Mannkind (MNKD) - Will FDA approve Afrezza? - I am doubtful (but will show you how to trade)

Update on FDA's delay
In my previous blog entry, I have explained why I was not as optimistic as Mr. Mann about the approval of Mannkind's experimental inhaled insulin drug, Afrezza.  So the FDA was delayed in December 2010, when can we expect to hear the final ruling?  While the FDA did not provide a firm date for the final decision announcement (PDUFA action date), it did indicate that the delay was going to be 4 weeks.  This would be coming up next week roughly Wed. on Jan 26, 2011.  If a complete response letter is issued to the Valencia, Cali-based biotech, which in my opinion will be very likely, then the company history tells us that we're looking at a ~30% drop right off the bat (Mannkind had received its first complete response letter in March 2010 and suffered a blow to its stock value).  The dip may even be greater this time around because a second rejection would put the nail in the coffin for Mannkind's (and largely Alfred Mann's) pursuit of a beathable insulin medicine to treat diabetes.


Trading Map
Despite the 'hype' all over the web about Afrezza's soon-to-be-received approval, I maintain my short position in the stock.  Here is what may be a profitable short play through put options.  Look to purchase February put options at the lowest possible price before Tuesday, Jan. 25 (remember the announcement might be out any time between now and next Wed. Jan 26).  Aim to buy whenever MNKD share price takes another leap as put options price changes in opposite direction to share price.  I know it's expensive right now ($2.15, strike price $9) but it will be worth it!!!!!   If and when Mannkind's Afrezza gets rejected, the put options will seem that much shinier!!!!!


Note:  Because put options become cheaper and cheaper by the day, it may be worth it to wait until the last possible minute before the order is sent in.  The only caveat is that you might miss the play completely in the event that the FDA jumps the gun on decision release.  Weigh your options (no pun intended).  Good luck!

Mannkind (MNKD) - False hype behind Al Mann's insider purchase

Alfred Mann's purchase creates false hype because:

1. He doesn't know the fate of Afrezza (like you and I)

2. The type of purchase was 'indirect'

3. He is restricted by a 'black out' period

--> His purchase was involuntary

Mannkind Corp (MNKD), maker of a new inhaled insulin product candidate (Afrezza), is up more than 10% on news that Alfred Mann, the founder & CEO of the biotech, had purchased 2,800,000 shares of his own company for a total of $22.7 million in 2 months.  Lots of investors see this as a positive indication of Afrezza's potential near term approval and hope to jump on the bandwagon last minute.  In addition, in a recent interview with Bloomberg at the JP Morgan Healthcare conference in San Francisco, Mann indicated that the FDA's delay in December was not surprising and reiterated his optimism in his company's invention.  However, he did say that the FDA's expanded audit process "seems optimistic but [he doesn't] think [one] cannot read too much into it".  This shows that even Al Mann doesn't know the fate of Alfrezza and therefore his 'buying spree' should not be taken as if he has any more information than you and I do.  

Most importantly, what most people fail to notice is that the type of Mann's transaction was 'indirect'.  This means that over time the company automatically converts part of Mann's salary and bonuses into a share purchase program, which acquires Mannkind's shares at certain periods of time.  Also, insiders are constrained by a 'black out' period around sensitive time points such that they are prevented from manipulating stock price.  Therefore, Mann did NOT voluntarily make the trade and may NOT have been willing to do so.  Are you still as excited?  I'm not!  

Mannkind Corp (MNKD) - on the move to higher ground as PDUFA approaches

Mannkind Corp (MNKD) has gained an incredible ~40% in the past 5 days as the biotech awaits FDA's final call on it's experimental inhaled insulin drug, Afrezza.  The PDUFA is scheduled for Dec. 29, 2010.  

Keep your eyes open for some beaten down put options if Afrezza does get approved.  This would be a play similar to what we've done with MELA and OREX.  Essentially we want to capitalize on the post-approval drop in Mannkind's share price.    

Vivus Inc. (VVUS) - unfinished battle for Qnexa

Vivus surged on Friday despite FDA's issuance of a complete response letter (CRL) to the company's experimental obesity drug, Qnexa.

