Customers (and creditors),
Forgive my delayed announcement on our business situation. Since the FDA raid Tuesday morning, I've been wrapped up in pressing matters, which I will explain below. I'm sitting here on minimal sleep, but will try to address this completely.
The facts are as follows -
The FDA raided our office/warehouse building in Portland OR at about 9:00am on Oct 30th. They had a warrant for seizure of the following -
- AndroHard, AndroDrive, AndroMass, AndroLean, AndroBulk, AndroEnhance, Sustain Alpha gel, and DermaTherm gel. Including all raw materials for these products.
- All computers, digital storage devices, documents from 2006 until current.
There were about 30 armed FDA agents who entered through the front and back of the building with guns drawn. A majority of them were from LA. We have no idea why they had guns. No employees at our office have any history of violence or criminal history.
I received a call about the raid, and immediately went to the office. I asked to speak to the head agent(s), who were Jeff Novitzky and Hilary Rickher. Against the advice of others, I choose to speak to them without an attorney. I handed them our DSHEA statement, and sat down and allowed them to question me for about 2 hours regarding the formulation, marketing, and manufacturing of our products. They did not detain me.
As of now, the affidavit for the warrant is sealed, so I am not entirely sure of the scope for the warrant. Based on the agents questions for me and other employees, here are the major reasons we were targeted -
- TREN & Superdrone: The FDA is aware that we sold Tren in 2009 and superdrone in 2010 for a very short period of time. This appears to be the most damning evidence. We sold these products despite FDA warning that they may be unsafe. We deemed these products suitable for sale given clear warning to consumers about potential side effects. As Primordial later determined in 2010, these hormones are not naturally occurring in the food supply, and thus not legal to sell as dietary supplements. Therefore, we discontinued the all unnatural steroid hormones by the end of 2010.
- Secret ingredients: The FDA questioned our production manager, asking about any "secret ingredients" added to our products, so they seem to believe we add illegal or unlisted substances to our products. Apparently the FDA has also invested in rigorous analytical testing of our products. They have been unable to find any "secret ingredients" in the product from the limited feedback Ive received, nor will they ever find any evidence of this. What's on the label is what we put into the product.
- Claims: Related to the AndroSeries products, the FDA had questions related to our claims of "AndroSeries equivalent to injectable testosterone." This was the work of my colorful marketing side, and bio-equivalency calculations I made. According to the FDA this is a drug claim, and thus the FDA considers AndroSeries marketed as an unapproved new drug because of this claim. Most companies get warning letters about claims, but we never received any communication from the FDA until the raid.
- Ingredients: The FDA also seems to believe the AndroSeries products are "adulterated" because the ingredients are not present in the food supply, or atleast, are not legal dietary ingredients. We have evidence that these hormones are legal dietary ingredients, are naturally occurring in food, are present in our bodies, and are natural human metabolites of DHEA (which is also a legal dietary ingredient). The FDA also believes that our doses are excessive, and not proven to be safe. We have evidence to show that our doses are very safe according to our human case studies.
- Topicals: They questioned the legal definition of the topical gel products. They seemed to believe we were selling them as dietary supplements. I informed them that they are sold as cosmetic products. The reason for this products being seized remains in question.
- GMP, ingredient origin, and other things: They also commented that synthetically manufactured ingredients (our hormones) are not dietary supplements, although 80% of the dietary supplement market comes from synthetically manufactured vitamins, amino-acids, etc. The FDA has also made accusations that our dose of active ingredients has been "inconsistent" between our batches. I am not sure of the origin of this claim. They also pointed out that our production workers were not wearing masks, and that we do not have a temperature controlled facility. (GMP requirements apparently)
Admittedly, we have struggled to meet GMP guidelines since they became a requirement in June 2010. We started as a home based company in 2006 which was entirely legal until 2010. We moved to 5000 sq ft facility in 2009, and hired laboratory staff to make efforts to meet GMP requirements. Meeting the multi-point analytical requirements, paper documentation, stability testing, etc is extremely expensive. We made a good faith effort to meet these requirements as much as our finances could afford.
As a side note, I feel empathy for the small american start-up who wants to produce and sell a dietary supplement. The initial minimum investment in releasing a new product is near $50,000 if all GMP guidelines are rigorously followed. This is in addition to the multi-million dollar facility and equipment required to test, analyze, verify, scan, pack, and manufacture dietary supplements. The US government needs de-regulation here, especially in this economy.
