TALLEVAST -- Rock Creek Pharmaceuticals announced Monday the company is suspending the sale of its supplement Anatabloc, which received nationwide attention in the ongoing corruption trial of a former Virginia governor.
Rock Creek, formerly Star Scientific, announced in an earnings update it is suspending the sale of CigRx and Anatabloc until the company can receive approvals from the Food and Drug Administration.
The company filed a New Dietary Ingredient Notification in June in response to a December warning letter from the FDA concerning the marketing of its drug and is awaiting a response from the FDA. The company disagrees that it should have to fill out the ingredient notification form for "lawful marketing" of the supplements.
The company also reported a net loss of about $12.7 million during the second quarter, due in part to a 71 percent decrease in sales of Anatabloc during the same period last year.
"We continue to execute on our previously disclosed initiatives including office consolidation, personnel and expense reductions, and realignment of third party resources," Rock Creek CEO Michael J. Mullan said. "Most significantly, we are fully engaged in the drug development process and will meet regulatory and scientific hurdles as they arise in the normal course of such development."
Rock Creek moved this year to Manatee County's Roskamp Institute where Mullan is the chairman. The institute does research on Alzheimer's and since 2011 worked with Rock Creek/Star Scientific to test its anatabi
ne citrate compound.
The founder of the institute, Robert G. Roskamp, purchased more than 769,000 shares of Star Scientific and also included a deal where Star Scientific/Rock Creek paid 5 percent in royalties from Anatabloc sales. That deal saw Roskamp bring in $301,000 in 2012, according to regulatory filings.
Anatabloc has received attention recently as the corruption trial of former Virginia Gov. Bob McDonnell and his wife, Maureen McDonnell, center around the two receiving gifts from former Star Scientific CEO Jonnie Williams in exchange for promoting Anatabloc using state resources. Williams, a part-time Sarasota and Bradenton resident, still works for the company as a consultant, paid $1 a month until the company reaches profitability. He is considered a star witness in the former governor's trial testifying under a partial immunity deal.
During the trial, it was revealed that Maureen McDonnell apparently pitched in private to Ann Romney, wife of former Gov. Mitt Romney, that Anatabloc could cure her multiple sclerosis despite the supplement not being approved for that use. Those details and other aspects of the drug were heavily mocked during Thursday's episode of "The Daily Show with Jon Stewart."
The company reported in its filing with the Securities and Exchange Commission that it anticipates additional legal expenses in connection to the federal trial involving the McDonnells. The company reported it doesn't believe it will be prosecuted in connection with the federal investigation.
Rock Creek sought to begin clinical drug testing trials using the compound anatabine citrate, found in Anatabloc, for its effects on autoinflammatory diseases, but the FDA told the company its Investigational New Drug application is on hold until Rock Creek can submit additional pre-clinical details. The company is also seeking similar permission in the United Kingdom, hoping to file an application by the end of the third quarter. If approved, European Phase II trials could begin in 2015 for inflammatory diseases and potentially nicotine addiction. The company has not said which inflammatory disease it wants to test using the compound, but diseases that fall under that category includes Alzheimer's, osteoarthritis and multiple sclerosis.
The company is also battling a federal class action suit filed by Howard T. Baldwin in January saying that the company and GNC made false claims to consumers about Anatabloc.
To help the company's finances, Rock Creek on Friday closed on a $6 million private placement financing, resulting in a net earning of $2.35 million from selling common stock and a $1.75 million credit line from one the company's largest stockholders, available through Aug. 15, 2015.
Rock Creek, trading as RCPI on NASDAQ, closed at 38 cents a share Monday.
Charles Schelle, Herald business reporter, can be reached at 941-745-7095. Follow him on Twitter @ImYourChuck.