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Biosante: Tiny Biotech Could Skyrocket with Estrogen Replacement Gel
An insightful reader emailed me (which I highly encourage!) last fall suggesting I look further into Biosante (BPA), a small company devoted to improving drug delivery. This is an excellent example of a missed opportunity by me, as the stock is up more than 50% since then.
Biosante is a tiny (according to their most recent 10-K they have fourteen employees) company working on transdermal delivery of hormones. In December of last year, they received FDA approval to market Elestrin, an estradiol gel designed to be rapidly absorbed through the skin. It is meant to be applied daily to the arms, shoulders, abdomen, or thighs. A gel or cream is less invasive than a patch that needs to be worn continuously.
In a Phase 3 study, Elestrin demonstrated significant decreases in incidence and severity of hot flashes in menopausal women, but at a substantially lower dosing level of estradiol. Lower estradiol levels can decrease undesired side-effects in hormone replacement therapy. Elestrin will be marketed by Bradley Pharmaceuticals. A launch is expected in mid-2007. Bradley Pharmaceuticals has experience selling specialty pharmaceuticals, so this is a good way to market their product.
In addition, Biosante recently announced they had begun a Phase 3 clinical trial of a similar product, to deliver testosterone, to treat female sexual dysfunction [FSD]. There is precedent in the scientific literature that administering testosterone indeed treats FSD. They also announced positive preclinical results on delivery of a vaccine to prevent bird flu. While both these products have potential (I’m not overly impressed by preclinical data), I think the main value-driver of this company is Elestrin.
As an aside, there are 493 literature references to clinical trials for FSD on “Pub Med” (a website that searches the medical literature) compared to 1,121 for erectile dysfunction in men.
In an article in The Motley Fool, Brian Lawler questioned just how much of the estrogen market Elestrin will actually capture. This is a critical issue. Novavax sells Estrasorb, also a transdermal estradiol delivery system, and has not gained any real traction in the market.
Novavax published data from a Phase 3 study in the journal Menopause. The lowest daily dose of Estrasorb was 8.6 milligrams of estradiol. By contrast, according to Phase 3 clinical data, dosing of Elestrin was found to be effective between 12.5 and 64 micrograms. For readers less conversant in the metric system, there are 1000 micrograms in a milligram. That is, the amount of estradiol dosed with Elestrin is a tiny fraction of that dosed in Estrasorb. Given there are known health risks associated with estradiol, the ability to give a significantly lower dose, I believe, makes for a superior product that should gain market share.