The ridiculously low stock price of Generex (GBNT.OB) has me back reminding investors what makes this company such a great bargain, perhaps unequaled in recent years. Two great potential platforms: Buccal ingestion of drugs (spray inside cheek), and cancer vaccines based on mediating T helper cells.
The test case for the buccal platform is insulin. Progress has been made. It successfully completed Phase I and Phase II. They will be announcing pretty soon that they will have all the patients they need to complete the testing of Phase III, and final results will follow six months later. Interim results were good enough to permit it join the IND program by the FDA, and September of this year they announced that a study done in Italy showed that it did not result in the antibodies that are found in insulin resistance. Even needles cause antibodies, so the buccal platform may turn out to be the superior and preferred method of ingesting insulin. Lastly, in the past few years all drugs that got into the IND program went on to final approval.
Perhaps the even greater challenge is patient acceptance. Pfizer (PFE) spent $2.8 billion on a lung-absorption insulin before writing it down, and passing back the patents to Nektar. Pfizer patients were not interested in putting drugs into their lungs, no doubt the lung function tests put them off. Buccal absorption means spraying the lining of the mouth. Nothing goes into the lungs.
Generex has thought ahead about the ultimate problem, educating patients, and they are purchasing a 51% of Global Medical Direct, which has 65,000 diabetic patients, and 800+ referring doctors. So, there is little left to chance here, but perhaps that is not so surprising since they have on their staff Gerald Bernstein M.D., a past president of the American Diabetic Association.
But many investors are even more enthusiastic about the cancer vaccines. A Phase I test was successfully completed for preventing breast cancer, and Phase II also appears to be going well. Their success was so intriguing that Pfizer oncology chief, Dr. Craig Eagle, joined the scientific advisory staff of Generex to help make sure the tests are meaningful.
A Phase I test for prostate cancer also was successful, and there are vaccines in process for Avian Flu and Swine Flu, HIV and other diseases.
For investors looking for that big gain, like a Microsoft, it is here in Generex. But to get the big gain you have to have the gumption, and the insight, to be able to see the value. Many clues are already evident to the intelligent investor, but if you wait for all the approvals and market penetration, the stock will be 10x of where it is now.
Thursday, November 11, 2010
Wednesday, November 3, 2010
Generex Lumped in With Other Lung Insulin Absorption Products - the Aftermath
When Pfizer (PFE) pulled the plug on its lung-absorption insulin offering Exubera in October of 2007 and wrote down $2.8 billion, a bunch of smaller companies were carried down with it. Nektar dropped for about a year after Pfizer returned all rights to its products used in the development of Exubera.
Commingled with Exubera was Generex (GNBT.PK), a small biotech firm, also working on an alternate strategy for insulin absorption, whose stock has never really recovered. Their product, Ora-lyn, is absorbed through the buccal tissues inside the cheek, and does not go into the lung at all.
Now in Phase III, Generex will soon be announcing that the last patient is enrolled, and six months later the FDA should announce its findings. The FDA has already given it Investigational New Drug (IND) approval, and in recent years this has also led to final approval.
Patients destroyed Exubera's chances. They had to do lung function tests that made patients weary about the treatment. If the lungs are safe for Exubera, why did they have to take such tests. Then concerns were raised over the possibility of lung cancer or other lung disease, so that it didn't have much chance even before the drug appeared on the market.
However, a great possibility exists for Generex. Pfizer thought it might raise as much as $2 billion in annual revenue from such a product. Absorption through the buccal lining does not appear to have nearly the risk to health as lung absorption, and diabetes patients doctors exclaim that their patients will do anything not to have to inject themselves with a needle.
We suggest that at a market cap of $90 million, Generex is greatly undervalued, perhaps by a billion. We are not addressing Generex's cancer vaccine program, which could be valued at even more.
Commingled with Exubera was Generex (GNBT.PK), a small biotech firm, also working on an alternate strategy for insulin absorption, whose stock has never really recovered. Their product, Ora-lyn, is absorbed through the buccal tissues inside the cheek, and does not go into the lung at all.
Now in Phase III, Generex will soon be announcing that the last patient is enrolled, and six months later the FDA should announce its findings. The FDA has already given it Investigational New Drug (IND) approval, and in recent years this has also led to final approval.
Patients destroyed Exubera's chances. They had to do lung function tests that made patients weary about the treatment. If the lungs are safe for Exubera, why did they have to take such tests. Then concerns were raised over the possibility of lung cancer or other lung disease, so that it didn't have much chance even before the drug appeared on the market.
However, a great possibility exists for Generex. Pfizer thought it might raise as much as $2 billion in annual revenue from such a product. Absorption through the buccal lining does not appear to have nearly the risk to health as lung absorption, and diabetes patients doctors exclaim that their patients will do anything not to have to inject themselves with a needle.
We suggest that at a market cap of $90 million, Generex is greatly undervalued, perhaps by a billion. We are not addressing Generex's cancer vaccine program, which could be valued at even more.
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