GENEREX BIOTECHNOLOGY AND ELAN AGREE TO TERMINATE DORMANT JOINT VENTURE

GENEREX SHAREHOLDERS' EQUITY TO INCREASE THROUGH CONVERSION OF PREFERRED STOCK

TRANSACTION WILL ALLOW COMPANY TO MEET NASDAQ MINIMUM STOCKHOLDERS' EQUITY
REQUIREMENTS

TORONTO, December 21, 2004 -- Generex Biotechnology Corporation (NasdaqSC: GNBT)
announced today that it has entered into an agreement which will result in the
conversion of $14.3 million of Generex preferred stock owned by Elan Corporation
PLC into Generex common stock at the voluntary conversion ratio of $25.277 per
share specified in the original terms of the preferred stock. Shares of Generex
closed Monday at $0.65.

When this transaction is completed, the full value of the outstanding preferred
stock will be added back to Generex stockholders' equity in its financial
statements for the current quarter, increasing the Company's net worth by $14.3
million. This will result in stockholders' equity exceeding the minimum
stockholders' equity requirements of Nasdaq Marketplace Rule 4310(c)(2)(B).

The transaction will also resolve all other aspects of the Company's
relationship with Elan. In connection with the establishment of a joint venture
in 2001, Generex issued certain preferred shares to Elan which had originally
been classified as equity. Subsequently, in connection with the audit of
Generex's financial statements for the fiscal year ended July 31, 2002, those
preferred shares were removed from the Company's stockholders' equity and
re-classified as mezzanine equity. This resulted in a reduction of Generex's
stockholders' equity by the value of the outstanding preferred stock, at that
time approximately $12 million.

Pursuant to an arrangement between Generex and Elan, Elan has agreed to sell the
preferred stock to a third party on terms which will require the third party to
immediately on closing convert all of the outstanding preferred stock into
Generex common stock at the preferred stock conversion ratio of $25.277 per
share for an aggregate of 534,085 shares. The closing could take place as early
as December 22, 2004.

Generex and Elan have agreed to terminate the joint venture and mutual releases
will be exchanged. The parties had agreed to pursue the development of buccal
morphine technology through the joint venture. Generex will now be free to
pursue buccal morphine on its own or with a new partner.

About Generex

Generex is engaged in the research and development of drug delivery systems and
technology. To date, it has focused on developing a platform technology for the
buccal delivery -- delivery to the oral cavity for absorption through the inner



mouth mucosa -- of drugs that historically have been administered only by
injection. Generex's buccal delivery technology has application to a large
number of drugs.
This release and oral statements made from time to time by Generex
representatives concerning 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," "plans," "intends," "believes," "will," "estimates," "forecasts,"
"projects" 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
claims the protection of the safe harbor for forward-looking statements that is
contained in the Private Securities Litigation Reform Act.