) --Let's be honest about

BioSante Pharmaceuticals'

TST Recommends


plan to start two, new phase III clinical trials of Libigel for female sexual dysfunction. This has very little to do with medicine or improving the lives of women. What it's really about is greed and the legal but unconscionable transfer of cash from investors into the pockets of BioSante executives.

Libigel, a low-dose testosterone gel, has already proven to be an expensive placebo following the failure of two, large phase III studies completed last December. The studies demonstrated quite convincingly that Libigel does not improve the sex lives of post-menopausal women compared to a placebo.

These failed studies should have ended the Libigel story and prompted

BioSante to proceed with an orderly liquidation

of the entire company so that stockholders might recoup a fraction of their tremendous financial loss.

Yet BioSante's executive team is more focused on self-preservation than shareholder well being. Chief executive Stephen Simes makes $500,000 per year in salary -- a princely sum considering under his watch, BioSante has flushed tens of millions of dollars down the toilet. The company's stock price trades at an all-time low.

By taking a mulligan on Libigel and pushing ahead foolishly with another set of clinical trials, BioSante is merely guaranteeing that its executive team, led by Simes, will continue to collect massive paychecks for the next five years or so.

BioSante stockholders will be responsible for those paychecks, of course. The company only has $49 million in the bank and is burning $7.5 million per quarter already. Debt on its books must be paid. Add to this financial mess the estimated price tag of the new Libigel clinical trials: $36 million, likely more.

Significant stockholder dilution is coming -- and soon. Analysts on BioSante's conference call Monday morning sounded overjoyed to audition for a chance at the underwriting business.

If BioSante's board had any integrity at all, it would force Simes and his crew to give up their lucrative salaries and executive perks, make them work for free until stockholders recoup their losses. Simes insists that Libigel has a future. If he really believes that, he should be willing to pay for it. Investors have already been bled dry.

--Written by Adam Feuerstein in Boston.

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Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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