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3142078 116389 38155251 11760920 -1548535 <p style="FONT-FAMILY: times"><font size="2"><b>1. DESCRIPTION OF BUSINESS </b></font></p> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;BioSante Pharmaceuticals,&#160;Inc. (the Company) is a specialty pharmaceutical company focused on developing products for female sexual health and oncology. The Company's products, either approved or in human clinical development, include: (1)&#160;LibiGel, once daily transdermal testosterone gel in Phase&#160;III clinical development for the treatment of female sexual dysfunction (FSD), specifically hypoactive sexual desire disorder (HSDD); (2)&#160;a once daily transdermal testosterone gel approved by the U.S. Food and Drug Administration (FDA) indicated for the treatment of hypogonadism, or testosterone deficiency in men, and licensed to Teva Pharmaceuticals USA,&#160;Inc. (Teva); (3)&#160;GVAX cancer vaccines, a portfolio of cancer vaccines, four of which have been granted FDA orphan drug designation, and are currently in 17 Phase&#160;I and Phase&#160;II clinical trials for the treatment of various cancers; (4)&#160;The Pill-Plus (triple component contraceptive), once daily use of various combinations of estrogens, progestogens and androgens in Phase&#160;II development; and (5)&#160;Elestrin, once daily transdermal estradiol (estrogen) gel approved by the FDA indicated for the treatment of moderate-to-severe vasomotor symptoms (hot flashes) associated with menopause and marketed in the U.S. by Jazz Pharmaceuticals,&#160;Inc. (Jazz Pharmaceuticals), our licensee. </font></p> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Company's lead product in development has been LibiGel for the treatment of FSD, specifically HSDD, in postmenopausal women, for which there is no FDA-approved pharmaceutical product. The Company continues to analyze the data from the two pivotal LibiGel Phase&#160;III efficacy trials first reported on December&#160;14, 2011. Initial analysis of the efficacy data from these trials shows that the trials did not meet the co-primary or secondary endpoints. Although there were no statistical differences from placebo, results indicated that LibiGel performed as predicted based on previous experience with testosterone products for FSD. However, the placebo response in the two efficacy trials was overwhelming and unpredictable; and therefore, LibiGel's results were not shown to be statistically different from placebo. The LibiGel Phase&#160;III safety study, which completed enrollment in June 2011, continues and will continue during further analysis of the LibiGel efficacy data and until a final strategic decision has been made. It is the Company's objective to meet with the FDA to determine the best path forward, and to make a decision during the second quarter of 2012 whether to continue the LibiGel Phase&#160;III safety study. </font></p> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Company's corporate strategy always has included product development of high value medically-needed pharmaceutical products. In light of recently announced top-line results from the Company's two pivotal LibiGel Phase&#160;III efficacy trials, the Company is assessing its corporate strategy. The Company is determining LibiGel's path forward and potential alternative strategies to utilize the continuing LibiGel Phase&#160;III cardiovascular events and breast cancer safety study. The Company also has expanded its efforts to explore new product development projects through in-licensing and mergers and acquisitions. In addition, a full review of the Company's GVAX cancer vaccine portfolio is underway. </font></p> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;On January&#160;31, 2012, the Company received a notice from the Listing Qualifications Department of The NASDAQ Stock Market indicating that, for the last 30 consecutive business days, the bid price for the Company's common stock had closed below the minimum $1.00 per share required for continued inclusion on The NASDAQ Global Market under NASDAQ Listing Rule&#160;5450(a)(1). The notification letter stated that pursuant to NASDAQ Listing Rule&#160;5810(c)(3)(A), the Company will be afforded 180 calendar days, or until July&#160;30, 2012, to regain compliance with the minimum bid price requirement. In order to regain compliance, shares of the Company's common stock must maintain a minimum bid closing price of at least $1.00 per share for a minimum of 10 consecutive business days. If the Company does not regain compliance by July&#160;30, 2012, the Company may transfer its common stock listing to The NASDAQ Capital Market and be eligible for an additional 180-day grace period if the Company meets the market value of publicly held shares requirement for continued listing and all other initial inclusion requirements for listing on The NASDAQ Capital Market, other than the minimum bid price requirement. In order to be afforded the additional 180-day compliance period, the Company also would need to provide NASDAQ written notice of its intention to cure the minimum bid price deficiency during the second compliance period by effecting a reverse stock split, if necessary. 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COMMITMENTS AND CONTINGENCIES </b></font></p> <ul> <li style="list-style: none"> <p style="FONT-FAMILY: times"><font size="2"><i>Aptar Pharma&#8212;Gel Packaging Machine </i></font></p></li></ul> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The Company has a commitment with Aptar Pharma to purchase a gel packaging machine for $844,740. As of September&#160;30, 2012, the Company had paid Aptar $804,132. The remaining obligation of $40,608 is due upon the shipment, assembly and calibration of the machine at a location designated by the Company. 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The complaint alleges that certain of the Company's disclosures relating to the efficacy of LibiGel and its commercial potential were false and/or misleading and that such false and/or misleading statements had the effect of artificially inflating the price of the Company's securities resulting in violations of Section&#160;10(b) of the Securities Exchange Act of 1934, as amended (Exchange Act), Rule&#160;10b-5 and Section&#160;20(a) of the Exchange Act. Although a substantially similar complaint was filed in the same court on February&#160;21, 2012, such complaint was voluntarily dismissed by the plaintiff in April 2012. The plaintiff seeks to represent a class of persons who purchased the Company's securities between February&#160;10, 2010 and December&#160;15, 2011, and seeks unspecified compensatory damages, equitable and/or injunctive relief, and reasonable costs, expert fees and attorneys' fees on behalf of such purchasers. The Company believes the action is without merit and intends to defend the action vigorously. On October&#160;10, 2012, the District Court entered an order setting the dates on which the plaintiff's consolidated amended complaint is due and establishing a briefing schedule on the defendants' anticipated motion to dismiss. On November&#160;6, 2012, plaintiff filed a consolidated amended complaint; the Company and Mr.