BioSante Pharmaceuticals, Inc. (NASDAQ: BPAX) is trying to make anyone with any caution look rather silly all over again this Tuesday morning.  The driver has been hope of its old cancer hopefuls but a coming February approval (or non-approval) of Teva to sell Bio-T-Gel has been another catalyst.  The ultimate outcome is unknown.  The problem is that the amount of royalties is said to be tiny even if an approval c
omes.  Just yesterday we questioned whether or not the rally was real because shares have now more than doubled off the lows.  We would note that this was after a drop of about 80% (from $2.50 to about $0.50) in December and the company has what looks on the surface like long-term viability issues.

Yesterday’s gain may have been pushed even more because of a Seeking Alpha article that the headline implies a stock double.

It turns out we are not alone in being cautious about a company with limited prospects.  The Street has an article called “6 Drug Stocks Unworthy of Biotech Bull Market” and it is not favorable.  Actually, there is not a single favorable mention in there at all by Adam Feuerstein.  His take: BioSante should just shut down and return the cash on hand to its shareholders.  Feuerstein noted, “That this failure of a company is surging this year is proof that a biotech sector sell off is coming. Get ready for it.”

So here is the issue… BioSante is up 9.5% at $1.15 on now over 1.1 million shares with more than 1 hour until the market opens. Yesterday’s high was $1.06 and the close was $1.05.  This stock traded a whopping 28.7 million shares on Monday and that was after closing at $0.74 on Friday.

This move just feels very questionable, even if it is up yet again.  With a $1.00 stock, it doesn’t take very many guys with decent sized trading accounts to swing a stock like this around. The same will likely be true on the downside when the tide turns.

JON C. OGG