Stock Alert for Generex Biotechnology Corp. (GNBT)(D*)
  • Generex Biotechnology Corp. (NASDAQ: $GNBT)
  • When will Generex Biotechnology (GNBT) stop falling?
  • " />

    Stock Alert for Generex Biotechnology Corp. (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 2 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 (Jul-29-10) FY

    2007

    FY

    2008

    %

    Chg

    Q4 2008 Q4 2009 %

    Chg

    Symbol GNBT Revenue, $Mn 0.20M 0.10M 50.0% 0.06M 0.10M 66.6%
    Current price $0.36 Gross marg. 65.5% 58.4% 11.0% n/a -53.0% n/a
    52wk Range: $1.01-0.31 Oper. margin -13952% -26756% 91.8% n/a -6840% n/a
    Avg Vol (3m): 2,347,200 Net margin -11750% -36200% 208.1% n/a -10730% n/a
    Market Cap. 96.82M
    Shares Outst. 266.1M EPS, $ -0.22 -0.33 33.3% -0.11 -0.06 45.5%

    Source: Reuters.com, SEC Filings.

    Financial Summary

    GNBT’s net loss for the quarter ended April 30, 2010, was $4,567,550 versus $11,349,015 in the corresponding quarter of the prior fiscal year. The decrease in net loss in this fiscal quarter versus the corresponding quarter of the prior fiscal year is primarily due to the prior year’s quarter interest expense of $5,344,911, which consisted mainly of non-cash interest charges recorded in connection with the Company’s secured convertible debentures and the $2,776,278 gain on revaluation of the derivative in the current year’s quarter.  Interest expense for the current year quarter was $53,326.  The decrease in net loss was partially offset by the increase in its general and administrative expenses, selling and marketing expenses and research and development expenses.  The operating loss for the quarter ended April 30, 2010, increased to $7,361,288 compared to $6,086,893 in the third fiscal quarter of 2009.  The increase in operating loss resulted from an increase in general and administrative expenses (to $3,266,725 from $2,736,650), an increase in selling expense (to $759,403 from $367,371) and an increase in research and development expenses (to $3,452,798 from $3,001,826).   Revenues in the quarter ended April 30, 2010, increased to $327,698 from $45,251 for the quarter ended April 30, 2009, reflecting primarily the sales of the Company’s over-the-counter products.

    The increase in research and development expenses in the current fiscal quarter versus the comparative quarter in the previous fiscal year, is primarily due to timing differences related to the clinical costs associated with the global phase 3 clinical trials of GNBT’s oral insulin product and platform technology, as well as the timing of earlier stage (pre-clinical, phase 1 and phase 2) clinical trials related to the Antigen immunotherapy products versus the previous fiscal year’s quarter.  The increase in general and administrative expenses is primarily related to a charge of $496,243 related to the executive stock options granted in the current quarter.  The increase in selling expenses for the quarter ended April 30, 2010, versus the prior year comparative quarter is associated with increased advertising and promotion of the Company’s over-the-counter products, as well as the costs associated with its MENA sales office in Dubai.

    Interest expense in the third quarter of fiscal 2010 decreased to $53,326, compared to interest expense of $5,344,911 in the third quarter of fiscal 2009, due to interest expense and costs of the repriced warrants recognized on the convertible notes issued in March 2008 recognized in the prior year quarter, but not in the current year.   Interest income decreased slightly to $3,411 in the third quarter of fiscal 2010, compared to $10,408 in the same quarter for the last year, primarily due to lower market interest rates.  GNBT received a slightly lower income from rental operations (net of expense) of $67,375 in the third quarter of fiscal 2010 compared to $72,381 in the same quarter of the previous fiscal year.  The change in fair value of the warrants carried as a derivative liability contributed a gain of $2,776,278 in the current quarter.  As the related accounting policy was adopted at the beginning of the current fiscal year, there was no similar adjustment in the comparative previous fiscal year quarter.

    Financial Strength (Jul-29-2010) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 2.15 5.17 2.65 0.73
    Current Ratio (MRQ) 2.35 5.55 3.17 0.87
    Long-Term Debt to Equity(MRQ) 20.62 18.42 22.99 112.56
    Total Debt to Equity (MRQ) 24.89 24.03 29.38 176.51

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    No recommendation data 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 it has now achieved 75% of the required number of per-protocol completers in its ongoing six month pivotal global phase 3 study of Generex Oral-lyn(TM), the Company’s proprietary buccal insulin spray product. These early results suggest that, should the current trend be maintained through the early 2011 completion date of the treatment phase of all enrolled subjects, the use of Generex Oral-lyn(TM) will support a non-inferiority claim relative to the standard-of-care injectable insulin. This position will be reviewed following a formal interim analysis after the 90-day results for all subjects become available.

