Generex Vs.

Generex Vs.

This morning Generex Biotechnologies (NASDAQ:GNBT) announced they were suing and Adam Feuerstein in the Supreme Court of the State of New York seeking $250,000,000 in damages for business defamation, product disparagement, and injurious falsehood. According to a press release issued by the company; “Generex contends that the articles disseminate numerous defamatory statements about the Company, its management, and its flagship product, Generex Oral-lyn(TM), and that the articles put forward several ostensible statements of fact that are, in truth, misleading or outright misstatements made with malicious intent or with a reckless disregard for the truth.”

Having read the articles written by Mr. Feuerstein, Diabetic Investor can understand why Generex is upset as his comments were less then complimentary. Generex fails to mention while the comments are less than complimentary they are very accurate.

Just to provide a little history here Diabetic Investor is well versed in the Generex story and has followed the company for over 10 years. Initially Diabetic Investor was intrigued by the company as the offered a slick delivery device and their insulin wasn’t inhaled rather it was absorbed in the mouth. Back then Generex was just one of many companies seeking to develop an alternate insulin delivery system, the main difference between Generex and everyone else was most of their competitors were focusing insulin inhaled into the lungs.

The Achilles heel of the company back then is really what it is today, lack of solid, credible clinical data. While the company has conducted several small clinical studies, mostly in third world countries, they have yet to conduct any rigorous trials here in the US or Canada. Diabetic Investor has never had a problem with the delivery device which resembles as asthma inhaler and is very patient friendly, nor do we have a problem with the insulin being absorbed in the mouth. However, this is a drug and it would be nice to see some large controlled trials that prove the drug actually works.

Just by way of comparison take a look at all the studies conducted by MannKind (NASDAQ:MNKD) for Afrezza™ which is currently awaiting approval at the FDA. Then stack those studies against the studies done by Generex for Oral-lyn™ and draw your own conclusions.

Here is just one example of how Generex operates; back in May 2008 the company stated they had initiated a Phase III clinical trial which will be a 6-month trail with 750 patients, the primary objective of compare efficacy with standard regular injectable therapy.  In March 2009 the company states that “over 314 patients enrolled in 74 sites. (USA, Canada, Bulgaria, Poland, Romania, Russia, Ukraine)- 60 subjects having achieved the requisite six-month treatment milestone- Non-inferiority to injectable insulin meal-time (prandial) insulin appears to be maintained. No significant “Adverse Events” or “Serious Adverse Events” have been reported (supports current initiatives of the study).” Then in late July of 2009 the company states that 352 patients have been enrolled in this trial.

Let’s see if we have this correct in May 2008 the company states they initiated a Phase III clinical trial which will include 750 patients. Almost a year later “over 314 patients” have been enrolled and 60 have been in for six-months. Based on the 19% of enrollees who completed six-months of treatments; “Non-inferiority to injectable insulin meal-time (prandial) insulin appears to be maintained.” (Diabetic Investor added highlighting and bold). Five months later another 38 patients have enrolled in the trial bringing the grand total to 352. So 14 months after they announce they have initiated a Phase III trial that will include 750 patients, they have less 50% of that number actually enrolled in the study and about the only thing we know is 60 have completed six-months of therapy and it APPEARS the drug is non-inferior to the current standard of care.

While Diabetic Investor has nothing against conducting this trial at 74 sites in the USA, Canada, Bulgaria, Poland, Romania, Russia, Ukraine (Although we must admit looking at this list of countries it sounds more like an international hockey tournament than a clinical trial.), some would question the reliability of the study with it being so spread out. One might also wonder why it’s taking so long to reach the 75o patient level, granted it’s not easy finding people willing to participate in a clinical trial they only need 10 people per site to reach their goal and that really shouldn’t be all the difficult.

The facts of the matter are Generex isn’t even close to submitting Oral-lyn™ to the FDA. Anyone who does even the smallest amount of research will find that when compared to other drugs in the category Generex’s clinical work is weak at best.

To Diabetic Investor Generex is like a child desperate for attention and who will do anything they can to get it. Like a child, they want investors to ignore the facts and focus on what might be; instead of actually doing all the hard work and letting the results stand on their own merit. The company continues to blame the messenger for simply pointing out what’s already in the public domain. This is the main reason Diabetic Investor decided long ago not to write about Generex until they actually had some real data. When it comes to diabetes it’s not enough to have a slick idea, especially when you’re talking about a potentially dangerous drug like insulin. As study after study has proven improper insulin usage has serious consequences and we better damn sure this drug, no matter how it’s delivered, does no harm.

The bottom line here is that Generex is a publicly traded company and investors have the right to know what’s going on with the company. This includes allowing members of the financial press to offer their opinions based on their research. As much as companies would like us to print their propaganda and swallow the manure they shovel, this is not the role of a free press. The fact is if the drug is good as they say it is it will stand up to scrutiny and Generex will get the last laugh.  Based on our research Diabetic Investor believes TheStreet is right on here and should be commended for informing investors.

As George Orwell noted; “If liberty means anything at all, it means the right to tell people what they don’t want to hear.” Generex may not like what TheStreet has said but they have every right to say it and the fact that they are dead on here is just icing on the cake.