Disgruntled Investors File Lawsuit Against Biosante Over Libigel

Details: Category: News; Published on Wednesday, 08 February 2012 14:47; Written by Lara Landis; Hits: 670

Investors saw Biosante’s Libel as a promising treatment for post-menopausal female sexual dysfunction. When the drug failed to do as well in clinical trials as expected, the price of the stock sank. Biosante currently faces a class action lawsuit alleging that the company defrauded investors when the company’s stock sank 77% in a single day, according to the Courthouse News Service.

Libigel, unlike many other Female sexual dysfunction drugs on the market is designed to target a drop of testosterone that occurs in many women after they reach menopause. The FDA has yet to approve or deny the drug, although the FDA will make an approval decision later this year or early next year.

Thomas Lauria claims that Biosante consistently misled the investors about the viability, effectiveness and potential market for Libigel. Libigel is a low-dose testosterone gel designed to elevate testosterone levels to pre-menopausal levels. Testosterone, the male sex hormone, controls the sex drive in men and women.

Stock prices for Biosante rose when the outlook for the drug look promising. High stock prices continued for several months until the final results of the Phase III trials were released.

Biosante’s last press release before the trials finished read:

BioSante Pharmaceuticals, Inc. (NASDAQ: BPAX), today announced successful completion of its principal LibiGel (testosterone gel) pharmacokinetic (PK) study. The top-line results indicate that LibiGel increases levels of free testosterone, bioavailable testosterone and total testosterone in the serum of postmenopausal women to within the normal ranges for younger, premenopausal women.

Seeking Alpha issued its own editorial asking if Libgel would make a comeback.

Sources:

Courthouse News Service

Will Biosante's Libigel Make a Comeback?