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Generex Biotechnology, and their wholly owned subsidiary Antigen Express, are developing promising new drugs to treat diabetes, as well as synthetic peptide vaccines targeting HER2/neu cancer and pandemic flu. The flagship product for Generex is Oral-lyn buccal insulin. Antigen Express' leading vaccine is the AE37 HER2/neu synthetic peptide vaccine to prevent breast cancer recurrence. I am not qualified to offer investment or medical advice, and make no claims that I am an expert in these areas. I am a layman and a shareholder in this company. The left side of Pipeline Review holds blogs regarding Generex and Antigen Express, while the right side offers items of due diligence mixed with my analysis which may be of interest to others seeking to learn about Generex's pipeline. If the left side only shows the latest blog, click on the word home to view them all.

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Wednesday, October 27, 2010

Talking Big Pharma, Vaccines and Baseball with Generex's Dr. Eric von Hofe

Last week, Generex (GNBT) Biotechnology held a live web cast from Nasdaq's Market Place in NYC, and the event served as an optimistic reminder of the potential of their pipeline, and highlighted the strong group of scientists united in seeing their top drugs and vaccines find eventual commercialization. One day before the Nasdaq web cast took place, I had the opportunity to meet with the top scientist leading their vaccine efforts.

Dr. Eric von Hofe is the President of Worcester-based Antigen Express, a wholly owned subsidiary of Generex. Antigen Express is building an impressive pipeline of next generation synthetic peptide based therapeutics aimed at a variety of major diseases, including cancer and infectious diseases. Dr. von Hofe and I settled in a small NYC deli, and we talked about corporate developments, his background, large pharma, the future he envisions for their platform technology, and my disdain for the Red Sox. Antigen Express is currently evaluating its leading candidate, the novel Ii-key hybrid HER2/neu peptide AE37 vaccine, in a multi-center Phase II trial for patients with breast cancer.

I have followed Dr. von Hofe's career for the last five years, and had briefly met him on two prior occasions. This was the first time I was able to speak with him for an extended time frame, or in an informal setting. I began by asking Dr. von Hofe his thoughts about the vast amount of corporate related changes that have taken place since we last met during Generex's Annual Meeting of Shareholders in July. Beyond the stock related issues, the Board of Directors terminated the employment of long serving CEO Anna Gluskin. Dr. von Hofe appreciated Ms. Gluskin's efforts, and said that working in the biotechnology field comes with the realization that there will often be changes that come rather quick. He recalled his own background, when he was working for Hybridon, where he coordinated research that critically validated gene targets for novel antisense medicines, and one day during a tough financial cycle he suddenly found himself unemployed. He quickly gained work consulting for other firms, and being able to adapt to change brought fun and learning experiences that helped him later.

With Generex's stock on less stable ground, questions about the company's financial condition come into play. I asked Dr. von Hofe if he was confident that interim CEO Mark Fletcher would be able to win enough funds to funnel to Antigen Express to finish the ongoing Phase II study for AE37 with HER2/neu expressing breast cancer patients. He quickly responded "yes, and with help from Joe". Joe is Joe Moscato from Seahawk Capital based in NYC, who is playing a pivotal role in Generex's business development and financing activities. I smiled and told Dr. von Hofe that I knew Joe, and that as a shareholder I tried to help him secure votes for last week's failed reverse split. The vote was actually supported by a strong majority of the shareholders that participated in the vote, but a unique law in Delaware required that 51% of all outstanding shares needed to to vote in favor of the proposal in order for it to pass. The final tally fell just under 3% short of that daunting hurdle. Dr. von Hofe stated that funding will not be an issue and he is not concerned.

Dr. von Hofe confidently said that their "is large pharma interest" in the AE37 vaccine for HER2/neu expressing breast cancer patients. Interim results were released at the San Antonio Breast Cancer Symposium in December 2009. As a reminder about the study, two hundred disease-free, high risk, breast cancer patients who had completed standard adjuvant therapy are being enrolled and randomized to receive six monthly inoculations of either the AE37 peptide vaccine or the adjuvant GM-CSF alone to compare their ability to prevent cancer recurrence. The December interim analysis followed the first 49 patients in the AE37 group and the first 71 for the control group. At a median follow up of 13 months, there were no (0.0%) recurrences in the AE37 group of patients, 0/49, compared to 7.0%, 5/71, in the control group. Dr.von Hofe stated that he hopes more significantly powered interim results will be available by mid-2011, although a public release of those results may not be made until later that year. Often, abstracts of results are submitted months in advance to prestigious events, like SABCS, and the general public may have to wait to see what an interested pharma company can see right away. The goal is for a large pharma to join the effort in funding a large scale Phase III study.

