A problem for small retail investors looking for trusted financial news websites lies in deciphering which ones serve their interests and which ones simply offer analysis more suited for the message board forums. Often the barrier between news and bluster is blurred and one example comes to mind which I would like to highlight. Adam Feuerstein is a Senior Columnist at TheStreet.com who blogs about the pharmaceutical and biotechnology industries. I feel that Feuerstein also serves as an example of how the flow of information from "news" sources to the retail investor is distorted and broken.
Last Friday, I read first hand an example of Adam's "reporting" on a biotechnology company I follow, Generex Biotechnology (OTCPK:GNBT). Since Generex is a micro cap company, having an article from a "news source" featuring them can result in volatile trading activity for their stock. A columnist offering a negative opinion on a company or stock can often result in a more well rounded perspective and be helpful. However, when the article presents a defamatory opinion based on untrue statements, the small retail shareholder holding shares can watch his investment deteriorate for potentially manipulative reasons.
Feuerstein takes a negative approach towards Generex in his daily featured article, titled Biotech Stock Mailbag. The problem is that he states his opinion based upon premises which I find to be blatantly false. Feuerstein belittles Generex's efforts in developing Oral-lyn buccal insulin spray by stating that "none of the Oral-lyn data collected by Generex has been peer-reviewed in credible medical journals, nor has it been presented at the top-flight diabetes meetings".
In the lively comment section that follows his article, I cited the numerous peer review articles which have been published by the independent researchers studying Oral-lyn in its Phase I, II and III trials, and named the plentiful "top-flight diabetes meetings" where Oral-lyn data has been presented, including having Oral-lyn data being selected for a prestigious podium presentation at last year's American Diabetes Association Scientific Sessions. You can view an example of the published peer reviews and the abstracts presented at major diabetes conferences here. In reality, Generex routinely presents Oral-lyn data at all of the major diabetes events and the latest peer review article was published last month.
Feuerstein responded to my comment by stating that he gains his perspective from "the thought leaders at the American Diabetes Association" who tell him that "Oral-Lyn is a waste of time and potentially dangerous". Dr. Gerald Bernstein is the Vice President Medical Affairs at Generex and previously served as President of the American Diabetes Association. He presently serves on several ADA committees and is a member of the Board of Directors for the ADA's Research Foundation. Dr. Bernstein is a certified "thought leader at the American Diabetes Association."
Generex's Oral-lyn buccal insulin spray is in a Phase III trial in the US and has recently been conditionally approved by the FDA under a Treatment IND. The FDA website states that they will permit an investigational drug to be used under a Treatment IND if there is sufficient evidence of safety and preliminary evidence of drug efficacy. The drug must be intended to treat a serious or life-threatening disease, or if there is no comparable alternative drug or therapy available to treat that stage of the disease in the intended patient population. The Treatment IND approval for Oral-lyn was the first awarded by the FDA to treat diabetes. When considering the FDA's overall concern over the safety profile of other diabetes drugs, both approved and in development, this is significant in properly understanding Oral-lyn's unique attributes. Since Feuerstein, a biotechnology reporter, is incapable of finding the numerous peer reviews detailing Oral-lyn's development, he is evidently unaware that there has never even been one single serious adverse event ever attributed to its usage. The FDA is apparently more diligent.
A reporter, analyst, or a highly regarded physician who specializes in endocrinology can certainly present a sophisticated conclusion that calls the quest to develop a non-invasive insulin drug an effort in futility. I feel Feuerstein's tactic is to inflame, in hopes of gauging a reaction. Since Feuerstein is a Senior Columnist at TheStreet, I believe there is no excuse for offering such negligent due diligence. I find his methodology is to interact with readers in the comments section of his article by offering low wit responses. In one example, he quips that:
"you will find, however, that the fear of needles meme is pushed more by those seeking to market alternative to insulin injections than those who actually need to inject themselves. oral-lyn will not be proven to be safe and effective because the clinical and regulatory hurdles are simply too high".
