Shares of BioSante Pharmaceuticals (NASDAQ:BPAX) are up 9% Tuesday on news that the company will be concluding a Phase III safety study of LibiGel, a treatment for sexual dysfunction in menopausal women. In 2008, the FDA informed BioSante that LibiGel would need a minimum exposure of over 12 months in cardiovascular and breast cancer safety studies before an NDA submission or approval. Since then, 3,200 women have been in safety studies for more than one year, and 1,700 women have been tested for more than two years. In December of 2011, LibiGel’s Phase III efficacy studies failed to meet primary/secondary endpoints or show proof of improvement over placebo, although the company said the treatment acted as anticipated. At the time, share price plummeted from $15 to $3. BPAX is continuing development of two new Phase III efficacy trials for LibiGel, and the company plans to submit a Special Protocol Assessment (SPA) for the trials which will prevent the FDA from altering its perspective on the trial’s assessment. The SPA, says BioSante, should help to clarify the drug’s path to approval
BioSante has roughly $45M in cash after a $3M capital raise on August 20, and burned almost $15M in the first half of this year. With the initiation of two new trials, however, expenses are increasing ($36M expected for the new trials) and the company may have less than a year of operation left without more cash. The recent direct offering could be the first of a few attempts to improve the balance sheet before major R&D expenditures begin. BPAX is trading close to its all-time low for a reason. LibiGel’s development has been littered with potholes and investors should question whether or not the product should still be in the pipeline at all after two failures in efficacy trials. Today’s bump means little for LibiGel’s – or BioSante’s – long-term strength.