The reasons for the substantial spike in Vivus' share price are the following:

1) Vivus' follow-up data package, ready to be submitted in 6 weeks (no lengthy additional trials needed)

2) FDA's seemingly 'neutral' stance on the possibility of approving a new diet pill (based on their response to Arena's angry investors)

3) Renewed investor confidence/interest after Arena's failure to obtain FDA's approval (potentially 'larger' market share for Vivus)

4) Qnexa's impressive efficacy in inducing weight loss (12-15% compared to placebo)

5) Qnexa's additional efficacy in diabetes
6) Qnexa's relatively mild side effects (non-tumor associated, unlike Arena's Lorcaserin)

Based on their interpretation of the CRL, JP Morgan upgraded VVUS from neutral to overweight and shifted the price target up from $13 to $16.  

Orexigen Therapeutics (OREX) - light volume behind rising share price (strong buying interest??)

While a drastic jump in Orexigen Therapeutics' stock (OREX) was not seen (due to many factors) after OREX's close competitor, Arena Pharmaceuticals (ARNA), received a negative review by FDA's advisory panel of the company's obesity drug candidate, a 'modest' gain of > 7% was sufficient to support the idea that investors have not completely given up on the company.  What's more interesting is the light trading volume behind the climbing share price, signifying a strong interest in the stock and a potential run in the near term.  Could encouraging 'insider information' have leaked to a small group of people to prompt the buying momentum?!?!  Perhaps.  Investors should be cautious, however, about hanging on to the stock too long as ARNA and VVUS' PDUFA dates quickly approach (rejections may cause OREX to swing dramatically in either direction.  *OREX was recommended post ARNA's 70% tumble after hours on Sept. 17, 2010*

VVUS Qnexa disapproved by FDA committee

FDA Panel Vote
Results from the highly anticipated advisory panel are finally out: 6 YES vs. 10 No for recommendation of the approval of Qnexa, VVUS' experimental obesity drug. After all, safety still trumps efficacy when it comes to introducing new drugs to patients. The 10-12% weight loss offered by Qnexa no longer weighs favorably in the face of potential cardiovascular risks. VVUS' share price bled an excruciating 56% in after market trading as frightened share holders dump their ownership of the company.

Trading Strategy
The way to capitalize on biotech catalysts is to get in early before a significant date (e.g. FDA panel, PDUFA, clinical results, major presentations...etc.) and exit just before the actual event. VVUS' story is a prime example of the unpredictability of the FDA's decision and the outcome of an NDA. If timed right, however, a majority of investors can still pocket a handsome return despite negative FDA/advisory committee remarks. In the case of VVUS, investors could still have gained a potential earning of as much as 42% in a 2-week window just prior to the panel meeting (July 1 - 14). Do REMEMBER though, it is always much much less risk-laden to exit BEFORE the date of interest as advised in a previous post to avoid getting burned on bad news.

So, now that the excitement about Qnexa is over, let's move on the next players in line. Stay tuned!

VVUS FDA panel meeting notes

Often times before a panel meeting (no later than 48 hours before the scheduled time), the FDA would prepare and release background material including comments on the examination of clinical trial data by a carefully chosen group of physicians. From this, a general sense of whether the drug being scrutinized would receive a solid recommendation from the medical experts for marketing approval can be extracted. Thus, working forward from the programmed meeting date of July 15, by the end of tomorrow the meeting notes should be available and the share price will undoubtedly reflect and amplify the experts' judgment. Keep alert throughout the day and check the FDA advisory calendar for any updates. Unfortunately, by the time the information becomes available to the 'general public' the stock price would have moved considerably already, so decide what you want to do FAST - whether you want to buy, sell, short the stock or trade options. VVUS' panel meeting with the FDA has been one of the most highly anticipated events in the past a year due to the unique indication (i.e. weight loss) that the drug intends to target. I am personally excited about this meeting, the outcome of which will set the tone for the upcoming assessment of another two potential weight loss medications by Arena Pharmaceuticals (ARNA) and Orexigen Therapeutics (OREX).

