Acquisitions, Financing, Expansion Initiatives & Strategic Plans
MIRAMAR, FL, Jan. 22, 2019 (GLOBE NEWSWIRE) -- via NEWMEDIAWIRE – Generex Biotechnology Corporation (www.generex.com) (OTCQB:GNBT) (http://www.otcmarkets.com/stock/GNBT/quote) is happy to provide the investment community with a review of the many accomplishments achieved in 2018, with a vision for growth in 2019 by Generex CEO Joseph Moscato.
At the end of 2017, Generex formed a new, wholly-owned subsidiary, NuGenerex Distribution Solutions, LLC (NDS), completing the initial organizational restructuring of the company. In January 2018, NDS acquired Empire State Pharmacy LLC in New York and Grainland Pharmacy LLC in Kansas, commencing the Company’s strategic plans to establish itself as a presence in the U.S. direct-to-consumer pharmaceuticals business. Since those initial pharmacy acquisitions, Generex has been conducting an extensive audit of a nationwide pharmacy network with database and IT systems that enable a robust direct-to-patient pharmacy program. The results of the audits and acquisition due diligence are forthcoming, allowing Generex to proceed with the planned acquisition in the coming weeks.
With the formation of NDS, Generex focused on the acquisition of the assets of the Veneto Group, a Management Services Organization (MSO) that operates a proprietary partnership and service model focused on the physician/patient relationship. With comprehensive solutions that integrate billing, insurance, and reporting from ancillary healthcare providers (pharmacy, labs, DME, imaging), NDS provides efficiencies and convenience and physicians and their patients. Generex is integrating the company’s products and services with NDS MSO network of physicians to provide end-to-end solutions from manufacturing to patient point of care to reduce costs, optimize outcomes, and improve patient satisfaction with care. The acquisition and integration of the MSO network and ancillary service providers was announced on November 3, 2018, and was completed in early 2019 with a payment of $15 million in Generex stock at the upmarket price of $2.50 per share, plus a $20 million follow on payment within 90 Days to satisfy current debt obligations. NDS is headquartered in Dallas, TX with over 100 employees operating in 5 states, and plans to expand the business to a total of 27 states over the coming months.
2018 started well for Generex oncology, as the company’s wholly-owned subsidiary Antigen Express was paid an initial $700,000 licensing fee from Shenzhen BioScien Pharmaceuticals for the rights to AE37 immunotherapeutic vaccine for the treatment of prostate cancer in China. The company is working with Shenzhen BioScien on the planning for a Phase II trial of AE37 in prostate cancer to be conducted at sites in the EU.
Taking advantage of the 2018 boom in immunotherapy for cancer, Antigen Express was renamed NuGenerex Immuno-Oncology. Generex finalized a research partnership with Merck to conduct a Phase II clinical trial of AE37 in combination with Merck’s Keytruda for the treatment of triple-negative breast cancer. The protocol was submitted under an investigational new drug application (IND), which has been allowed by FDA, and is being managed by the NSABP, with enrollment starting in the first quarter of 2019.
The company worked throughout 2018 to identify opportunities in the immuno-oncology field for acquisitions and partnerships. To that end, Generex’ Executive Vice President of Research & Development presented an update on the AE37 development program with a talk, Novel Therapeutics in Cancer Immunotherapy at the Immuno-Oncology Summit in Boston, MA together with leading researchers and executives in the field. The company is currently in discussions with potential licensing and development partners to advance the Ii-Key immunotherapeutic vaccine technology, with the objective to spin out NuGenerex Immuno-Oncology as an independent, public, subsidiary company.
Generex recently announced a stock dividend for Generex shareholders who will receive 1 share of NuGenerex Immuno-Oncology for every 4 shares held in Generex Biotechnology. The payment date for the dividend is set for February 25, 2019.
In the diagnostics arena, Generex acquired the remaining 49% of shares in its subsidiary Hema Diagnostic Systems (HDS) for $1, and renamed its now wholly-owned subsidiary NuGenerex Diagnostics (NGDx). The HDS investors released Generex from an outstanding note in the amount of $624,403.64 in exchange for shares of the Company’s common stock valued at $18.99 per share. As part of the transaction, the HDS investors released the company from notes totaling $13,431,705.66 made to HDS prior to the Generex acquisition. Overall, this transaction resulted in $624,403.64 plus the Company’s 51% share of the HDS debt being removed from Generex corporate debt and added to the Company’s stockholders’ equity, thereby increasing shareholder value.
The company filed a Patent for its New Diagnostic Point-of-Care Platform, the Express II, which has applied for a CE Marking from the European Economic Area (EEA) for the commercialization of the NGDx Express II rapid test for syphilis and awaits approval. The company plans to apply for FDA clearance of the Express II Syphilis test in the U.S. market. Further, at the end of the year, Generex was able to exchange the warrants associated with the HDS acquisition in exchange for Generex common stock.
At the end of 2018, Generex established NuGenerex Therapeutics advancing a strategy to build a regenerative medicine company with the acquisitions of Olaregen Therapeutix and Regentys. Olaregen is preparing to launch the company’s first product, Excellagen Wound Conforming Gel, which is FDA cleared for 17 wound healing indications. The company will distribute Excellagen through the proprietary market channels of NDS. Regentys is developing a novel, patented Extra-Cellular Matrix Hydrogel (ECMH) for the treatment of ulcerative colitis and inflammatory bowel diseases.
