View Filing Data

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2012	Jul. 31, 2012
Document and Entity Information
Entity Registrant Name	BIOSANTE PHARMACEUTICALS INC
Entity Central Index Key	0001023024
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		21,921,596
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

Condensed Balance Sheets - USD ($)	Jun. 30, 2012	Dec. 31, 2011
CURRENT ASSETS
Cash and cash equivalents	$ 42,417,045	$ 57,225,234
Prepaid expenses and other assets	512,640	801,147
TOTAL CURRENT ASSETS	42,929,685	58,026,381
PROPERTY AND EQUIPMENT, NET	862,439	861,364
OTHER ASSETS
Investments	3,413,762	3,405,807
Deposits	88,793	86,203
TOTAL ASSETS	47,294,679	62,379,755
CURRENT LIABILITIES
Accounts payable	3,835,756	3,150,677
Accrued compensation	1,031,624	1,597,329
Other accrued expenses	1,028,623	2,479,697
Current portion of convertible senior notes	10,477,635
TOTAL CURRENT LIABILITIES	16,373,638	7,227,703
Long-term convertible senior notes		17,336,760
TOTAL LIABILITIES	16,373,638	24,564,463
Capital stock
Capital stock	265,768,782	255,054,440
Accumulated deficit	(234,847,741)	(217,239,148)
TOTAL STOCKHOLDERS' EQUITY	30,921,041	37,815,292
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	47,294,679	62,379,755
Class C Special Shares
Capital stock
Capital stock	65	65
Common Stock
Capital stock
Capital stock	$ 265,768,717	$ 255,054,375

Condensed Statements of Operations - USD ($)	3 Months Ended		6 Months Ended
Condensed Statements of Operations - USD ($)	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
REVENUE
Royalty revenue	$ 108,780	$ 81,003	$ 222,780	$ 138,003
Total revenue	108,780	81,003	222,780	138,003
EXPENSES
Research and development	5,398,305	11,116,323	10,581,522	25,980,744
General and administration	1,948,995	1,989,103	3,780,847	3,582,659
Depreciation and amortization	30,933	40,519	61,799	82,463
Total expenses	7,378,233	13,145,945	14,424,168	29,645,866
OTHER
Convertible note fair value adjustment	15,953	(1,753,000)	(3,194,385)	(2,392,000)
Interest expense	(92,047)	(172,000)	(216,243)	(344,000)
Other income		13,000		13,000
Interest income	1,431	1,711	3,423	4,956
NET LOSS	$ (7,344,116)	$ (14,975,231)	$ (17,608,593)	$ (32,225,907)
BASIC AND DILUTED NET LOSS PER SHARE (in dollars per share)	$ (0.36)	$ (0.96)	$ (0.89)	$ (2.16)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic (in shares)	20,202,737	15,664,225	19,790,109	14,900,067
Diluted (in shares)	20,202,737	15,664,225	19,790,109	14,900,067

Condensed Statements of Cash Flows - USD ($)	6 Months Ended
Condensed Statements of Cash Flows - USD ($)	Jun. 30, 2012	Jun. 30, 2011
CASH FLOWS (USED IN) OPERATING ACTIVITIES
Net loss	$ (17,608,593)	$ (32,225,907)
Adjustments to reconcile net loss to net cash (used in) operations
Depreciation and amortization	61,799	82,463
Loss on disposal of fixed assets	432	2,099
Employee & director stock-based compensation	582,466	581,402
Stock warrant expense - noncash		152,554
Convertible note fair value adjustment	3,194,385	2,392,000
Changes in other assets and liabilities affecting cash flows from operations
Prepaid expenses, deposits and other assets	285,917	1,470,298
Accounts payable and accrued liabilities	(1,252,676)	3,183,419
Net cash (used in) operating activities	(14,736,270)	(24,361,672)
CASH FLOWS (USED IN) INVESTING ACTIVITIES
Purchase of investment	(7,955)
Purchase of fixed assets	(63,306)	(542,919)
Net cash (used in) investing activities	(71,261)	(542,919)
CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES
Fractional share payout	(658)
Proceeds from common stock option exercises		16,391
Proceeds from issuance of common stock by registered direct offerings		23,858,955
Net cash (used in) provided by financing activities	(658)	23,875,346
NET (DECREASE) CASH AND CASH EQUIVALENTS	(14,808,189)	(1,029,245)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	57,225,234	38,155,251
CASH AND CASH EQUIVALENTS AT END OF PERIOD	42,417,045	37,126,006
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Interest paid	184,094	344,000
Shares issued for convertible senior notes and accrued interest	$ 10,132,534
Purchase of fixed assets on account, non-cash investing activity		$ 38,386

