Velan-Repertoire Responds to Misleading Characterizations by the Radius Board

Velan Capital Investment Management LP and Repertoire Partners LP (together with the other participants in their solicitation, “Velan-Repertoire” or “we”), collectively one of the largest stockholders of Radius Health, Inc. (“Radius” or the “Company”) (NASDAQ: RDUS), with beneficial ownership of approximately 7.7% of the outstanding shares and economic exposure to approximately 10.1% of the outstanding shares, today responded to recent statements made by the Radius Board of Directors (the “Board”).

In its recent letter to stockholders, the Board touts that the Company was “effectively transformed through internal activism.”ⁱ However, in our view, the Company is deliberately applying a flawed definition of activism to mislead stockholders. This is apparently what the current Board considers activism (and an effective transformation, no less):

• Replacing the CEO in 2020 and then packing the Board with three new “independent” directors with prior ties to new CEO G. Kelly Martin within a year of his hiring, resulting in a conflicted Board where four of seven non-management directors have ties to CEO Martin.ⁱⁱ
• Dissolving the Strategy Committee in 2020, mere months ahead of the Company’s acquisition of RAD011.
• Unilaterally adding two new directors in May 2022 in a defensive and reactive attempt to provide the illusion of change when confronted with a contested election, while blatantly disenfranchising stockholders by placing these directors in classes not up for election.

CEO Martin and the Board are apparently proud to announce that “90% of the management team has been changed and approximately 60% of current employees have joined the Company” in the past 24 months. What they fail to tell stockholders is that in the year leading up to CEO Martin’s appointment, TYMLOS’ revenue growth was 61% from the first quarter of 2019 to the first quarter of 2020, compared to CEO Martin’s tenure which has seen TYMLOS’ revenue decline 10% from the first quarter of 2020 to the first quarter of 2022.

We believe the incredibly high employee turnover coupled with declining sales is the result of poor Board oversight and CEO Martin’s strategic preference to only dedicate half of his time to TYMLOS. In our view, a properly functioning Board would have demanded that TYMLOS get the appropriate management focus and prioritized sales growth. Instead, Radius touts its productivity per commercial employee – which is only increasing because the number of employees is declining at a faster rate than revenue.