Generex Taps Former Eli Lilly Senior Medical Director to Strengthen Clinical and Regulatory Efforts for Oral-lyn

"Having worked with the Generex team in the fledgling stage of Generex Oral-lyn development while at Eli Lilly, I believed then that the product had the potential to become a first-in-class therapeutic insulin treatment even though the companies ultimately headed in different directions as is often the case with early stage collaborations." - Dr. James H Anderson Jr on December 9, 2010

Generex Biotechnology (GNBT) announced on Thursday the appointment of Former Eli (LLY) Lilly Senior Medical Director Dr. James H. Anderson, Jr., MD, FFPM, FACE to the company's Scientific Advisory Board. While such news is not often met with much fanfare, there is an unique element to this announcement when considering the history between Generex and Eli Lilly. A look back may help us realize where we are today as we wait for Oral-lyn's future to unfold.

In September 2000, Generex and Eli Lilly entered into a Development and License Agreement for Oral-lyn buccal insulin. In May 2003, the companies mutually agreed to end the deal. During that two and a half year time period, Lilly did not conduct a single clinical trial to assess either the safety or efficacy of Generex's buccal insulin, while they were actively spending their resources developing the AIR inhaled insulin system, as part of a developmental agreement with Alkermes (ALKS) that was signed in 2001. Lilly had held rights to separate buccal and inhalable insulin programs, and like many large pharmas at the time, they were placing their bet that inhalable insulin was the right path to take.

Like clowns jumping into the same car, many pharma companies were competing with one another to develop inhalable forms of insulin. Pfizer, with partner Nektar (NKTR) Therapeutics, led the foray, and in 2006 they were the first inhalable insulin to win FDA approval. The Exubera story is well known, and I won't repeat the entire saga. Pfizer's failure to earn commercial success with Exubera led to their costly decision in late 2007 to abandon the product and return rights to Nektar. Pfizer recorded a $2.8 billion pretax hit on the product, one of the drug industry's costliest failures. Industry giant Novo (NVO) Nordisk followed Pfizer's lead, and in January 2008 they decided to end development of the AERx inhaled insulin system while the product was deep into costly Phase III testing.

Later in 2008, Lilly terminated their agreement with Alkermes to develop inhalable insulin. Their first quarter results for that year reveal the asset impairment and exit costs associated with betting on the wrong non-invasive insulin to be $132.6 million. Today's news reminds me that sometimes large pharma places the wrong bet, and in this case quite a few found themselves racing down the same dead end. Mannkind is the sole surviving biotech developing a promising form of inhalable insulin, they have a PDUFA date for Afrezza inhalable insulin later this month. This comes after they received a Complete Response Letter a few months ago. Their product offers definite advantages over the failed inhalable insulins such as Exubera, and I actually have come to hope they succeed so diabetics later have greater choices for administering their required insulin.

While thinking of all the money the large pharmas lost while following each other into development of inhalable insulin, I recall a quote attributed to Generex representative Todd Falls in 2003 after Lilly terminated their agreement to develop buccal insulin. He remarked at the time that Lilly "didn't want to put the money into us. Lilly felt, I guess, they had some other interests, and didn't want to be the lead on the project." That decision didn't work out very well for Lilly, and Generex is still here with Oral-lyn being studied in a worldwide Phase III trial, and conditionally approved by the FDA in the first Treatment IND awarded to a diabetes drug.

I continue to believe that Oral-lyn, a tasteless liquid aerosol mist formulation that is administered to the buccal mucosa using a proprietary delivery system, has many advantages over inhalable and injectable forms of insulin, although they must be further proven in the Phase III study. These include the small and simple hand held metered dose device, significantly lowered risk of postprandial hypoglycemia, lack of insulin resistance amongst subjects, an actual decrease in Body Mass Index, with no absorption into the lungs. One spray equals one unit of meal time insulin, and this provides greater flexibility in usage, as well as the ability to take small dose sprays before a snack when a treat simply can not be resisted. The unique time action profile for Oral-lyn may be its greatest advantage, with its ability to mimic the first-phase insulin response seen in a healthy person.

Dr James H Anderson was involved with Oral-lyn when Eli Lilly held developmental rights, and has returned all these years later to talk so optimistically about its development. His statement that he believed even then that Oral-lyn had the potential to become a first-in-class therapeutic insulin treatment even though the companies ultimately headed in different directions helps erase doubt formed by the demise of the deal between the two companies. Since we know that Lilly did not conduct a single test to evaluate Oral-lyn, we can see that a business decision was made void of negative data and full of faulty strategy. Dr Anderson is surely needed to assist Generex, and his background is proven. After all, he was a key player in getting Lilly's blockbuster Lispro approved. That is the type of experience the team at Generex needs to help get Oral-lyn to the finish line.

As Generex continues to align the company with expert talent to strengthen the company's clinical/regulatory efforts, the news always strikes me as sort of a validation of the state of the pipeline. New additions to the Scientific Advisory Board, such as Amgen (AMGN) co-founder Dr Joseph Rubinfeld, Pfizer's (PFE) Vice President of Strategic Alliances and Partnerships Dr Craig Eagle, and now Former Eli Lilly Senior Medical Director Dr. James H. Anderson Jr, also have their own reputations on the line, yet they are quoted making remarks that speak volumes about the hidden worth of Oral-lyn, as well as the company's immunotherapeutic cancer vaccines. Generex's faithful shareholders sure hope some of that hidden worth soon comes into vision.