Last year, BioSante Pharmaceuticals'
The problems come when you compare the data with placebo, which performed equally as well. Determined to prove that the drug is working and the effect was just masked by the placebo, management plans to run two more clinical trials to test the efficacy of LibiGel.
Good luck with that. It isn't going to be fast or cheap.
BioSante plans to meet with the Food and Drug Administration to get the agency to sign off on a Special Protocol Assessment in the third quarter, which would allow the biotech to start the trials late this year or early next. It'll take six to nine months to enroll patients in the trial and then six to eight additional months to run the trial, so we're looking at data in early to mid-2014.
The cost for both trials is expected to come in at around $30 million to $36 million. And the company is burning about $2.5 million per month, which includes the cost of a safety study. All told, it'll need at least $75 million to get to the data, probably more.
BioSante had less than $50 million in the bank at the end of the first quarter. A dilutive financing is inevitable, perhaps after data from the safety study is released later this year, which might add a little value. Of course, being safe isn't all that useful if the drug doesn't do anything.
Is it worth it? If LibiGel was guaranteed to pass the new set of clinical trials, I'd say yes. Even if the opportunity isn't as large as the multibillion-dollar marker that Pfizer's
But placebo effect isn't something that's easy to make go away, much to the chagrin of drugmakers that have to count on patient-reported outcomes to determine whether their drugs work. Chelsea Therapeutics
BioSante plans to make some changes to discourage patients from thinking about their problem -- switching from daily diary entries to weekly ones, for example -- which experts say should help decrease the placebo effect, but there's no guarantee that it'll work.
And of course, there's the possibility that most of the effect in the LibiGel treated arm was just a placebo effect, so if BioSante succeeds in removing some of the placebo effect, it'll decrease the treatment arm by a similar level.
This is a big gamble, and I'd suggest most investors would be better off letting someone else foot the bill for the trials and revisit the drugmaker in 18 months.
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