Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)

Executives

John Barratt – Chairman of the Board

Mark Fletcher – President, Chief Executive Officer

Von Hofe – President of Antigen Express

James Anderson – Senior Scientific Advisor

David Brusegard – Chief Operating Officer

Analysts

Chris Parkin – CG Parkin Communications

T Maharaj – Private Investor

Sally Prescott – Private Investor

John McMillan – MGI Securities

Adam Mosbridge – Private Investor

Eric Layman – Private Investor

Duane Kuick – Private Investor

Bill Catcher – Private Investor

Generex Biotechnology Corporation (OTCQB:GNBT) Investor Conference Call January 31, 2013 10:00 AM ET

Operator

Good day, ladies and gentlemen. Welcome to the Generex Biotechnology Conference. At this all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions). As a reminder, this conference is being recorded.

I would like to hand to conference over to our host for today, Mr. John Barratt, Chairman of the Board. Sir, please go ahead.

John Barratt

Good morning everyone, thank you very much for joining us this morning. I have with me Mark Fletcher, President and Chief Executive Officer and the Member of the Generex Board, as well Dr. Eric Von Hofe, President of Antigen Express and also a member of the Generex Board, Dr. James Anderson, Senior Scientific Advisor and a member of the Generex Board and David Brusegard, Chief Operating Officer.

I’m obliged to start off by making reference to forward-looking statements and the Safe Harbor statements under the Private Securities and Litigation Reform Act of 1995. During this call, management may discuss financial projections, information or expectations of Generex’s products or markets or otherwise make statements about the future, which statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made.

These risks and uncertainties are detailed in Generex’s filings with the SEC, our Annual Report on Form 10-K, respective to our fiscal year ended July 31, 2012 was filed with the SEC on October 15, 2012 and amended on October 19, 2012.

This morning you’ll hear addresses from Mark Fletcher, Dr. Anderson and then Dr. Von Hofe. Following the addresses, the phone lines will be open for stockholder questions and comments and company representatives will be available to respond.

I’d now like to turn it over to Mark Fletcher.

Mark Fletcher

Thank you John and to my fellow stockholders good morning. The purpose of today’s call is to provide our fellow stockholders with an update in respect of ongoing Generex initiative.

In October of 2010, our common stock was delisted from NASDAQ capital market, and trading moved to the over-the-counter bulletin board. Since that time, our common stock has experienced declines in both stock price and liquidity. Generex is a development stage company, a company endeavoring to achieve the commercialization of the drug products in its pipeline.

At this juncture Generex is not a revenue generating enterprise. To date, we have had to rely on access to the capital markets where the funding was required in order to move our clinical and regulatory programs forward. The realities of stock price and liquidity has made accessing, funding more difficult, complex and costly.

Over the past 12 months, we have succeeded in completing the issuance of three series of convertible preferred stock to raise capital. Our capital position was further augmented by the disposition of some non-essential real-estate assets and the refinancing of some other real-estate assets.

In order to comply with the terms of the convertible preferred stock transaction we completed last month, and in order to put Generex in a position to raise the additional capital that will be necessary to achieve the clinical and regulatory successes that we are aiming for, it is necessary to implement an increase in an authorized capital. Therefore, we have set Thursday, March 28, as the date for the next Annual Meeting of the Generex stockholders. The meeting will go through the usual items for stockholder consideration, the election of directors, and the ratification of the appointments of independent public accountants.

At the meeting, we will also solicit stockholder approval of the requisite increase in authorized capital. Your board is recommending that all stockholders those in favor of the proposal, as the availability of additional authorized capital is necessary to meet our obligations to a preferred stock investors that the authorized capital is not increased, we may be required to redeem the preferred stock for cash.

The meeting will also solicit stockholder approval of reverse stock split. Your management is of the view that reverse stock split meter in future will be desirable to improve the stock’s health, and strength and permit access to the capital markets on better terms. Your board is recommending that all stockholders those in favor of the proposal.

The reverse stock split proposal previously approved by stockholders, which authorization expired last month was tied to an uplifting of the Generex common stock to a national exchange. However, such an uplifting requires not only a minimum share price but a minimum level of stockholders equity and sufficient capital stock rate for not less than 12 months. We’re unable to proceed with the reverse stocks but on that basis because Generex’s capital structure was not otherwise qualified of stock for an uplifting.

