NEWARK - Nutraquest, Inc., formerly known as Cytodyne Technologies, Inc., its owner Robert Chinery, and three related companies have agreed to pay the State a total of $940,000 and to adhere to strict constraints on their marketing and advertising practices under a settlement announced today by Attorney General Peter C. Harvey and Consumer Affairs Director Kimberly Ricketts.

"Consumers expect, and state law requires, that companies make accurate statements when advertising the benefits and effectiveness of their products," Acting Governor Richard J. Codey said. "There should be no gray areas, especially when it comes to products that can affect someone’s health and well being. Under this agreement, the settling companies have agreed to rules to ensure that their advertisements will not mislead consumers."

Attorney General Harvey and the Division of Consumer Affairs filed suit in mid-2003 against Manasquan-based Cytodyne Technologies, Chinery and other defendants alleging that Cytodyne’s advertisements for Xenadrine RFA-1, an ephedra-based weight loss product, and for Xenadrine EFX, an ephedra-free weight loss product, exaggerated the benefits and understated the risks of each product.

"Under this settlement, the defendants can no longer make unsubstantiated claims about their weight loss products in their ads," said Attorney General Harvey. "They had targeted vulnerable consumers with false promises of dramatic weight loss with little to no effort. The fact is, there is no miracle weight loss product. We’re protecting the public’s health and safety by preventing the defendants from claiming that a product is ‘safe’ or ‘effective’ unless there is scientific evidence to substantiate those statements."

"People struggling with weight issues are entitled to realistic expectations of what a product will do for them, not some false hope that has been put before them and can’t be achieved," Director Ricketts said. "Now when someone appears in a commercial to plug these products, the public can be confident that the reported results are both accurate and not misleading."

The other defendants included five New Jersey doctors who allegedly provided testimonials that falsely suggested that they had conducted research on Xenadrine RFA-1 that established that it was safe, effective or unique. The State previously settled with each doctor for between $15,500 and $17,500. In December 2003, the Food and Drug Administration (the "FDA") announced that all diet supplements that contained ephedra would be banned as of April 12, 2004.

Deputy Attorney General Joshua T. Rabinowitz and Deputy Attorney General Sunil Raval represented the State in this matter.

On or about May 23, 2003, Cytodyne changed its name to Nutraquest, Inc. and transferred the rights to promote and distribute EFX to two companies called "Cytodyne LLC" and "Cytodyne I LLC" (the "LLCs"). RTC Research and Development LLC ("RTC") owns the patent and certain other rights to EFX.

The agreement settles the State’s claims against the LLCs and RTC for their advertisements for EFX. It also settles the State’s claims against Nutraquest and Chinery for Nutraquest’s advertisements for EFX, RFA-1 and Tetrazene KGM-90, a product that Nutraquest introduced after it filed for bankruptcy protection. The settlement requires Nutraquest, RTC, Chinery and the LLC’s to each pay $235,000 towards the settlement. Because Nutraquest is subject to the protection of the U.S. Bankruptcy Court, the settlement required the approval of the Bankruptcy Court, which approved Nutraquest’s payment of an administrative claim to the State of $45,000 and also approved granting the State an unsecured claim of $190,000.

Under the agreement, each corporate entity that settled agrees that, among other things, its marketing for its weight-loss products would:

• Not represent that the product by itself causes weight loss without the need to diet or exercise;
  
  
• Not claim that the product causes weight loss via a specific biochemical mechanism, unless scientific evidence substantiates the claim;
  
  
• Require each person who endorses the product to submit a sworn statement that discloses information about his/her use of the product and the results he/she achieved;
  
  
• Not use an endorsement that identifies weight loss results that are not typical of what an average consumer can expect to achieve without clearly and conspicuously disclosing that the results are not typical;
  
  
• Not represent that a product is X%, or Y times, more effective than another product (or diet and exercise alone) unless it can substantiate that claim and discloses the average weight loss of the persons in the study that substantiates the claim;
  
  
• Not represent that a product has been clinically proven to be safe or effective, unless there is scientific evidence to substantiate the claim;
  
  
• Not misrepresent the results of any clinical test or study; and
  
  
• Not offer to sell a weight loss product through a print advertisement, an internet promotion or a telephone promotion without providing the consumer with (a) a statement to consult a health care professional before beginning a weight loss program and (b) a statement to read the product label before using the product;

###