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Generex: What Happens in India, Stays in India

Stocks in this article: GNBT

On March 25, 2008, Generex announced receipt of a "commercial order" for 210,000 canisters of Oral-lyn from Shreya.

"We are pleased to anticipate the commercialization of our flagship product in a major market like India and the attendant revenue," said Generex CEO Gluskin in the March 25, 2008 press release.

Generex and Shreya announced the commercial launch of Oral-lyn in India under the brand name Oral Recosulin in November 2008. By January 2009, Oral Recosulin was available for sale and over 50 doctors in India were prescribing the product, according to Generex's 10Q filed with the SEC for the quarter ended Jan. 31, 2009.

On March 11, 2009, Generex provided investors with a sales update on Oral Recosulin (Oral-lyn) in India, announcing that Shreya had "procured Oral Recosulin orders from more than 60 doctors for over 100 patients."

Gluskin, in the same press release, stated, "We believe that the rapid progress that our licensee has made in India reflects the demand for a pain-free insulin product."

That "rapid progress," however, wasn't generating any Oral Recosulin revenue for Generex. While Generex claimed in early 2009 that Indian doctors were prescribing Oral Recosulin to their diabetes patients, as of the company's last quarterly financial update in March, Generex has not shown any record of sales from Oral Recosulin in India, nor any of the other three countries -- Ecuador, Lebanon and Algeria -- where the product is allegedly approved for sale.

Oral-lyn yanked in India

The most probable reason for why India was not generating any Oral-lyn revenue for Generex was that the Indian government revoked Oral-lyn's approval soon after the product's launch.

On March 26, 2009, the Drugs Controller General of India (DCGI) ordered Generex and Shreya to halt the importation and sale of Oral-lyn.

The Indian government took action against Oral-lyn after an investigation by Mint, an Indian business newspaper, alleging that Generex and Shreya violated Indian drug laws by seeking approval without conducting mandatory human clinical trials in India.

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