Merger deal gives generic drugmaker control of troubled BioSante

The generic drugmaker ANI Pharmaceuticals has stepped up to take over troubled BioSante as the biotech preps for Round Two of its failed late-stage program for a female libido treatment. The two companies announced a merger agreement this morning in which ANI shareholders will wind up with a slight majority of shares in the combined operation, which will continue under ANI's executive leaders. 

BioSante ($BPAX) was battered late last year after LibiGel--designed to boost the number of satisfying sexual events for women--failed a pair of Phase III studies, torpedoed by the placebo response in the control arm. Once touted as a possible blockbuster, BioSante's shares were blasted by the bad news. But the biotech regrouped, vowing to mount two new Phase III studies to prove that it worked--an expensive, high-risk effort rarely accomplished in the drug development world.

Now ANI--a small company which generated $16 million in sales last year from its generics and contract manufacturing operations--will go public in the reverse merger, giving BioSante shareholders 47% of the combined company with contingent value rights (a CVR) on LibiGel that could generate up to $40 million, provided that investigators can eventually prove it works. And ANI gets a revenue stream from a product on the market.

"We believe that potential future license and other royalty fees due to BioSante for its FDA-approved male testosterone gel, licensed to Teva, and other products could generate significant future cash flow for ANI going forward," says ANI chief Arthur S. Przybyl, who will remain at the helm following the merger.

BioSante recently wrapped a cardio safety study of LibiGel, which had been requested by regulators. The biotech said recently that it was planning to get FDA approval of its new Phase III studies early in 2013. 

- here's the press release

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