hormone-related protein, or hPTHrP, is currently in Phase II development by the company for the treatment of osteoporosis in postmenopausal women. PTHrP is a critical peptide for promoting new bone formation, with a distinct role from parathyroid hormone, or PTH, which primarily regulates calcium homeostasis and bone resorption. Radius pointed out that Novartis would assume the global clinical development, manufacturing, and marketing of BA058 and all associated costs, when it exercises the option to license BA058. Under the agreement, Radius would receive payments on the option exercise and on successful completion of certain development, regulatory, and commercial milestones. Radius would also be eligible to receive royalties on product sales and has retained the option to co-commercialize BA058 in the United States. The company did not reveal the additional terms. C. Richard Lyttle, Ph.D., President and CEO of Radius, commented, ‘It was our stated intention to partner BA058 prior to commencing Phase III development, as this offers the best opportunity to maximize its value potential for Radius while expediting its development for the patients who need it. Through this innovative option arrangement, we have put in place an early mechanism to partner BA058 with Novartis, a global leader in the field of osteoporosis.’ Regarding the $10 million investment, Ansbert Gadicke, MD, General Partner of MPM Capital and General Partner of the MPM Bio IV NVS Strategic Fund, stated that the firm’s commitment reflects its belief in the potential of BA058 to address important unmet needs for osteoporosis patients in the near future, and in the attractive commercial potential of Radius. ‘We look forward to following the progress of this exciting bone anabolic agent and to its potential late-stage development by Novartis,’ Gadicke said. NVS closed Friday’s regular trading session at $54.34, down $0.41 or $0.75%, on a volume of 927 thousand shares. Source