Generex Biotechnology Provides Fiscal Year Overview
- GNBT Reorganization & Transformation
- Acquisitions: Olaregen Therapeutix, Regentys, Veneto Assets, Pantheon Medical, MediSource Partners
- Completed 100% Acquisition of HDS (now NuGenerex Diagnostics) and Retired Associated Debt
- NuGenerex Immuno-Oncology (NGIO) Formation and Kiromic Acquisition
- Excellagen® Wound Conforming Gel Matrix
- Product Launch & Commercial Sales
- APMA Seal of Approval
- Substantially Increased Shareholder Equity
- Appointed New Independent Directors
- Rewarded Shareholders with Dividends: GNBT 20:1, GNBT 1:1 (Pending), and NGIO 1:4
MIRAMAR, Fla., July 10, 2019 (GLOBE NEWSWIRE) -- Generex Biotechnology Corporation (www.generex.com) (OTCQB:GNBT) (http://www.otcmarkets.com/stock/GNBT/quote) today provided an overview of Generex’s accomplishments for the fiscal year ending on July 31, 2019, as outlined herein.
Since the new management team has taken over in January 2017, Generex has been reorganized as a strategic, diversified life science holding company that is actively involved in building a modern organizational platform for the financing, development, commercialization, and distribution of promising devices, biologics, therapeutic, and diagnostic products to improve human health and return value to its investors. As the foundation for the reorganization, we are acquiring operating companies that provide multiple and significant revenue streams through delivery of patient-focused healthcare products and services, including specialty pharmacy, orthopedic implants, surgical supplies, biologics, medical devices, and regenerative medicines. These foundational acquisitions service unique market channels that provide end-to-end healthcare solutions in partnerships with patients, physicians, health systems, and payors. The synergistic business models of the combined organization offer cross channel sales opportunities for rapid growth, with significant revenues and profits projected going forward.
Our new management team has embarked upon a complete strategic reorganization and transformation of the entire corporate structure, leveraging Generex’s legacy assets which have applied over $400 million dollars in developmental activities over the years, providing Generex with net operating loss (“NOL”) carryforwards from both United States and Canadian sources. Generex has NOL carryforwards totaling $241.5 million in the United States expiring in 2019 through 2038; and $35.6 in Canada expiring in 2024 through 2039. On December 1, 2018, the loss carryforwards accumulated from sources in the United States are subject to an annual limitation of approximately $36.9 million annually on a go forewarned basis. Under the Tax Cuts and Jobs Acts (the “Act”), additional NOL carryovers of approximately $4.6 million can be utilized entirely subject to the 80 percent of a taxpayer’s pre-NOL deduction taxable income. We have also formulated an acquisition strategy and identified targets to build a specialized healthcare platform with both scalability and the ability to leverage across the organization in an effort to achieve higher profit margins.
On April 3, 2019, Generex appointed two new independent Directors giving Generex an experienced and talented Board of Directors with deep expertise in healthcare, medical devices, drug development, sales and marketing, investment banking, and finance, thereby meeting all requirements for listing on a national exchange.
On January 7, 2019 Generex acquired Regentys Corporation. Regentys is a development stage, regenerative medicine company focused on developing treatments for patients with gastrointestinal (GI) disorders. Their first product, ExtraCellular Matrix Hydrogel (ECMH), is a first-in-class, non-pharmacologic, non-surgical treatment option for patients suffering from Ulcerative Colitis. The FDA has provided guidance that Regentys ECMH™ can be approved through the 510(k) de novo regulatory path, which has fewer regulatory hurdles than the PMA approval process, and which historically resulted in a 90% approval rate. Regentys plans to initiate clinical trials in the fourth quarter of 2019.
On January 7, 2019 Generex acquired 51% of Olaregen Therapeutix, and subsequently acquired an additional 10% from Olaregen Class A shareholders for a total ownership of 61%. Olaregen’s foundational product, Excellagen®, is an FDA-510(k) cleared aseptically-manufactured, syringe-based, ready to use 3-dimensional wound conforming matrix that supports a favorable wound healing environment. Excellagen is indicated for the management of wounds including; partial and full-thickness wounds, pressure ulcers, venous ulcers, diabetic ulcers, chronic vascular ulcers, tunneled/undermined wounds, surgical wounds (donor sites/graft, post-Mohs surgery, post-laser surgery, podiatric, wound dehiscence), trauma wounds (abrasions, lacerations, second-degree burns and skin tears) and draining wounds.
