|National Distribution Sends Shares of Generex Higher|
|By Vinny Cassano|
|Tuesday, 21 September 2010 08:17|
After a weekend of speculative anticipation surrounding Generex Biotechnology Corporation (Nasdaq:GNBT), Monday morning welcomed an exciting new week for shareholders who have been anxiously following the recent developments of the company.It's been largely assumed by many that big news regarding Oral-lyn would the catalyst to launch this stock up to near the one dollar mark - and that still could be the case - but for now Generex greeted the new trading week with news of a national sales agreement for the company's consumer product line, which includes the Glucose RapidSpray, Crave-NX Diet Aid Spray, BaBOOM Energy Spray, and the Glucose RapidSpray for Pets. Each of these products utilizes the same delivery method as the Oral-lyn insulin spray; absorption through the inner lining of the cheek.
The sales agreement was with Elias Shaker & Company, a national name that has long-standing relationships with distributors, wholesalers, retailers, grocery and drug chains and just about any other retail point that you can think of.
The potential of the consumer product line does pop up in the news once in a while, most recently when it was announced that a subsidiary of Merck KGaA would move RapidSpray into the Mexican, but these products have largely been considered an afterthought as Oral-lyn stole the spotlight during the later stages of clinical development. With this deal, however, Generex has just announced another pipeline of revenue potential that could grow at a rapid pace once ES&C has the products on shelves throughout the USA.
It looks like, at least for a short term as volume soared through the thirteen million mark on Monday, that the Generex rebound may be in full effect. It also looks like Generex could have a lifeline should any unexpected hiccups delay the progression of Oral-lyn.
Truth be told, however, the near to mid term success or failure of Generex lies with the fate of the Oral-lyn Phase III trial and (if positive) the ultimate approval decision by the FDA.
The news of consumer product sales potential and distribution is highly encouraging, but it could just be a set-up for more significant news on the Oral-lyn front that may launch the share price straight towards a dollar where - if it were to remain for ten consecutive trading days - the need for a reverse split would be a moot point.
The short term future of this stock may not yet have revealed itself, but it's been my opinion for some time that we'd see a run to at least a buck before the Oral-lyn Phase III results were released. The recent news announcements and price action are setting up for the perfect storm to allow that to happen, in my opinion.
As always, there's no sure things in the stock market - no matter how promising a situation looks - and GNBT is no exception. That said, the recent surge in price, volume and solid news releases gives investors a whole lot of reason to be excited about this company and stock right now.
I'll add on any pullback.
Vinny also authors the popular stock investing blog VFC's Stock House.