VVUS up 22.45% this week ahead of FDA panel

VVUS - FDA advisory panel in 10 days!!!

The clock is ticking. The FDA's advisory panel will gather on Thursday July 15 to offer independent expert opinions on Vivus' (VVUS) investigational obesity drug, Qnexa. As discussed in my previous post, subjects taking Qnexa achieved an average weight loss of 14.7% (37 lbs) in two major phase III trials lasting 56 weeks involving 3,750 patients. While concerns about the potential side effects of Qnexa may present a barrier, VVUS is confident that the low doses of the drug combination (Phentermine/topiramate) delivered by Qnexa will drastically minimize possible negative effects previously associated with these two individual drugs by themselves.

Competitors
Qnexa currently has two competitors in late stage development. The first is Lorcaserin from Arena Pharmaceuticals (ARNA) and the second is Contrave from Orexigen (OREX). Patients prescribed Lorcaserin and Contrave in phase III studies lost an average of 5.8% and 7% body weight, respectively.

Panel meeting for Lorcaserin - Sept 16, 2010
PDUFA date for Lorcaserin - Oct. 22, 2010

Panel meeting for Contrave - Dec. 7, 2010
PDUFA date for Contrave - Jan. 31, 2011


FDA's Cutoff
The FDA has two alternate efficacy benchmarks in its most recent draft guidance. A weight-management product can be regarded as effective if after one year of treatment:
1) The proportion of subjects who lose greater than or equal to 5% of baseline body weight in the active-product group is at least 35%, is approximately double the proportion in the placebo-treated group
2) The difference between groups is statistically significant.

Strategy
Data from Qnexa's studies certainly support the advancement of VVUS' diet pills based on the above guidelines. However, it is now up to the physicians to decide whether the benefits outweigh the potential risks of the drug. We will find out about this next week. Given past experiences with FDA's panels, it is quite likely that they will meet ~2 to 3 days ahead of schedule. Since share prices tend to fluctuate dramatically on the panelists' votes, it would be less risky to exit by July 13.

Amylin (AMLN) shares up 19.93% on Roche (RHHBY) NDA delay

Roche announced Friday that its Phase III clinical trials have been halted due to adverse reactions to diabetes drug candidate Taspoglutide. This will likely push back the drug's timeline to filing for a min. of 12-18 months and thus its future competitiveness given an increasing number of similar GLP-1(glucagon-like-peptide-1)-based therapies including Amylin's (AMLN) and Alkermes' (ALKS) Bydureon (PDUFA: Oct 22, 2010) and Novo Nordisk's (NVO) newly-approved Victoza. Adverse reactions experienced by patients in Roche's late trials include hypersensitivity reactions, stomach pain, heart and respiratory symptoms. Roche's shares were down 2.43% during Friday's trading.


Meanwhile, shares of AMLN and ALKS popped 19.93% and 9.43%, respectively, as investors see Roche's Taspoglutide NDA delay as a sign of security for Bydureon's marketability. The PDUFA date for Bydureon, the once-weekly version of the previously approved diabetes drug (Byetta), is scheduled for Oct 22, 2010.

Vivus Inc. (VVUS) took an unexpected dive today - great entry point?

What happened?


Shares of Vivus experienced an unexpected ~8% loss today after Lazard Ltd's analyst William Tanner downgraded shares of Vivus to "hold" from "buy," citing the risk of an unfavorable panel review taking place on July 15, 2010. The change in opinion arose out of concerns about the potential side effects, such as minor memory impairment and cardiovascular risk, previously linked to topiramate (Topamax) and phentermine, the two constituents of VVUS's weight loss drug candidate. The company has already addressed this issue by quoting results from clinical trials which showed that Qnexa, at low doses, actually improved some risk factors for heart disease, including decreasing blood pressure, bad cholesterol and triglycerides. At higher doses, Qnexa was associated with increased heart rate.