LIQUIDITY AND CAPITAL RESOURCES

6 Months Ended

Jun. 30, 2012

LIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY AND CAPITAL RESOURCES

3. LIQUIDITY AND CAPITAL RESOURCES

Substantially all of the Company’s revenue to date has been derived from upfront, milestone and royalty payments earned on licensing transactions and from subcontracts. The Company’s business operations to date have consisted mostly of licensing and research and development activities and the Company expects this to continue for the immediate future. The Company itself has not introduced commercially any products. If and when the Company’s products for which it has not entered into marketing relationships receive FDA approval, the Company may begin to incur other expenses, including sales and marketing related expenses if it chooses to market the products itself. To date, the Company has used primarily equity financings, and to a lesser extent, licensing income, interest income and the cash received from its 2009 merger with Cell Genesys, Inc. (Cell Genesys), to fund its ongoing business operations and short-term liquidity needs.

As of June 30, 2012, the Company had $42,417,045 of cash and cash equivalents. As of June 30, 2012, the Company had outstanding $11,782,000 in aggregate principal amount of its 3.125% convertible senior notes due May 1, 2013. In July 2012, the Company issued an aggregate of 1,784,070 shares of its common stock to two of the holders of the Company’s 3.125% convertible senior notes due May 1, 2013 in exchange for the cancellation of $3,504,150 in aggregate principal amount of such notes and accrued and unpaid interest of $20,686. As a result of such exchange, as of July 31, 2012, the Company had outstanding $8,277,850 in aggregate principal amount of its 3.125% convertible senior notes due May 1, 2013.

Absent the receipt of any additional licensing income or financing, the Company expects its cash and cash equivalents balance to decrease as the Company continues to use cash to fund its operations, including in particular the LibiGel Phase III safety study, and beginning in mid-2013, the two new LibiGel Phase III efficacy trials, assuming the Company continues to fund its LibiGel Phase III clinical development program. Based on these assumptions, and after considering the July 2012 exchange of $3,504,150 of the Company’s convertible senior notes into common stock, the Company expects its cash and cash equivalents as of June 30, 2012 to meet the Company’s liquidity requirements until approximately the third quarter of 2013. These estimates may prove incorrect or the Company, nonetheless, may choose to raise additional financing earlier.

The Company does not have any existing credit facilities under which the Company could borrow funds. In the event that the Company would require additional working capital to fund future operations, the Company could seek to acquire such funds through additional equity or debt financing arrangements. If the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience dilution. Debt financing, if available, may involve covenants restricting the Company’s operations or the Company’s ability to incur additional debt. There is no assurance that any financing transaction will be available on terms acceptable to the Company, or at all. As an alternative to raising additional financing, the Company may choose to license one or more of its products or technologies to a third party who may finance a portion or all of the continued development and, if approved, commercialization of that licensed product, sell certain assets or rights under the Company’s existing license agreements or enter into other business collaborations or combinations, including a possible sale or merger of the Company. In addition, from time to time, the Company may purchase, exchange or restructure its outstanding convertible senior notes through cash purchases and/or exchanges for other equity securities of the Company, in open market purchases, privately negotiated transactions and/or a tender offer. Such purchases, exchanges or restructurings, if any, will depend on prevailing market conditions, the Company’s available cash and cash equivalents, the Company’s liquidity requirements, contractual restrictions and other factors. Such purchases, exchanges or restructurings could dilute the percentage ownership of the Company’s stockholders, result in the issuance of securities at a discount to market price or that may have rights, preferences or privileges senior to those of the Company’s existing stockholders and/or decrease the Company’s cash balance. A significant decrease in the Company’s cash balance, together with an inability to raise additional financing when needed, may impair the Company’s ability to execute strategic alternatives or leave the Company without sufficient cash remaining for operations.

