Why BioSante Expects a Positive Review of Drug for Female Sexual Disorder

| About: ANI Pharmaceuticals, (ANIP)

By May 2011, an independent Data Monitoring Committee (DMC) is expected to review the Phase III safety trial data of BioSante Pharmaceuticals, Inc.'s (BPAX) Libigel, a drug designed for the treatment of female sexual dysfunction (FSD) in surgically menopausal women.

DMC is an independent advisory expert group that reviews the safety and efficacy of a drug during a clinical trial. This group can make a recommendation to stop the trial ahead of its schedule if the trial participants experience severe or unexpected side effects and/or if the investigational drug shows no treatment benefit. On the other hand, if there is no safety concern and the investigational drug seems promising, it recommends the continuation of the trial. Thus, a favorable review by a DMC bodes well for the trial results of an investigational drug.

Female Sexual Dysfunction (FSD) is a woman's lack of sexual desire, arousal and pleasure with a persistent inability to attain and maintain an orgasm during sexual intercourse. It occurs due to low levels of testosterone in females. The majority of women suffering from FSD are either naturally menopausal (those whose ovaries have stopped producing testosterone due to their age) or surgically menopausal (where menopause has been induced by the surgical removal of ovaries). Libigel is targeted towards the latter category of patients.

In a human body, most of the testosterone is secreted by the testes in males and by the ovaries in females. In males, testosterone promotes the growth and development of the male sex organs, deepening of their voices, and the growth of facial hair, as well as controls all sexual functions, including libido and erectile potency (capability of achieving and maintaining an erection sufficient enough to permit satisfactory sexual intercourse). Testosterone also promotes fertility in adult males.

Although testosterone is generally characterized as the male sex hormone (since males produce about 10 times more testosterone than females), it also plays a vital role in the female body. Testosterone is responsible for the development of sexual desire, sexual arousal, sexual pleasure, experiencing orgasm, increased bone density, raised energy levels and improved mood in females. However, after surgical menopause, due to the absence of ovaries, there is no production of testosterone, causing testosterone deficiency, which leads to FSD.

Approximately 25 million women are surgically menopausal in the U.S., with approximately 20-25% (5-6.25 million) of them experiencing FSD. There is no FDA approved drug for FSD in surgically menopausal women and doctors prescribe male testosterone therapy to these patients. However, this treatment causes recurrent side effects like severe acne and unwanted hair growth, thereby presenting a significant unmet market need for a safer treatment option.

It is estimated that if Libigel is approved, the drug can generate peak sales of approximately $700 million, or 375.74% of the company’s current market capitalization.

I expect a positive review of the Phase III safety trial of Libigel by the independent DMC, based on the previous reviews of the same trial by the independent DMC and the encouraging data from the Phase II trial of the drug.

In February 2011, during the fifth independent DMC review of the Phase III trials of the drug, only 17 cardiovascular events (0.58%) and eight (0.27%) breast cancer events were reported in the 2,869 women, who were exposed to either Libigel or placebo for an average of more than 12 months. Given that both the event rates were much lower than the anticipated event rates, the independent DMC recommended for the continuation of the Phase III safety trial without any modifications, including the continued enrollment of new patients. After the fifth independent DMC review, it was decided that additional safety reviews would be conducted by the independent DMC every 90 days, thus scheduling the next independent DMC to occur in May 2011.

Apart from the Phase III trials, previously Libigel was evaluated in a Phase II trial. The data from the double-blinded, placebo-controlled Phase II trial demonstrated that Libigel significantly improved the number of satisfying sexual events in surgically menopausal FSD women. The data demonstrated that Libigel-treated patients experienced a significantly increased number of satisfying sexual events by 238% from baseline (before starting the treatment) as well as from placebo-treated patients. Additionally, Libigel showed a placebo-like side effect profile, without any serious adverse events and any discontinuations of treatments due to adverse events.

Libigel is an experimental gel formulation, designed to be applied once daily on the upper arm. It delivers testosterone to FSD patients through the skin. The drug is being developed by utilizing Antares Pharma Inc.'s (AIS) Advanced Transdermal Delivery (ATD) technology, which facilitates the gel formulation to get rapidly absorbed through the skin into the bloodstream. By using this technology, Libigel replaces the missing testosterone in surgically menopausal FSD women in a non-invasive and painless manner.

Since Libigel is the lead pipeline candidate of BPAX, a positive review by an independent DMC in May will prove to be a bullish event for the stock.

Disclosure: I am long BPAX.