Is BioSante Next in the Biotech Buyout Binge?

Earlier this week BioSante Pharma (BPAX) reported 3Q08 results which included a net loss of $6.6M or ($0.24) per share and a loss of $16.3M or ($0.60) per share for the first nine months of the year. The primary focus at the company is the development of LibiGel, which is currently being evaluated for both effectiveness and safety in three Phase 3 clinical trials for the treatment of female sexual dysfunction [FSD]. The Company ended 3Q08 with $17.5M in cash, compared to $22.8M at the end of 2Q08.

As illustrated on the accompanying all-data stock price chart for BPAX, the stock is now trading at a strong support level around 2 bucks – from which the stock has rebounded sharply on previous occasions and strong insider buying has occurred this year. A summary of 2008 insider buying includes:

- option exercise buys at $2.15 per share for purchase of over 147,000 shares
- open market buys at $3.59-$3.73 per share for purchase of 80,000 shares

The underlying story at BioSante and the potential for LibiGel to become a blockbuster drug as the Viagra for women has not changed since my previous articles, with links provided below. Also, Procter & Gamble (PG) signed a deal with Noven Pharma (NOVN) this summer to develop a skin patch for FSD, with an expected FDA filing in 2010 or 2011 an estimated market size of $1B (compared to about $4B for male erectile dysfunction drugs). PG already markets such a product in Europe (Intrinsa), which failed to gain FDA approval due to the lack of long-term safety data.

BPAX Reacquires Elestrin – 8/10/08

Insiders Are Bullish on BPAX – 1/14/08

With BPAX currently trading under 2 bucks, investors have a chance to buy (as I did today) at levels below recent option strike prices for insiders at a level which has proven to be a long-term support for the stock as indicated on the chart by the three arrows. Also, at a presentation earlier this week, CEO Stephen Simes stated that BPAX had sufficient liquidity through the end of 2009 and stated that LibiGel licensing discussions could result in a buyout of the entire company -- following in the pattern of several small and micro-cap biotech buyouts within the last year with 100%-plus premiums.