The Company can provide no assurance that additional financing, if needed, will be available on terms favorable to the Company, or at all. This is particularly true if investors are not confident in our LibiGel Phase III clinical development program, the future value of the Company and/or economic and market conditions deteriorate. If adequate funds are not available or are not available on acceptable terms when the Company needs them, the Company may need to reduce its operating costs or the Company may be forced to complete other strategic alternatives, such as selling or merging the Company or winding down its operations and liquidating the Company. In such case, the Company’s stockholders could lose some or all of their investment.

CONVERTIBLE SENIOR NOTES

6 Months Ended

Jun. 30, 2012

CONVERTIBLE SENIOR NOTES

CONVERTIBLE SENIOR NOTES

5. CONVERTIBLE SENIOR NOTES

The Company has outstanding 3.125% convertible senior notes due May 1, 2013 (the 2013 Notes). The aggregate principal amount of the 2013 Notes outstanding at July 31, 2012, June 30, 2012 and December 31, 2011 was $8,277,850, $11,782,000 and $20,782,000, respectively. In February 2012, the Company issued 1,868,055 shares of its common stock to one of the holders of the 2013 Notes in exchange for the cancellation of $9,000,000 in aggregate principal amount of such notes and the related accrued and unpaid interest on such notes. A non-cash fair value adjustment of $(2,545,530) was recorded during the first quarter of 2012 as a result of the cancellation of such notes. The fair value adjustment recorded upon the cancellation of the notes is primarily attributable to the time value effect of settling these obligations at a date prior to the stated maturity of the notes. In July 2012, the Company issued an aggregate of 1,784,070 shares of its common stock to two of the holders of the 2013 Notes in exchange for the cancellation of $3,504,150 in aggregate principal amount of such notes and accrued and unpaid interest of $20,686. It is anticipated that an additional non-cash fair value adjustment of $(611,621) will be recorded during the third quarter of 2012 as a result of the July 2012 cancellation of such notes.

The remaining $8,277,850 aggregate principal amount of the 2013 Notes are exchangeable at the option of the holder or upon certain specified events into an aggregate of approximately 370,871 shares of the Company’s common stock at a conversion price of $22.32 per share. The 2013 Notes are general, unsecured obligations of the Company and are described in Note 7 to the Company’s financial statements for the year ended December 31, 2011. As of June 30, 2012, the 2013 Notes were not eligible for redemption. The indenture governing the 2013 Notes, as supplemented by the supplemental indenture, does not contain any financial covenants and does not restrict the Company from paying dividends, incurring additional debt or issuing or repurchasing the Company’s other securities. In addition, the indenture, as supplemented by the supplemental indenture, does not protect the holders of the 2013 Notes in the event of a highly leveraged transaction or a fundamental change of the Company except in certain circumstances specified in the indenture.

As described in Note 3, “Liquidity and Capital Resources,” from time to time, the Company may purchase, exchange or restructure its outstanding 2013 Notes through cash purchases and/or exchanges for other equity securities of the Company, in open market purchases, privately negotiated transactions and/or a tender offer.

The Company has elected to record the 2013 Notes at fair value in order to simplify the accounting for the convertible debt, inclusive of the redemption, repurchase and conversion adjustment features which otherwise would require specialized valuation, bifurcation and recognition. Accordingly, the Company has adjusted the carrying value of the 2013 Notes to their fair value as of June 30, 2012, with changes in the fair value of the 2013 Notes occurring since December 31, 2011, reflected in fair value adjustment in the unaudited condensed statements of operations. As described in Note 9, “Fair Value Measurements,” the fair value of the 2013 Notes is based on Level 2 inputs. The recorded fair value of the 2013 Notes of an aggregate of $10,477,635 as of June 30, 2012 differs from their total stated aggregate principal amount of $11,782,000 as of such date by $1,304,365. The recorded fair value of the 2013 Notes of an aggregate of $17,336,760 as of December 31, 2011 differed from their total stated aggregate principal amount of $20,782,000 as of such date by $3,445,240. During the three and six months ended June 30, 2012, the Company recorded a fair value adjustment of $15,953 and $(3,194,385) related to the 2013 Notes that remained outstanding as of June 30, 2012, that for the three months ended June 30, 2012 decreased the recorded liability and corresponding expense and for the six months ended June 30, 2012 increased the recorded liability and corresponding expense. For the three and six months ended June 30, 2011, the Company recorded a fair value adjustment of $(1,753,000) and $(2,392,000) that increased the recorded liability and corresponding expense.

