SciGen Buys China Rights to Generex Oral Insulin Spray

By: China Bio Today Monday, April 14, 2008 1:38 PM

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SciGen, Ltd. (ASX: SIE), a Singapore company that trades in Australia, has licensed the China rights to Oral-lyn™, an oral insulin spray product that is being developed by Generex (NSDQ: GNBT).

SciGen will supply its own recombinant human insulin product, while Generex will formulate and fill Generex Oral-lyn for marketing and distribution by SciGen in the territory. SciGen will be responsible for gaining approval of the product. Oral-lyn is in Phase III trials in the US and elsewhere. It has been approved for use in India.

SciGen will also have the right to distribute the product in Hong Kong, Indonesia, South Korea, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The financial terms of the arrangement were not disclosed.

SciGen focuses on biosimilars with vaccine and therapeutic products in endocrinology, oncology, and immunology. Besides its Singapore headquarters, the company has offices in the United Kingdom and subsidiary companies in South Korea, Hong Kong, India, the Philippines, Vietnam, Australia, Israel, and the United States, plus joint ventures in China, partners in Poland, and distributors in all countries in the Asia Pacific region. 90% of SciGen's shares are owned by Bioton, a Polish biotech company.

SciGen’s products include human growth hormone, recombinant human insulin, GCSF, EPO, interferon alpha and a third generation hepatitis B vaccine. At this point, none of its products are registered in China, though it offers many of its products in Australia, the Phillipines, Vietnam and other countries in the Asia Pacific region.

In December 2005, SciGen and Hefei Life Science & Technology Investments established a China joint venture that announced it would spend $30 million to build a manufacturing facility for Sci-B-Vac, its hepatitis B vaccine, in Hefei. The joint venture also said it would distribute a minimum of $140 million of the product over 7 years, starting in 2008. The joint venture is 51% owned by SciGen, 25% by Hefei, and 24% by Bioton.

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4/15/2008 9:36:51 PM Analyst report by GNBTAnalysts Navdeep S. Jaikaria, Ph.D., a Senior Biotechnology Analyst at Rodman & Renshaw, he reiterated his Market Outperform Rating on Generex and $6 price target. Some of the highlights of the report, titled, "NO IMPACT ON ORAL-LYN FROM LILLY TERMINATION OF ALKERMES INHALED INSULIN" were: Alternative Insulin Competitors Continue to Fall and Enhance the Oral-ly Opportunity Last Friday, Alkermes Inc. (ALKS, Not Rated) announced that it received a letter from Eli Lilly (LLY, Not Rated) terminating their license agreement for the development of AIR Inhaled Insulin. This news, as well as the announcement in October 2007 by Pfizer Inc. (PFE, Not Rated) of the termination of its development of Exubera, an in-market inhalable insulin by Nektar Therapeutics Inc. (NKTR, Not Rated), have continued to place unwarranted pressure on the shares of Generex, which is in the final stages of preparation for a Phase III trial with Oral-lyn, the company's proprietary oral insulin product candidate. We believe disappointing sales with Exubera inhaled insulin made uncertain the prospects for further commercialization of Alkermes' AIR and AERx, an inhaled insulin system by Novo Nordisk A-S (NVO, Not Rated) whose Phase III development was discontinued in January 2008. We believe this news is positive for Generex as they enhance Oral-lyn's opportunity as a safe, more tolerable, non-injectable insulin for the treatment of patients with diabetes. We Reiterate that the High Hurdles with the Inhaled Route of Insulin Delivery are Not Likely to be Observed with Buccal Cavity (Oral) Delivery of Insulin Concerns continue to grow that inhaled insulins, such as Exubera, may all be plagued by the observation of an early, non-progressive decline in lung function that does not improve over long-term use of Exubera, as well as problems associated with formulation of insulin into inhalable powder form. Further, the advancement of more convenient injectable devices, such as pens filled with pre-mixed insulin analogs, obviated the value of convenient mealtime titratable insulin delivery. We believe the significant hurdles seen with the inhalation route of delivery bode negative for inhaled insulin products, and open the door for Oral-lyn as the insulin potentially with the best non-injectable alternative route of mealtime insulin delivery. Reply Rating: (1) (0)
4/15/2008 9:36:51 PM Analyst report by GNBTAnalysts Navdeep S. Jaikaria, Ph.D., a Senior Biotechnology Analyst at Rodman & Renshaw, he reiterated his Market Outperform Rating on Generex and $6 price target. Some of the highlights of the report, titled, "NO IMPACT ON ORAL-LYN FROM LILLY TERMINATION OF ALKERMES INHALED INSULIN" were: Alternative Insulin Competitors Continue to Fall and Enhance the Oral-ly Opportunity Last Friday, Alkermes Inc. (ALKS, Not Rated) announced that it received a letter from Eli Lilly (LLY, Not Rated) terminating their license agreement for the development of AIR Inhaled Insulin. This news, as well as the announcement in October 2007 by Pfizer Inc. (PFE, Not Rated) of the termination of its development of Exubera, an in-market inhalable insulin by Nektar Therapeutics Inc. (NKTR, Not Rated), have continued to place unwarranted pressure on the shares of Generex, which is in the final stages of preparation for a Phase III trial with Oral-lyn, the company's proprietary oral insulin product candidate. We believe disappointing sales with Exubera inhaled insulin made uncertain the prospects for further commercialization of Alkermes' AIR and AERx, an inhaled insulin system by Novo Nordisk A-S (NVO, Not Rated) whose Phase III development was discontinued in January 2008. We believe this news is positive for Generex as they enhance Oral-lyn's opportunity as a safe, more tolerable, non-injectable insulin for the treatment of patients with diabetes. We Reiterate that the High Hurdles with the Inhaled Route of Insulin Delivery are Not Likely to be Observed with Buccal Cavity (Oral) Delivery of Insulin Concerns continue to grow that inhaled insulins, such as Exubera, may all be plagued by the observation of an early, non-progressive decline in lung function that does not improve over long-term use of Exubera, as well as problems associated with formulation of insulin into inhalable powder form. Further, the advancement of more convenient injectable devices, such as pens filled with pre-mixed insulin analogs, obviated the value of convenient mealtime titratable insulin delivery. We believe the significant hurdles seen with the inhalation route of delivery bode negative for inhaled insulin products, and open the door for Oral-lyn as the insulin potentially with the best non-injectable alternative route of mealtime insulin delivery. Reply Rating: (0) (0)