Entry point?
Basically, little has changed since the release of final phase, pivotal trial data which demonstrated a promising outlook for Qnexa and generated lots of excitement in the medical community. The drop in VVUS share price may have simply been a short term reaction to an analyst's opinion. Vivus is still a solid firm with 1 product (MUSE) on the market, 1 in Phase III, and 2 in Phase II development in addition to Qnexa. Besides the opinion of a few, many remain hopeful to see Qnexa become an FDA-approved weight loss medication on pharmacy shelf. The commercialization of Qnexa will contribute to cutting down many risk factors correlated with obesity, and hopefully alleviate the costs of treatment associated cardiovascular diseases/stroke, diabetes, and cancer.


The fall in VVUS shares may represent a discount for investors to ride the surge before the July 15 FDA panel.

Open: 11.37
High: 11.65
Low: 10.84
Close: 10.95
Volume: 11,750,800
Avg vol: 4,414,060

Disclosure: Long VVUS

Vivus Inc. (VVUS) - a short 'weight' to a fat market

VIVUS Inc. (VVUS) is a biopharmaceutical company developing innovative, next-generation therapies to address unmet needs in obesity, diabetes and sexual health. The company's lead product in clinical development, Qnexa, has recently completed phase 3 clinical trials for the treatment of obesity. Qnexa is also in phase 2 clinical development for the treatment of type 2 diabetes

Catalyst
FDA Advisory Panel Meeting - July 15, 2010
PDUFA Date - October 28, 2010


What is Qnexa?
Qnexa is a once-daily, combination drug (phentermine 15 mg immediate-release + topiramate 92 mg controlled-release) in Phase 3 clinical development for weight loss in obese patients and improving blood sugar control in diabetics. Phentermine is the most widely prescribed prescription weight loss drug which is available in generic forms and has a database of 1.8 million patient years of usage.

Topiramate is better known as Topamax, which has 5.8 million patient years of use and was originally developed as a seizure drug and is also used for the prevention of migraine headaches. While both components of Qnexa will be available in generic forms, topiramate is not indicated for weight loss and the dosages being evaluated in clinical trials would make dosing difficult using the two drugs individually.

Vivus holds composition of matter and method of use patents for Qnexa as a combination treatment for obesity in the unique dosage forms that were investigated in several Phase III pivotal trials last year.

Clinical Trial Results

Stage: Phase III pivotal
Trial name: EQUIP (OB-302), CONQUER (OB-303)
Trial length: 56 weeks
Total # patients: > 3,750 across 93 sites
Summary: The EQUIP and CONQUER studies met all primary endpoints by demonstrating statistically significant weight loss with all three doses of Qnexa, as compared to placebo. Patients taking Qnexa also achieved significant improvements in cardiovascular and metabolic risk factors including blood pressure, lipid levels, and type 2 diabetes.

EQUIP
-> Wt loss: 37 lbs (14.7%) and 18 lbs with full-dose Qnexa and low-dose Qnexa, respectively vs. 6 lbs in the placebo group
-> 60% of the full-dose Qnexa patients who completed the study lost at least 10% of their baseline weight
-> 43% of the full-dose Qnexa patients who completed the study lost at least 15% of their baseline weight
-> Patients treated with full-dose Qnexa had significant improvements in blood pressure, triglycerides and cholesterol

CONQUER
-> Wt loss: 30 lbs and 24 lbs with full-dose Qnexa and mid-dose Qnexa,
respectively, vs. 6 lbs in the placebo group
-> Reduction in hemoglobin A1c levels of 0.6% from 7.3% at baseline as
compared to a reduction of 0.1% from 7.4% at baseline for the
placebo patients (p<0.0001) -> 39% of the full-dose Qnexa patients who completed the study lost at
least 15% of their baseline weight

Data extracted from VVUS press release

Amlylin Pharmaceuticals (AMLN) posts 1Q2010 financial report

AMLN announced today that the company earned total revenue of $174.1M for the quarter ended Mar. 31, 2010, while accumulating non-GAAP operating loss of $3.8M (an 81% improvement from the same period in 2009), beating analysts' expectation of -$0.29 by 2 cents per share. Prepared to hand in their Bydureon (Byetta once-weekly) response to the FDA this week, the San Diego-base biotech is in line with the hope to launch the new diabetes drug by the end of this year - a catalyst for shareholders and cheerful news for patients.

