BioSante Pharmaceuticals Inc. raised $10.3 million through the sale of about 4.8 million common shares.

"We needed to remove the financing-risk cloud hanging over the company," Phillip Donenberg, BioSante's chief financial officer, told BioWorld Today. "This financing puts our cash balance in the $12 million range, so that financing cloud over underfunded companies is gone."

Through the end of its last reported fiscal quarter ended March 31, BioSante reported $3.4 million in cash and cash equivalents. It incurred a net loss of $1.2 million for the period, with about 8.6 million shares outstanding prior to the private placement.

The Lincolnshire, Ill.-based company, which sold the shares at a negotiated discount of about $2.15 apiece, also issued to its investor group warrants to purchase about 2.4 million additional shares. The five-year warrants are convertible into common shares at $2.15 each.

On Wednesday, BioSante shares (OTC BB:BISP) gained 5 cents to close at $2.60.

BioSante said it would use the proceeds to continue its hormone replacement programs focused on female health disorders. Its pipeline includes a Phase III estradiol gel product called Bio-E-Gel to treat menopausal symptoms, as well as a testosterone gel called LibiGel for female sexual dysfunction.

"Clearly, our use of these proceeds is to fund our one pivotal Phase III trial for our estrogen gel product," Donenberg said, adding that the company expects to complete the study and file a new drug application by the end of the year. "Clinical sites are signed up, and the first patient should be initiated shortly."

Though he kept specific study details close to his chest, Donenberg called it a "small-patient, short-in-duration trial." LibiGel remains in Phase II testing in an ongoing study that continues to recruit patients. BioSante has yet to partner either product, and plans to continue to move each into the marketing stage on its own.

"They are the driving force of this company," Donenberg said. "When we go to Wall Street, they clearly want to hear more about the hormone therapy products because they are nearer term, and Bio-E-Gel is the value driver of this company. We hope to be the first estrogen gel to the $1.8 billion market."

Another product in late-stage clinical development, Bio-T-Gel, is a testosterone-based therapy for hypogonadism. Donenberg said BioSante hopes for a regulatory filing in the middle of next year.

It has partnered an undisclosed hormone therapy product with Teva Pharmaceuticals USA Inc., a wholly owned subsidiary of Jerusalem-based Teva Pharmaceutical Industries Ltd. For its part, BioSante received an up-front payment of $1.5 million and is eligible for milestone payments and royalties on eventual sales. Teva is responsible for continued development, regulatory filings and all manufacturing and marketing associated with the product.

Beyond its hormone therapies, the company is developing a calcium phosphate nanoparticulate-based platform technology called CAP to create vaccines, vaccine adjuvants, drug delivery systems and biomanufacturing products.

Seattle-based Corixa Corp. licensed CAP on a nonexclusive basis for use in vaccines against a variety of infectious and autoimmune diseases and cancers. BioSante also is working with the U.S. Army and Navy on CAP-based biodefense and malaria vaccines.

Donenberg said several potential partners are evaluating CAP technology for their own protein delivery programs, notably oral insulin. Such suitors eventually could enter licenses similar to the Corixa relationship.

"We want to sign as many nonexclusive licenses as we possibly can to exploit this technology," Donenberg said. "This is completely nontoxic, safe and biodegradable. And its small size allows it to carry the antigen to give it a little boost to where it needs to go."

He added that the latest funding could possibly boost BioSante's shares to a more senior exchange such as the American Stock Exchange or Nasdaq's Small Market.

New York-based SCO Securities LLC acted as the transaction's placement agent.

SDS Merchant Fund, of Greenwich, Conn., led the financing, which also included Perceptive Life Sciences Fund, of New York; SCO Capital Partners LLC, of New York; Quogue Capital LLC, of New York; Crestview Capital, of Northbrook, Ill.; and Orion Biomedical Funds, of New York. Four BioSante directors also participated in the investment.