Is BioSante Pharmaceuticals Next In Line To Receive Institutional Praise?

The biotech universe has been a hot investment option towards the end of the year for those looking for high risk high reward equities. This industry offers investors a chance to find companies which price per share is valuated based on science rather than heavy influence from major indices and economic news around the world. Though often times it is hard to distinguish the golden eggs among the rotten ones, it is becoming increasingly popular to see investors and firms begin buying up companies prior to their upcoming FDA catalysts in anticipation of the news, often a few weeks or months in advance.

One of the companies looking to take advantage of the recent inflow of attention to the small cap biotechs is BioSante Pharmaceuticals (NASDAQ:BPAX), who has 2 upcoming catalysts for the first half of 2011 which could easily propel the company to new 52-week highs. It is expected in the coming weeks that they begin phase 2 study at Johns Hopkins cancer center for GVAX (therapeutic cancer vaccine) and also phase 3 results for their flagship product, LibiGel to support an NDA filing. With a market capitalization of only 112M, it isn´t a surprise the company´s Director, Ross Manango has been scooping up shares at $1.47 during December in anticipation of the company´s forward looking events during the new year. The company has also increased cash on hand by nearly $6M from product revenues and partnerships year-over-year as its clinical pipeline continues to grow stronger, dispelling any worries of future dilution. (source: 11/12/2010 10-Q EDGAR ONLINE)

Such occurences have recently been witnessed in XOMA (NASDAQ:XOMA) whose shares rose a whopping 204.68% since last Monday´s trading, Repros (NASDAQ:RPRX) who jumped 82% on Thursday, and ACADIA (NASDAQ:ACAD) who went on to gain 31% on Wednesday and Friday´s market. Though no material news was formally announced neither XOMA nor ACADIA, the shares jumped solely in anticipation of upcoming FDA catalysts, with Repros being the exception of the three. Repros reported positive developments for its experimental testosterone deficiency drug, Androxal.

What´s most important to note is that all three of these companies saw heavy institutional accumulation during the last three months leading up to their anticipated catalysts, something BioSante has yet to experience. Of the 62 institutional holders, 8 are new positions, 24 have increased positions during the last 3 months as reported by NASDAQ. These include prominent names, of the likes including, Condor Capital, WMS Partners, JP Morgan Chase, BNP Paribas and Comerica Bank.

Product Porftolio

BioSante specializes in developing products for female sexual health and oncology, and of them is LibiGel, which most investors anticipate as having a blockbuster market potential. It is a gel formulation of testosterone, designed to be quickly absorbed through the skin after a once-daily application on the upper arm, delivering testosterone to the bloodstream evenly over time and in a non-invasive and painless manner. The topical application of LibiGel has the added advantage of reduced skin reactions compared to other forms of transdermal delivery systems (i.e. patches).

Treatment with LibiGel in BioSante´s Phase II clinical trial significantly increased satisfying sexual events in surgically menopausal women suffering from FSD. The Phase II trial results showed LibiGel significantly increased the number of satisfying sexual events by 238% versus baseline (p