AMLN's shares slid 61 cents or 2.80% today, closing at $21.14 as investors remain on the sidelines after hearing the company's first quarter financial updates. Amylin's president and CEO, Daniel M. Bradbury, reassures the shareholders that "with the submission of [the] BYDUREON response this week, [AMLN] is preparing to make this revolutionary treatment option available this year to the millions of patients living with type 2 diabetes." Mr. Bradbury emphasized that "[his company] remains focused on driving revenue from their currently marketed products, BYETTA and SYMLIN, and continues to exercise financial discipline so that the firm remains on track to generate sustainable positive operating cash flow by year end."

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.

FDA postponed Amylin's drug approval

As predicted yesterday, Amylin held an Investor Conference Call this morning 5:30ET announcing the FDA's response to the company's request for commercializing Bydureon (see previous post on this drug). AMLN's stocks climbed this morning to $22.20 (9.58% jump from Friday's closing price), reflecting investor's confidence in the final approval of the drug. See AMLN's press release for details.

End-of-day recap
With the FDA's positive response to the NDA of Bydureon, stocks were trading up 0.22% ($36.01), 14.74% (to $14.01) and 15.99% (to$23.50) for Eli Lilly & Co., Alkermes, and Amylin, respectively, on the first day of the week. The greater leap for the latter two companies reflects the importance of Bydureon to their narrower portfolios, compared to the pharma giant, Lilly, emphasizing the magnitude of influence a single drug approval has on biotech firms. The agency will require no further preclinical or clinical data, but would like to see the finalization of the product labeling with associating Risk Evaluation and Mitigation Strategy (REMS). AMLN will also need to clarify existing manufacturing processes, likely as a result of questions related to the FDA's early problematic inspection of Amylin's Ohio manufacturing plant, where Bydureon will be produced. Nevertheless, the overall encouraging answer from the agency and the relatively swift timeline towards the eventual drug approval (several weeks for AMLN to address the issues and ~6 mo. for the FDA to make the final decision) are behind the bullish attitude of the stakeholders.

Interesting observation: Notice that the shot in stock prices for ALKS and AMLN (green shading) occurred almost at the exact same time around 12 - 1 pm ET? I suspect that this was due to those on the west coast catching up to the news around 9 am in the morning and frantically rushing in their orders, which helped raise the values. Too bad they were one step behind in grabbing those lower-priced shares!

FDA's magic wand pointing at Amylin's longer acting Byetta

As the FDA sits literally hours away from okaying the once-weekly Byetta (exenatide) co-developed by Amylin (AMLN), Eli Lilly & Co. (LLY), and Alkermes (ALKS), industry followers are holding their breath and betting on dramatic boost in stock prices of the 'renewed' Byetta's developers. Seeing that the twice-daily formulation of the GLP-1 analog was able to capture $700 million in annual sales, the revised version of the drug (Byetta LAR), requiring merely 1 injection per week (as opposed to 14 injections), is likely to be quickly embraced by the Type 2 diabetes community. If approved, the new medicine is estimated to rake in peak sales of $2 billion by 2017 according to a JP Morgan Analyst.

While approval of Byetta LAR seems utterly inevitable, analysts are split on this one. This is partly because 1) the FDA has been known to surprise the crowd in the past and may either delay the final decision or request for additional information and 2) previous records have linked GLP-1 analog to pancreatitis, renal failures, and thyroid cancer (see Novo Nordisk's Victoza, a once-daily GLP-1 agonist approved earlier this year).

Despite the skepticism, Daniel Bradbury, Amylin's CEO, is confident about the success of the approval. Will the magic work for him?