Your management and board are of the view that an increase in authorized capital, together with the ability to affect the reverse stock split, will put it in a position to improve the health and strength of Generex’s capital structure and thereby set the stage for the achievement of our goals for both Generex, Oral-lyn and Antigen Express.

Although we did see the anticipated decline in liquidity over the course of 2011 and 2012, I note that our three-month’s average daily volumes has improved to almost 3.3 million shares. Yesterday coincident with our announcement the Antigen Express successes with AE37 breast cancer vaccine, almost 42 million shares traded and the price of the stock increased by 59.5%.

We believe this demonstrates the interest in the clinical and regulatory initiatives remains robust, with the tenant prospects for the creation of significant stockholder value. Our preliminary proxy statements for the annual meeting has been approved by the Securities and Exchange Commission, and the definitive proxy statements will be made available to the stockholders in mid-February.

The summary of the proposals that I provided here is not a substitute for the preliminary proxy statement that we filed or any other document, including the definitive proxy statement that we will be filing. I encourage all of my fellow stockholders to read the preliminary proxy statement and the other attended documents that will be filed with the SEC including the definitive proxy statement as they become available because they contain very important information about these proposals.

You can get copies of the preliminary proxy statements at the SEC’s website which is sec.gov or at the Generex’s website, generex.com.

Last week, we announced that our partner in India Shreya LifeSciences has completed it’s phase 3 trial of Generex Oral-lyn in patients with Type-2 diabetes and submitted the results to the Indian government with the view to securing approval for the marketing of the product.

I will now ask Dr. Anderson to comment on this positive development and its impact on our own plans for Generex Oral-lyn in the clinic and regulatory spirit. Dr. Anderson?

James Anderson

Thank you Mr. Fletcher. Good morning. I will address three topics today with regard to Generex Oral-lyn buccal insulin product program. First a review of the trial O-84, part of which was discussed at a prior AGM, second the completion and regulatory submission of the Oral-lyn phase 3 study in India, in the partnership of Generex and Shreya Pharmaceutical to produce, distribute markets, Oral-lyn in India. Thirdly, the planned improvements in the Oral-lyn formulation for global registration will be discussed.

Previously I provided data on patients who had completed the O-84 clinical trial, six months trial with a six-month extension, comparing Oral-lyn’s injected regular insulin in patients with Type-1 diabetes. You will recall that in that patient segment of completers is measured by hemoglobin A1C, the metabolic control achieved with Oral-lyn was equivalent to the control of patients randomized to injected regular insulin. For a number of significant reasons the data from the O-84 trial was reexamined, re-analyzed and in the final report rewritten.

While a positive data from a small group of completers did not change appreciably, the trial as a whole did not meet the primary objective for showing non-inferiority of Oral-lyn to inject it regular insulin. Although the study did yield some useful information, why did the study fail to meet the primary objective?

A major reason was that two-thirds of the subjects randomized to receive Oral-lyn failed to complete the study. Majority of those patients who dropped out, did so during the first one to three weeks of therapy. While a few study sites were in the US and Canada, the majority were in Eastern Europe and the new republics of the former Soviet Union. More than two thirds of the patients enrolled in the study were given education and instructional materials not in their native languages. As importantly two thirds of the physicians and health care professionals did not have complete materials in their native language. We believe the test was the flaw that resulted in lack of understanding how to use Oral-lyn correctly which produced excessive dropout rate that led to not achieving the primary objective.

For this study in the prespecified non-inferiority margin was 0.50%. The 90% confident centre ball to that range of values defining the difference between two parameters. It’s calculated to be 0.24% to 0.53% since the 0.50 non-inferiority margin is in between the upper and lower values of confidence centre ball. The study was not able to show that Generex Oral-lyn was non-inferior and is equal to the injected human insulin. The extremely low number of patients completing their trial directly affected the values of the confidence centre ball. But even with that huge dropout the upper limit of the 90% confidence centre ball was very close to the pre-specified non-inferiority margin of 0.50%.

Study almost was successful. In sharp contrast, the phase three trial conducted in India a series of Shreya Life Sciences, is an excellent example of the way a trial should be conducted. This study, 12-week parallel control study comparing Oral-lyn and injected rapid insulin in patients with type two diabetes was conducted at fourteen sites in India with 209 patients put on drug. The educational materials and the informed consents were translated into nine different languages so that each individual persists that in his or her representatives could read the information in a language in which they were conversant and comfortable.

