BioSante At It Again (BPAX)

BioSante Pharmaceuticals, Inc. (NASDAQ: BPAX) is trying to make anyone with any caution look rather silly all over again this Tuesday morning.  The driver has been hope of its old cancer hopefuls but a coming February approval (or non-approval) of Teva to sell Bio-T-Gel has been another catalyst.  The ultimate outcome is unknown.  The problem is that the amount of royalties is said to be tiny even if an approval comes.  Just yesterday we questioned whether or not the rally was real because shares have now more than doubled off the lows.  We would note that this was after a drop of about 80% (from $2.50 to about $0.50) in December and the company has what looks on the surface like long-term viability issues.

Yesterday’s gain may have been pushed even more because of a Seeking Alpha article that the headline implies a stock double.

It turns out we are not alone in being cautious about a company with limited prospects.  The Street has an article called “6 Drug Stocks Unworthy of Biotech Bull Market” and it is not favorable.  Actually, there is not a single favorable mention in there at all by Adam Feuerstein.  His take: BioSante should just shut down and return the cash on hand to its shareholders.  Feuerstein noted, “That this failure of a company is surging this year is proof that a biotech sector sell off is coming. Get ready for it.”

So here is the issue… BioSante is up 9.5% at $1.15 on now over 1.1 million shares with more than 1 hour until the market opens. Yesterday’s high was $1.06 and the close was $1.05.  This stock traded a whopping 28.7 million shares on Monday and that was after closing at $0.74 on Friday.

This move just feels very questionable, even if it is up yet again.  With a $1.00 stock, it doesn’t take very many guys with decent sized trading accounts to swing a stock like this around. The same will likely be true on the downside when the tide turns.

JON C. OGG