For the six months ended June 30, 2012 and 2011, approximately $(22,000) and $415,000, respectively, of the fair value adjustment was attributable to the change in instrument specific credit risk. The change in the aggregate fair value of the 2013 Notes due to instrument specific credit risk for the six months ended June 30, 2012 was estimated by calculating the difference between the June 30, 2012 fair value of the 2013 Notes as recorded and what the fair value of the 2013 Notes would have been on June 30, 2012 if the December 31, 2011 discount rate continued to be used in the calculation. The instrument specific credit risk for both periods has increased the fair value of the 2013 Notes as market borrowing rates have decreased for similarly rated companies and are estimated to have decreased for the Company as well, indicating a lower credit spread assuming no significant changes in the risk-free borrowing rate.

The Company establishes the value of the 2013 Notes based upon contractual terms of the 2013 Notes, as well as certain key assumptions.

The assumptions as of June 30, 2012 were:

Average risk-free rate	0.19	%
Volatility of BioSante common stock	86.6	%
Discount rate for principal payments in cash	18.8	%

The assumptions as of December 31, 2011 were:

Average risk-free rate	0.19	%
Volatility of BioSante common stock	77.4	%
Discount rate for principal payments in cash	18.5	%

The discount rate is based on observed yields as of the measurement date for debt securities of entities having a Ca and Caa3 rating for long-term corporate obligations as assigned by Moody’s Investors Service. Volatility is based on the historical fluctuations in the Company’s stock price for a period of time equal to the remaining time until the debt maturity. The risk-free rate is based on observed yields as of the measurement date of six month and one-year U.S. Treasury Bonds.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

STOCKHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2012

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

7. STOCKHOLDERS’ EQUITY

During the six months ended June 30, 2012, the Company issued an aggregate of 1,868,055 shares of its common stock to one of the holders of the 2013 Notes in exchange for the cancellation of $9,000,000 in aggregate principal amount of such notes, including accrued and unpaid interest. In July 2012, the Company issued 1,784,070 shares of its common stock to two of the holders of the 2013 Notes in exchange for the cancellation of $3,504,150 in aggregate principal amount of such notes and accrued and unpaid interest of $20,686. See Note 5, “Convertible Senior Notes” for information regarding the 2013 Notes.

On May 30, 2012, the Company’s stockholders approved an amendment to the Company’s Restated Certificate of Incorporation to effect a reverse split of the Company’s outstanding shares of common stock and class C special stock in the discretion of the Company’s Board of Directors at an exchange ratio of not less than 1-for-2 and not more than 1-for-10. On June 1, 2012, the Board of Directors of the Company effected a 1-for-6 reverse split of the Company’s outstanding shares of common stock and class C special stock. The reverse stock split did not change the number of authorized shares of the Company’s common stock or class C special stock or the par value of the Company’s common stock or class C special stock, but because the number of authorized shares of the Company’s common stock and class C special stock was not affected, the effect of the reverse stock split was to increase the number of authorized but unissued shares of the Company’s common stock and class C special stock. The primary purpose of the reverse stock split was to increase the Company’s ability to maintain the listing of its common stock on The NASDAQ Global Market.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21484-112644

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
-URI http://asc.fasb.org/extlink&oid=6228006&loc=d3e74512-122707

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21488-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 4
-Subparagraph (SAB TOPIC 4.C)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187143-122770

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6405834&loc=d3e23285-112656

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Section B
-Paragraph 7, 11A
-Chapter 1
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30, 31
-Article 5

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 20: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Article 4

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 2, 3, 4, 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 23: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2012

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

8. COMMITMENTS AND CONTINGENCIES

Aptar Pharma — Gel Packaging Machine

The Company has a commitment with Aptar Pharma to purchase a gel packaging machine for $847,532. As of June 30, 2012, the Company had paid $337,096 resulting in a remaining obligation of $510,436 as of such date.

