Di­etary sup­ple­ment fig­ure who gave McDon­nell gifts is re­sign­ing

The Washington Times Daily - - Metro - BY MICHAEL FELBERBAUM

RICH­MOND | The head of a di­etary sup­ple­ment maker en­tan­gled in a po­lit­i­cal scan­dal with Vir­ginia Gov. Bob McDon­nell will re­sign amid a se­cu­ri­ties probe and share­holder law­suits.

Star Sci­en­tific Inc. CEO and founder Jon­nie R. Wil­liams Sr. and Pres­i­dent Paul Per­ito will step down af­ter its share­holder meet­ing Dec. 27, the com­pany said Thurs­day. State and fed­eral au­thor­i­ties are in­ves­ti­gat­ing Mr. Wil­liams’ re­la­tion­ship with Vir­ginia’s two top Repub­li­cans — Mr. McDon­nell and At­tor­ney Gen­eral Ken­neth T. Cuc­cinelli II.

Sep­a­rately, the com­pany is fac­ing a fed­eral se­cu­ri­ties probe and share­holder law­suits al­leg­ing trumped up claims for its di­etary sup­ple­ment Anat­abloc.

The Glen Allen, Va.-based com­pany said Mr. Wil­liams and Mr. Per­ito rec­om­mended to its board of di­rec­tors that “sig­nif­i­cant lead­er­ship changes are needed to bet­ter lever­age op­por­tu­ni­ties in phar­ma­ceu­ti­cal de­vel­op­ment.” Both will stay on with the com­pany for another year to help with lit­i­ga­tion and new prod­uct de­vel­op­ment.

Fol­low­ing the lead­er­ship tran­si­tion, Star Sci­en­tific said it in­tends to ac­cel­er­ate plans to sub­mit a new drug ap­pli­ca­tion with the Food and Drug Ad­min­is­tra­tion, as well as un­der­take clin­i­cal tri­als. It did not iden­tify the drug.

Star Sci­en­tific had sold va­ri­eties of to­bacco lozenges that dis­solve in the mouth since 2001 but ex­ited that busi­ness last year to fo­cus on di­etary sup­ple­ments, in­clud­ing its Antabloc anti-in­flam­ma­tory sup­port prod­uct. Hall of Fame golfers Fred Cou­ples and Nancy Lopez are am­bas­sadors for the sup­ple­ment.

“We are proud of the suc­cesses we have had in iden­ti­fy­ing and de­vel­op­ing truly in­no­va­tive pro­cesses and prod­ucts that can make a dif­fer­ence in peo­ple’s lives,” Mr. Wil­liams said in a state­ment.

Com­pany spokes­woman Tal­hia Tuck said the res­ig­na­tions were not re­lated to any of the in­ves­ti­ga­tions. In Au­gust, the com­pany said it doesn’t ex­pect to be pros­e­cuted for “any of the mat­ters” be­ing in­ves­ti­gated.

Dr. Michael Mul­lan, CEO of the pri­vate re­search center Roskamp In­sti­tute, is ex­pected to re­place Mr. Wil­liams af­ter a share­holder vote at the an­nual meet­ing, the com­pany said. He also heads Archer Phar­ma­ceu­ti­cals Inc., which spe­cial­izes in tar­geted drug dis­cov­ery for Alzheimer’s disease based on re­search done at Roskamp in Florida.

Dr. Mul­lan is a Bri­tish re­searcher who pre­vi­ously headed an Alzheimer’s re­search center at the Univer­sity of South Florida. He has de­signed stud­ies as­sess­ing the im­pact of the com­pound on mice.

Dr. Christo­pher Chap­man, who runs a phar­ma­ceu­ti­cal con­sult­ing firm, is ex­pected to serve as pres­i­dent.

The Roskamp In­sti­tute is in­volved in nu­mer­ous stud­ies re­lated to the com­pound in Anat­abloc. Its founder, Robert Roskamp, owns shares in Star Sci­en­tific and the com­pany also has a deal that grants a for-profit af­fil­i­ate of the in­sti­tute 5 per­cent roy­al­ties of sales of Anat­abloc.

Star Sci­en­tific said Dr. Mul­lan would re­main CEO of Roskamp for “strate­gic plan­ning is­sues” but with­draw from

day-to-day op­er­a­tions.

In a reg­u­la­tory fil­ing, the com­pany said Mr. Wil­liams plans to con­tinue as a non-ex­ec­u­tive em­ployee for one year to help with patent prose­cu­tions and new prod­uct de­vel­op­ment. Mr. Per­ito in­tends to serve as vice pres­i­dent and se­nior coun­sel of le­gal and reg­u­la­tory af­fairs for one year to man­age on­go­ing lit­i­ga­tion.

Star Sci­en­tific has recorded losses for 10 con­sec­u­tive years be­gin­ning with the year end­ing Dec. 31, 2003.

Its ac­cu­mu­lated deficit as of Dec. 31, 2012 was $231.5 mil­lion. It had 23 em­ploy­ees as of the end of last year.

Investigators are look­ing at whether Mr. Wil­liams or his com­pany ben­e­fited as a re­sult of more than $124,000 worth of gifts and loans to Mr. McDon­nell and first lady Mau­reen McDon­nell, each of whom pro­moted Mr. Wil­liams’ com­pany’s anti-in­flam­ma­tory prod­uct. Mr. McDon­nell said in July that the gifts and loans had been re­turned or re­paid to Mr. Wil­liams.

Mr. Cuc­cinelli, who on Tues­day lost a bid for gov­er­nor, also ac­cepted more than $18,000 worth of gifts from Mr. Wil­liams and Star Sci­en­tific, and once owned more than $10,000 in com­pany stock. In Septem­ber, Mr. Cuc­cinelli gave a Rich­mond char­ity $18,000 — the same value as gifts he ac­cepted from Mr. Wil­liams.

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