Potential short term hits

Keep an eye out for the tickers listed below for a quick snap:

Delcath Systems (DCTH): NDA filing - April, 2010

Amylin Pharmaceuticals (AMLN), Eli Lilly & Co. (LLY), Alkermes Inc. (ALKS): PDUFA date - Mar. 12, 2010



MannKind Corporation (MNkD): PDUFA pending

Dendreon Corporation (DNDN): PDUFA date - May 1, 2010

InterMune Inc. (ITMN): NDA review - Mar. 9, 2010

Updates - Generex Biotechnology Corp. (GNBT)

Oral-lyn's FDA Approval

GNBT's Oral-lyn, an oral insulin medicinal spray, was granted approval last week under the FDA's Expanded Access Treatment Investigational New Drug (IND) program. This means that, by showing benefits that outweigh the risks associated with patients for whom currently approved drugs are no longer effective, Oral-lyn can now be prescribed as an alternative therapeutic option. GNBT is now planning to further broaden Oral-lyn's access to patients in North America, where the company expects to introduce a new paradigm for the treatment of diabetes based on it's proprietary oral insulin product. The FDA's permission for Oral-lyn's prescription by physicians is viewed as a considerable attraction for partnerships and collaborations as GNBT penetrates the North American market with this novel drug. For additional details, see GNBT's press release.

Peptide Vaccine Receives Patent in China

The peptide vaccine technology, Ii-Key, developed by GNBT's subsidiary, Antigen Express Inc., obtained a patent in China last week, enabling GNBT to initiate conversations with a number of big pharmas regarding potential joint venture/licensing partnership. The Toronto-based biotech is backed by positive interim results (13-month time point) from a Phase II trial of an Ii-Key modified peptide vaccine for patients treated for breast cancer who are at high risk of relapse. The study reported a 7% relapse rate in the control arm versus 0% relapses in the Ii-Key peptide arm (AE37). GNBT's CEO, Anna Gluskin, stated that she is "confident that with the right partnerships, [the Ii Key modified peptide vaccine] technology can have a far reaching positive impact on the treatment of many types of cancers and [GNBT] intends to aggressively pursue its goal of bringing these platform technologies to the commercialization stage." For additional details, see GNBT's press release.

Absorbing Profit through Generex's Magic Oral Formulation

Technology, management, and finance are the big three’s when it comes to seeking the next rising star on the market. Generex Biotechnology Corp. (GNBT), closing at 63 cents a share before the weekend, presents appealing qualities in each of these three areas as a small-cap biotech worth adding to the portfolio.

Technology

The key technology that the development stage company focuses on is a platform pharmaceutical formulation that enhances drug uptake through the inner lining of the mouth. This is accomplished through a special compact inhaler that contains proprietarily formulated drug in aqueous solution, which is delivered in droplets at an optimal angle to maximize the impact with the buccal mucosa (mucous membrane of the inside of the cheek). The size of the droplets is created by a uniquely designed mechanical device specifically for oral (NOT lung) drug absorption. The combination of these features offers a simple and convenient way for patients to take accurate and reliable amounts of medications. Furthermore, the buccal absorption route, having access to a large bed of blood vessels, allows drugs to enter the circulation of the body rapidly, effectively, and without pain, an advantage especially desirable for patients (a lot of them kids) who face the discomfort and fear behind multiple daily injections of medicines such as insulin. Non-invasive therapies lead to improved patient compliance and therefore positively reduce the dollars (estimated $8.5B in the US alone) associated with noncompliance.

Currently, Generex is targeting the metabolic disease market with its lead product, Generex Oral-lyn™, an oral insulin spray intended for diabetes treatment. Oral-lyn™ is already approved for sale in India, Algeria, Lebanon and Ecuador, and is in global Phase III clinical trials with over 347 patients being enrolled in 74 clinical sites around the world, including sites in the United States, Canada, Bulgaria, Poland, Romania, Russia and Ukraine. In addition, with the remarkable efforts of Generex's regulatory team, the oral insulin, demonstrating the potential of efficacy through clinical testing without unreasonable risks, recently (September, 2009) became the only developmental drug intended to treat diabetes to receive the FDA's approval under the Treatment Investigational New Drug program. This successfully positions Oral-lyn™ as an extremely favourable product candidate for near future FDA approval of the drug’s marketing in the US. According to a close physician friend specializing in diabetes patient care, “the compact size [of Generex’s insulin delivery device] and avoidance of [insulin] lung deposit are no doubt advantages [for more convenient and safer glucose management]”. Importantly, these will help prevent the oral insulin from following the footsteps of Pfizer's failed inhaled insulin product, Exubera, criticized for its bulky appearance and carcinogenic risks to the lungs.