Pending Litigation

On February 3, 2012, a purported class action lawsuit was filed in the United States District Court for the Northern District of Illinois under the caption Thomas Lauria, on behalf of himself and all others similarly situated v. BioSante Pharmaceuticals, Inc. and Stephen M. Simes naming the Company and the Company’s President and Chief Executive Officer, Stephen M. Simes, as defendants. The complaint alleges that certain of the Company’s disclosures relating to the efficacy of LibiGel and its commercial potential were false and/or misleading and that such false and/or misleading statements had the effect of artificially inflating the price of the Company’s securities resulting in violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (Exchange Act), Rule 10b-5 and Section 20(a) of the Exchange Act. Although a substantially similar complaint was filed in the same court on February 21, 2012, such complaint was voluntarily dismissed by the plaintiff in April 2012. The plaintiff seeks to represent a class of persons who purchased the Company’s securities between February 12, 2010 and December 15, 2011, and seeks unspecified compensatory damages, equitable and/or injunctive relief, and reasonable costs, expert fees and attorneys’ fees on behalf of such purchasers. The Company believes the action is without merit and intends to defend the action vigorously.

On May 7, 2012, Jerome W. Weinstein, a purported stockholder of the Company filed a shareholder derivative action in the United States District Court for the Northern District of Illinois under the caption Weinstein v. BioSante Pharmaceuticals, Inc. et al., naming the Company’s directors as defendants and the Company as a nominal defendant. A substantially similar complaint was filed in the same court on May 22, 2012 and another substantially similar complaint was filed in the Circuit Court for Cook County, Illinois, County Department, Chancery Division, on June 27, 2012. The suits are generally related to the same events that are the subject of the class action litigation described above. The complaints allege breaches of fiduciary duty, abuse of control, gross mismanagement and unjust enrichment as causes of action occurring from at least February 2010 through December 2011. The complaints seek unspecified damages, punitive damages, costs and disbursements and unspecified reform and improvements in the Company’s corporate governance and internal control procedures. Additional lawsuits may be filed by other purported stockholders of the Company.

The lawsuits are in their early stages; and, therefore, the Company is unable to predict the outcome of the lawsuits and the possible loss or range of loss, if any, associated with their resolution or any potential effect the lawsuits may have on the Company’s operations. Depending on the outcome or resolution of these lawsuits, they could have a material effect on the Company’s operations, including its financial condition, results of operations, or cash flows.

The Company is not involved in any other legal actions, however, from time to time may be subject to various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business. Such matters are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time.

FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2012

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

9. FAIR VALUE MEASUREMENTS

The Company accounts for its convertible debt and U.S. Treasury money market fund at fair value. Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy has been established that prioritizes observable and unobservable inputs used to measure fair value into three broad levels, which are described below:

Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk.

Financial assets and liabilities recorded at fair value on a recurring basis as of June 30, 2012 and December 31, 2011 are classified in the tables below in one of the three categories described above:

Description	June 30, 2012 Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market fund	$	41,468,496	—	$	41,468,496	—
Total assets	$	41,468,496	—	$	41,468,496	—
Liabilities:
2013 Notes	10,477,635		—	10,477,635		—
Total liabilities	$	10,477,635	—	$	10,477,635	—

Description	December 31, 2011 Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market fund	$	55,465,507	—	$	55,465,507	—
Total assets	$	55,465,507	—	$	55,465,507	—
Liabilities:
2013 Notes	17,336,760		—	17,336,760		—
Total liabilities	$	17,336,760	—	$	17,336,760	—

The Company made an election to record the values of the 2013 Notes at fair value with gains and losses related to fluctuations in the value of these financial liabilities recorded in earning immediately. The fair values of the 2013 Notes are estimated based on the risk-free borrowing rate, the volatility of the Company’s stock, and the current borrowing rates for similar companies. See Note 6, “Convertible Senior Notes” for more information and disclosures regarding key assumptions used in this fair value determination.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2012

FAIR VALUE MEASUREMENTS

Schedule of financial assets and liabilities recorded at fair value on a recurring basis

