Hi-Tech said it will acquire Guadalajara, Mexico-based Advanced Pharmaceuticals and Nutritionals (APN) for an undisclosed amount. APN is said to be one of the fastest supplement and OTC companies operating in the Mexican, Central American and South American markets.
"The combination of these two great companies accelerates Hi-Tech's international growth strategy, substantially diversifies our business streams and establishes a durable leadership position in Mexico and the South American Nutritional and OTC marketplace," said Jared Wheat, Hi-Tech’s chairman and CEO.
Tainted products
In a recent study conducted by a team led by Dr Pieter Cohen of the Harvard Medical School, 11 of 21 sports and weight supplements purchased in early 2014 that listed extracts of Acacia rigidula as the main herbal ingredient were also found to contain B-methylphenethylamine (BMPEA), a synthetic stimulant, in varying amounts. Hi-Tech manufactured six of the 11 brands found to contain the stimulant in doses ranging from 3 mg up to 94 mg.
Hi-Tech and Wheat have had at least a decade of run-ins with regulators. In 2008, the Federal Trade Commission secured a permanent injunction against Hi-Tech and Wheat on a case that began in 2004. The injunction prohibited the company from advertising weight-loss products with certain claims unless those claims were substantiated by competent and reliable scientific evidence. In 2013 FDA seized more than $2 million worth of what it called “adulterated dietary supplements” from Hi-Tech’s Norcross, GA facility that it said contained the banned stimulant ingredient DMAA. Hi-Tech took the unusual move at that time of suing FDA over what it termed as a “bullying campaign”.
Later in 2013, Wheat and the company were found in contempt of the FTC order because they continued to market products with claims lacking sufficient evidence. In May of last year the company was also ordered to pay a $40 million in compensatory damages (the amount of the sales of the offending products). In September of last year, according to attorney Riëtte van Laack writing in the FDA Law Blog, Wheat was ordered to report for a prison term on the contempt charge in the FTC case. Requests for comment from Hi-Tech went unanswered, so it is unknown whether Wheat served time behind bars and if so, how much.
According to CNBC, this is not Wheat’s first encounter with law enforcement. According the news organization, 20 years ago Wheat was convicted of running a massive marijuana smuggling operation in the South.
Acacia rigidula supporter
Wheat is not backing down on the subject of Acacia rigidula. The company has issued a statement responding to Cohen’s study that carefully steps around the issue of the source of the varying doses of BMPEA found in the Hi-Tech brands and rather dings Cohen’s team for not getting the market introduction date of Acacia ridigula extracts right.
“What most concerns me was that Mr. Cohen stated that Acacia rigidula was released in 2013 when Hi-Tech has sold Acacia containing weight loss aids since 2003 and VPX since 2007. We were the first to launch them into the marketplace right before the banning of ephedrine alkaloids,” Wheat said.
Wheat also said that research done at Texas Tech University in the late 1990s showed that BMPEA can in fact be found as a constituent of Acacia rigidula, again without definitively stating whether all of the BMPEA found in the Hi-Tech brands that Cohen’s team tested came from a botanical source or was added as a separate constituent. This research and other previous research cited by Wheat that he says supports the presence of BMPEA in Acacia was unavailable on the Pubmed database.