In this study only 11 of the 209 subjects, 5% dropped out of the trial. While the manuscript of the full trial results has been submitted to an international journal of clinical diabetes and thus the detailed results are embargoed into a publication. I can share that there was a statistically significant improvement in the hemoglobin A1c of those patients planned to Oral-lyn compared to injected insulin.

And that -- the statistically significant improvement in metabolic control cured much more rapidly than the oral untreated group than in the injected insulin group. Shreya Life Sciences and their investigators were excited about the results and so were we. The results of that trial were also submitted to the drug control general of India, the Indian Regulatory Authority in December of 2012 as part of the dossier to gain final approval for marketing in India. We are extremely pleased to announce that Shreya anticipates approval for the sale of Oral Recocylin which is their trade mark for Oral-Lyn in India within mid 2013.

In the country of India the International Diabetes Federation has estimated there are over 50% people with Diabetes Mellitus. Generex is currently working with Shreya to transfer the technology to facilitate the local manufacturing of Oral-lyn to global standards to ensure continious product availability. We are also working with Shreya in the planning and design, the patient and professional educational materials, product launch materials and sales and marketing strategies. Now I’d like to address the planned improvements in Generex Oral-lyn. A review was conducted last year with insulin formulation chemist, clinical diapotologist and diabetes sales and marketing leaders.

The new techniques in protein, chemistry in pharmaceutical formulation science suggested there was normal changes in the production process in contents of the components. We could improve Oral-lyn thus increasing the convenience, compliance and safety for patients by producing a more concentrated Oral-lyn formulation that will allow dosing in the average patient to be reduced to fewer sprays.

We have developed a clear and complete plan for identifying the modifications to the Oral-lyn formulation and rapidness delivery device to ensure two to three international units of bio available insulin per spray. Our new program and conferences of pharmacokinetic and glucodynamic trail design and clinical study plans for conducting trial with appropriately validated methodology. These short studies will demonstrate the integrity and bio viability for the insulin formulation delivered by the device. Assess the pharmacokinetic using validated methodology and appropriately designed clinical models in front of the bio availability of the delivery insulin and assess the glucodynamic response and fasted post meal and U-Glycemic Clinical models.

Our planned final phase 3 trial required by the USFDA for registration, will examine the reducibility and intra-subject variability both short term and over the duration of the study. We will also assess intrinsic and extrinsic factors that could affect absorption such as pharyngeal infections, smoking and vascular medications.

These studies will also provide data demonstrating the ability of Oral-lyn to achieve metabolic results that are not possible for subcutaneous injected insulins even with the rapid acting instrumental logs available today. This will allow our marketing partners to justify any potential price premium over injected insulin and help ensure a more rapid uptake of use in the medical community.

The obvious question of many of you maybe asking right now is why are you changing the formulation if the current formulation is good enough to sell in India? I’m not going immediately differ to the bandwagon of blaming all of our ill on Coca-Cola, McDonalds and the Ford Motor Company.

But an unpleasant reality of Western Civilization is that we’re more obese than our Asian brethren. With our increased weight, our meal-time insulin doses are also higher, frequently in the range of double or more. So, while the less obese and better exercise the patients in India can easily use the current formulation of Oral-lyn, a stronger formulation is required for the average patient in North America.

Since we anticipate that obesity will continue to become more prevalent world-wide, we’re already in discussions with our partner Shreya for future productions and sales of the improved Oral-lyn formulation in India and other global markets as well.

In summary, we’re quite excited and pleased with the progress we have made with Generex Oral-lyn, for the last six months. Conduct have correctly designed and well implemented clinical studies continues to demonstrate the validity and efficacy of the Oral-lyn product and the platform. The anticipated approval, launch and sales of Oral-lyn in one of the largest populations of diabetes mellitus in the world signifies the new milestones in the successful reorganization for Generex Biotechnology.

While the Oral-lyn reformulation clinical study work and final FDA submission were dependent upon adequate and appropriately timed funding, partnering to meet timeline goals. We are confident that we are now moving forward in the right direction both for Generex and for its investors.

Thank you and I look forward to our next opportunity to inform you of the additional new programs in diabetes protection diagnosis, therapy and prevention that are in development in the Generex pipeline. Thank you Mr. Fletcher.

