Generex to acquire majority interest in Global Medical Direct

Generex Biotechnology Corporation (NasdaqCM: GNBT) (www.generex.com) today announced that it has entered into a definitive agreement to acquire a majority interest (51%) in Global Medical Direct, LLC ("GMD") of Lenexa, Kansas, a nationwide Durable Medical Equipment and Pharmaceutical provider specializing in direct-to-consumer diabetes supplies and medications (www.globalmeddirect.com).

Generex Interim President & Chief Executive Officer, Mark Fletcher stated:  "The acquisition of Global Medical Direct will be a significant step toward our goal of providing a cost effective distribution platform for our over-the-counter products and our existing pipeline of diabetes prescription products as they come to market.  What's more, we can now reach diabetes patients, their doctors, and insurance companies with information about the FDA Treatment IND program for Generex Oral-lyn™, which they can take advantage of right now.  In a single acquisition, we are bringing together the foundations for marketing, distribution, and education components needed to make Generex Oral-lyn™, upon FDA approval, the breakthrough product we believe it to be.  I have been impressed by the success and management of GMD and believe this presents an ideal strategic opportunity for Generex."

GMD provides its growing roster of over 65,000 diabetes patients with an easy-to-use, cost effective, and convenient way for them to obtain their diabetes supplies and medications through their health plans or employer and government payors such as Medicare and Medicaid.  GMD provides it patients with blood glucose meters, test strips, lancets, insulin, insulin pumps, and diabetes maintenance medications and supplies.  GMD manages the reimbursement process for patients, dealing directly with insurers and payors.  Generex sees great value in GMD's expertise in reimbursement issues in connection with the commercialization of Generex Oral-lyn™, Metformin gum, and the other products in its pipeline.

The closing of the transaction is subject to a number of terms and conditions, including the completion of a two-year financial audit, agreement upon ancillary agreements, favorable completion of due diligence, and attainment of sufficient financing by Generex. The acquisition is anticipated to close in early January, 2011.  Terms of the acquisition will be included in a Form 8-K to be filed by Generex.

Based on a continuation of revenue and net income growth rates to date, GMD's management estimates its 2010 revenue will be approximately $30 million with net income exceeding $8 million, after successful double digit growth rates over the previous five years.  GMD's 2009 revenue was over $22 million.  The foregoing financial information is derived from management-prepared financial statements and has not yet been audited or reviewed by independent auditors.

In addition to providing a significant, profitable revenue stream to enhance Generex's bottom line, Generex believes the acquisition of GMD will bring  a number of strategic benefits to accelerate revenue growth at Generex, including:

• The means to expose patients, doctors, and insurers to the existence and benefit of the Food and Drug Administration's Treatment IND program.
• The creation of a pre-launch platform with an in-house marketing, education, and distribution environment in the event of potential full FDA approval of Generex Oral-lyn™ and new Metformin products.
• Placement of Generex's own brands of glucometers, strips, and lancets into GMD's sales and marketing engine, as well as the popular Glucose RapidSpray™ product.
• A platform for Generex's diabetes related support products including soaps, vitamins, etc.
• Direct informational engagement of patients, doctors, and insurers using GMD's educational platform and call center.
• A staff experienced in dealing with the intricacies of the reimbursement policies and paperwork for diabetes-related products across U.S. state and federal governments.
• An in-house pharmacy and dispensary that dovetails with GMD's national scale shipping and distribution facility.

Approval of Reverse Stock Split

Generex management is asking its stockholders to approve a reverse stock split proposal on October 15.  Management believes that a reverse stock split will put Generex in a stronger position to aggressively pursue commercialization opportunities for its buccal drug delivery and immunotherapeutic vaccine platform technologies.  Based on the current price of the stock, it is anticipated that the reverse stock split ratio would not exceed 1-for-4.

If the reverse stock split is not approved, Generex's common stock will not remain listed for trading on the Nasdaq Capital Market.  While the stock would then be eligible for quotation on the Over-The-Counter (OTC) Bulletin Board (OTCBB), management believes that a Nasdaq listing will afford the Company a wider variety of potentially less dilutive financing alternatives.  As a development stage company, Generex must look to the capital markets to fund its on-going product development initiatives.  In addition, the greater visibility and liquidity offered by a Nasdaq listing will enhance the Company's bargaining power with prospective partners and collaborators who will want comfort that Generex will have access to the capital necessary to support it contributions.

Management recognizes that many stockholders are concerned that a reverse stock split might compromise share value.  However, management is not seeking the reverse stock split in a vacuum.  We believe that the strength and maturity of Generex's buccal drug delivery and immunotherapeutic vaccine pipelines, together with the synergistic benefits of the proposed GMD acquisition, and financing from the proposed rights offering to stockholders, will create a solid foundation not merely for the preservation of share value but for significant growth.

Accordingly, the Board of Directors of Generex strongly urges stockholders to vote IN FAVOR of the reverse stock split proposal on October 15.