Generex has been active in recruiting top oncology scientists to their newly formed Scientific Advisory board, and in August I had the pleasure of speaking to newly signed Dr. Craig Eagle. Dr. Eagle is the Vice President of Strategic Alliances and Partnerships for the Oncology business unit at Pfizer (PFE), and an account of our discussion can be found here. Dr. Joseph Rubinfeld, one of the original founders of Amgen (AMGN), has agreed to act as Generex's Chief Scientific Advisor, and Col. George E. Peoples, lead researcher of the United States Military Cancer Institute, is serving as a top consultant in the ongoing clinical and regulatory development of Generex's proprietary breast cancer vaccine.

In a related email exchange, Col. Peoples remarked that his "personal campaign has been to get vaccines into the adjuvant setting as opposed to the majority of trials that have been conducted in the metastatic setting". He said that "Big Pharma is not quite ready to invest given the dismal track record of previous therapeutic vaccines in the metastatic setting. Their oncology drug development strategy has always been to establish a market in metastatic patients, and then once there is a revenue stream, then go after the adjuvant market (ie, Herceptin)."

Dr. von Hofe said that he often has to remind himself to make people aware that the target for AE37 is well defined and the same as that for Herceptin, although AE37 may reach a much broader population base. Herceptin, which also zeroes in on cancer that is over-expressing HER-2/neu, can be used only in patients expressing the highest level of HER-2, or about 25 percent of breast cancer patients. In comparison, the AE37 peptide vaccine stimulates the immune system to recognize tumor cells in patients with a lower expression of HER-2, so that 75 percent of breast cancer patients may respond to Antigen's vaccine. Ovarian, prostate, lung, colon, stomach and pancreas cancers are also HER2/neu over expressing, and as such are potential targets for AE37.

Dr. von Hofe noted that Dendreon (DNDN) Corporation's approval for Provenge, the first ever therapeutic cancer vaccine approved by the FDA, ushered in a lot of new interest into the immunotherapy sector. Provenge is designed to treat metastatic prostate cancer, while Generex is gearing up for a Phase II study for AE37 in early stage prostate cancer patients. Dr. von Hofe stated that preparations are well underway, and clinical sites are currently being identified. The Phase I results for patients with prostate cancer were first announced at the 2009 ASCO Annual meeting, and are consistent with those of prior clinical trials of AE37 in patients with breast cancer. Results have shown the vaccine is targeted and effective, while causing very limited toxicity, with no patients experiencing toxicity over Grade 2.

I asked Dr. von Hofe about Apthera's E75 peptide vaccine, since I am aware that the immuno effects of this CD8 T Cell targeting vaccine are short lived. I had read previous preclinical data stating that a combined effect of E75 linked with AE37, which targets CD4 T Cells, may help E75 gain prolonged memory. Dr.von Hofe acknowledged the preliminary data suggests a combination may prove useful for E75, but that his interest is in proving AE37 is effective and safe on its own, and that AE37 is already long lasting. Also, AE37 is already the subject of a combined approach with another CD8 targeting peptide vaccine. To me, it sounds like Apthera, a private company, can figure out their problems on their own, because Generex has moved on to better opportunities.

Dr. von Hofe sat back and smiled while recalling his phone ringing and hearing of this combined peptide vaccine opportunity provided by the Mary Crowley Cancer Research Center in Dallas. Mary Crowley researchers proposed a Phase I study to assess the safety and immunological response in patients with either breast and/ or ovarian cancer with AE37 linked with GP2, a CD8 targeting T Cell peptide vaccine under research at the USMCI, and they wanted "no claims on IP". Dr. von Hofe called that a "no brainer", and said he was pleased that they recognized the potential of the AE37 vaccine. This particular study is ongoing, although Generex has no control over the slower pace of recruitment. I laughed and told Dr. von Hofe he would like more phone calls like that, and he quickly agreed.

My time with Dr. von Hofe was near complete, but I had to tell him one area I had of concern. I said that I see one problem with Antigen Express, and I asked if they were all Boston Red Sox fans? I told him that I am a Yankees fan, and he chuckled. He recalled reading a story in the newpaper of a bird in Boston that flew down and hit the head of a young girl. She was not hurt, and her named turned out to be the same as Alex Rodriguez's daughter. I mockingly protested that he would find that to be funny. It was nice to see a vaccine researcher whom I have followed and admired for so long act casual and at ease. He told me that his children were all happy when the Red Sox won the World Series, and in this case I'll make an exception to my rule. I have found a Red Sox fan that I acknowledge to be smarter than me. As he roots for the dreaded Red Sox, I root for Generex to revolutionize how early breast cancer is treated. There will be no stock exchange big enough for the company that follows in the footsteps of Herceptin and Provenge, only to potentially surpass them both.