    Initial trending outcomes revealed that insulin resistance was not observed for subjects using Generex Oral-lyn(TM) and that subjects using Generex Oral-lyn(TM) demonstrated, on average, no weight gain and an actual decrease in Body Mass Index (BMI). This compared favorably to subjects using injectable insulin that have, on average, gained weight and experienced an increase in BMI. In addition, it was previously reported that when comparing hypoglycemic events, subjects using Generex Oral-lyn(TM) were observed to have a better Adverse Event profile than subjects using injectable insulin. These previous findings along with current trends of non-inferiority using recently collected information and extrapolations clearly positions this study favorably.

    GNBT also recently announced that one of its proprietary confectionary over-the-counter products, Glucose RapidSpray(TM), is now available under a trial run at selected Boots UK (www.Boots-UK.com) retail chain stores.

    Boots is a member of Alliance Boots (www.allianceboots.com) and has approximately 2600 stores, from local community pharmacies to large destination health and beauty stores. Alliance Boots is a leading international, pharmacy-led health and beauty group delivering a range of products and services to customers.

    Glucose RapidSpray(TM) (www.GlucoseRapidSpray.com) is a proprietary, innovative alternative for people who require or want additional glucose. Glucose RapidSpray(TM) delivers a fat-free, low-calorie glucose formulation that was developed using the Company’s proprietary buccal drug delivery technologies. Glucose RapidSpray(TM) delivers glucose directly into the mouth where it is absorbed. Glucose RapidSpray(TM) is simple to carry and use with no large tablets to chew or messy gels to swallow.

    Presently, Glucose RapidSpray(TM) is available in retail pharmacies across Canada, the United States and in independent stores and pharmacies in the Middle East. The processes for registering the product for retail marketing in other countries is underway.

    Glucose RapidSpray(TM) was introduced to Boots UK through the Boots Centre for Innovation (www.BootsInnovation.com). Established in 2007, Boots Centre for Innovation has been set up to work closely with early stage companies or inventors to develop pioneering products for the shelves of Alliance Boot stores. Boots Centre for Innovation is a not-for-profit partnership between Alliance Boots, Longbow Capital and The Institute of Life Science at Swansea University.

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

    Technical Analysis

    Source: http://stockcharts.com

    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 bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above zero, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Jul29-2010 symbol Share, $ $ Mn 2010 2011 2010 2011
    Biodel Inc. BIOD 3.77 90.07M n/a n/a n/a n/a
    CPEX Pharmaceuticals Inc. CPEX 25.97 66.10M n/a n/a 3.58 n/a
    MannKind Corp. MNKD 6.72 762.42M n/a n/a n/a n/a
    Drug Manufacturers Median 306.19M n/a n/a n/a n/a
    Generex Biotechnology Corp. GNBT 0.36 96.82M n/a n/a 79.65 n/a

    Source: Thomson Financial

    Insider Trading Activity

    NET SHARES PURCHASE ACTIVITY

    Inside Purchases – Last 6 Months

    Shares Transaction
    Purchases 8,700 1
    Sales n/a 0
    Net Shares Purchased (Sold) 8,700 1
    Total Insider Shares Held 4.3M n/a
    % Net Shares Purchased (Sold) 0.2% n/a
    Net Institutional Purchases — Prior Qtr to Latest Qtr
    Shares
    Net Shares Purchased (Sold) (3,606,380)
    % Change in Institutional Shares Held (77.7%)

    Source: Yahoo Finance

    DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority.  We are neither licensed nor qualified to provide investment advice.

    The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice.  The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities.  We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

    Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company.  An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report.  Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research.

    Any individual who chooses to invest in any securities should do so with caution.  Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested.  Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing.

    Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934.  Subscribers are cautioned not to place undue reliance upon these forward looking statements.  These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated.  Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC.  You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements.

    We are committed to providing factual information on the companies that are profiled.  However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions.  We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so.  Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable.

    To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information).

    We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www.finra.org.

    Leave a Reply

    Your email address will not be published. Required fields are marked *