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BioSante shares soar on FDA approval, but will the euphoria last?
Shares of BioSante Pharmaceuticals Inc. surged as high as $1.23 and closed up 27% to $.96 +0.208 after regulators approved a testosterone gel that will be marketed by its partner Teva Pharmaceutical Industries Ltd.
The Food and Drug Administration approved Bio-T-Gel as a treatment for low testosterone levels, or male hypogonadism. Bio-T-Gel is intended to be applied to the skin once per day. Low testosterone is associated with fatigue, depression and various sexual dysfunctions.
Shares of BioSante had been hammered recently after BioSante's LibiGel, a testosterone gel designed to treat female sexual dysfunction failed in two late-stage clinical trials. BioSante also developed Elestrin, a hot flash treatment licensed to Jazz Pharmaceuticals PLC.
The Lincolnshire, Ill. based company developed Bio-T-Gel and licensed it to Teva-- which is based in Israel. That firm did not say when it plans to start selling the product. BioSante will receive royalties and potentially other payments once it's on the market.
Teva is the world's largest maker of generic drugs, and it is expanding its branded drug business. Sales of brand-name products rose 32 percent in the fourth quarter after the company bought Cephalon Inc., which makes cancer drugs and the sleep disorder drug Provigil. Generic drug revenue grew 12 percent as Teva started selling generic versions of the cholesterol fighter Lipitor and anti-psychotic Zyprexa.
Rodman & Renshaw analyst Elemer Piros said BioSante won't get much royalty revenue from Bio-T-Gel because it's the fifth product to be approved for the condition. Other low-testosterone treatments are made by Abbott Laboratories Inc., Eli Lilly & Co., Endo Pharmaceutical Holdings Inc., and Auxilium Pharmaceuticals Inc. Piros kept a "Market Perform" rating on shares of BioSante.
It seems clear that BioSante isn't being valued very highly by those on Wall Street-- even as shares rose significantly today. If the LibiGel project is dead, then the rest of the BPAX pipeline looks more risky and unattractive than before. We would take profits here and wait until the dust settles.
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