Generex (GNBT) - more than a mouthful

The past three weeks have been tough for the oral insulin developing company, Generex Biotechnology (GNBT), previously covered in this blog. The turmoil started out with a pair of articles (Mar. 19 and Mar. 26, 2010) by Adam Feuerstein posted on TheStreet.com, questioning the science behind the biotech firm's product candidate, Oral-lyn, currently under a worldwide phase III trial. You can read more about GNBT in my earlier posts: here and here. To guard the company's reputation and to defend itself from damaging misinformation, the leader in buccal mucosal drug delivery for metabolic diseases determined to speak up Tuesday (Apr. 6, 2010) and pursue legal actions against TheStreet.com, Inc. and Adam Feuerstein in the Supreme Court of the State of New York, demanding $250,000,000 in "damages for business defamation, product disparagement, and injurious falsehood". In marked frustration, Executive Vice-President & General Counsel of Generex, Mark Fletcher, stated "These articles go well beyond the expression of disparaging opinion or fair comment and Feuerstein and TheStreet.com have abused their public forum by spreading categorical falsehoods about Generex and Generex Oral-lyn when a modicum of due diligence would have revealed the truth, an injury then compounded by unfounded and libelous allegation and innuendo. We are now seeking to hold Feuerstein and TheStreet.com accountable for the damage they have unjustifiably inflicted on Generex and its stockholders."

Meanwhile, GNBT shares tumbled 10.9% from 55 to 49 cents a share. Piling on top of the business of propelling the oral insulin forward into the market, securing investor confidence and patient trust in the midst of an exhausting lawsuit will likely be more than a mouthful for the news-laden biotech.