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Biotech Stock Mailbag: Generex

BOSTON (TheStreet) -- Have you entered TheStreet's first-ever FDA Drug Approval Contest yet?

Eleven new drugs are vying for FDA approval in October, which makes the month a perfect time to see which of the Biotech Stock Mailbag readers can best predict how many of these new drugs cross the FDA finish line and how many are left standing on the sidelines.

Please visit TheStreet's FDA Drug Approval Contest web page and submit your entry quickly. The FDA may issue the first of October's drug approval decisions tonight, so don't dawdle. Good luck!

Moving on to this week's Mailbag. Larry G. writes, "Hey Adam, what are your thoughts on Anna getting knocked out of the way over at Generex Biotechnology (GNBT)?"

Anna is Anna Gluskin, the now former chairman and CEO of Generex. On Wednesday night, Generex said the board relieved Gluskin of her executive duties although she will remain a director.

"Generex has reached a stage in its maturation where new senior management leadership is now needed for the company to capitalize more effectively on the opportunities that we believe are available to the company. We believe that a tighter focus on the company's core business is needed and we have determined that this can only be achieved under a new President and CEO," said John Barratt, a Generex independent director who was named the company's new chairman, in a statement.

Mark Fletcher, Generex's general counsel, was appointed interim CEO while a search for a permanent chief executive is conducted.

My thoughts: Gluskin was a terrible CEO, so her departure is a positive. However, I've never believed Generex to be an investable company for many reasons beyond Gluskin's lack of leadership. Gluskin's exit minus any other fundamental changes or improvements at Generex doesn't change my view.

I'm happy to see Generex's board do something smart for once. It's a step in the right direction; however, Gluskin remains tied to the company as a director. Why? Won't that hamper more positive change? Will Generex be able to attract a well-qualified CEO when the company's old, ousted CEO still sits on the board? And why did the board act now to remove Gluskin? Are there other facts that investors don't know about?

Generex's statement regarding the changes in the company's executive team is rather vague. Let's see if any more detail or disclosure is provided that can shed light on the situation when Generex files its annual report with the Securities and Exchange Commission. The 10-K is usually released in mid-October.

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