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Generex Provides Corporate Update

August 2, 2011

WORCESTER, Mass. and TORONTO, Aug. 2, 2011 /PRNewswire/ — Generex Biotechnology Corporation (OTCBB: GNBT) (www.generex.com) is pleased to provide its shareholders with a corporate update of developments that have been achieved since the appointment of Mark Fletcher as President & Chief Executive Officer on September 29, 2010.

“Since my appointment as President & Chief Executive Officer of Generex, I have made it a priority to proactively communicate significant catalysts to the investment community and to our stockholders with the objective achieving credibility, respect and, most importantly, shareholder value,” said Mark Fletcher. “Generex is at a pivotal point in its growth cycle as a biotechnology company, and we will continue to advance with our strategic development plan in order to unlock the Company’s true value and pave the way for future innovations in both the diabetes and oncology spaces.”

The developments that have been achieved since the Company’s reorganization are as follows:

  • Focused on Delivering on its Strategic Development Plan. On March 30, 2011, the Company unveiled its strategic development plan seeking to (a) obtain shareholder approval to implement a reverse stock split in conjunction with a national exchange listing, and (b) to spin off its wholly-owned subsidiary Antigen Express, Inc. (www.antigenexpress.com) as a separate DTC-eligible SEC registered company, which will include the issuance of one or more dividends of Antigen Express stock to Generex stockholders. On June 8, 2011, at the Company’s annual meeting of stockholders, Generex stockholders approved the proposal to amend the Company’s Restated Certificate of Incorporation to effect a reverse stock split.
  • Updated the Generex Oral-lyn(TM) Clinical Development Plan. At the Company’s annual meeting of stockholders on June 8, 2011, Dr. James H. Anderson, Jr., MD, FFPM, FACE, Generex’s Senior Scientific Advisor, provided a synopsis on the clinical and regulatory program for Generex Oral-lyn(TM). The Company had received written guidance from the US Food and Drug Administration (FDA) in late May in response to data submitted on Generex Oral-lyn(TM). The FDA response did not comment on any safety issues identified in the clinical trials, nor were there safety questions raised by the FDA. The FDA did not express any concerns about the RapidMist(TM) delivery device. There were 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. The Company is in the process of providing the additional information requested for complete clarification. The FDA guidance placed no limitations or restrictions on the types of patients included or trial designs of current or future clinical studies. The Company’s new clinical development plan for Generex Oral-lyn(TM) will focus on fast-track registration in the North American major markets, highlighting the product’s rapid absorption and sharp peak in plasma insulin concentration mimicking normal insulin secretion, and its short duration of activity reducing the potential for hypoglycemia. Studies will include a key activity/effect (pharmokinetic/glucodynamic) study using the final formulation and a series of small, well-designed phase 3 studies (potentially conducted as one study with multiple arms). It is anticipated that these studies would be completed during 2013. A consensus meeting with the FDA to obtain agreement with the clinical plan and submission data package is planned this year to insure timely regulatory agency review and positive marketing approval. Generex will also focus on studies that will measure Generex Oral-lyn(TM)’s ability to provide metabolic benefits that cannot be achieved with subcutaneously injected insulin such as prolonged reduction of over-production of glucose by the liver. The additional, added-value, market expansion work will be done concurrently.
  • Reported Positive Clinical Data on Generex Oral-lyn(TM). The Company recently provided preliminary results of the Generex Oral-lyn(TM) 084 Phase III clinical trial in patients with Type 1 diabetes and another study of patients with impaired glucose tolerance (IGT). The clinical trial 084 in patients with Type 1 diabetes will be closed this month. Interim results demonstrated that the type 1 patients treated with Generex Oral-lyn(TM) maintained metabolic control (hemoglobin A1c) over the 12 month duration of the trial. The clinical study of patients with IGT is the first demonstration of Generex Oral-lyn(TM)’s ability to directly increasing first phase insulin levels and reducing post prandial glucose using a non-invasive therapy, thus the potential to use Generex Oral-lyn(TM) as a frontline treatment for patients with IGT could have far reaching implications.
  • Advanced Oncology Clinical Programs. In regard to the on-going Phase II clinical study of Antigen’s AE37 novel immunotherapeutic vaccine for the treatment of breast cancer with The Henry M. Jackson Foundation for the Advancement of Military Medicine, Inc., the Company announced that it will increase patient enrollment from 190 to 330 to ensure good representation of patient populations being considered for the upcoming Phase III trial. The Company anticipates that a Phase III clinical study of the breast cancer vaccine will be initiated prior to the completion of the extant Phase II study. Results from the ongoing Phase II study will be used for patient number adjustment, thereby assuring statistical significance in the Phase III trial. Also, the Company recently completed a Phase I study of the AE37 vaccine for prostate cancer and a Phase I study of the AE37 vaccine for ovarian cancer is underway. AE37 represents a new class of self-potentiating peptide vaccines designed to stimulate the immune system to specifically recognize and kill cancer cells.
  • Valuation of the AE37 breast cancer vaccine. Recently, a leading national independent valuation firm specializing in pharmaceuticals prepared an appraisal for the Company’s AE37 breast cancer vaccine and arrived at a value of $301 million at the vaccines current stage of clinical development. Given that Herceptin®, which is only available to treat roughly one-third of the patients that would be eligible for AE37, had sales of $1.8 Billion in 2008, the Company believes the estimated valuation of its breast cancer vaccine to be conservative. The report did not include or evaluate the potential use of AE37 for treatment of other cancers expressing lower levels of HER2 than are required for use with Herceptin®, such as prostate, ovarian, colon, and lung tumors.
  • Strengthened Product Pipeline. In addition to the clinical advancement of Generex Oral-lyn(TM) and its oncology product pipeline, the Company has been focusing its efforts on leveraging both its RapidMist(TM) buccal drug delivery technology and it immunotherapeutic vaccine platform by way of partnering with leading research and development companies. A collaboration with RXi Pharmaceuticals (NasdaqCM: RXII) to explore the use of RXi’s RNAi technology to develop proprietary vaccine formulations for active immunotherapy demonstrated positive early research data. The Company recently entered into a binding letter agreement to license its RapidMist(TM) buccal drug delivery technologies to Amarantus BioSciences, Inc. (OTCBB: AMBS) for use with its proprietary MANF proteins in exchange for a non-refundable license fee of $10 million. In addition, the companies will jointly pursue the development of a MANF-based biomarker test to diagnose patients in the very early stage of development of diabetes likely to respond to Generex Oral-lyn(TM) treatment. The binding letter of agreement with Amarantus also calls for the license fee to be paid in Amarantus common stock. The Company’s intention is to dividend a portion of Amarantus shares to Generex stockholders after the completion of the reverse stock split and an effective registration of Amarantus shares to be owned by Generex. Generex will also enhance a collaboration with Antigen Express in developing early identification of markers of immune system activation associated with the immunologic destruction of the beta cells, which may lead to immune system therapy that could prevent the development of diabetes.
  • Expanding Leadership. The Company is actively broadening its leadership with the appointment of Mark Fletcher as President & Chief Executive Officer, Dr. David Brusegard, Ph.D. as Chief Operating Officer, Stephen Fellow as Acting Chief Financial Officer, Dr. James H. Anderson as Senior Scientific Advisor and Director (formerly with Eli Lilly and Company as a Senior Medical Director for Diabetes and Cardio-metabolic Medicine), and U.S. Congressman Curt Weldon (a Co-Founder of the Congressional Diabetes Caucus) as a corporate advisor. In addition, Dr. Anderson and Dr. Eric von Hofe, current President of Antigen Express, were both elected to the Company’s board of directors.
  • Strengthened Intellectual Property. The Company was granted a new patent for its buccal drug delivery platform technologies from the Canadian Intellectual Property Office (Patent No. 2,354,148, a patent titled Aerosol Formulations for Buccal and Pulmonary Application) increasing the number of issued patents related to the Company’s buccal drug delivery platform technologies to 162. In addition, the Company received a Notice of Allowance from the United States Patent Office relating to an application making augmentative pharmaceutical composition claims for the Antigen Express AE37 immunotherapeutic cancer vaccine, which strengthens independent composition of matter claims directed to the AE37 peptide. The full term of the new patent will extend through January 5, 2028.
  • Presented and Published Clinical Results at Leading Conferences and Publications. The Company presented its clinical data at leading scientific conferences such as at the 33rd Annual San Antonio Breast Cancer Symposium, the 4th International Congress on Pre-Diabetes and the Metabolic Syndrome in Madrid, Spain, and the 7th Annual Clinical Diabetes Technology Meeting in Philadelphia, PA. Studies have also been recently published in world-recognized publications such as Expert Review of Vaccines, the peer-reviewed scientific journal Diabetes, Obesity and Metabolism, and the international peer-reviewed journal Hormone and Metabolism Research.