Mark Fletcher

Thank you very much Dr. Anderson. Our significant achievements in respect of the Antigen Express AE37 breast cancer vaccine over the past year, including the presentation of positive interim results at the last Annual Meeting in the American Society Clinical Oncology and the establishment of a world-class Scientific Advisory Board has been publicly reported. Including in our press-releases yesterday and earlier this morning and in encourage all of our stockholders to rebuild for leases.

I will now ask Von Hofe, President of Antigen to provide a brief view of where the breast cancer vaccine clinical and regulatory program currently stands. Dr. Von Hofe?

Eric Von Hofe

Yeah, thank you and good morning everyone. Antigen Express, as many of you know was currently and phase 2 development of an immunotherapeutic vaccine, designed to prevent recurrence in patients who have had breast cancer. The trial is randomized, controlled and single blinded. To date, the compound being tested AE37 has shown very good immunological activity as well as a very good safety profile in patients.

The pre-planned interim analysis conducted on October 2011 sort of strong print with reduced relapse in patients in the AE37 arm of the trial. Based upon those results the clinical study report was submitted to the FDA and an end of Phase 2 meeting requested. While the meeting was scheduled, the company opted to postpone the meeting to allow time to address last minute questions from the agency. After addressing all questions that have been raised the FDA indicated that the end of phase 2 meeting would not be necessary and the company was invited to submit a protocol for the phase 3 while the company is elected to do under special protocol assessment.

The combination of having a phase 3 ready compound as well as a flexible robust technology platform to generate a considerable business development, interest in Antigen Express and we are poised to take advantage of this. Thank you very much.

Mark Fletcher

Thank you Dr. Von Hofe. Your management team is continuing its pursuit of partnership opportunities for the breast cancer vaccine as well as the other product candidates for AE37 and the IIT platform. And a reference to range funding for the previously announced plan to spin out Antigen Express into a separately traded entity with a dividend of Antigen Express stock to the Generex stockholders.

I want to take this opportunity to personally thank all of our loyal and dedicated Generex and Antigen Express employees and consultants including Joe Moscato with Seahawk Capital, who have worked and will continue to work tirelessly to advance our business plans and create the business development opportunities our stockholders are expecting.

I want to thank our stockholders for their continuing support and we look forward to addressing you once again on March 28. And we encourage our stockholders to vote in favor of the proposals that are put forward at that meeting.

At this point, we will now open the call to questions and comments from our fellow stockholders.

Question-and-Answer Session

Operator

(Operator Instructions). And our first question comes from the line of Chris Parkin from CG Parkin Communications.

Chris Parkin – CG Parkin Communications

Good morning. Thank you for the information. I have just a kind of a two-part question. Dr. Anderson on the Shreya results, are we saying that we actually showed superiority or simply lack of inferiority to inject the regular?

James Anderson

We showed non-inferiority, I do not have the complete details of the study. I do not know if they went further than the protocol design in statistically demonstrating superiority, but they were able to clearly show non-inferiority. And as I commented, the statistical improvement in Hemoglobin A1C occurred at a much earlier time-point during the trial than it did with injected insulin.

Chris Parkin – CG Parkin Communications

Do you have any information on hypoglycemia, post postprandial specifically?

James Anderson

No, I do not.

Chris Parkin – CG Parkin Communications

Okay. That’s all. Well, one more point, where was the manuscript submitted?

James Anderson

I can’t share that with you.

Chris Parkin – CG Parkin Communications

Okay, that’s fine. I understand. Thank you very much.

Operator

Thank you. And our next question comes from the line of T Maharaj, a private investor.

T Maharaj – Private Investor

Yes sir, good morning. I’m trying to find out since the stock hasn’t gotten beaten down this much, when – inside of the stock operations in shares. What if they’re going to purchase any shares?

Mark Fletcher

Yeah, we certainly don’t mandate that any directors or officers due to their personal financial resources to purchase stock. Certainly, overtime various officers and directors have purchased stock and that’s been reflected in Form-4s filed with the SEC. But as I say, we don’t mandate that anybody to extend personal resources to buy stock.

Operator

Thank you. And our next question comes from the line of Sally Prescott, a private investor.

Sally Prescott – Private Investor

Hi, I would like to know when the veterinary aspect might be possible. I have a min-pin and you cannot inject her, she wriggles and goes and goes crazy as hysteric almost. And I’m reading on the web that so many people can’t inject their dogs and they cannot insulin by pill or anything like that. They need that very desperately. These dogs are small dogs are suffering like you cannot believe emotionally and every other way, with these being stuck because they are so small anyway, they don’t have much skin to pull up. And they feel it really badly.

