In Brief

GNC outperforming, issuing shares; Vitacost emerges from strategic review; Fleminger’s green tea QHC remanded back to FDA; supplement firm Modern Products unaware of GMPs; more news In Brief.

GNC outperforming, issuing shares

With its fiscal 2012 first quarter still in progress, [GNC Holdings Inc.]expects to beat its previously stated earnings-per-share projection of 49 cents, which was up from 33 cents per share in the year-ago quarter. The supplement retailer said March 12 its revised guidance stems from its same store sales performance in January and February, which GNC expected would increase between 8% and 9% in the quarter. Pittsburgh-based GNC also announced March 13 a secondary offering of 17 million shares of class A common stock that will be priced at $33.50 each; during the firm’s initial public offering last April, shares were priced at $16 (Also see "In Brief" - Pink Sheet, 11 Apr, 2011.).

Vitacost emerges from strategic review

The online supplement retailer ends 2011 with 1.4 million active customers, an increase of 22% year over year, and trims its full-year reported net loss 2.4% to $14.8 million. [Vitacost.com Inc.] said March 15 its customer recruitment efforts, driven by higher sales and marketing spend and a “refer-a-friend” campaign, aided the acquisition of 254,531 new customers in the fourth quarter, a 98% increase. Boca Raton, Fla.-based Vitacost reported net sales up 13.8% to $67.4 million in the October-December period and up 18.1% to $260.5 million for the full year. The company, emerging from a strategic review that cost $3.4 million in 2011, has rebranded its website and in-house product line and is expanding its third-party product offerings. The firm expects to increase sales 15% to 20% annually over the next five years.

ChromaDex net loss grew in 2011

The ingredient developer and supplement marketer reports a significantly larger net loss in 2011, due largely to a share-based compensation expense related to previously issued stock options. ChromaDex Corp.said March 15 its net loss grew to $7.9 million last year, compared to $2.1 million in 2010, including nearly $3 million in non-cash charges associated with the share-based compensation expense. The Irvine, Calif., firm’s sales grew 7.2% to $8.1 million as ChromaDex in 2011 launched BluScience, its first finished supplement product line. The company has projected BluScience sales will reach $20 million in 2012 and $110 million in 2015 (Also see "ChromaDex Looks To Pharma Model For Commercializing Supplement Research" - Pink Sheet, 12 Mar, 2012.).

Green tea QHC remanded back to FDA

FDA must revisit a qualified health claim for green tea and the reduced risk of breast and prostate cancers after the U.S. District Court for the District of Connecticut determines the agency’s approved QHC violates the First Amendment. Fleminger Inc., maker of TeaForHealth green tea products, sued FDA in June 2010 alleging the agency violated its constitutional right to make truthful statements by approving an extremely qualified QHC, which stated “it is highly unlikely that green tea reduces the risk of” cancer . In a Feb. 23 decision, the district court says FDA’s QHC is especially burdensome and suggests a less-restrictive disclaimer that says green tea may reduce the risk of certain cancers, “although FDA has concluded that there is very little scientific evidence to support the claim.”

Jarrow appeals FDA response on NDI FOIA request

FDA has “no responsive information” on file to answer 90 of 128 items attorneys for Jarrow Formulas Inc. requested concerningthe development of the new dietary ingredient draft guidance, according to the firm. For several items the agency opted to withhold information requested on behalf of the firm last September via the Freedom of Information Act (Also see "NDI Notification Draft Guidance In Brief" - Pink Sheet, 19 Dec, 2011.). Attorneys Scott Polisky and Susan Brienza said March 14 it strains credulity that FDA was unable to find in its files any information or correspondences relating to supplement safety concerns and how the guidance would assuage them. The attorneys have appealed FDA’s “insufficient” response to the Department of Health and Human Services.

Supplement firm unaware of GMPs

Modern Products Inc. failed to establish a dietary supplement good manufacturing practices program, FDA says in a March 7 warning letter. Agency inspectors found last summer that the Mequon, Wis.-based firm, which distributes but does not manufacture products, was unaware of applicable supplement regulations. Modern Products lacked written quality control procedures and master manufacturing records, FDA says. Additionally, the warning letter says Modern Products’ labeling violates nutrient content claims rules. For example, the Swiss Formula Broth product claims to contain vitamin B but no B vitamins are listed on the nutrition label.

DoJ finalizes consent decree with ATF Fitness

James Vercellotti, his company ATF Fitness Products Inc. and its manufacturing arm enter into a consent decree with the Department of Justice after ATF ignored FDA warnings about violations of dietary supplement good manufacturing practices. The consent decree of permanent injunction, entered March 9 in the U.S. District Court for the Western District of Pennsylvania, prohibits Vercellotti and ATF from engaging in any business with supplements until an independent expert verifies they comply with GMPs. The order also directs ATF to destroy, under FDA supervision, all adulterated supplements within 15 days. The agency originally alleged that Oakmont, Pa.-based ATF failed to report serious adverse events, including one case of a consumer suffering a mild heart attack after using an ATF sports supplement (Also see "Enforcement In Brief" - Pink Sheet, 5 Dec, 2011.).