“We are pleased with the developments that have been achieved to date,” said Dr. Anderson. “We are aggressively focused on implementing the strategic development plan and we are excited about the future prospects that lie ahead for Generex and its shareholders.”

About Generex Biotechnology Corporation

Generex is engaged in the research, development, and commercialization of drug delivery systems and technologies. Generex has developed a proprietary platform technology for the delivery of drugs into the human body through the oral cavity (with no deposit in the lungs). The Company’s proprietary liquid formulations allow drugs typically administered by injection to be absorbed into the body by the lining of the inner mouth using the Company’s proprietary RapidMist(TM) device. The Company’s buccal insulin spray product, Generex Oral-lyn(TM) is in Phase III clinical trials at several sites around the world. Antigen Express, Inc. is a wholly owned subsidiary of Generex. The core platform technologies of Antigen Express comprise immunotherapeutic vaccines for the treatment of malignant, infectious, allergic, and autoimmune diseases. Antigen Express has pioneered the use of specific CD4+ T helper stimulation in immunotherapy. One of its platform technologies relies on inhibition of expression of the Ii protein. Antigen Express scientists, and others, have shown clearly that suppression of expression of the Ii protein in cancer cells allows for potent stimulation of T helper cells and prevents the further growth of cancer cells. For more information, visit the Generex website at www.generex.com or the Antigen Express website at www.antigenexpress.com.

Cautionary Note Regarding Forward-Looking Statements

This release and oral statements made from time to time by Generex representatives in respect of the same subject matter may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by introductory words such as “expects,” “plans,” “intends,” “believes,” “will,” “estimates,” “forecasts,” “projects,” or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Forward-looking statements frequently are used in discussing potential product applications, potential collaborations, product development activities, clinical studies, regulatory submissions and approvals, and similar operating matters. Many factors may cause actual results to differ from forward-looking statements, including inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known and others of which are not. Known risks and uncertainties include those identified from time to time in the reports filed by Generex with the Securities and Exchange Commission, which should be considered together with any forward-looking statement. No forward-looking statement is a guarantee of future results or events, and one should avoid placing undue reliance on such statements. Generex undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Generex cannot be sure when or if it will be permitted by regulatory agencies to undertake additional clinical trials or to commence any particular phase of clinical trials. Because of this, statements regarding the expected timing of clinical trials or ultimate regulatory approval cannot be regarded as actual predictions of when Generex will obtain regulatory approval for any “phase” of clinical trials or when it will obtain ultimate regulatory approval by a particular regulatory agency. Generex claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act.

SOURCE Generex Biotechnology Corporation


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