BioSante shares nosedive after libido gel flunks pivotal studies

BioSante ($BPAX) shares went into a meltdown this morning after the company announced that its experimental female libido gel failed to outperform a placebo in a pair of big pivotal trials. The stock nosedived, plunging 74%--to 56 cents--as investors digested the news about the blockbuster hopeful, which BioSante execs blamed on an unusually high placebo response.

LibiGel failed co-primary as well as secondary endpoints in the studies. And analysts quickly raised some big questions about the company's next move.

"The magnitude of the miss on the efficacy data is what is surprising everybody," Jefferies' Graig Suvannavejh told Bloomberg. "People had a view that the bigger concern might have been safety, and efficacy was a layup of sorts. The big question isn't what happens with LibiGel going forward, but what's next for the company."

Investigators reported that the women recruited for the study didn't experience a significant increase in either sexual desire or sexual encounters after using LibiGel, compared to the placebo arm. Researchers recruited 1,172 women for the studies.

"LibiGel did exactly what we wanted it to do, and in a very safe manner," BioSante CEO Stephen Simes noted to reporters. "If the placebo would have acted like previous placebo or what would have been predicted, we would have won with flying colors. It's not that LibiGel did not work. The problem is that both arms worked equally well." And BioSante isn't ready to give up on the program yet.

"We will be looking to see if there are certain subsets of the data ... whether there is an age of patients who are responding or more likely to respond and so on," the company told analysts in a call.

- here's the press release
- read the Reuters story
- get the report from Bloomberg