The regulatory hurdles are high, but again I note that Generex is the first biotechnology or pharmaceutical company to engage the FDA to win conditional approval for a diabetes drug via a Treatment IND. Currently, Oral-lyn is the only non-invasive insulin available to diabetics in the US. To date, Oral-lyn has been shown to be safe and effective, and in some of the more recent Phase II studies it was concluded by the independent researchers that Oral-lyn treatment resulted in superior effect over regular injectable insulin. That factual point aside, it is also a fact that non-compliance due to various reasons for aversion to injectable insulin therapy is a serious problem resulting in a worsening condition that may lead to blindness, amputations, and transplants.
A new peer review article was published in Diabetes Care (February 2010 issue; vol 33: pp 240-245) which asked 502 people with diabetes who used insulin to complete an internet survey. More than half of those surveyed, 57 percent, said they had intentionally missed an insulin dose, and 20 percent said they regularly skipped insulin injections. Among the reasons for skipping insulin injections were complaints of injection pain, embarrassment by the need for insulin and thought that the injections interfered with their daily life. One in five stated they skip insulin injections often. Those 57 percent of diabetics that stated they sometimes skip insulin injections represent a true market of patients that may be open to a safe and effective noninvasive insulin.
The report in Diabetes Care, which is published by the American Diabetes Association, comes on the heels of a similar report (found here) issued in 2008 by the American Association of Diabetes Educators which found that 33% of the surveyed patients have experienced "dread" in relation to insulin injections, 14 percent surveyed feel that insulin injections have a negative impact on their life, more than 29 percent of the surveyed feel that injecting insulin is the hardest aspect of their diabetes care. The reports published by the American Diabetes Association and the American Association of Diabetes Educators skipped Feuerstein's attention, which is odd since he is a professional columnist offering an opinion on the subject, and as I previously noted, he stated that he gains his perspective from "the thought leaders at the American Diabetes Association".
Feuerstein also fails to understand the true benefit of Generex's Oral-lyn buccal insulin spray. The needle-less aspect is but one of Oral-lyn's advantages over currently approved injectable insulin. The time profile for Oral-lyn is the greatest of its advantages, which enables buccal insulin dosing to mimic the first-phase insulin response seen in a healthy person. This first-phase insulin release is one of the first functions that people with diabetes lose. Dr. Bernstein has stated that Oral-lyn is taken right before the first bite of the meal, immediately begins to be absorbed into the bloodstream through the inner lining of the mouth, peaks in 30 minutes, and works quickly allowing blood sugar levels to cleanly return to baseline within two hours.
With this very fast onset and offset of action, Oral-lyn buccal insulin spray may offer less risk of postprandial hypoglycemia as compared to conventional injected insulin therapy. With each spray of the Generex RapidMist delivery device, one unit of meal time Oral-lyn buccal insulin is rapidly delivered into the bloodstream. The amount of sprays given is determined by the amount of insulin each unique diabetic requires to cover a meal. Generex's CEO, Anna Gluskin, recently commented that they believe Oral-lyn's dose response "resembles the body's natural insulin response effectively and has the flexibility that allows patients to fine-tune their insulin treatment regimens for optimum therapeutic results."
Analogue prandial insulin is dosed approx 15 minutes before a meal, peaks in an hour, and has a duration of effect of 4 hours. Regular insulin is dosed 30 minutes before a meal, peaks in 2 hours and lingers up to 6 hours in the bloodstream. This slow acting tail activity for both analogue and regular insulin is said to often cause low blood sugar levels to occur after the glucose spike provided by the meal starts to decline. Postprandial hypoglycemia is a life-threatening risk, and is an important obstacle towards achieving good metabolic control. Since there is no similar tail of activity with Oral-lyn as there is with all other forms of injectable insulin, the risk of postprandial hypoglycemia may be greatly minimized. And since blood levels are back at baseline after the meal, there is no reason to gorge on post meal snacks to offset any lingering insulin, which should help avoid unhealthy weight gain.
Feuerstein has been associated with similar questionable commentary where, in my opinion, he paints an uninformed negative article about a volatile research and development biotechnology company with little regard for objective commentary. These companies are in precarious positions as they attempt to navigate the toughest of regulatory environments while often searching for venues to raise the large amounts of capital needed to advance the more promising drugs in their pipeline. I feel it is easy to take a blurry and narrow focus on an area of their development to offer a distorted image of their true achievements and potential. The harder task as an investor is to take an in depth view to gain a clearer understanding of where the emerging firm may be headed in the future.
Disclosure: The author is long GNBT.