-- In February 2006, BioSante submitted an NDA for Elestrin.

-- In November 2006, BioSante signed an agreement with Bradley Pharmaceuticals, Inc. for the marketing of Elestrin (estradiol gel) in the U.S., through its Kenwood Therapeutics division. Under the terms of the agreement, BioSante received or will shortly receive already triggered milestone payments in the amount of $10.5 million. It is our understanding that Bradley expects to launch Elestrin in mid-2007 into the $1.3 billion estrogen therapy market with at least 50 sales representatives. BioSante has the right under the agreement to receive up to an additional $30 million upon the achievement of certain sales-based milestones plus royalties upon sales of the product.

-- BioSante received approval from the FDA for the marketing of Elestrin in the United States on December 15, 2006. The FDA approved two doses of Elestrin, 12.5 micrograms per day and 37.5 micrograms per day in a non-conditional full approval and BioSante received three years of marketing exclusivity for Elestrin. Elestrin 12.5 micrograms per day is the lowest dose of estradiol approved by the FDA for the treatment of moderate-to-severe vasomotor symptoms, and is, in fact, 50% lower than the next lowest dose currently approved and marketed for the treatment of hot flashes. BioSante also received notice of allowance for a new patent that covers the formulation used in Elestrin which once issued will expire on June 23, 2021. BioSante personnel are named inventors on the new patent.

-- Results of the pivotal Phase III study of the safety and efficacy of Elestrin in the treatment of menopausal symptoms have been published in the March 2007 issue of Obstetrics & Gynecology, the primary journal of ACOG. The paper titled "Low Dose of Transdermal Estradiol (E2) Gel for Treatment of Symptomatic Postmenopausal Women," reports on BioSante's 12-week, double-blind, placebo-controlled Phase III study of 484 symptomatic menopausal women, which was designed to identify the lowest safe and effective dose of transdermal estradiol therapy. The lead investigator for the multicenter study was Dr. James A. Simon, Director of the Women's Health Research Center in Washington, D.C.

-- Recent publications have reported on the potential health benefits of estrogen in menopausal women including the most recent issue of Circulation that reports on a French study which indicates the potential benefit of transdermal estrogen compared with oral estrogen.

-- BioSante has initiated the Phase III development program for LibiGel in the treatment of female sexual dysfunction, specifically hypoactive sexual desire disorder. BioSante believes that two Phase III clinical studies will be required as well as an additional safety study to look specifically at the potential for cardiovascular risk of testosterone therapy. BioSante also believes that based on FDA guidance to BioSante that it may submit an NDA after six months of efficacy data and one year of testosterone safety exposure. Based on successful completion of the Phase III safety and efficacy trials and if the safety study does not show an unacceptable increase in cardiovascular risk, our LibiGel NDA may be approved. The Phase III trials will enroll approximately 360 subjects each. BioSante still is determining the number of subjects required for the safety trial, however, BioSante believes the number will be reasonable and affordable.

 

-- BioSante signed an option and license agreement with Medical Aesthetics Technology Corporation (MATC) for the development and commercialization of products in the field of aesthetic medicine, specifically, the improvement and/or maintenance of the external appearance of the head, face, neck and body. Under the amended agreement, MATC has until July 2007 to exercise its option to secure a license upon payment to BioSante of a license fee. Under the terms of the agreement, BioSante has the right to receive additional milestone payments upon approval by the FDA or first commercial sale of each product containing CaP, a royalty on net sales of any such products, and a share of any milestones and license fees from third party sublicenses.

-- BioSante completed several animal studies using CaP as a vaccine adjuvant in the development of an H5N1 (Bird Flu) vaccine. Based on these results BioSante believes that CaP may be in a position to enhance the efficacy of H5N1 vaccines in development, allowing the use of significantly less vaccine and possibly allow for use via intranasal delivery instead of by injection.

-- BioSante continued work under its subcontract with the University of Nebraska for the development of recombinant Factor IX formulations using CaP for delivery of Factor IX via alternative routes of administration for the treatment of hemophilia.

-- BioSante completed its subcontract with Dynport Vaccine Company for the development of a second generation anthrax vaccine. BioSante currently is evaluating continued development or partnering to move this vaccine further in the pipeline.

 

For the year ended December 31, 2006, BioSante recorded net income of approximately $2.8 million or $0.13 per basic and diluted share for the year ended December 31, 2006, compared to a net loss of $9.7 million or ($0.50) per basic and diluted share for the same period in 2005. The company's cash, cash equivalents and short-term investments as of December 31, 2006 were approximately $11.5 million, compared to $9.1 million at December 31, 2005.

"2006 was a very important financial year for BioSante," said Simes. "We recorded our first ever year with net income which was primarily the result of the revenue from our agreement with Bradley for Elestrin. Due to a $2.625 million upfront licensing payment from Bradley and a $7.6 million private placement completed in July 2006, we were able to increase our cash balance from a year earlier. Based on our current cash balance and the additional milestone payments already due from Bradley, we believe we are in a solid financial position to move forward with our LibiGel development program and our other operations."

 

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