Last month Generex (GNBT.ob) provided investors with an update on the Phase II breast cancer vaccine AE-37, which is being developed by subsidiary Antigen Express. Although that update followed one that was also encouraging regarding the insulin spray Oral-lyn, potential investors were unimpressed as the Generex share price remained trading for roughly a dime.

While many long term investors hold the potential of Oral-lyn as their reason for sticking around, Generex announced earlier this year that AE-47 would be the center piece of the future. As a part of that future, Generex would spin off its subsidiary and offer current investors an Antigen Express dividend, with Generex still maintaining majority control of the new company.

An update on the status of the spinoff was provided last week, and according to the update, Generex is currently reviewing multiple transaction opportunities for its spinoff plans. As part of those plans, an initial fund raising will be necessary, and if the merger and fund raising are successful, Generex will seek to have the newly-formed company listed on a national exchange.

All of this is expected to take place by early 2012, and according to last week's update - the company will keep investors "updated" on what takes place.

Meanwhile, Generex continues to view the spinoff as an opportunity to place a value on AE-37 on its own, while GNBT will be valued based on the potential of Oral-lyn. A still-unnamed independent valuation firm placed a current value of $300 million on AE-37 at its current pipeline stage, a valuation which Generex still uses as bait lure in new investors.

The technology behind and effectiveness of AE-37 may be everything as sound as Generex and Antigen Express advertise, but it's not exactly 'cancer immunotherapy season' right now after Dendreon (DNDN) had to revoke its year-end sales guidance for Provenge, the grand-daddy of all cancer immunotherapies.

Many companies with Phase III cancer immunotherapy products are trading for nowhere near a market cap of $300 million in this environment, let alone a Phase II company, so that's an item worth noting as the AE story evolves. Oncothyreon (ONTY), for instance, is sitting at a cap of 300 mil, but results from its Phase III Stimuvax trials are due shortly, and the company has a big-named partner already landed in GlaxoSmithKline (GSK).

Comparatively, Anitgen Express might be looking to enter the market at a rough time.

There's still some encouraging potential to look at in regards to both Oral-lyn and AE-37, so it could be that the current prices will be looked back upon as quite the bargain. CEO Mark Fletcher has given the company direction that was lacking under the previous administration, and it could be just a matter of time before the direction pays off.

It will take more money to bring Oral-lyn and AE-37 to market, and that's what investors will be watching right now - how the fund raising takes place.

Regardless of the potential of the spinoff and pipeline, the recent Generex updates have failed to move the share price from the ten cent level; and that in itself could be an example of investors waiting to see something happen before taking the leap.

Keep an eye on it.

Disclosure: No positions.

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