Seeking to add to the portfolio of pharmacy retail products, and focused on the trends in the CBD market, Generex signed an agreement with Puration, Inc. to develop and produce NuGenerex CBD HydroHealth High Alkaline Water. The CBD used in the NuGenerex CBD HydroHealth product line will be exclusively derived from industrial hemp, now legalized under the 2018 Farm Bill, using a patented extraction process that yields ultra-purified and characterized CBD formulations. By establishing the relationship with Puration, Generex is positioned to lead in the field of cannabinoid medicines.
Also, at the end of 2018 and into the beginning of 2019, Generex has built a surgical products manufacturing and supply business through the acquisitions of Pantheon Medical, MediSource Partners, and the publicly traded company Fuse Medical. Together, these companies generate current revenues of over $32 million, with surgical products, biologics, and services that can be utilized by surgeons and podiatrists, including the NDS network of MSO physicians, to increase sales through the company’s proprietary market channels. Such end-to-end solutions provide Generex with efficiencies and synergies that will increase revenues and profits.
Throughout the first half of 2018, Generex reorganized the company’s management team, adding experienced executives to oversee the development, implementation and execution of the company’s strategic growth plan. First, Generex announced the appointment of Terry Thompson as Chief Operating Officer, Terry brings a wealth of operational experience in the pharmaceutical industry having been a founding member of the executive team at Medco. Other key appointments continued throughout the year with the additions of Anthony S. Crisci, ESQ., CPA as General Manager & Chief Legal Compliance Officer, Roger Ivey as Executive Vice President and General Counsel, Dick Suedkamp as Executive Vice President of Finance and Accounting, Steve Worster as Chief Compliance Officer, Brad Guy as Chief Human Resource Officer, Anthony J. Dolisi as Chief Commercial Officer, and Michelle Starr as Chief Marketing Officer. Biographies of the entire Generex management team can be found on the company web site (http://www.generex.com/company).
Throughout the past year, Generex has worked to keep investors informed of the company’s strategic plans and initiatives. To that end, Joseph Moscato, CEO has presided over 3 conference calls, transcripts of which can be found on the company web site at http://www.generex.com/investor.
The major news for Generex in 2018 was the issuance of a 20:1 share dividend in November, in which Generex shareholders received 20 new shares of Generex Biotechnology for every share held on the payment date. This 20:1 dividend rewarded loyal Generex shareholders, not only with their additional personal shares, but also in the financial status of the company. Four major Generex shareholders, including the CEO Joseph Moscato, Director Lawrence Salvo, the previous owner of HDS, and an investment fund contributed their dividend shares to the benefit of the company, creating a “Pool” of shares that can be used to achieve the company’s strategic objectives. Generex has recently used the Pool Shares to pay for acquisition of the Veneto Group assets at the up-market price of $2.50 per share. These shares were also used in a share exchange with the Olaregen private investors to acquire an additional 9% of the company (on top of the already 51% already owned by Generex) at the up-market price of $2.50 per share. Generex in in negotiations with the Olaregen shareholders to acquire the remaining 40% of the company and achieve 100% ownership of the company.
Summing up the years and providing insight into 2019 plans, CEO Joseph Moscato stated, “After years of work, our plans for Generex and the NuGenerex family of subsidiary companies is coming into focus for the investment community. We have built an MSO network with ancillary healthcare services, concentrating on the physician patient relationship. We have added complementary companies with FDA cleared devices and approved products that illustrate our philosophy to offer end-to-end solutions to improve not just health, but also the economics of healthcare. We have rewarded our investors with a share dividend, and have announced plans to spin-out our oncology franchise, NuGenerex Immuno-Oncology and the Ii-Key technology with an additional share dividend for Generex shareholders in the new oncology company. We have identified and are in discussions with potential partners to expand the company’s product and IP portfolios through licensing, acquisitions, and development agreements. We continue to utilize the Pool Shares for non-dilutive financing to advance our agenda as we build a new kind of life science holding company to meet the challenges of tomorrow’s healthcare marketplace.”
He continued, “This is just the beginning, as we have just now established the platforms and infrastructure for growth in 2019. We have finally completed the audits of the direct-to-patient pharmacy network, and plan to complete that acquisition in the coming weeks. The pharmacy databases and IT infrastructure will be valuable additions that have significant synergies with Generex and the NuGenerex family of companies. We will complete the recently announced acquisitions in the surgical supply space, and will be announcing additional acquisition opportunities in the field of regenerative medicine, including exosomes and the next generation stem cells. We are expanding the NDS MSO network to 20+ additional states, with plans to expand beyond the current physician specialties of surgery and podiatry to include oncology, geriatrics, and other sub-specialties that require ancillary healthcare services for their patient care. Plus, we are in discussions to acquire and integrate a hospital management company that owns a 13-hospital network that provides new market channels and will enable Generex to offer expanded, patient focused services and products.
2018 was a year to launch the “New” Generex with a new structure and a focus on acquiring revenue generating companies, and integrating them into the NuGenerex family. This year, we are executing on the operational plans of our service companies, launching our first drug with Excellagen and becoming a force in the regenerative medicine field, and we are realizing the value of our oncology assets through a spin-out strategy for NuGenerex Immuno-Oncology.
Through 2019, we will continue to grow and add value to Generex, and we want to thank our investors for believing in our corporate mission to provide physicians, hospitals, and all healthcare providers with an end-to-end solution for patient centric care from rapid diagnosis through delivery of personalized therapies, streamlining care processes, minimizing expenses, and delivering transparency for payers.”
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 immune-oncology assets, medical devices, and diagnostics, the Company 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.
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.