BioSante Pharmaceuticals, Inc.
(NDAQ: BPAX) insiders appeal to be bullish on the stock as it
approaches its 52-week low. The biopharmaceutical company, which is
developing a female sexual dysfunction drug, saw executives and
directors purchase some 151,000 shares in just the last month between
$3.59 and $3.98. Meanwhile, not a single insider has sold stock – even
when it was trading at a 52-week high last May. So, should individual
investors consider buying into this stock?
BioSante currently has a market cap of $110 million with a strong
balance sheet, $30 million in cash, no debt, and a promising drug in
the pipeline – LibiGel. The new drug is a low-dose testosterone in a
gel formulation designed to increase sexual desire in women. A recent
study conducted by the Journal of the American Medical Association
found that 43% of American women (40 million or so) are estimated to
experience some degree of impaired sexual function. The company
believes that LibiGel will be the first FDA-approved product for FSD,
with an estimated 1.4 million off-label prescriptions written during
3006. The minimum estimated US market for LibiGel is $2 to $4 billion
with blockbuster sales potential.
What does the competition look like? Well, Procter & Gamble
(NYSE: PG) developed their own twice-weekly testosterone skin patch in
2004, but it was rejected by the FDA and only approved for use in
Europe. Since then, they have failed to launch any additional safety
studies, so it appears that they will not attempt approval in the
United States. Meanwhile, the FDA recently sent warning letters to
compounding pharmacies that are pushing “bio-identical hormone
replacement therapy” products designed to do the same thing as the
testosterone gel. Moreover, BioSante’s FDA approval enables patients to
get insurance to cover the drug in many cases – which means more sales.
So, where does the drug stand now? LibiGel needs just 12 months of
safety data before a new drug application (NDA) will be considered by
the FDA. The Phase 3 trial for the drug launched last week and is
designed to demonstrate the product’s safety in low doses. The first
efficacy trial is now underway and the company plans to initiate a
second in early 2008. Clearly, insiders are also bullish on the
prospects of this drug as they are buying up a record amount of stock.
Combined, these factors make BPAX a stock worth watching!
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