The FDA approved BioSante Pharmaceuticals'
Both drugs deliver testosterone to people, but they have wildly different economics.
Bio-T-Gel treats hypogonadism -- essentially low testosterone -- in men. Replacing testosterone seems to be a simple thing to do based on the number of testosterone treatments available: Abbott Labs'
And BioSante only gets a portion of those sales; it licensed the rights to the drug to Teva Pharmaceutical
LibiGel, on the other hand, is fully owned by BioSante. If the drug were approved, it would owe a royalty to Antares Pharma
And the market is wide open. LibiGel delivers testosterone to women with sexual dysfunction. The female version of Viagra has been harder to come by.
Unfortunately, LibiGel failed its most recent clinical trial. The drug probably works, but the placebo affect washed out any effect that might have been there. Without another major trial, I have a hard time seeing the drug getting approved.
BioSante isn't being valued very highly -- even with the increase today, it has just a $125 million market cap -- but that seems pretty reasonable. Bio-T-Gel doesn't look like it's worth much and assuming LibiGel is dead, you're paying for a pipeline that includes a risky cancer vaccine program and an oral contraceptive.
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Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Abbott Laboratories and Teva Pharmaceutical Industries. Motley Fool newsletter services have recommended buying shares of Abbott Laboratories and Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.