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"Female Viagra" Drug Failure Causes BioSante Shares to Plunge 77%

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LibiGel, meant to boost libido, is no more effective than a placebo, according to a study.

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So much for female Viagra.

Shares of BioSante Pharmaceuticals (BPAX) dropped 77% Thursday after the company said its LibiGel treatment for women with low sexual drives worked no better than a placebo in the company's own studies. The shares fell to $0.48 in morning trading, the lowest price in BioSante's almost 12 years as a public company. (The company just raised $48 million in a new stock offering in August.)

"We have been committed to LibiGel for many years and we are committed to determining the future of LibiGel," CEO Stephen Simes says in a statement. "We will continue to analyze the efficacy trial data fully and determine plans for our next steps in the LibiGel development plan."

It seems unlikely that the company would go forward after the disappointing study results. In a separate trial, BioSante is studying the safety of the drug, though Simes says "we will be analyzing the best path forward for the study given the results reported" from the efficacy trial.

The safety testing appeared to be the biggest hurdle for BioSante as earlier company studies suggested the drug -- a testosterone gel -- worked. (See BioSante Rising as Female Libido Drug Moves Forward) Safety issues were at the center of decisions by German drug maker Boehringer Ingelheim and Procter & Gamble (PG) to scrap their own programs for female libido treatments. Pfizer (PFE) reportedly was doing some animal testing of a woman's sex treatment last year. But despite some salacious headlines out of the UK, there's been little progress. Pfizer actually tested Viagra for women but gave up on the idea in early 2004, concluding that it didn't work.

Despite the nickname female Viagra, BioSante's LibiGel doesn't bear any resemblance to Pfizer's blockbuster impotence pill. Viagra increases blood flow to the penis, while LibiGel is aimed at boosting testosterone levels in women. Simes has said millions of women in the US get prescriptions for off-label use of testosterone cream to boost their sex drives. (There's no approved use for testosterone treatment as a female libido booster.)

Simes also has said the market for sex-drive treatments for women could rival the demand for erectile dysfunction drugs for men -- at least a $2 billion a year opportunity. Pfizer, Eli Lilly (LLY), Merck (MRK), GlaxoSmithKline (GSK) and Bayer compete for men's impotence treatments.

While it has other research programs, LibiGel is BioSante's lead drug candidate. The company's market cap dropped down to about $52 million today. BioSante lists $70.5 million in assets, including less $1 million in cash, as of September 30. During its run as a public company, BioSante has an accumulated loss of about $211 million.

Twitter: @brettchase

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No positions in stocks mentioned.
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