Worcester Biotech Takes On TheStreet.com
Worcester’s Generex Biotechnology Corp. has sued TheStreet.com Inc. and one of its senior columnists for $250 million in damages claiming defamation, product disparagement and “injurious falsehood.”
The suit was filed in New York State Supreme Court April 6.
Adam Feuerstein, TheStreet.com senior columnist, wrote columns published March 10 and March 26 about Generex.
Generex is developing technology to deliver drugs for metabolic diseases through the inner lining of the mouth.
Its flagship product is Oral-lyn, which is an alternative to injections for administering insulin to diabetics.
In a March 10 column, Feuerstein wrote that the company is “a total bust.”
“None of the Oral-lyn data collected by Generex has been peer reviewed in credible medical journals, nor has it been presented at top-flight diabetes meetings,” he wrote.
Following that column, Generex issued a press release that demanded a retraction of the column.
In a follow-up column, Feuerstein wrote, “For a veteran reporter and columnist like myself who enjoys nothing more than exposing the modern day snake oil salesmen of the biotech age, Generex’s all-bluster-no-bite protestations are a huge red flag.”
Feuerstein went on write that Generex’s aim is not to help diabetics, but is instead “a ruse to perpetuate a 15 year-long stock promotion scheme. In the process, investors are getting fleeced while Generex management earns millions of dollars in compensation.”
The Damage Done
Mark Fletcher, Generex’s executive vice president and general counsel, said in a statement that Feuerstein’s columns are simply unfair.
“Feuerstein and TheStreet.com have abused their public forum by spreading categorical falsehoods about Generex…” he said.
The damage caused was “compounded by unfounded and libelous allegations and innuendo,” Fletcher said.
Online, opinion of Generex, Feuerstein and TheStreet vary wildly.
People who have commented on Feuerstein’s columns have both praised him and alleged that if TheStreet.com’s co-founder and television personality Jim Cramer “was holding this stock, the story would have been 180 degrees in the other direction.”
InvestorVillage.com ran Generex’s press release announcing the lawsuit under the headline “TheStreet.com and its Bought and Paid for HedgeScum Adam Feuerstein Sued.”
Reuters blogger Felix Salmon stood up for Feuerstein, saying, “Well done…for standing up to egregious bullying from Generex.”
The company, which is based in Canada, finished its most recent quarter with a net loss of $7.3 million on revenue of $431,344 compared to a net loss of $12 million on revenue of $434,636 a year earlier.
Generex executives did not respond to requests for comment on the lawsuit.
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