Early last week Generex Biotechnology Corp. issued a press release that outlined the current status of the Oral-lyn development program. Oral-lyn is the company's developmental insulin spray that delivers insulin buccally through the inner lining of the cheek.
This flagship product had been the key to the future for Generex, so many investors were thrown off course earlier this year when the cancer vaccine AE37, being developed by subsidiary Antigen Express, was labeled as the "centerpiece of the future."
Generex CEO Mark Fletcher and company answered some of those concerns in the subsequent conference call, but many investors were still left feeling confused about what was perceived to be a momentous shift away from Oral-lyn as the primary path to success for Generex and its shareholders.
Hence the PR last week that provided the update on the status of Oral-lyn that investors were waiting for.
On Friday of last week, GNBT shares dropped up to 25% on significant volume after TheStreet.com's biotech blog (the usual culprit when there's controversy about questionable blogging practices) published a post that summed up the earlier Generex Oral-lyn update. Generex, in turn, had some issues with the legitimacy of the facts made on the biotech blog.
The meat of the dispute is noted in the below excerpt:
Generex "closed" the recent Phase III clinical trial of Generex Oral-lyn™ because the trial had been completed in accordance with the clinical trial protocol. The blog author's assertion that Generex "shut down" the trial inappropriately implies that the trial was curtailed or flawed, which is not the case. Further, the trial was completed on schedule in accordance with the clinical trial protocol.
Generex and TheStreet's biotech blog do have a history.
Early last year Generex filed a $250 million lawsuit against TheStreet.com and its biotech blogger, after the blogger had played liberally with the facts. Litigation is still ongoing in that suit, and this most recent go-round of salvos certaintly doesn't bring the two sides any closer.
The fact that GNBT has dipped pretty significantly in the midst of all this just makes it a more attractive entering point for those looking to get in on the longer-term hopes of Oral-lyn, but I'll still be hanging on the sidelines for right now until the reverse split takes place, and then I'll reassess.
Oral-lyn can be a game-changer if it makes it through the FDA, so if one has patience and some speculative cash to burn, then GNBT might look like a decent buy right about now.
As for Generex's most recent PR? They got one thing right; they identified author of the post in question for what he is - just another blogger with an opinion.
Watch list this story.
Disclosure: No position.
