UPDATE 1-Generex to start Phase 3 trials for insulin spray

(Adds comments from chief executive)

TORONTO, June 25 (Reuters) - Generex Biotechnology Corp. (GNBT.O) said on Monday it would start a Phase 3 trial of its oral insulin spray later this year, and the small Canadian firm could get marketing approval for its first drug by late 2009.

Shares of Generex, which should start dosing patients before the year-end in the United States, Canada and Europe, shot up 16 cents, or 8.9 percent, to $1.96 on Nasdaq in morning trading.

"This is probably the most significant development in the company's history," Anna Gluskin, the company's president and chief executive, told Reuters.

Gluskin expected approval in major markets, including the U.S. and Europe, by late 2009.

The six-month trial will include 750 patients with Type 1 diabetes mellitus. The study will compare the efficacy of Generex Oral-lyn and the RapidMist Diabetes Management System with that of standard regular injectable human insulin therapy, in patients with Type 1 diabetes mellitus.

($1=$1.07 Canadian)