Jan. 01--The U.S. Food and Drug Administration has warned dietary supplements maker Star Scientific Inc. to stop making therapeutic claims about two of its products.
The Henrico County-based company, whose former CEO is central to a gift scandal involving Gov. Bob McDonnell, disclosed Tuesday that it received a warning letter from the FDA saying the claims violated federal food and drug laws.
The FDA took issue with the company's claims about its over-the-counter dietary supplement called Anatabloc, which Star Scientific says has anti-inflammatory properties.
The agency also said Star Scientific never submitted a required pre-market notification to use the active ingredient in a consumer product. That ingredient, an alkaloid called anatabine, has been authorized as an "investigational new drug" needing pre-market approval.
"Because the required pre-market notification was not submitted to FDA, your products containing anatabine are deemed to be adulterated ... and are prohibited from being marketed in the United States," the FDA's letter to the company said.
The FDA gave the company 15 days to take corrective action.
In a statement Tuesday, Star Scientific said it is "responding to the letter and has already advised the (FDA) that it intends to work cooperatively to resolve these issues, including undertaking a review of the company's websites."
Anatabloc, which is sold online and at the retailer GNC, is the company's main source of income.
Its marketing campaign has included endorsements from athletes such as pro golfer Fred Couples and tennis pro John Isner, who have said in promotions that taking Anatabloc helps reduce their muscle soreness and joint inflammation.
The FDA's warning letter, dated Dec. 20, says the company has promoted Anatabloc and another supplement called CigRx in a way that renders them "unapproved new drugs" under federal law, based on statements on the company's corporate website and websites that promote and sell the products.
Anatabine is found in tobacco, eggplant, tomatoes and other plants. Star Scientific says it has anti-inflammatory properties that may be helpful in various health conditions, based on published animal studies.
In its letter, the FDA cited statements indicating that anatabine may help in recovery from traumatic brain injury, that it may reduce the severity of ulcerative colitis, that it may be effective in treatment of multiple sclerosis, and that it may reduce inflammation associated with Alzheimer's disease.
Anatabine "is not generally recognized as safe and effective" for those uses, the FDA said. The agency said it may take regulatory action "such as seizure and/or injunction" unless the company takes corrective action within 15 days.
An FDA spokeswoman said corrective action means the company "must cease making therapeutic claims that its product Anatabloc can be used in the cure, mitigation, treatment or prevention of disease."
"The warning letter cites multiple violations," the FDA spokeswoman said. "All violations must be addressed."
The FDA did not specifically order Star Scientific to remove the product from sale.
The FDA warning came just as the unprofitable company was undergoing a major leadership transition.
Star Scientific's top two corporate officers resigned, as planned, their executive posts last week when shareholders approved five new directors for its six-member board. Both executives also lost their board seats.
In a separate announcement Tuesday, Star Scientific said it has entered into a letter of intent for a $15 million credit facility with company founder Jonnie R. Williams Sr.
Williams, who has been at the center of a political scandal involving tens of thousands of dollars' worth of gifts to McDonnell, stepped down last week as the company's chief executive officer and as a board member. He is expected to remain with the company for at least one year as a non-executive employee.
Under the credit facility, the company can borrow up to $10 million without shareholder approval, and an additional $5 million under the credit facility that may require shareholder approval.
The credit facility consists of an unsecured, two-year corporate note bearing a 5 percent annual interest rate. Notes under the credit facility will be convertible into common stock at $1.25 per share, the closing bid price for the company's stock on Monday.
As consideration for the credit facility, the company agreed to issue 6 million warrants with a strike price of $1.25, the company said.
The Nasdaq stock market must approve the transaction, which is scheduled to close no later than Jan. 31, the company said.
Williams, 58, had been the company's CEO since November 1999 and a board member since October 1998. He owns about 9.8 percent of the company's shares.
Star Scientific has not been profitable for a decade.
The company formerly sold discount cigarettes and smokeless tobacco products, but it exited the tobacco business in late 2012 to focus entirely on its relatively new business in dietary supplements and pharmaceuticals development.
As a part of the changes last week, shareholders approved a proposal to rename the company Rock Creek Pharmaceuticals to better reflect its focus away from tobacco products and toward the development of pharmaceuticals.
Star Scientific reported sales of about $7.29 million and a net loss of $20.3 million for the first nine months of 2013.
Faced with losses for years, the company has repeatedly turned to private investors to raise money.