Sunday, April 11, 2010

GNBT: Generex Files Suit Against TheStreet.com

It's been an event-filled couple of weeks for Generex.

After becoming the latest target of TheStreet.com's biotech blogging bash, Generex announced on April 6th that the company had commenced legal proceedings with New York State's Supreme Court against both TheStreet.com and that company's infamous biotech blogger, Adam Feuerstein.

Generex is seeking $250 million in damages from the suit for "business defamation, product disparagement, and injurious falsehood", according to the press release.

It's been no secret that TheStreet's opinion-based biotech blog has a reputation of playing liberally with the facts and prefers to gear their posts towards negativity and biases, but lawsuits such as the one initiated by Generex have been a rare occurrence.

America's respect for personal opinion is heavily protected by the First Amendment, the main reason why opinion-based blogs such as Feuerstein's can thrive in the US, but Mark Fletcher, Generex's Generex's Executive Vice-President and General Counsel, claims that TheStreet's articles "go well beyond the expression of disparaging opinion or fair comment."

This will be a development worth watching, if only because TheStreet.com is rarely taken to task for suspect reports, but it's highly unlikely that Generex will see much - if any - of the $250 million; you have to wonder where that number came from anyway, the stock has only dropped a dime or so since the bashing reports were published on TheStreet's website.

The most significant news that could be generated by Generex would be positive Phase III results for Oral-Lyn; for that we're still standing by.

Disclosure: Long GNBT.


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1 comment:

  1. Hi Vinny, You wrote:

    "If Oral-lyn is proven to be an effective method of delivering insulin to diabetics through the inner lining of the cheek, then GNBT is in for huge jump in market cap."

    What are your current targets and when? Thanks!
    Marc

    ReplyDelete

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