Company Tied to Governor Gift Scandal Suspends Supplement Sales

SARASOTA, Florida—The dietary supplement company that is at the heart of a criminal trial currently underway against former Virginia governor Robert McDonnell said Monday it will indefinitely suspend the sale of its products Anatabloc and CigRx.

Rock Creek Pharmaceuticals Inc., formerly known as Star Scientific, already had limited the advertising and marketing of its products after receiving a warning letter from FDA last year that claimed the company had not properly marketed its dietary supplements.

In a regulatory filing Monday, Rock Creek Pharmaceuticals said it made the decision to suspend sales in conjunction with its ongoing review into how its dietary supplement business will affect its main focus on developing pharmaceutical products.

Last year, Star Scientific founder Jonnie Williams resigned from his post as CEO amid a political scandal tied to McDonnell. According to a 14-count criminal indictment filed in the U.S. District Court for the Eastern District of Virginia against McDonnell and his wife Maureen, from April 2011 through March 2013, the couple improperly accepted more than $135,000 from Williams in direct payments as gifts and loans, thousands of dollars in golf outings and other things of value.

McDonnell and his wife have pleaded not guilty in a trial that is currently underway. Williams said repeatedly that the couple supported his company and the anti-inflammatory product, Anatabloc, former Virginia Attorney General Jerry Kilgore testified Monday, according to The Associated Press.

Last year, the U.S. Attorney’s Office in the Eastern District of Virginia issued subpoenas to Star Scientific, its directors and others, seeking documents. In Monday’s regulatory filing, the company reiterated its previous view that it will not be prosecuted for any of the matters that the U.S. Attorney’s Office has been investigating.

In the wake of the McDonnell scandal, Star Scientific received an unrelated warning letter from FDA. FDA said Star Scientific had failed to file a new dietary ingredient (NDI) notification for anatabine as a dietary ingredient and had made certain unauthorized drug claims.  The company said it later submitted an NDI notification to FDA despite its position that it didn’t need to do so. The dispute highlighted a potential disagreement between FDA and the dietary supplement industry over the regulation of NDIs.

“The Company anticipates that it will complete its review of the dietary supplement in a timeframe after the FDA responds to the company’s pending NDIN," Rock Creek Pharmaceuticals stated in Monday’s regulatory filing. “The company may have to take a charge of all or part of the inventory value, once the company completes its review of the dietary supplement."

Since Anatabloc was introduced in August 2011, it has comprised nearly all of the company’s revenues. For the six months that ended on June 30, 2014, Rock Creek Pharmaceuticals generated net sales of USD $1.8 million. The results marked a 63.3-percent plunge in sales compared to the same period a year ago, consistent with the company’s decision to limit its advertising and marketing after receiving FDA’s letter. The company has operated in the red for 11 years and posted a net loss of USD $22.5 million for the six months that ended on June 30, 2014.