BioSante (BPAX) released Phase III data from their two LibiGel trials and made our job of describing the data very simple. In a word, the data were horrible. For example, in the BLOOM-2 study the placebo actually performed better than the drug! Oysters had a better chance of success.

Subjects in BLOOM-2 who were treated with LibiGel showed an increase of 1.0 day with a satisfying sexual event compared to baseline, while those receiving placebo gel showed an increase of 1.28 days with a satisfying sexual event compared to baseline.  Subjects in the first trial, BLOOM-1, who were treated with LibiGel showed an increase of 1.47 days with a satisfying sexual event compared to baseline, while those receiving placebo gel showed an increase of 1.26 days with a satisfying sexual event compared to baseline (p=0.463). No, we didn’t misplace the decimal there – the statistics suggest that any treatment effect is just as likely due to placebo effect as to drug effect. Wow – these data are vastly worse than even we expected! 

This is a huge disappointment for BPAX and we expect the stock to get hammered tomorrow when it resumes trading.  The stock should open below $1.00 and could easily break $0.50 considering this is some of the worst clinical data you will ever see.  The company will end the year with $56 million in cash and has traded near that level in after-hours trading. We recommend that you cover all shorts and puts today. We will cover our BPAX short using the closing price from tomorrow, Thursday, December 15.