Description	June 30, 2012 Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market fund	$	41,468,496	—	$	41,468,496	—
Total assets	$	41,468,496	—	$	41,468,496	—
Liabilities:
2013 Notes	10,477,635		—	10,477,635		—
Total liabilities	$	10,477,635	—	$	10,477,635	—

Description	December 31, 2011 Balance		Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market fund	$	55,465,507	—	$	55,465,507	—
Total assets	$	55,465,507	—	$	55,465,507	—
Liabilities:
2013 Notes	17,336,760		—	17,336,760		—
Total liabilities	$	17,336,760	—	$	17,336,760	—

LIQUIDITY AND CAPITAL RESOURCES (Details)	1 Months Ended		6 Months Ended
LIQUIDITY AND CAPITAL RESOURCES (Details)	Jul. 31, 2012 USD ($) holder shares	Feb. 29, 2012 USD ($) holder shares	Jun. 30, 2012 USD ($) holder item shares	Dec. 31, 2011 USD ($)	Jun. 30, 2011 USD ($)	Dec. 31, 2010 USD ($)
Liquidity and capital resources
Cash and cash equivalents			$ 42,417,045	$ 57,225,234	$ 37,126,006	$ 38,155,251
Minimum
Liquidity and capital resources
Number of products or technologies licensed by the entity as an alternative to raising additional financing \| item			1
2013 Notes
Liquidity and capital resources
Principal amount	$ 8,277,850		$ 11,782,000	$ 20,782,000
Interest rate (as a percent)	3.125%		3.125%
Number of shares issued in exchange for cancellation for debt \| shares	1,784,070	1,868,055	1,868,054
Number of holders of debt instrument to whom shares are issued by the entity \| holder	2	1	1
Principal amount of debt cancelled	$ 3,504,150	$ 9,000,000	$ 9,000,000
Accrued and unpaid interest payable on cancellation of debt	$ 20,686
Number of new LibiGel Phase III efficacy trials \| item			2

CONVERTIBLE SENIOR NOTES (Details)	1 Months Ended		3 Months Ended				6 Months Ended		12 Months Ended
CONVERTIBLE SENIOR NOTES (Details)	Jul. 31, 2012 USD ($) holder shares	Feb. 29, 2012 USD ($) holder shares	Sep. 30, 2012 USD ($)	Jun. 30, 2012 USD ($) $ / shares	Mar. 31, 2012 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2012 USD ($) shares holder $ / shares	Jun. 30, 2011 USD ($)	Dec. 31, 2011 USD ($)
Convertible senior notes
Fair value adjustment				$ (15,953)		$ 1,753,000	$ 3,194,385	$ 2,392,000
2013 Notes
Convertible senior notes
Interest rate (as a percent)	3.125%			3.125%			3.125%
Principal amount	$ 8,277,850			$ 11,782,000			$ 11,782,000		$ 20,782,000
Number of shares issued in exchange for cancellation \| shares	1,784,070	1,868,055					1,868,054
Accrued and unpaid interest payable on cancellation of debt	$ 20,686
Number of holders of debt instrument to whom shares are issued by the entity \| holder	2	1					1
Principal amount of debt cancelled	$ 3,504,150	$ 9,000,000					$ 9,000,000
Number of shares of common stock receivable upon conversion \| shares							370,871
Conversion price (in dollars per share) \| $ / shares				$ 22.32			$ 22.32
Recorded fair value				$ 10,477,635			$ 10,477,635		17,336,760
Amount of difference between aggregate recorded fair value of the notes and their total stated principal amount				1,304,365			1,304,365		$ 3,445,240
Fair value adjustment				$ 15,953	$ (2,545,530)	$ (1,753,000)	(3,194,385)	(2,392,000)
Fair value adjustment attributable to the change in instrument specific credit risk							$ (22,000)	$ 415,000
Additional non-cash fair value adjustment attributable to conversion of debt			$ (611,621)
Assumptions to establish the value of the Notes
Average risk-free rate (as a percent)							0.19%		0.19%
Volatility of BioSante common stock (as a percent)							86.60%		77.40%
Discount rate for principal payments in cash (as a percent)							18.80%		18.50%

