Twinlab To Discontinue Ephedra Products 35391

Twinlab To Discontinue Ephedra Products

HAUPPAUGE, N.Y.--Twinlab Corp. will discontinueits ephedra-containing supplements, effective March 31, 2003. Instead, thecompany will be concentrating on launching a line of ephedra-free products underits national brands, which include Ripped Fuel, Diet Fuel and Metabolift.Products containing ephedra accounted for approximately 21 percent of thecompany's net sales for fiscal 2001.

"We were recently granted a U.S. patent on one of ourweight-loss formulations, which puts us in a unique position to respond to thegrowing consumer demand for efficacious, ephedra-free products," said RossBlechman, Twinlab's chairman, president and chief executive officer.

In the company's 2001 year-end report (FY01), filed in April2002, the company stated the Food and Drug Administration (FDA) may one dayrequire Twinlab to substantially reformulate and relabel almost all of itsephedra products, prohibit certain combination products, and preclude thecompany from making certain claims for such products.

Twinlab has also been the defendant in several pending ephedra-basedlawsuits over the years. Some suits allege that Twinlab's ephedra productscaused injuries, death and/or damages; other suits seek class actioncertification for alleged deceptive advertising claims. The company, as ofApril, intended to vigorously defend these lawsuits.

For 2002, the company's liability insurance for ephedra productsdid not cover legal defense costs (which were a covered expense under priorinsurance programs). This new insurance also provides significantly lowercoverage limits and higher self-insured retentions, as well as requires thecompany to pay higher premium costs.

"We believe [discontinuing ephedra products] is a soundbusiness decision in the current climate of escalating insurance costs andregulatory uncertainties, and are confident that our long history of providingsafe and effective products ... will make this a positive move for the company,its customers and its consumers," Blechman said, adding that the companyexpects to experience a reduction in net sales due to this continuation butanticipates it to have no effect on the company's profits.

The ephedra-free formulation has already been tested in a recentclinical study, in which it was found supplementation led to a 13-percentdecrease in body fat. While the full ingredient listing is not being disclosed,a company representative told INSIDER that one ingredient is a green teaextract.

In additional company news, executive vice presidents NeilBlechman and Brian Blechman retired from the company; they will continue toserve on the board of directors.