Tuesday, August 31, 2010

Readers Respond: GNBT, Mannkind vs. Generex

From Anne-Marie regarding my last post on Generex:

What are your current thoughts on Mannkind vis-a-vis Generex? What do you think the probabilities are for each to be approved? What type of news are we waiting for in September from GNBT? Finally, do you think GNBT will have options at some point?



VFC's Take: First, here's a couple of links to some of my posts regarding this topic:

MNKD Drops After the FDA Asks More Questions and TheStreet.com vs. Generex

In the first link I outline my opinions of Generex and Oral-lyn in comparison to Mannkind and Afrezza.  In short, I believe that Oral-lyn will end up being the oral spray of choice because of the fact that the insulin will be delivered through the inner lining of the cheek and not the lungs, as will be the case for Afrezza.  I don't necessarily think that the patients will be alarmed much by the difference in delivery system, but the Doctors may have enough concern about the long term effects on the lungs to prescribe Oral-lyn over Afrezza.  It seems that there is enough concern about the subject for the FDA to delay an approval decision and for questions to be made public. 

On that note, I think that the FDA fiasco brings up an interesting point that I believe is important to emphasize.  When MNKD's share price got smoked in response to the FDA delay, shares of GNBT remained stable in the immediate aftermath.  But then a funny thing happened; you had bloggers representing websites such as TheStreet.com coming out and slamming GNBT, not MNKD.  A swarm of Internet stock message board bashers were employed in full force to create a mood of fear, panic and discontent around GNBT in cyberspace.  Other self-professed journalists who had thought Oral-lyn was great during Phase I trails came out against the product in Phase III.  In a swift instant, the subject of Afrezza's cloudy future was ignored and the spotlight was put on Oral-lyn.  This was a prime example of the classic 'change the subject' routine often employed by the big boys when they want to manipulate the system.  I will say that these are my own opinions based on my own experience and perceptions, but when you see the same things happen with the same clowns involved more than a couple of times...let's just say that VFC is not a big believer in coincidence. 

It could be that many had hedged their bets on Afrezza, believing that the product would have ample time on the market during the pre-Oral-lyn era to build a solid sales lead, only to be blindsided by the FDA.  It could be that those same players attacked GNBT in order to knock the share price down to a more attractive entry point knowing that Oral-lyn, becoming a possible better and safer alternative to Afrezza, was actually the better bet. 

That said, it's also possible that the attacks that materialized on Generex were the result of a few bitter big boys and some biotech bloggers looking for hits to their websites at the height of a popular event.  What we do know is that some of that blogging was so irresponsible that TheStreet.com was hit with a $250 million dollar lawsuit and had to issue a retraction statement, however pathetic it was.  It's also worth noting that one of the items included in the retraction was an apology for mis-spelling 'Oral-lyn.'  I mention that point because I am inclined to believe that if Oral-lyn and its definciencies were intended to be the subject of a 'report,' then the correct spelling of the product would have been a priority while preparing the report.  The fact that it wasn't tells me that it was a hastily prepared hack job prepared for ulterior motives.  But hey, who the heck am I?  I'm just a guy with an opinion - and I've actually been very appreciative of being able to accummulate shares at levels that resulted from the suspected coordinated attack.

Now, should GNBT soar one day, and should Oral-lyn succeed - the same ones who bashed and attacked the stock will act like they were on board all along - just like Adam Feurstein, TheStreet.com's biotech blogger does with Dendreon.   As Hannibal Smith would say, "Slimeball."

I've said it before and I'll say it again - it's a heck of a lot easier to sit back and bash stocks that have already enjoyed a good run than it is to find hidden gems before they soar.  Especially in a sector where three out of ever four companies fail.  There's nothing to that, that's like looking at Pamela Anderson when she's 50 and saying she's just OK, when you've missed out on all the slow motion 'Baywatch' years.  Give me a good site with some good stock picks and suggestions and I'll take that any day over the guy that always advises to the negative because the odds show that he'll be right more often than wrong that way. 

The truth is, one speculative hit can make up for an entire portfolio of speculative stocks.  TTNP and DNDN were hits like that, and if GNBT becomes a hit as a result of Oral-lyn success, then the current trading levels will be looked back upon with disbelief that the shares were so cheap.

Back to Anne-Marie's questions:

I think that both will end up being approved.  I also think that the FDA delay was a gut shot to Mannkind's Afrezza for the long term because, if approved, the product will not have the same amount of time on the market to gain sales momentum without Oral-lyn competition as it will now.  Again, I emphasize that I believe Oral-lyn will be the insulin spray of choice, if approved and barring any Phase III setbacks or unforseen safety concerns.

There have been rumblings that we will see news in September, although I'm not convinced that that will be the case.  My experience in the market has taught me that news comes when it's expected about 50% of the time; and the 'September news' strikes me as more speculation than it does as fact anyway.  Hey, I want a positive update just as much as the next guy, but until I see it, it's a non-factor and I'm not going to lose any sleep thinking about it.

As for the question of options, it would make good sense to throw some options out there at some point, but I have no guesses as to when that would happen.

Disclosure:  Long GNBT.

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1 comment:

  1. Thank you for responding, much appreciated!



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