BOSTON ( TheStreet) -- It's not in my nature to begin the Biotech Stock Mailbag with a congratulatory slap on my own back, so please allow me to indulge this one time as I revel in the latest failure acknowledged by Generex Biotechnology ( GNBT.OB).

Last week, Generex finally admitted what every rational human being understood a long time ago: The company's experimental insulin spray for diabetes, known as Oral-Lyn, is not ready for regulatory approval. The ongoing phase III study of Oral-lyn, years behind schedule, is being shut down and cannot serve as the basis for a U.S. approval filing, Generex said.

Generex updated the status of Oral-lyn based on information received in May from officials at the U.S. Food and Drug Administration. The agency, discussing Oral-lyn, raised a "variety of questions about preclinical, clinical, toxicology, manufacturing, and regulatory and product labeling issues related to the wide variety of formulations and prior protocol changes that were made historically," according to Generex.

Not only will the current phase III study be shut down, but Generex says it must meet with FDA again and then design and conduct a "series" of new phase III studies of Oral-Lyn in order to gather enough data for a possible approval filing. Generex thinks (hopes? prays?) all this new clinical work can be finished during 2013.

I told you so.

Full disclosure: Generex is suing TheStreet and me regarding prior published columns on Oral-lyn. That litigation is currently ongoing.

Via Twitter, @US_proptrader asks, "What's your read on Oncothyreon (ONTY)?"

I don't have a fundamental explanation for the surge in Oncothyreon's stock price -- from $6 to $9 -- since the beginning of June. Wedbush raised its price target from $7 to $15 on Wednesday but that doesn't account for the stock's recent run. Oncothyreon hasn't made any significant announcements in the past month and the company's experimental cancer immunotherapy Stimuvax didn't have a visible presence at the recent American Society of Clinical Oncology (ASCO) annual meeting.

What you may be seeing is anticipatory buying ahead of a second interim analysis of the ongoing Stimuvax phase III "START" study in non-small cell lung cancer. Oncothyreon CEO Bob Kirkman told me in an interview Tuesday that this second interim analysis is to be conducted after 75% of deaths in the study have taken place, which the company estimates will happen in the second half of the year. Kirkman wouldn't offer more specific timing, but technically speaking, the second half of the year starts next week as the calendar rolls into July.

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