Generex Biotechnology Corp. (NASDAQ: $GNBT)

Generex Biotechnology Corp. (NASDAQ: $GNBT)(D*)

* Financial status indicator is deficient: Issuer failed to meet NASDAQ continued listing requirements.

Generex Biotechnology Corp. (GNBT) is engaged in the research, development and commercialization of drug delivery systems and technologies. The Company focuses on its technology for the administration of formulations of large molecule drugs to the oral (buccal) cavity using a hand-held aerosol applicator. Its wholly owned subsidiaries include Generex Pharmaceuticals Inc., Antigen Express Inc., Generex (Bermuda) Inc., Generex Pharmaceuticals (USA) LLC and Generex Marketing & Distribution Inc. The Company is in development stage. In September 2009, the Company announced the incorporation of SIA Generex Biotechnology BALTIC as a wholly owned subsidiary. The Company’s products include Generex Oral-lyn, an insulin spray formulation used for the treatment of type-1 and type-2 diabetes; Glucose RapidSpray, which provides an alternative for people who require additional glucose in their diet, as well as delivers glucose formulation directly into the mouth; BaBOOM! Energy Spray, an instant energy spray designed to increase energy levels for sports, work, study, travel and overall fatigue; and Crave-NX, a fat-free glucose spray that is used as an aid for dieters. GNBT’s under development products include medicinal chewing gum for the treatment of Type-2 diabetes mellitus and obesity; morphine and fentanyl products for breakthrough and postoperative pain; and AE37, an immunotherapeutic vaccine that is in phase II clinical trials for patients with HER-2/neu positive breast cancer. The Company markets its products through distributors and retail chains in Ecuador, Canada and the United States.

The Company was founded in 1983 and is based in Toronto, Canada.

Share Statistics (16-Apr-10)			FY 2007	FY 2008	% Chg	Q4 2008	Q4 2009	% Chg
Symbol	GNBT	Revenue, $Mn	0.2M	0.1M	50.0%	0.06M	0.10M	66.6%
Current price	$0.49	Gross marg.	65.6%	58.4%	11.0%	n/a	-53.0%	n/a
52wk Range:	$1.14-0.26	Oper. Margin	-13952%	-26756%	91.8%	n/a	-6840%	n/a
Avg Vol (3m):	2,822,160	Net margin	-11750%	-36200%	208.1%	n/a	-10730%	n/a
Market Cap.	125.52M
Dil. Shares Outst.	306.1M	EPS, $	-0.22	-0.33	33.3%	-0.11	-0.06	45.5%

Source: Reuters.com, SEC Filings.

Financial Summary

Financial Strength (16-Apr-2010)	Company	Industry	Sector	S&P 500
Quick Ratio (MRQ)	2.13	5.90	2.63	0.80
Current Ratio (MRQ)	2.32	6.37	3.13	0.95
Long-Term Debt to Equity (MRQ)	8.76	22.39	25.71	146.05
Total Debt to Equity (MRQ)	13.96	26.39	33.03	210.80

Source: Reuters.com, SEC Filings.

Analyst Consensus

No chart available.

Source: www.ft.com

No consensus analysis data available.

Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=GNBT.W

Investment Highlights

GNBT recently announced that John Muir Physician Network Clinical Research Center has agreed to participate in the U.S. Food and Drug Administration (FDA) Expanded Access Treatment Investigational New Drug (IND) Program for the Company’s flagship product, Generex Oral-lyn(TM), a proprietary buccal insulin spray product. In September 2009, the FDA approved the treatment use of Generex Oral-lyn(TM) under the FDA’s Treatment IND Program.

John Muir Physician Network Clinical Research Center is a top-rated and prestigious clinical research site. The research center is part of the John Muir Physician Network, which is comprised of John Muir Medical Group, a group of nearly 800 providers, and is a subsidiary of John Muir Health, a recognized leader in providing quality medical care in the San Francisco/Bay Area. John Muir Physician Network Clinical Research Center will be the first site in the State of California to participate in the Treatment IND.

The John Muir Physician Network Clinical Research Center provides rapid enrollment, high data integrity, as well as compassionate and quality care to their research subjects. It has extensive primary research experience in diabetes mellitus and its complications and other endocrine metabolic disorders such as obesity.

Under the Expanded Access Treatment IND program, Generex Oral-lyn(TM) will be provided to patients with serious or life-threatening type 1 or type 2 diabetes mellitus, with no satisfactory alternative therapy available for the treatment of diabetes, and who are not eligible to participate in the Company’s ongoing global phase III pivotal clinical trial. This Treatment IND is open to patients who comply with the selection criteria of the treatment protocol, including those who are taking currently approved anti-diabetic medications. There are no oral or injectable medications contraindicated for this treatment use program.

GNBT recently announced that it has entered into a common stock purchase agreement with Seaside 88, LP, a private investment limited partnership. Seaside has committed to purchase up to 49,455,130 shares of GNBT common stock. Seaside will purchase up to 2 million shares every two weeks in up to 25 tranches (with up to 1,455,130 shares purchased in the final tranche). GNBT and Seaside closed the first tranche of 2 million shares for gross proceeds to GNBT of $945,180 at a per share price of $0.47259, being 89% of the 10-day volume weighted average trading price (VWAP) of the Company’s common stock on the NASDAQ Capital Market immediately prior to the closing.

At each subsequent closing, the price of the common stock to be sold will be an amount equal to the lower of (a) the VWAP for the ten consecutive trading days immediately prior to the closing date multiplied by 0.89, and (b) the VWAP for the trading day immediately prior to the closing date multiplied by 0.95.

Source: http://www.generex.com/

Technical Analysis

Source: http://stockcharts.com

GNBT is below its 50-day moving average. This bearish sign is even more significant because the moving average is also trending lower.

GNBT is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

The MACD for GNBT currently indicates a strong bearish signal for two reasons. First, the MACD is below the signal line, a 9-day moving average. Second, the MACD is below the critical level of 0, which implies that the underlying moving averages are trending lower.

Comparative Analysis

Company Name	Ticker	Price per	Mrkt. Cap.	P/E		P/S
Apr-16-2010	symbol	Share, $	$ Mn	2009	2010	2009	2010
Biodel Inc.	BIOD	4.65	111.06M	n/a	n/a	n/a	n/a
CPEX Pharmaceuticals Inc.	CPEX	15.15	38.52M	n/a	n/a	2.57	n/a
MannKind Corp.	MNKD	6.54	741.29M	n/a	n/a	n/a	n/a
Drug Manufacturers Median			296.95M	n/a	n/a	n/a	n/a
Generex Biotechnology Corp.	GNBT	0.49	125.52M	n/a	n/a	104.70	n/a

Source: Thomson Financial

Insider Trading Activity

NET SHARES PURCHASE ACTIVITY Inside Purchases – Last 6 Months
	Shares	Transaction
Purchases	48,700	5
Sales	52,700	2
Net Shares Purchased (Sold)	(4,000)	7
Total Insider Shares Held	4.79M	n/a
% Net Shares Purchased (Sold)	(0.1%)	n/a

Net Institutional Purchases — Prior Qtr to Latest Qtr
	Shares
Net Shares Purchased (Sold)	(3,344,960)
% Change in Institutional Shares Held	(63.4%)

Source: Yahoo Finance

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