J Capital is short ChromaDex (CDXC)
An Oceans 11 of stock promoters.
After months of examining ChromaDex (CDXC), we have come to the conclusion that this company, which sells a health supplement called Tru Niagen, is pure hype, dished up by an Oceans 11 of stock promoters. CDXC promotes its single product with iterative press releases that boost share price long enough for insider sales before the vaunted advantages contained in those press releases quietly disappear.
- The SEC has labeled the team behind CDXC “micro-cap fraudsters” who manipulate share prices and then “dump” the stock.
- Not only is the management team dubious, but so is the auditor. CDXC uses Marcum LLP, which the PCAOB says is riddled with deficiencies.
- The latest promote is a Walmart distribution deal, announced twice, in March and in June, for full effect. The company frequently announces deals
that end up producing virtually no sales. - After reviewing the company’s reported acquisitions and dispositions since 2012, we believe they have provided negative real value to shareholders but payoff to insiders.
June 29 update: Recycling a 4-month-old announcement
A closer look at CDXC’s “positive” Phase 3 trial news yesterday reveals some troubling facts.
The study, conducted in Turkey, was very narrow, focused on young people without co-morbidities, whose likelihood of rapid recovery from Covid19 is high.
Furthermore, CDXC had already touted this news in a press release on February 24.
The study, conducted in Turkey, was very narrow, focused on young people without co-morbidities, whose likelihood of rapid recovery from Covid19 is high.
Furthermore, CDXC had already touted this news in a press release on February 24.
The Phase 3 trial that CDXC touted on Monday was conducted at a single site in Istanbul among 304 patients with a mean age of 36 and without co-morbidities.[1] The Phase 2 trial had been conducted with 93 patients. According to the FDA. A typical Phase 3 trial is for 300-3,000 subjects and is conducted over 1-4 years.[2]
The published study reports that it was supported by a grant from the Knut and Alice Wallenberg Foundation in Sweden and “in partnership with” CDXC.[3]
The “good news” about the alleged effects of one of Tru Niagen's components on Covid19 could get CDXC into more hot water with the U.S. government. CDXC has already been cautioned by the Food and Drug Administration and the Federal Trade Commission in relation to promotional statements. The agencies issued warning letters in November 2020 and April 2021 instructing CDXC to stop telling the public that Tru Niagen has benefits for fighting Covid.
The November 17, 2020 letter from the FDA said:
Based on our review, these products are unapproved new drugs sold in violation of section 505(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), 21 U.S.C. § 355(a). Furthermore, these products are misbranded drugs under section 502 of the FD&C Act, 21 U.S.C. § 352. The introduction or delivery for introduction of these products into interstate commerce is prohibited under sections 301(a) and (d) of the FD&C Act, 21 U.S.C. § 331(a) and (d). [4]
The letter went on to criticize CDXC for claiming without basis that:
Your Tru Niagen products are labeled to contain nicotinamide riboside (NR). On your websites, you claim that these products increase levels of nicotinamide adenine dinucleotide (which you abbreviate as “NAD” or “NAD+”).[5] Claims on your websites also suggest that depletion of NAD/NAD+ worsens COVID-19 and that increasing NAD/NAD+ levels—including through NR supplementation—is safe and/or effective for the treatment or prevention of COVID-19.
The FDA gave CDXC 48 hours to remove the promotional statements. Yet CDXC received another warning letter in April. The contents of this letter have not been disclosed. But the FDA told CDXC that it would update its website as soon as CDXC addressed the problem. The website as of June 28 had not been updated.
The published study reports that it was supported by a grant from the Knut and Alice Wallenberg Foundation in Sweden and “in partnership with” CDXC.[3]
The “good news” about the alleged effects of one of Tru Niagen's components on Covid19 could get CDXC into more hot water with the U.S. government. CDXC has already been cautioned by the Food and Drug Administration and the Federal Trade Commission in relation to promotional statements. The agencies issued warning letters in November 2020 and April 2021 instructing CDXC to stop telling the public that Tru Niagen has benefits for fighting Covid.
The November 17, 2020 letter from the FDA said:
Based on our review, these products are unapproved new drugs sold in violation of section 505(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act), 21 U.S.C. § 355(a). Furthermore, these products are misbranded drugs under section 502 of the FD&C Act, 21 U.S.C. § 352. The introduction or delivery for introduction of these products into interstate commerce is prohibited under sections 301(a) and (d) of the FD&C Act, 21 U.S.C. § 331(a) and (d). [4]
The letter went on to criticize CDXC for claiming without basis that:
Your Tru Niagen products are labeled to contain nicotinamide riboside (NR). On your websites, you claim that these products increase levels of nicotinamide adenine dinucleotide (which you abbreviate as “NAD” or “NAD+”).[5] Claims on your websites also suggest that depletion of NAD/NAD+ worsens COVID-19 and that increasing NAD/NAD+ levels—including through NR supplementation—is safe and/or effective for the treatment or prevention of COVID-19.
The FDA gave CDXC 48 hours to remove the promotional statements. Yet CDXC received another warning letter in April. The contents of this letter have not been disclosed. But the FDA told CDXC that it would update its website as soon as CDXC addressed the problem. The website as of June 28 had not been updated.
[1] https://onlinelibrary.wiley.com/doi/10.1002/advs.202101222
[2] https://www.fda.gov/patients/drug-development-process/step-3-clinical-research
[3] https://www.kth.se/en/aktuellt/nyheter/covid-19-patients-recover-faster-with-metabolic-activator-treatment-study-shows-1.1087654
[4] https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/chromadex-607692-11172020
[2] https://www.fda.gov/patients/drug-development-process/step-3-clinical-research
[3] https://www.kth.se/en/aktuellt/nyheter/covid-19-patients-recover-faster-with-metabolic-activator-treatment-study-shows-1.1087654
[4] https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/chromadex-607692-11172020
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Cartoon by Johannes Leak
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Opinions are intended to provide insight on macroeconomic issues and commentary is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy.
Investments involve risk. The value of investments can go down as well as up, and investors may not get back the full amount invested. The information contained in these reports has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion.
The reports and other commentary displayed are for information purposes only and should not be relied upon as investment advice. The information provided is not a complete analysis of every material fact regarding any country, region, or market. Because market and economic conditions are subject to change, comments, opinions and analyses are rendered as of the date of this posting and may change without notice.
Opinions are intended to provide insight on macroeconomic issues and commentary is not intended as individual investment advice or a recommendation or solicitation to buy, sell or hold any security or to adopt any investment strategy.
Investments involve risk. The value of investments can go down as well as up, and investors may not get back the full amount invested. The information contained in these reports has not been reviewed in the light of your personal financial circumstances. Reliance upon the information is at your sole discretion.