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Generex Creates Own Regulatory Reality

Stocks in this article: GNBT NOV LLY SNY HEB CTIC

TORONTO ( TheStreet) -- Generex Biotechnology (GNBT) CEO Anna Gluskin may have run afoul of U.S. regulations governing experimental drugs when she spoke to investors earlier this year about the prospects for the company's Oral-lyn insulin spray.

Gluskin said at a January conference that the U.S. Food and Drug Administration had essentially granted a "mini-approval" for Oral-lyn and that Generex was moving ahead with plans to commercialize and market the diabetes treatment to doctors and a wide swath of diabetes patients in the U.S.

The FDA does not have a "mini-approval" process, and Generex has not filed an application seeking full marketing approval for Oral-lyn as a treatment for diabetes, according to FDA spokeswoman Karen Riley. Generex is still only about halfway through a single phase III study of Oral-lyn, according to the company's latest corporate update.

In September 2009, FDA permitted Generex to make the still-experimental Oral-lyn available to certain diabetes patients under the regulatory agency's expanded access program, known formally as a "Treatment IND" protocol. The FDA program grants access to experimental, unapproved drugs for patients with serious or life-threatening diseases who lack other treatment options.

The standards by which the FDA reviews an experimental drug for the expanded access program are different and less thorough than if FDA were reviewing the drug for final marketing approval, according to FDA regulations confirmed by Riley.

FDA rules do permit companies to recoup costs associated with granting expanded access to unapproved drugs, but companies like Generex are prohibited from marketing or generating any profits while operating under Treatment IND approvals.

Generex's Oral-Lyn is an insulin mist that patients spray into their mouths. The insulin is designed to be absorbed buccally (through the lining of the mouth) and into the bloodstream, in contrast to standard injectable insulin like those made by Novo Nordisk (NVO), Eli Lilly (LLY) and Sanofi-Aventis (SNY)>, among others.

Generex did not comment on this story in response to a phone call and emails seeking comment.

Two videos of Gluskin making questionable statements about Oral-lyn were posted to the Web after her presentation at the OneMedForum 2010 Conference on Jan. 13 in San Francisco, a health care conference in which small biotech firms pitch themselves to investors.

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