Company: BioSante Pharmaceuticals (BPAX)Short term catalyst: 3 presentations at healthcare conferences (9/7, 9/12, 9/27); press release
Mid-term catalyst: Bio-T-Gel PDUFA (11/14), LibiGel Phase III efficacy trial results update (4Q2011)
Long term catalyst: LibiGel NDA filing (mid/end-2012)
52-week high: $4.02
52-week low: $1.30
TheStreet.com Interview with BioSante CEO
Cash Position
On Aug. 2, 2011, BPAX closed a $48 million public offering of common stock. According to BPAX CEO, Stephen Simes, the proceeds of the $48 million underwritten financing together with the cash the company had before the transaction results in almost $80 million in cash. This cash balance is sufficient to fund the LibiGel program and BioSante through the anticipated LibiGel new drug application (NDA) submission by the end of 2012, and in fact all the way through a potential FDA approval which could come in mid-2013. This long runway was one of the key reasons for executing the transaction at this time. Another reason for executing the transaction at that time was so that in the fourth quarter of this year when the company announce LibiGel efficacy data investors can concentrate on the quality of the data versus being concerned that BPAX would need to raise money.
More on LibiGel Trials
LibiGel (testosterone gel) is being developed for the treatment of female sexual dysfunction (FSD), hypoactive sexual desire (HSDD) in post-menopausal women. BPAX has completed enrollment in two pivotal efficacy trials under SPA agreements with results expected during the fourth quarter of 2011. In addition, the company has also completed enrollment in a Phase III safety trial, which is expected to produce data supporting LibiGel's NDA submission anticipated to be made in 2012..
Primary safety outcomes being evaluated are related to cardiovascular (CV) events such as CV death, myocardial infarction, and stroke with a lower than expected rate of 0.58% (22 CV events) observed to date and a 0.24% rate of breast cancer (nine cases). BPAX has patent protection for LibiGel through mid-2022 and estimates over 4 million testosterone prescriptions are written off-label for the treatment of female sexual dysfunction (FSD), representing a potential market opportunity of $2 billion.
Summary of the background and rationale for development of LibiGel for the treatment of FSD, HSDD in post-menopausal women (based on BPAX's recent SEC 10-K Annual Report filing)
“Although generally thought of as being limited to men, testosterone also is important to women and its deficiency has been found to cause low libido or sex drive. Studies have shown that testosterone therapy in women can boost sexual desire, sexual activity and pleasure, increase bone density, raise energy levels and improve mood.
According to a study published in the Journal of the American Medical Association (JAMA), 43% of American women between the ages of 18 to 59, or about 40 million women, experience some degree of impaired sexual function. Among the more than 1,400 women surveyed, 32% lacked interest in sex (low sexual desire). Furthermore, according to a study published in the New England Journal of Medicine (NEJM), 43% of American women between the ages of 57 to 85 experience low sexual desire.
According to IMS data, two million testosterone prescriptions were written off-label for women by U.S. physicians in 2009 and according to independent primary market research, at least 2 million additional prescriptions of compounded testosterone were written off-label for women. Female sexual dysfunction is defined as a lack of sexual desire, arousal or pleasure. The majority of women with FSD are postmenopausal, experiencing symptoms due to hormonal changes that occur with aging or following surgical menopause.”
Trading Roadmap
Given the list of catalysts in the short, mid-, and long term (including PDUFA, clinical trail results, NDA filing), there is great potential that BPAX will see a 'Hike' ahead of the company's anticipated submission in 2Q2012. Under normal circumstances, it would be safe and less risky to purchase call option contracts with an expiry date many months down the road. However, with the increased volatility and unpredictability seen in the markets around the world at the moment, I would remain cautious in making such 'long term' trades with catalysts that are as far as 3 months away. Currently, Dec 2.5 call options are traded at $.75. With BPAX trading in the $3.60 -3.80 range just prior to the latest round of stock offer, this is a reasonable entry to me. The 3 presentations by BPAX in September could potentially attract more investor attention and kick off the 'Hike'. I will continue to monitor BPAX price in the coming weeks. Good luck! You are always welcome to follow me on Twitter (@MichaelJuan01) for trading updates.
About BioSante
About LibiGel
About Bio-T-Gel