&#160;Simes intend to file motions to dismiss the consolidated amended complaint on or before December&#160;21, 2012. </font></p> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;On May&#160;7, 2012, Jerome W. Weinstein, a purported stockholder of the Company filed a shareholder derivative action in the United States District Court for the Northern District of Illinois under the caption </font><font size="2"><i>Weinstein v. 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On September&#160;24, 2012, the District Court consolidated the two cases before it and entered a stipulation and order setting the dates on which the plaintiff's consolidated amended complaint is due and establishing a briefing schedule on defendants' anticipated motions to dismiss. The Company expects a similar scheduling order to be entered in the action pending in Illinois state court. </font></p> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;The lawsuits are in their early stages; and, therefore, the Company is unable to predict the outcome of the lawsuits and the possible loss or range of loss, if any, associated with their resolution or any potential effect the lawsuits may have on the Company's operations. 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The exchange ratios are subject to potential adjustment as described in the Merger Agreement depending upon the amount of the Company's "net cash", as defined in the Merger Agreement and generally consisting of the Company's cash and cash equivalents less certain expenses and liabilities, as of a determination date prior to the closing date of the Merger, but in no event will the current ANI stockholders own less than 50.1&#160;percent (or the current Company stockholders own more than 49.9&#160;percent) of the outstanding shares of common stock of the combined company. 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The Merger Agreement also provides that under specified circumstances, the Company may be required to reimburse ANI up to $500,000 for ANI's expenses in connection with the transaction. 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The aggregate cash payments to be distributed to the holders of the CVRs, if any, will be equal to 66&#160;percent of the net cash payments received by the combined company as a result of the sale, transfer, license or similar transaction relating to the Company's LibiGel program, as determined pursuant to the CVR agreement, and will not exceed $40&#160;million in the aggregate. </font></p> <ul> <li style="list-style: none"> <p style="FONT-FAMILY: times"><font size="2"><i>Employee Reduction Implications </i></font></p></li></ul> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;As a result of the conclusion of the Company's LibiGel Phase&#160;III cardiovascular events and breast cancer safety study, as announced by the Company in September 2012, and considering the Company's October&#160;4, 2012 announcement of its potential merger with ANI, the Company plans to reduce its workforce during the fourth quarter of 2012. In connection with the announced reduction, the Company will pay approximately $300,000 in aggregate severance costs during the remainder of 2012. The termination of employment of these employees will result in the cessation of any further vesting in certain stock options held by these employees and a reversal of previously recognized non-cash stock-based compensation expense related to such options in a similar amount, thereby offsetting the employee reduction severance costs. </font></p> <ul> <li style="list-style: none"> <p style="FONT-FAMILY: times"><font size="2"><i>Third Amendment To License Agreement with Teva </i></font></p></li></ul> <p style="FONT-FAMILY: times"><font size="2">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;In October 2012, the Company entered into an amendment to its development and license agreement with Teva pursuant to which Teva made a $1.0&#160;million payment to the Company upon the signing of the amendment and agreed to make the following milestone-based payments to the Company: (1)&#160;$500,000 if the FDA authorizes marketing of the licensed male testosterone gel as an "AB-rated" equivalent to AndroGel&#174;; (2)&#160;$750,000 upon the earlier to occur of (a)&#160;December&#160;31, 2012 and (b)&#160;five business days after Teva's submission to the FDA of a final report regarding a "washing" clinical study required by the FDA; and (3)&#160;$500,000 upon the earlier to occur of (a)&#160;December&#160;31, 2013 and (b)&#160;five business days after Teva's commencement of commercial manufacture of the licensed product for sale in the United States. In addition, Teva has agreed to pay the Company $4.0&#160;million in the event Teva is the sole marketer in the United States of a generic 1% testosterone gel AB-rated to AndroGel&#174; for at least 180&#160;days immediately following the launch date of the licensed product in the United States. The royalty rate to be paid by Teva to the Company under the agreement is five percent of net sales; provided, however, that during the period of time that Teva markets the licensed product and is the sole marketer of a generic 1% testosterone gel that is AB-rated to AndroGel&#174; in the United States, the royalty rate will be seven and one half percent of net sales. Additionally, pursuant to the terms of the October 2012 amendment, the parties agreed to release each other from certain liabilities. </font></p> 99710 100000 0.53 0.47 0.501 0.499 5 2 0.5 17000000 1000000 750000 500000 0.90 1 0.57 2 0.02 0.85 P6M 1 P10Y 0.66 40000000 0.2 1784070 20686 79024 2 3504150 -2545530 1 1179966 2359932 3268798 1.4725 3475000 1 P5Y 1.50 534037 38583132 3413762 30088 2004814 463942 860094 333163 14454258 5327711 87548 283348 5300 -23730408 -117794 852468 -323225 -3807074 -22118650 528742 211068 3268798 140712 211068 300000 7933 2 17000000 P3Y P5Y 1000000 500000 750000 500000 5 4000000 5 180 0.05 0.0750 -23852199 -44959599 -121791 658 1 The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.