LibiGel trial failure leaves BioSante investors unsatisfied

Trial results are seldom more damning than those received by BioSante Pharmaceuticals. Its product to improve female sex drive, LibiGel, failed to perform against placebo in two pivotal studies, news of which caused shares to crash 76% to a record low of 51 cents in early trading today.

As its portfolio of hormone replacement products has been outlicensed or sold, and the remaining pipeline largely speculative cancer vaccine products, analysts from Roth Capital Markets possibly phrased it best when asking of BioSante, “what’s the carcass worth?” With the Illinois company's market value now equal to cash in the bank, it would appear to be a prime reverse merger candidate for any private firm looking for a stock-market listing.

No satisfaction

BioSante’s pivotal Bloom 1 and Bloom 2 trials aimed to demonstrate that LibiGel could significantly increase the number of satisfying sexual encounters over four weeks of use by women with hypoactive sexual desire disorder (HSDD). Declines in testosterone following menopause are thought to be a factor in reduced sexual desire; BioSante’s approach has been to create a testosterone-containing gel absorbed transdermally, placed on the upper arm.

The gel failed on all efficacy counts – with patients in the placebo arm of Bloom 2 even showing a numerically higher number of days with a satisfying sexual encounter. Women using the gel also failed to show an increase in sexual desire as measured by the inventory of sexual events and desire (ISED), an index that was required under a special protocol assessment agreed with the FDA.

According to BioSante’s management, the frequent diary entries that were required to track the ISED measurements may have contributed to the surprisingly high placebo effect seen in the control arm that confounded the trial. Beyond that, the executives were at a loss to explain the failure given that LibiGel did in fact increase blood testosterone levels.

There was always some question about the size of the market, with 2016 forecasts ranging from Roth’s $841m to Leerink Swann $286m. And indeed, whether testosterone has any meaningful effect at all is subject to some question. Procter & Gamble’s Intrinsa patch, which was waylaid on safety grounds, was judged by an FDA advisory committee to have a clinically meaningful if marginal benefit.

BioSante says four million testosterone prescriptions are written off-label each year to treat reduced sexual desire in women; based on the strong placebo effect seen in the Bloom trials BioSante chief executive Stephen Simes questioned in a call with investors whether those off-label prescriptions were also prompting a placebo response.

In any case, with such major off-label prescribing already under way, a significant marketing effort would have been required – and a large partner necessary – to convert those prescriptions to LibiGel, and pricing would have been an important consideration in establishing market share.

Challenging times

BioSante now has some important strategic choices to make. It forecasts having $56m cash on December 31 and expects that its monthly cash burn of $3.2m in 2012 will be curtailed, which gives it breathing room into 2013. With very few catalysts on the horizon it is looking like a challenging time indeed.

Bio-T-Gel, a Teva-partnered product for male hypogonadism, is up for FDA approval by February 14. However, as it is subject to legal action from Abbott Laboratories, there is no expectation that it will begin generating royalties anytime soon, and BioSante’s management said it is not counting on that revenue.

Mr Simes said the company will now be on the lookout for products to in-license. Its existing pipeline of cancer vaccines brought on board with its 2009 buyout of Cell Genesys remain largely in phase II, with trials of a melanoma vaccine at Johns Hopkins University being funded by the Hussman Foundation. Mr Simes signalled that the company will be looking for similar deals to achieve licensing income from that portfolio; no phase III trials should be expected.

Thus BioSante has the look of a company starting over from scratch. It does have the cash to in-license a late-stage product, but it would not be surprising for a strategic review and staff reductions to follow soon. It may be a long time before life returns to BioSante shares.

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