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Torc Investments and Research Initiates Coverage of Generex Biotechnology With a Buy Rating and 12-Month Price Target of $3.00-$3.50

Posted on: Wednesday, 27 September 2006, 09:01 CDT

Generex Biotechnology Corporation (NASDAQ: GNBT) announced today that Torc Investments and Research LLC, a NASD registered broker-dealer, initiated research coverage of the Company today with a Buy rating and a 12-month price target of $3-$3.50.

The Report, issued by Director of Research Amanda McNamara, noted that, "The company's main product is centered on diabetes, a very lucrative and growing market where it is estimated that 350 million people worldwide will be affected by 2025 (up from 230 million currently). According to the International Diabetes Federation, every 10 seconds a person dies from diabetes-related causes where it is the fourth leading cause of death by disease globally. Many of these complications can be avoided if the disease is treated early on and diabetics were more compliant in treating their disease. As more user-friendly delivery devices for insulin enter the marketplace to replace needles, compliance should increase significantly. But such alternative delivery methods for insulin have their own setbacks...A very viable solution to such issues rests with insulin mouth sprays where insulin is delivered through the mouth and avoids the lungs."

The Report noted that, "Generex Oral-lyn is a mouth spray that allows for incremental dosing and comes in a convenient pump similar in size to a common asthma pump versus competitive inhaled insulin products that are bulky. This product is available for sale in Ecuador, a key introductory market to build momentum and brand awareness despite its small size...Although Generex has multiple products in its pipeline, the true driver of sales will stem from the success of Generex Oral-lyn. Highlighting this fact for valuation purposes, we are comparing and discounting Generex's market capitalization to MannKind Corp. since both companies target the alternative insulin delivery market and both are reliant on one main product to significantly drive sales."

The Report concluded that, "We believe a fair price target range for Generex Biotechnology Corporation over the next 12 months is $3.00 to $3.50, equating the market capitalization of GNBT to $330 million - $385 million (using an estimated average number of shares outstanding of 110 million for fiscal 2007 for GNBT). This range is less than half of MannKind's current market capitalization of $921 million but is not unreasonable due to the comparison of targeted markets. MannKind's product (Technosphere Insulin), although roughly 3 1/2 years away from possibly receiving FDA approval, targets the U.S. market that consists of approximately 23 million diabetics (20-79 age group) versus Generex's current targeted markets for Generex Oral-lyn (Mexico, Canada and Andean countries) that have approximately 18.6 million diabetics combined (same age group). Valuations applied to Generex also recognize the valuable work being done at the company's Antigen Express subsidiary as it moves forward into drug development and away from strictly working in the laboratory for various cancers."

"We are pleased that an independent research firm has recognized the value of our portfolio of products," said Anna Gluskin, President and Chief Executive Officer of Generex Biotechnology. "We believe that there exists great potential for Oral-lyn and look forward to further demonstrating our unique ability to orally deliver insulin through additional clinical activities and by entering new markets."

The entire report is available at www.torcinvestments.com.

About Torc Investments and Research LLC

Torc Investments & Research LLC is a NASD registered broker-dealer offers a multitude of specialized services. The firm acts as an introducing broker to Merrill Lynch for hedge funds, institutional and high net worth retail accounts. It offers execution services through TradeSpeed technology which provides clients with direct market access with an emphasis on celerity. The company's research department provides in-depth, fundamental research analysis for equities with its core focus on the micro-cap and small-cap sector. Industry experience, coupled with superb technology and customer service, allow TORC Investments & Research to offer their clients advantageous and valuable resources in the financial sector.

About Generex

Generex is engaged in the research and development 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 flagship product, oral insulin (Generex Oral-lyn(TM)), which is available for sale in Ecuador for the treatment of patients with Type-1 and Type-2 diabetes, is in various stages of clinical trials around the world. For more information, visit the Generex Web site at www.generex.com.

Safe Harbor Statement: This release and oral statements made from time to time by Generex representatives concerning 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 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 cannot be regarded as actual predictions of when Generex will obtain regulatory approval for any "phase" of clinical trials. Generex claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act. Torc Investments and Research has received a fee of twenty-five thousand dollars for one year of research coverage of Generex.

 Contacts: Amanda McNamara Torc Investments & Research, LLC Phone: 212-897-7317  

SOURCE: Generex Biotechnology

Source: MARKET WIRE

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