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Biotech Stock Mailbag: Generex

Common sense should tell you that an insulin spray like Oral-lyn is more fiction than science. If Oral-lyn was real, Big Pharma would have snatched up the technology a long time ago. Instead, Pfizer lost millions with an insulin bong, and Al Mann, billionaire healthcare entrepreneur and MannKind's founder, is spending hundreds of millions of dollars of his own money to build another inhalable insulin device. For that kind of money, Mann could have bought Generex several times over. He didn't.

Dr. Paul Robertson, a diabetes expert affiliated with the Pacific Northwest Research Institute in Seattle and the past president for medicine and science at the American Diabetes Association (ADA), is a skeptic because absorption of insulin through the lining of the mouth is too erratic and potentially dangerous.

"If a diabetes patient has a sore throat, for instance, the insulin will be absorbed faster than if the patient's throat is normal," he says. "Having a consistent and known rate of insulin absorption is very important because without knowing when to take insulin or how much, the patient runs the risk for hypoglycemia."

David Kliff, a diabetic himself who runs the well-respected Diabetic Investor newsletter, has followed Generex for years and is more succinct in his appraisal. "Generex is full of crap -- always."

Oral-lyn is approved as an alternative to insulin injections in Ecuador, India, Lebanon and Algeria, claims Generex, although the company has not yet recognized revenue from the product.

Perhaps Oral-lyn will start producing revenue for Generex when it's approved in Syria and Iraq? I'm not making this up, by the way. Generex is trying to get Oral-lyn approved in Iraq and actually touts Oral-lyn's approval in these other countries as proof that it works.

A phase III study of Oral-lyn is enrolling patients at centers in the U.S. and Canada, although it looks like most of the patients hail from Eastern Europe. In two years, Generex has only been able to enroll about half of the study's planned 750 patients.

Generex does claim to have an agreement with the FDA to allow Oral-lyn to be used by U.S. diabetes patients who can't tolerate insulin injections. Generex has never disclosed how many patients might fit under that definition.

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