Olaregen launched Excellagen® in April at The Symposium on Advanced Wound Care (SAWC), the premier interdisciplinary wound care program in the United States. Olaregen has initiated sales in the VA system, in hospital surgical suites, and physician offices, with distribution being managed by McKesson in the commercial market and the Buckingston Group, a disabled American Vet owned distributor in the VA.
Olaregen is poised to become a significant force in regenerative medicine, as we are providing comprehensive training to over 75 biotech sales professionals for specialty hospital sales across the US, strategically concentrating our efforts in key metropolitan areas. We have had unprecedented interest from new, potential partners proceeding and following SAWC, and we are building our sales team and growing our distribution channels to serve the wound care market. Recently, Excellagen garnered the seal of approval from the American Podiatric Medical Association (APMA).
On November 1, 2018, Generex acquired Veneto’s management services organization (MSO) business and two additional ancillary services. The Veneto assets acquired by Generex include management services operations, systems, facilities, licenses, and infrastructure to coordinate ancillary pharmacy, laboratory, and other services.
Since the acquisition, Generex subsidiary NuGenerex Distribution Solutions (NDS) has expanded the MSO from 3 to 5 states, revamped the non-opioid surgical pain management pharmacy program through out-sourcing with local pharmacies, and reorganized the MSO to be more efficient and compliant with federal and state Anti-Kickback and Stark laws. Additionally, NDS hired Lance Goudzwaard as Chief Commercial Officer. A nationally recognized speaker, author and thought leader in his field, Mr. Goudzwaard is one of less than a thousand fellows in the American College of Medical Practice Executives. Mr. Goudzwaard is responsible for the delivery and operation of the management services organization (MSO) platform with an aggressive growth strategy designed to expand the model to 27 states in the next several months. Mr. Goudzwaard will also focus on building and developing our durable medical equipment (DME) service offering called DME-IQ™, a software system being introduced to the orthopedic market with turnkey services to support the development and management of compliant and profitable in-office DME programs.
On January 17, 2017, Generex acquired an initial 51% interest in Hema Diagnostic Systems, LLC (“Hema” or “HDS”), and on December 1, 2018, we acquired the remaining equity of HDS, and HDS became a wholly owned subsidiary, renamed NuGenerex Diagnostics (NGDx). The NGDx EXPRESS diagnostic technology has been expanded with the new, patent-pending EXPRESS II technology and a new product pipeline. We filled our first international commercial order for 40,000 units of its NGDx-Malaria PF/PV Cassette Test Kit to Imres, BV, a Netherlands-based medical distribution company, and was recently granted a CE Mark Certification under the European Medical Devices Directive (MDD) for its The Express II Syphilis Treponemal Assay, a rapid point-of-care diagnostic assay for the detection of syphilis antibodies in primary and secondary syphilis.
This year, Generex renamed its wholly-owned subsidiary Antigen Express as NuGenerex Immuno-Oncology (NGIO) and announced plans to build a multi-platform cancer immunotherapy company. Generex completed a research partnership agreement with Merck to study the combination of AE37 in combination with Merck’s checkpoint inhibitor, Ketruda® (pembrolizumab) for the treatment of triple negative breast cancer; the trial is currently screening patients for enrollment. Additionally, Antigen Express signed a licensing agreement with Shenzhen Bioscien, a Chinese biopharmaceutical company, to develop AE37 for the treatment of prostate cancer. Under terms of the agreement, Shenzhen is to pay for the commercial development of AE37, conducting clinical trials in the EU under ICH guidelines. Shenzhen holds the exclusive license for the use of AE37 for the treatment of prostate cancer in China; Generex retains rights to the clinical data as well as global market rights for AE37 in the prostate cancer market outside of China.
On February 25, 2019 Generex paid a dividend in our new cancer company, whereby Generex shareholders received 1 share of NGIO for every 4 shares of GNBT. Those shares are now book-shared with Generex’s transfer agent, which is holding them in GNBT shareholders accounts; the shares will have value once we take NGIO public.