Navdeep S. Jaikaria, Ph.D., a Senior Biotechnology Analyst at Rodman & Renshaw, he reiterated his Market Outperform Rating on Generex and $6 price target. Some of the highlights of the report, titled, "NO IMPACT ON ORAL-LYN FROM LILLY TERMINATION OF ALKERMES INHALED INSULIN" were: Alternative Insulin Competitors Continue to Fall and Enhance the Oral-ly Opportunity Last Friday, Alkermes Inc. (ALKS, Not Rated) announced that it received a letter from Eli Lilly (LLY, Not Rated) terminating their license agreement for the development of AIR Inhaled Insulin. This news, as well as the announcement in October 2007 by Pfizer Inc. (PFE, Not Rated) of the termination of its development of Exubera, an in-market inhalable insulin by Nektar Therapeutics Inc. (NKTR, Not Rated), have continued to place unwarranted pressure on the shares of Generex, which is in the final stages of preparation for a Phase III trial with Oral-lyn, the company's proprietary oral insulin product candidate. We believe disappointing sales with Exubera inhaled insulin made uncertain the prospects for further commercialization of Alkermes' AIR and AERx, an inhaled insulin system by Novo Nordisk A-S (NVO, Not Rated) whose Phase III development was discontinued in January 2008. We believe this news is positive for Generex as they enhance Oral-lyn's opportunity as a safe, more tolerable, non-injectable insulin for the treatment of patients with diabetes. We Reiterate that the High Hurdles with the Inhaled Route of Insulin Delivery are Not Likely to be Observed with Buccal Cavity (Oral) Delivery of Insulin Concerns continue to grow that inhaled insulins, such as Exubera, may all be plagued by the observation of an early, non-progressive decline in lung function that does not improve over long-term use of Exubera, as well as problems associated with formulation of insulin into inhalable powder form. Further, the advancement of more convenient injectable devices, such as pens filled with pre-mixed insulin analogs, obviated the value of convenient mealtime titratable insulin delivery. We believe the significant hurdles seen with the inhalation route of delivery bode negative for inhaled insulin products, and open the door for Oral-lyn as the insulin potentially with the best non-injectable alternative route of mealtime insulin delivery.

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4/15/2008 9:36:51 PM

Analyst report by GNBTAnalysts

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