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GNBT and India

|Includes: Generex Biotechnology Corp. (GNBT)
Let’s try to set some facts straight regarding Oral-Lyn and India.
November 2007, Generex receives approval to sell Oral-Lyn in India and distribution agreement with Shreya:
March 2008, Generex receives purchase order for Oral-Lyn from Shreya in India:
December 2008, Generex lists in Quarterly report the approval of Oral-Lyn in India on page 12 and that they do not expect to receive revenues in Fiscal 2008 from the sale of the product in 2008, listed on page 13. 
March 2009, Sales of Oral-Lyn are halted when the Wall Street Journal website “live-mint” investigates the marketing approval of Oral-Lyn in India. It is discovered that a local clinical study was not conducted as required by the Drugs and Cosmetic Act of India; although it is not always necessary to achieve approval. Oral-Lyn apparently was approved with expectations of conducting a post-marketing study in India; however, the investigation by Live-Mint was of the “lapse in the regulatory mechanism as no clinical trials were conducted in India”.
[The keys is that Oral-Lyn was approved, Generex did not expect to gain revenues in Fiscal 2008, and that sales were halted pending the outcome of an investigation by the DCGI of India. Given that March 2009 is still part of Fiscal 2008 for Generex, this should be considered no big deal, particularly since sales were not expected.]
October 2009, Although Generex made sales to Shreya, the company indicates that it will not recognize revenues on page 12 of the annual report. While it isn’t explicit, I took it as meaning that the investigation was still being conducted by the DCGI, which shouldn’t be surprising since it had only been 3-months since the start of the investigation.
December 2009 There is nothing new reported in the quarterly report, which again is not surprising given that this is a government investigation.
March 2010 The quarterly report indicates on page 16 that “The product was approved in India in January 2009, but per the requirements of the approval, a study in India with Oral Recosulin is still ongoing and we have not recognized any revenue from the Indian market to this point.”
and Shreya is in the process of conducting a phase III clinical trial for DCGI:
While I am not defending GNBT management (I am still upset about the reverse split concept leaving 750M shares outstanding), I think the information has been available to the lay investor, had they been willing to search for it.
The fact of the matter is that GNBT did have sales in India. They even shipped product to India, which apparently has made it to some shelves according to LiveMint. Thus I am having the difficulty understanding the claims about lying. While I would have preferred that GNBT told us what was/is going on in India, it is Shreya who has to deal with the issue at this point.
(I will admit, I could use a better closing, but it’s what I got).

Disclosure: Long GNBT