To advance the NGIO strategy, we recently announced that Generex has signed a Letter of Intent to acquire Kiromic, a clinical-stage immuno-oncology company with multiple, patented proprietary platforms, including CAR-T, CAR NK, an oral vaccine delivery system, and DIAMOND AI, an artificial intelligence system with a multifaceted predictive algorithm. Kiromic has used the DIAMOND AI technology to identify and validate several cancer biomarkers, including SP17, which was granted the last orphan indication for ovarian cancer by FDA. In addition to advancing the ovarian cancer program, NGIO plans to advance Kiromic’s proprietary CAR-T and CAR NK technologies into proof of concept clinical trials.
NGIO will house both Kiromic and Antigen Express, Inc., which is developing AE37 in combination with Merck’s Keytruda for the treatment of triple negative breast cancer. Together, the broad technology portfolio and deep pipeline opportunities provided in the merger position NuGenerex Immuno-Oncology on the forefront of cancer immunotherapy. Generex has identified a vehicle to accomplish the public spin-out of NGIO, and will provide updates as the Kiromic acquisition and spin-out plans are finalized.
On November 30, 2018 Generex rewarded shareholders with a 20 to 1 share dividend to thank investors for allowing the new management team the time to clean up and reorganize the capital structure of Generex, and recently announced a new 1 to 1 share dividend for GNBT shareholders to be paid the day after the planned up-listing to Nasdaq.
Joe Moscato, President & Chief Executive Officer of Generex, said, “Since taking over Generex, my management team and I have implemented a three-stage plan to bring Generex back to a national exchange. Stage 1 included the complete restructuring of Generex’s capital structure with a 1:1000 reverse split of GNBT shares and the elimination of derivative liabilities. With that accomplished, we initiated Stage 2 of our reorganization in September 2018 when GNBT shares were trading in the $1.60 to $1.80 range. With the acquisition of an MSO and the foundation of NuGenerex Distribution Solutions to manage our proprietary MSO distribution channel, we paid the promised 20:1 share dividend as a reward to shareholders for their loyalty is allowing the reorganization. On the dividend pay date, GNBT shares traded at $18.99 per share. FINRA auto-adjusted our share price on December 3, 2018 to $0.83 per share, and since then, our share price is up an additional 300%. Additionally, we have substantially increased shareholder equity from negative $43.6 million to positive $10.5 million, which is projected to increase further upon closing our target acquisitions.”
Mr. Moscato continued, “We are still executing on our Stage 2 acquisition strategy as we expand our MSO network and close the previously announced acquisitions of Pantheon Medical and MediSource Partners to provide orthopedic implants, surgical kits, and biologics to our MSO physicians. Additionally, the synergies among our NuGenerex family of subsidiary companies are being demonstrated through a contract between Olaregen and NDS for distribution of Excellagen through the MSO network. Plus, we are building the last piece of our end-to-end solution by establishing NuGenerex Chronic Care Solutions and NuGenerex Health HMO/MSO.
We are now prepared to execute on Stage 3 of the plan, which is focused on the up-listing of GNBT on the Nasdaq stock exchange. To that end, we have engaged Donohoe and Associates to help in the Nasdaq listing process, and we expect to file the application shortly, followed by our final 1:1 share dividend, an S-1 filing, and equity financing to support the future growth of the transformed Generex.
I’d like to thank our noteholders for giving us the courtesy of extending our payments, thereby enabling us to continue executing on our plan, as detailed in our quarterly filings. I would also like to give my sincere thanks to the 3 individual investors who joined me in contributing 34.5 million shares into the Generex share pool that I have previously described for the benefit of Generex. We have utilized those pool shares to pay for cashless acquisitions and payment of notes without impacting the Generex capital structure, because those shares are already factored into the market, making up part of the 60.3 million outstanding shares. I have announced that 20.4 million of the remaining pool shares will be retired to the Generex corporate treasury following the Nasdaq listing and the payment of the 1:1 dividend, thereby minimizing investor dilution, as outlined in prior a press release.
Finally, many thanks to our shareholders and investors for their support. Our dedicated management team and I pledge to continue executing on our plans to build revenue, profitability, and value for GNBT shareholders, and I will present the result of our efforts at the H.C. Wainwright conference in September in New York city.”
About Generex Biotechnology Corp.