STOCK-BASED COMPENSATION (Details) - $ / shares	6 Months Ended
STOCK-BASED COMPENSATION (Details) - $ / shares	Jun. 30, 2012	May 30, 2012
STOCK-BASED COMPENSATION
Number of shares of the entity's common stock authorized for issuance under the plan before amendment		1,000,000
Number of shares of the entity's common stock authorized for issuance under the plan		1,800,000
Number of shares that remained available for issuance under the plan	945,391
Stock options
Stock-based compensation
Options granted under the plan (in shares)	354,782
Weighted average exercise price of options granted (in dollars per share)	$ 4.10
Options expired and cancelled (in shares)	86,994
Warrants
Stock-based compensation
Warrants expired (in shares)	65,872
Weighted average exercise price of warrants expired (in dollars per share)	$ 235.62

STOCKHOLDERS' EQUITY (Details)	1 Months Ended				6 Months Ended
STOCKHOLDERS' EQUITY (Details)	Jul. 31, 2012 USD ($) holder shares	Jun. 30, 2012	May 31, 2012	Feb. 29, 2012 USD ($) holder shares	Jun. 30, 2012 USD ($) holder shares
Stockholder's equity
Reverse stock split conversion ratio		0.1667
Minimum
Stockholder's equity
Reverse stock split conversion ratio			0.0050
Maximum
Stockholder's equity
Reverse stock split conversion ratio			0.0010
2013 Notes
Stockholder's equity
Number of shares issued in exchange for cancellation \| shares	1,784,070			1,868,055	1,868,054
Number of holders of debt instrument to whom shares are issued by the entity \| holder	2			1	1
Principal amount of debt cancelled	$ 3,504,150			$ 9,000,000	$ 9,000,000
Accrued and unpaid interest payable on cancellation of debt	$ 20,686

- Definition

Number of shares issued during the period as a result of the conversion of convertible securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.29-30)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 29, 30
-Article 5

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 129
-Paragraph 4, 5
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Condensed Balance Sheets (Parenthetical) - shares	Jun. 30, 2012	Dec. 31, 2011
Class C Special Shares
Capital stock, issued shares	65,214	65,214
Capital stock, outstanding shares	65,214	65,214
Common Stock
Capital stock, issued shares	20,137,526	18,269,755
Capital stock, outstanding shares	20,137,526	18,269,755

DESCRIPTION OF BUSINESS (Details)	6 Months Ended
DESCRIPTION OF BUSINESS (Details)	Jun. 30, 2012 vaccine item
DESCRIPTION OF BUSINESS
Number of cancer vaccines that have been granted FDA orphan drug designation \| vaccine	4
Number of Phase I and Phase II clinical trials \| item	17

COMMITMENTS AND CONTINGENCIES (Details) - Gel Packaging Machine - Aptar Pharma	6 Months Ended
	Jun. 30, 2012 USD ($)
Commitment and contingencies
Amount of commitment to purchase machinery	$ 847,532
Amount paid	337,096
Remaining obligation	$ 510,436

BASIS OF PRESENTATION (Details)	1 Months Ended
BASIS OF PRESENTATION (Details)	Jun. 30, 2012
BASIS OF PRESENTATION
Reverse stock split conversion ratio	0.1667

FAIR VALUE MEASUREMENTS (Details) - Recurring basis - USD ($)	Jun. 30, 2012	Dec. 31, 2011
Total
Assets:
Total Assets	$ 41,468,496	$ 55,465,507
Liabilities:
Total liabilities	10,477,635	17,336,760
Total \| 2013 Notes
Liabilities:
Fair value of convertible debt	10,477,635	17,336,760
Total \| Money market fund
Assets:
Total Assets	41,468,496	55,465,507
Significant Other Observable Inputs (Level 2)
Assets:
Total Assets	41,468,496	55,465,507
Liabilities:
Total liabilities	10,477,635	17,336,760
Significant Other Observable Inputs (Level 2) \| 2013 Notes
Liabilities:
Fair value of convertible debt	10,477,635	17,336,760
Significant Other Observable Inputs (Level 2) \| Money market fund
Assets:
Total Assets	$ 41,468,496	$ 55,465,507