As another arm of operation, Generex’s wholly owned subsidiary, Antigen Express, Inc. focuses on developing proprietary vaccine formulations that work by stimulating the immune system to either attack offending agents (i.e., cancer cells, bacteria, and viruses) or to stop attacking benign elements (i.e., self proteins and allergens). Products already in mid-stage development include Antigen’s synthetic peptide vaccines designed to stimulate a potent and specific immune response against tumors expressing the HER-2/neu oncogene for patients with HER-2/neu positive breast cancer (potential application in personalized medicine) in a Phase II clinical trial and patients with prostate cancer and against avian influenza in two Phase I trials. Further research programs also encompass areas in seasonal influenza virus, H5N1, HIV, HPV, melanoma, ovarian cancer, allergy and Type I diabetes mellitus.

Management

Worthy of note within Generex’s management is the newly addition of Dr. Joseph Rubinfeld, one of the original founders of Amgen Inc. (world’s largest independent biotech firm) as the company's Chief Scientific Advisor.

In addition to his contribution in founding Amgen, Dr. Rubinfeld has a fifty year history in pharmaceutical and consumer product development, including the development of the multi-billion dollar antibiotic Amoxicillin as well as the invention and development of the first synthetic biodegradable detergent. In 1984, Dr. Rubinfeld won the prestigious Common Wealth Award for Science and Invention, recognition of his determination in achieving major inventions, represented by the numerous patents obtained during his distinguished career. Dr. Rubinfeld co-founded the IBA (Industrial Biotechnology Association) in 1981, which was the precursor to today's BIO (Biotechnology Industry Organization). He has also served as an advisor or board member to a number of biotech companies including AVI BioPharma, Quark Pharmaceuticals, and Cytrx Corporation. In 1991, he founded Supergen, a drug development company based in Dublin, California, where he served as Chairman, CEO and President until 2003 and as a member of the board of directors until 2005.

Dr. Rubinfeld will assist Generex in developing and implementing product commercialization strategies for its proprietary drug delivery platform and its synthetic vaccine platform technology programs.

"Generex is at a very pivotal position in its history, as the Company transitions from a pure research and development organization to the commercialization of its drug delivery platform and significant sales growth. After a substantial review of the Company's intellectual property, I am convinced that what is unique to Generex is that its delivery method can be applied to a host of drugs already on the market. Its Generex Oral-lyn™ diabetes product just scratches the surface of the potential benefits for patients, by providing a simple pain-free alternative to injectable drugs or other difficult drug delivery systems. Partnership opportunities for improved delivery of such drugs could significantly benefit patients and also extend the longevity of intellectual property protection, which is critical for pharmaceutical company revenues." says Dr. Rubinfeld when asked about the prospect of Generex. He further states, "I am equally intrigued with the synthetic vaccine technologies in development at the Antigen Express subsidiary. The cancer vaccines are showing promising results in initial human testing. Also, with the global concerns of the current flu pandemic, I believe there will also be partnering opportunities. The technology, which can reduce the time to get new vaccines available to the public, is a very attractive proposition. I am excited to assist in all of these areas. I feel rejuvenated to apply my knowledge to a company with such a vast potential."

With the joining of Dr. Rubinfeld along with his belief in Generex’s technologies, wealth of experience in early stage biotechnology development, and exceptional track record in large pharmaceutical companies, Generex is optimistic that they will achieve goals of becoming a rapid-growing, well-rounded, and profitable drug company of the future.

Finance

Data provided by Capital IQ, as of Jan. 31, 2010



Summary

Although it may not be apparent from the current financial numbers due to premature product marketing, Generex is prepared to surface to the top with the Company's flexible and well-protected technologies that allow drugs to be absorbed through the inner lining of the mouth as an alternative to needle injection, ongoing cancer/flu vaccine programs, extensively experienced leaders, and upward-trending estimated income. All of these substantially appreciate the value of the company, making it an attractive subject for acquisition, partnership, and immense growth.

I am long Generex and am anticipating painless absorption of profits from this company.