Generex Biotechnology is an integrated healthcare holding company with end-to-end solutions for patient centric care from rapid diagnosis through delivery of personalized therapies. Generex is building a new kind of healthcare company that extends beyond traditional models providing support to physicians in an MSO network, and ongoing relationships with patients to improve the patient experience and access to optimal care.
In addition to advancing a legacy portfolio of immuno-oncology assets, medical devices, and diagnostics, Generex is focused on an acquisition strategy of strategic businesses that complement existing assets and provide immediate sources of revenue and working capital. Recent acquisitions include a management services organization, a network of pharmacies, clinical laboratory, and medical device companies with new and approved products.
Our newly formed, wholly-owned subsidiary, NuGenerex Distribution Solutions (NDS), integrates our MSO network with a pharmacy network, clinical diagnostic lab, durable medical equipment company (DME-IQ) and dedicated call center.
About Olaregen Therapeutics
Olaregen Therapeutix, Inc. is a regenerative medicine company focused on the development, manufacturing and commercialization of products that fill unmet needs in the current wound care market. Generex aims to provide advanced healing solutions that substantially improve medical outcomes while lowering the overall cost of care. Olaregen's first product introduction, Excellagen (flowable dermal matrix) is a topically applied product for dermal wounds and other indications. Excellagen is a FDA 510K cleared device for a broad array of dermal wounds, including partial and full thickness wounds, pressure ulcers, venous ulcers, diabetic ulcers, chronic vascular ulcers, tunneled/undermined wounds, surgical wounds (donor sites/ grafts, post-Mohs surgery, post-laser surgery, podiatric, wound dehiscence), trauma wounds (abrasions, lacerations, second-degree burns and skin tears) and draining wounds, enabling Olaregen to market Excellagen in multiple vertical markets. Additionally, Excellagen can serve as an Enabling Delivery Platform for pluripotent stem cells, antimicrobial agents, small molecule drugs, DNA-Based Biologics, conditioned cell media and peptides. Olaregen's initial focus will be in advanced wound care including diabetic foot ulcers (DFU), venous leg ulcers and pressure ulcers. Future products focusing on innovative therapies in bone and joint regeneration comprise the current pipeline. Generex's mission is to become a significant force in regenerative medicine and advance the science of healing.
About our Service-Disabled Veteran-Owned Small Business (SDVOSB)
This a Service-Disabled Veteran-Owned Small Business (SDVOSB) that specializes in the sale, marketing, and distribution of innovative medical products through a nationwide network of veteran owned distribution services.
About MediSource Partners
MediSource Partners is a 10-year-old private company, currently contracted with over 25 vendors (including Pantheon Medical) for nationwide distribution of implants and devices for spine, hips, knees, foot, ankle, hand, and wrist surgeries. Additional product lines include biologics (blood, bone, tissue, stem cells), durable medical equipment, and soft goods. Generex also supplies kits to process bone marrow aspirates and platelet rich plasma biologics at the time of surgery.
About Pantheon Medical
Pantheon Medical is a manufacturer of a physician friendly, “all-in-one”, integrated kit that includes plates, screws, and tools required for orthopedic surgeons and podiatrists conducting foot and ankle surgeries. Generex is developing and submitting several new product lines to the FDA which will include cannulated surgical screws, plates, and implants.
Cautionary Note Regarding Forward-Looking Statements
This release and oral statements made from time to time by Generex representatives in respect of the same subject matter may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by introductory words such as "expects," "plan," "believes," "will," "achieve," "anticipate," "would," "should," "subject to" or words of similar meaning, and by the fact that they do not relate strictly to historical or current facts. Forward-looking statements frequently are used in discussing potential product applications, potential collaborations, product development activities, clinical studies, regulatory submissions and approvals, and similar operating matters. Many factors may cause actual results to differ from forward-looking statements, including inaccurate assumptions and a broad variety of risks and uncertainties, some of which are known and others of which are not. Known risks and uncertainties include those identified from time to time in the reports filed by Generex with the Securities and Exchange Commission, which should be considered together with any forward-looking statement. No forward-looking statement is a guarantee of future results or events, and one should avoid placing undue reliance on such statements. Generex undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Generex claims the protection of the safe harbor for forward-looking statements that is contained in the Private Securities Litigation Reform Act.
Generex Biotechnology Corporation
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