And I want to know why the FDA and all doesn’t hurry up and do this, why are they lollygagging like they’re doing and letting other drugs get approved, that are some of them are absolutely killing people through their liver. And otherwise and yet they put you all off and keep you on a short leash for so long, it is just outrageous the way Generex has been treated, not only by the WallStreet, by the Shouters, by all the people who don’t want you to succeed, maybe the needle-makers, but you are only to fight back and get an immediate and talk about the fact that you could be helping pet owners, cats and dogs that are almost impossible to inject within. And they’re going to die and go blind and die because of the lack of interest in Washington of getting this done by the FDA? Thank you.

Mark Fletcher

Thank you for your comments. We have done some work in the veterinary area. But obviously our priority is humans with types of 1 and Type-2 diabetes and we’re focusing our efforts there. But I can very much foresee that once we reach certain clinical and regulatory milestones that it will be possible to segway into the veterinary area. And I don’t know Dr. Anderson if you have any additional comment on that or not?

James Anderson

Yes, I can be extremely sympathetic and I only have to give a heartworm pill to my dog and that’s trouble enough. Certainly the improvement in the new improved Oral-lyn formulation would make it much more feasible to consider the use of that product in the animal population and it’s something that we will be looking at as we go forward.

Operator

Thank you. And our next question comes from the line of John McMillan from MGI Securities.

John McMillan – MGI Securities

Good morning gentlemen, thanks for taking my question. I see the company moving forward as you have been going through so many difficult generations in developing the company. My question is, is the staffing of people and the number of people working on AE37, and also your regulatory team, and a technical team. Can you give me some more color of how many people you have sort of backing the company and moving the company forward because that would be of interest to me. Thank you.

Mark Fletcher

Well, Dr. Von Hofe, why don’t you address that from the Antigen side and then Dr. Anderson can address it from the Generex Oral-lyn side.

Eric Von Hofe

Sure. Yeah, so we have – we’re a small staff, we have three people here at this one location, there are a number of others that are assisting us in this. We also have capabilities from the investigator, the principle investigator of the study. So currently our needs are being met, I mean, we are certainly very lean, but all our needs are being met to ensure that the trial is working order. And the green light, we received from the FDA to proceed with Phase 3, I think collaborating to this. So, well, we are a lean and mean, we do have sufficient resources.

Mark Fletcher

And just to clarify the phase 2 trial is being conducted by the Henry M Jackson Foundation for the advancement of military medicine. They are in many respects like a clinical research organizations for the trial and they work closely with each of the individual clinical trial sites which are staffed by leading physicians who manage the patients and manage the data.

So in addition to that, we internally have David Brusegard, our Chief Operating Officer and we use outside consultants including statisticians where necessary. And we also unfortunately do have the support of our fairly extensive scientific advisory board, we made the detailed announcements on the participants in that scientific advisory board in the spring of last year.

Dr. Anderson, what do you – do you want to comment please on the Generex Oral-lyn side.

James Anderson

For the Generex Oral-lyn, we are progressing in two fronts, one, the clinical study that were just completed, were done primarily by our partner Shreya that involved 14 sites with 14 primary investigators, a number of sub-investigators, so total clinical staff support probably in the range of 60 to 80 people. Internally Shreya which is a large pharmaceutical company with about $380 billion in sales annually, undoubtedly had a staff working there that was probably in the range of 20 to 30 people and laying the process of data acquisition analysis and production of publications.

From the standpoint, internally of the improved Oral-lyn formulation we will be using a number of outside consultants whose expertise has been derived and demonstrated from other large insulin manufacturing companies. And we have approximately six actively working consultants in the design program for the new Oral-lyn formulation.

As we have funding we will increase that number of individuals and particularly as we get into the clinical study. So, at this time we as well as Antigen are, as Dr. Van Hofe said, lean and mean. But as we are funding, that will be expanded to produce a very active program.

Operator

Thank you. And our next question comes from the line of Adam Mosbridge, a private investor.

Adam Mosbridge – Private Investor

Thank you. I just wanted to ask the status of the spin-out of Antigen Express, it’s been expected for the last year or so?

