Please ensure Javascript is enabled for purposes of website accessibility

BioSante Is Ready for Some Action

By Brian Orelli, PhD - Updated Apr 6, 2017 at 8:37PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

But it's still risky.

Talk about getting excited. BioSante Pharmaceuticals (Nasdaq: BPAX) is up 38% this month without a single press release from the company. Bloomberg published an article in which CRO Stephen Simes says the company is looking for a partner or a buyer of the whole company, but that only seems to have been an aphrodisiac for a desire that was already there.

It appears investors are opening positions in BioSante in anticipation of the release of company data from two clinical trials for its female sexual-dysfunction treatment, LibiGel, by the end of the year.

There are two risks here. First the placebo effect comes into play in subjective readouts like the desire to have sex. Taking a drug, whether it contains active ingredients or not, could be enough to push women toward a higher libido, making it harder to prove that the drug works.

The second concern is safety. The FDA is likely to see a female sexual-dysfunction drug as a lifestyle drug. Unlike diabetes or high cholesterol, not treating the disease is not life-threatening -- even if the women's husbands would claim otherwise. Boehringer Ingelheim, Pfizer (NYSE: PFE), and Procter & Gamble (NYSE: PG) all stopped developing female sexual-dysfunction drugs because of safety issues.

LibiGel is in a long-term study checking for the risk of cardiovascular events and breast cancer. So far, the data-monitoring board has allowed the trial to continue, which should give investors a little confidence, but it's not a guarantee that the long-term study will end in BioSante's favor.

I could see Pfizer, Eli Lilly (NYSE: LLY), Bayer, or GlaxoSmithKline (NYSE: GSK) licensing LibiGel, since they all sell erectile-dysfunction drugs. But I have a hard time seeing them getting turned on to the drug until it proves itself in the clinic -- and maybe not until it gets past the FDA.

Even at this inflated level, there's still plenty of upside for BioSante if LibiGel is approved, but it also means there's further to fall.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Check out his holdings and a short bio. The Motley Fool owns shares of GlaxoSmithKline. Motley Fool newsletter services have recommended buying shares of Pfizer, GlaxoSmithKline, and Procter & Gamble. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

ANI Pharmaceuticals, Inc. Stock Quote
ANI Pharmaceuticals, Inc.
$35.80 (-0.11%) $0.04
Eli Lilly and Company Stock Quote
Eli Lilly and Company
$322.77 (1.91%) $6.05
Pfizer Inc. Stock Quote
Pfizer Inc.
$49.15 (1.17%) $0.57
The Procter & Gamble Company Stock Quote
The Procter & Gamble Company
$149.73 (-0.03%) $0.04
GSK Stock Quote
$34.06 (-0.56%) $0.19

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.