Speaking of the economy, the FDA must have over $2,000,000 budgeted for the investigation of Primordial Performance and its products. (as can be gleaned from the number of agents and depth of the investigation) This seems like a tremendous waste of tax payer dollars, especially when the FDA could have policed the situation with a simple warning letter. Where does this leave Primordial products?
The FDA seized our inventory as evidence based on its opinion that these products are misbranded and adulterated. The products are not controlled substances, so they are not illegal to be in possession of. However the FDA has made it clear they don't want us to distribute them.
If you are selling our products, I would advise against that, but there doesn't appear to be any legal issue with possessing or consuming the products as an individual. What happens now?
The FDA will now review our 5+ years of company records. They aren't going to find anything more than what they already know. I really have no idea if they are going to press criminal charges, or if this will all be settled out of court. At this point there have been no criminal charges or arrests.
Again, the affidavit is sealed, so I am unable to see the primary evidence or reason for the seizure. As with any seizure, there is not much you can do to prevent the items from being seized, and any attempt to get the items back requires a claim to be filed, attorneys, with lengthy and expensive legal battles. The US court system does not move quickly even if you really want your Andro back.
Even if we prevail in court, and the products are deemed to be legal and safe dietary supplements, this process could take years and hundreds of thousands of dollars in legal fees. So if we win, we still loose.
Although we don't have final numbers, it is estimated that the FDA seized up to $500,000k in inventory, valued at over $1,000,000 in revenue. From bad to worse
People seem to assume we have millions in the bank, but it couldn't be further from the truth.
Primordial has been struggling financially for the past several years. We have about $300,000 in dept with various suppliers and creditors. Most of our business trouble was related to excessive overhead, inefficient operations, and excessive employee turnover. Trying to fix these issues in a company is like trying to fix an engine while its running. Primordial has only had one slightly profitable year in the 6 years we've been in business. We've essentially operated on a very tight cash flow for the past 3 years. None of the investors or shareholders have ever made any financial gain from Primordial, except for my average $60,000/yr salary.
Since AndroSeries was about 80% of our revenue, and its been cut, it essentially cuts us at the jugular. Before the FDA stepped in, we had very little money in the bank, but a decent inventory to keep us in business. Now we have no money, no credit, and no inventory. It means doors closed for us.
What made our fall even more abrupt, was the fact that we had been behind on rent payments. We had a strict repayment plan to avoid eviction, but we wont be able to follow through on those payments now. We will likely be getting locked out of our building by Nov 7th. Because of this we have allocated all resources to clearing the building. The final days
As you can see, there won't be much left of Primordial as a company by the end of this month. Most employees have been laid off and the final remaining inventory is being sold off until it is gone. We will continue shipping our last few products from a fulfillment house. We expect to be sold out of all products by the end of Nov. When this happens, we will be taking the site down and replacing it with a simple blog to keep conversations going about the status of this case.
Our remote employee Jered will continue to assist with customer service as we wind down.
I might walk away with enough to live on for a couple months after all payroll and moving expenses are paid. I will probably be moving back to Eugene with my mother to save money and figure out what my next move will be. Am I going to fight the FDA?
In many ways, I'm eager to have my day of reckoning with the FDA. This story deserves a good ending. Is our position on the legal status of these ingredients strong enough to hold up in court? How about our safety data? Or our diligent effort to legitimize a safe and legal dietary steroid supplement?
Although I'm still recovering from a major ass kicking, the story of David and Goliath inspires me. I've always like fighting hardest when I've been the underdog. It's FDA's next move, so we will just have to see what happens. Epilogue
Since I was 16 I've invested my life in the study, research, and development of hormone products. I did it for the fun of it. Its always been my personal passion to create something that could produce life changing results for people. The fact that we weren't making any profit at PP really didn't matter to me. The reward was the unsolicited letters of gratification from guys who discovered a greater life with our products. I loved creating hormone products, guys love using them, and it was a great time.
I hadn't been around much for the past 12 months. I've been quite captivated in my most recent work. I was confined in my small studio apartment constructing a plan for my next business. It was a complete male hormone solution, much evolved from the current Primordial platform. I'm not sure if the heart of this embryo is still beating, but I'm searching.
I thank those who stood by until the very end here at the office, and those customers who maintained great loyalty over the years. I know if you could many of you would suit up and charge into battle. Maybe our day to rally will come.
-Eric Potratz President & Founder