Eric Von Hofe

I will address that. When we first put together the plan to spin-out Antigen Express, the AE37 breast cancer vaccine was still fairly early in its phase 2 trial. As we explored funding mechanisms for the spin-out and considered the key component of valuation it became clear to us that if we permitted the clinical program for the vaccine immature, we would be able to achieve a much higher valuation for the vaccine. And for Antigen Express generally the higher the valuation the greater benefits of the spin-out to Generex and its stockholders.

Since that spin-out concept was first introduced we have made very significant advancements in the vaccine program. As we mentioned earlier, positive interim results were achieved and reported as ASCO. We’re able to attract a cadre of world-class scientists and physicians to join us as advisors, representing institutions like MD Anderson, Indiana School of Medicine, University of California, the Mayo Clinic, Samantha Cancer Center, Harvard Medical School, Dink University and also the National Surgical Adjuvant Breast and Bowel Project.

The fact that these experts are prepared to publicly align themselves with our program speaks the quality of our science and the prospects for success. At this juncture, as we approach the inclusion of the phase 2 trial later this year, and complete preparation and submission with the FDA as a protocol for phase 3, the valuation matrix has improved very substantially. We’re working just to put together a transaction structure that will maximize the benefits to our stockholders.

In particular, the pending conclusion of the phase 2 trial and our successes there have accelerated interest from respective partners and collaborators. We have confidential disclosure agreements in place with many of these interested parties and we have kept them informed of our progress. It’s no secret that the goal of any development companies like (inaudible) to establish relationship that will lead to product commercialization. And we are actively pursuing those relationships.

Being on the cost for the phase 3 trial, I think that we’re ideally positioned to achieve transaction here by not in a position at this juncture to speculate on timing, it’s a process, it does take time. And we’re actively engaged in that process. But our goal is still to achieve the spin-out of Antigen and with our success and the maturity of the clinical and regulatory program we are looking to achieve a very satisfactory valuation and transaction.

Operator

Thank you. And our next question comes from the line of Armaldo (inaudible) Incorporated.

Unidentified Analyst

Good morning gentlemen. I own a substantial number of shares of Generex. And I do not watch my portfolio very often. But I was really alarmed on the percentage of drop in the share price. And at one time a few months ago, I even wondered if the company will sort of survive. Can you more or less shed some light on it? Thank you very much.

Mark Fletcher

Yes, I can. Back when management changed, as anyone who was around that juncture is aware, the stockholders declined to approve a reverse stock split that was necessary to maintain the listing on the NASDAQ capital market. We indicated to the stockholders at that time that – the consequences of delisting from the NASDAQ capital market and moved over the counter bulletin board would most likely be a decline in liquidity and the stock price. And regrettably that has proven to be the case.

And of course that makes funding for Generex more complicated and more costly and more dilutive to the stockholders. Since that time, over the last two years we have struggled with that reality and I think that we’re at the point now where we’re on the verge of turning the corner with positive indications on the Generex Oral-lyn front and the success and maturity of the Antigen Express of Breast Cancer vaccine, I am looking forward to the time on our stock regains of health. And I think a key to regaining that health will be the pathogen of proposals at the March 28, stockholders meeting or increased authorized capital and the prospect of a reverse stock split to improve the price.

Unidentified Analyst

Thank you very much.

Operator

Thank you. And our next question comes from the line of Eric Layman, a private investor.

Eric Layman – Private Investor

Good morning. Thank you for taking my call. What I’m interested in, I guess is, could you elaborate on the mechanics of the spin-off, particularly regarding where the proceeds of the issuance of the shares go. Would they go to the Generex stockholders or would they go to the new DE stockholders, and if it’s Generex, I guess the question is then, how do you envision AE raising capital. And if it’s AE, then what is the value to a Generex shareholder. Thanks.

Mark Fletcher

The plan is to spin-off Antigen Express which is currently a wholly owned subsidiary of Generex into a company that is trading on the over-the-counter bulletin board. It will be a typical reverse merger transaction, immediately following which Generex will be the majority owner of the stock in that company. The funding that we’re talking about putting together will be – we anticipate a traditional pipe transaction, private investment and public equity, and that will come in that new company, such that the money will be in that new company.

I would expect that any investors that are putting forward money for that program would certainly want to see that money reside in Antigen Express, the new Antigen Express and be used to fund, that’s ongoing clinical and regulatory work. As we’ve announced previously – we also anticipate issuing stock dividend in that new company to the Generex stockholders.

