ANI Pharmaceuticals (ANIP)

[Just the facts maam]

Jeff had informed me that Przybyl would sell Libigel for $200 million if the opportunity arose. Out of concern that this may be true and not just a ploy to get us to vote for the merger, I took the time the send Przybyl the following e-mail. At the very least, it now on record.

Hello Mr Przbyl,

Once again congratulations on becoming CEO of the merged company of Biosante and ANI.

As a shareholder coming over from Biosante I have been researching what I believe is your business model. Please correct me if I am mistaken but when you were solely ANI your projections appeared to target an EBITDA to Revenue ratio in the 35% to 40% similar to the ratio Akorn presently utilizes. From what I gather is you would like to use the royalty revenue generated by Teva’s testosterone gel, and any other Biosante product to improve upon the EBITDA to revenue ratio and/or accelerate the ANI pipeline development. If this is the case, I commend your business model.

I believe you are fully aware of the Libigel saga and no doubt have much more information then I have been able to collect. However, I would like to share with you several concerns that I, as many other Biosante shareholders, have expressed as it relates to Libigel.

Regarding Efficacy

The Libigel safety trial, according to Mr Simes, Biosante’s former CEO, was strictly a safety trial and when questioned about the efficacy component of the trial he claimed that they opted to do this later. However, evidence seems to counter this assertion.
The official title for the trial is “A Phase III, Randomized, Double-Blind, Placebo-Controlled, Multi-Center Study of the Long-Term Safety and Efficacy of LibiGel® for the Treatment of Hypoactive Sexual Desire Disorder in Postmenopausal Women”

In addition, supportive evidence as stated in the American Heart Journal suggest that efficacy for treating HSDD was being recorded.
The following is an excerpt from the American Heart Journal article entitled “A cardiovascular safety study of LibiGel (testosterone gel) in postmenopausal women with elevated cardiovascular risk and hypoactive sexual desire disorder” Volume 163, Issue 1 , Pages 27-32, January 2012

Credited to the following William B. White, MD, Deborah Grady, MD, MPH, Linda C. Giudice, MD, PhD, Scott M. Berry, PhD, Joanne Zborowski, RN, Michael C. Snabes, MD, PhD

Which was received 28 June 2011; accepted 26 September 2011. published online 23 November 2011.

You will notice that Joanne Zobrowski and Michael Snabes (Biosante employees) are also credited within the article.

http://www.ahjonline.com/article/S0002-8703(11)00706-X/abstract


The following is an excerpt from the above noted article after 2889 patients had already been enrolled.

Study treatment and procedures

Treatment

Participants are randomized in a 1:1 ratio to receive either 1% testosterone gel 0.22 g/d (LibiGel) or an equivalent weight of identical placebo gel daily. Randomization is stratified by use of postmenopausal hormone therapy (none, estrogen, or estrogen + progestogen).

Study procedures

There are 9 clinical visits and 14 telephone contacts during the course of the study (Figure 1). Office visits will occur at screening and randomization and at 3, 6, and 12 months postrandomization and yearly thereafter. Telephone contacts will be completed at week 6, month 9, and at 3-month intervals unless a clinical visit is required. Subjects are instructed to contact sites if they believe that they have experienced a CV event or breast cancer. At each scheduled contact, participants are asked about adverse events and health care and hospitalizations; questioned about specific androgenic side effects, potential CV events, and breast cancer; and undergo other assessments of safety and tolerability as well as laboratory measures.

Efficacy will be evaluated at office visits and telephone contacts using the Subject Global Assessment and Perception of Benefit Questions.(As per Simon J, Braunstein G, Nachtigall L, et al. Testosterone patch increases sexual activity and desire in surgically menopausal women with hypoactive sexual desire disorder. J Clin Endocrinol Metab. 2005;90:5226–5233) Participants who discontinue study drug will be encouraged to complete all study visits, examinations, and questionnaires and to report potential CV events and breast cancer.

When you consider that recruiting started in 2008 and the article was published in late 2011, evidence supports the notion that there is efficacy data waiting to be analyze if it has not already been analyzed. In addition unlike the two efficacy trials which suffered the placebo effect. The set up to test efficacy within safety trial is much less encumbered (less clinical interference).

If the efficacy within the safety trial was set up as a safety net , it would explain why on October 20th , 2010, the inclusion criteria, “Must be taking a stable dose of estrogen therapy” was removed from the efficacy trials especially when earlier results with this inclusion were so successful. Especially when you consider the November 2, 2005 - Biosante releases which states the following.

Dr. Daniel Shames, Director of the FDA’s Division of Reproductive and Urologic Products.

Dr. Shames stated that the FDA acknowledges testosterone’s efficacy in treating HSDD and the need for testosterone products to be approved for women affected by this condition. As extended long-term, pre-marketing safety studies are often not economically feasible for companies, the FDA will now permit a complete safety profile to be submitted post-marketing, with efficacy and some safety data submitted pre-approval. The agency will assist companies in determining the best development plan for their testosterone products, consistent with the need for sufficient efficacy and safety requirements. The FDA is most interested in safety data addressing cardiovascular and breast cancer risk associated with testosterone therapy.

Cardiovascular Risk Reduction

We are also concerned as to the minimal amount of information that Simes and Biosante released in relation to the patents they applied for respecting “Methods for while decreasing cardiovascular risk”. Especially while fighting to remain listed on Nasdaq. The unexpected discovery of a 71 % (some indications up to 99%) reduction in cardiovascular risk would be considered material information that should be shared with shareholders and the public and could have mitigated the pressures the share price had been under.
Since the American Heart Journal article referenced earlier states that majority of the 2889 patients enrolled at the time the article was submitted included:.

Hypertension 1962 patients (67.9%)
Dyslipidemia 1870 patients (64.7%)

And

Included multiple studies in a single study, such as separate demonstrations of drug effectiveness as monotherapy and in combination with another drug;

Concomitant medications, n (%)
Antihypertensives 1071 (53.3%)
Aspirin 522 (26.0%)
Cholesterol-lowering agents 1068 (53.2%)
Estrogen alone 324 (16.1%)
Estrogen/progestins 60 (3.0%)

One can only assume a significant percentage of these supported the following claims from the patent application.

[0104] There were eight adjudicated cardiovascular events determined from this Phase 3 clinical trial after greater than 4,000 woman-years of therapy. A comparison of the observed number of cardiovascular events to the expected rate of cardiovascular events revealed that the number of observed events was only about 29% of those expected, resulting in a 71% reduction in cardiovascular events.

[0105] A greater number of observed cardiovascular events in the untreated postmenopausal women group reveals that administering a therapeutically effective amount of an androgen, i.e., testosterone, decreases in the risk of having a cardiovascular event in postmenopausal women at high risk for cardiovascular disease.

appft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2FPTO%2Fsearch-bool.html&r=4&f=G&l=50&co1=AND&d=PG01&s1=biosante.AS.&OS=AN/biosante&RS=AN/biosante

An acquaintance informed me that in a conversation he had with you, leading up to the merger vote, that if you were offered $200 million for Libigel you would sell it. This statement concerned me greatly, as to your understanding, at the time, of the value of Libigel. Dr Snabes who now works for Abbvie as Senior Director Men's and Women's Health is fully aware of the potential value of Libigel. I just wanted to ensure you were equally aware.

I have faith that regardless, of how it looks (and it does not look good), Mr. Simes and the Biosante’s Board of Directors were acting in the best interest of shareholders and I trust that you will prove this to be the case by maximizing the return for ANI shareholders (including the former Biosante shareholders) with respect to Libigel.


Thank you.