So, Generex stockholders will benefit two ways, number one, Generex will have it’s stockholdings in that company on its book as a very valuable asset, which will hopefully be reflected in the stock price. And secondly we foresee Generex stockholders participating directly in the new Antigen by getting some stock dividends.

Eric Layman – Private Investor

Very good, thank you.

Mark Fletcher

Thank you.

Operator

Thank you. And our next question comes from the line of Duane Kuick a private investor.

Duane Kuick – Private Investor

Hi, how are you today? I wanted to ask, was that a partnership is the one we’re concerned? Are you going to be able to meet the end phase trials for Oral-lyn? And also, I’m concerned about a reverse stock split that without any approvals, most likely the stock filing is on its way back down.

Mark Fletcher

With respect to Generex, Oral-lyn, we need to get into a position where we can raise some additional capital in order to move forward with our own clinical and regulatory programs hoping to build on the strength of the experience that we recently announced in India. With respect to reverse stock split, I know that there is a reception that following a reverse stock split, the price falls back and there is a loss of liquidity or rather a loss of value.

My approach is that if we can get the price back up to some sort of reasonable range, trading in the stock will be healthier, and we can build on the strength of the Generex Oral-lyn program and the Antigen Express accept us in order to maintain value and prevent any kind of loss of value as a result of the reverse stock split. I think that anyone would agree that if we are trading at a price that is substantially higher than where we are now, the trading pattern will be healthier, we’ll get more interest from stock market and we’ll be in a better position to raise additional capital that we need for our projects.

Operator

Thank you. And our final question comes from the line of Bill Catcher, a private invester.

Bill Catcher – Private Investor

Good morning. First a shout-out to Andy, thank you for your responses to my e-mail. I have two questions, first to Andy probably and that is – with the success of the Indian trials, is there any possibility of any other countries using those trials as the basis for using Oral-lyn in their countries. The second question involves a kind of controversial matter, which Seeking Alpha just had a very bearish or bullish article rather on the company extremely bullish. Except for one factor, and that is the management of the company.

And the offer Thomas Bernard seemed to feel that with all do respect to Mr. Fletcher, that he doesn’t have a lot of pharmaceutical or any pharmaceutical experience, he’s in maternity. And he felt that the company would be much better off if there were a leader that did have significant pharmacological experience in development of drugs. So, can you comment on any of that?

Mark Fletcher

I’ll comment on the article, I don’t know the individual who wrote that and I don’t know what his qualifications or experience might be to make those judgments. In the case of Generex, the part of the reason for the management change was the difficulties that the company found itself in both in terms of its programs and it’s funding. And Generex was not at that time and is still not I think in a position to go out and successfully recruit the sort of senior executive that you’re referring to, that certainly is something that can happen down the road.

Over the past two years what we’ve been focusing on is cleaning up the company, raising money and regularizing the capital structure, things that I feel that I am capable of addressing. And unfortunate that has the expertise of people like Dr. Anderson and Dr. Von Hofe on the clinical regulatory side of things to assess. But Andy, I’ll let you address the question about Generex Oral-lyn.

James Anderson

Thank you for your question Mr. Catcher. The partnership with Shreya LifeSciences obviously it’s only seen on India. And it is by various counts either the largest or the second largest diabetes market in the world in terms of number of patients. However, Shreya is involved in a rather large segment of rest of the world particularly the Asian markets, and I think all that I can say at this point it’s we are in discussions with them about other potential marketing territories. And as soon as we have anything that would be definite, we will share that with all of you.

Bill Catcher – Private Investor

Okay, thank you. But regarding the management situation, I would suggest from my own many years of experience in TheStreet. In the marketplace that if the chairmanship or the executive officer, what would be replaced, the stock would have significant gain in value, that is my opinion nothing personally against Mr. Fletcher, but I just think that might be the likelihood. But thank you very much for your answers.

Mark Fletcher

Thank you.

James Anderson

Thank you.

Operator

And that concludes our question-and-answer session today. Do you have any concluding remarks?

Mark Fletcher

No, I don’t think we do. I think everything has been handled very well. And thank you for your support in terms of the communication. I think we’ll just sign-off now. Thank you.

James Anderson

Thank you very much everyone.

Operator

Thank you. Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program. And you may now disconnect. Everyone have a good day.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Generex Biotechnology's CEO Hosts Investor Conference Call (Transcript)

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts