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Hype or Help: The maker of Cold-FX debuts a new product

Dr. Jacqueline Shan made it big when she developed Cold-FX. She's at it again with a new line of products, but the question remains the same: do they actually work?

Jan 6, 2014

by Jessica Wynne Lockhart

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Photograph Ryan Girard

Over the course of her 20-plus years as a columnist at the Globe and Mail, Margaret Wente has written some outrageous things. But for those in the vitamin supplement industry, one that does $3 billion in sales in Canada and 10 times that in the U.S. every year, a recent column of Wente’s was something else entirely: dangerous.

“My concern with this whole supplements stuff is you’ve got to try and sell fear and then hope.”– James McCormack, professor, University of British Columbia

In it, she declared that she was “leaving the vitamin church,” noting that “most nutrition research is a pseudoscience – a giant fraud committed on the public.” After years taking Vitamin D supplements in an effort to improve her bone density, she discovered that, according to new research published in The Lancet, she might just as well have been taking a sugar pill. “This is just the latest in a long list of debunks of substances as diverse as antioxidants, salt, gluten, fish oil and vitamins A through E,” she wrote. “All these things have been the subject of countless scientific studies whose results have been published in important journals. All have been endorsed (or condemned) by the most authoritative bodies – government health agencies, Harvard professors, nutritionists, dietitians and cancer societies, to say nothing of Dr. Oz and Oprah. And it’s snake oil. All of it.”

On this issue, Wente’s views appear to be at odds with that of the general public. Despite growing concern that the science behind supplementation is dubious at best and calls for Health Canada to implement tighter controls on natural health care products, the public’s appetite for them has stayed strong. Seventy per cent of Canadians use natural health products on a regular basis, and the demand from baby boomers for preventative natural health care products is only going to grow. Susan Eng, vice-president for advocacy at CARP, a non-profit organization dedicated to improving the lives of aging Canadians, thinks she knows why. “This has proven to be the generation that’s very accepting of alternative medication,” she says. “They tend to look beyond [a] doctor’s advice. They represent a really new and important market for natural health products.”

It’s exactly this market that Dr. Jacqueline Shan, best known as the creator of Cold-fX, hopes to tap with Afinity, a line of omega-3 supplements targeted at boomers. “It’s one of the fastest growing demographics in Canada. People today live longer, are more active and more educated,” Shan says. “People want different ways to manage their health – especially aging populations.”

And while the market has huge potential, Shan and her Edmonton-based company have their work cut out for them. The launch of Afinix comes just five years after Shan was sanctioned by the Alberta Securities Commission for improper financial disclosures following Cold-FX’s move into the U.S. That ruling came amid reports that Cold-FX was little more than a well-marketed placebo. There’s little hard evidence that her new line of products will be any different.

A decade ago, when Shan completed clinical tests on Cold-FX to determine its efficacy, the ginseng-based pills became the cold medication of choice in Canada. The tests, not commonly done with such products, attached medical credibility to something that would otherwise be relegated to stores with healing crystals and magnetic bracelets. Sales soared. Her new company, Afinix, is using this same model to develop natural health products for what they call “active agers.” “It was very natural for me to create another company doing the same thing,” Shan says. “It really has always been my mission to focus on commercializing and developing innovative natural health products.”

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Shan is banned from serving as an officer or director of a public company in Alberta until later this year, the result of improper disclosures involving Cold-FX’s move into the U.S.
Photograph Tina Chang

And so, in September, Afinix released Afinity, its first product. The omega-3 fatty acids inside are naturally found in oily fishes, eggs and flaxseed, and were first connected to positive health in 1929. However, it wasn’t until nearly 50 years later that their role in the natural health market was cemented, when a 1975 study examining Greenland Inuit concluded that their almost nonexistent rate of coronary heart disease could be attributed to their diet, which was high in EPA and DHA, the two most commonly recognized omega-3s. By the early 2000s, omega-3s were the latest nutritional craze, appearing in fortified margarines, juice and eggs. There was no shortage of medical experts championing their ability to reduce the risk of heart disease, cure inflammation and even help with cognitive functions.

These are the same benefits that Shan promises through her new line of products, which target joint inflammation and pain (Afinity Arthritic Care), blood pressure and improved heart function (Afinity Cardio Health) and dementia (Afinity Cognitiv Care). Plans are also underway to develop products that will reduce the symptoms of andropause and menopause. For Shan, omega-3s are the fountain of youth. “I believe that most aging-related health conditions are preventable and we can help to delay that,” she says. “This is probably one of the most extensively studied molecules that shows many clinical and health benefits.”

A bottle of 90 Afinity capsules costs up to $30, twice the price of competitor brands. What will set Afinity apart from other supplements, according to Shan, is its lack of additives and trans-fats, which she claims inhibit the benefits of EPA and DHA. In addition to purity, the supplements, made with anchovy and sardine fish oil, are higher in potency and sourced from smaller fish, which she says contain fewer environmental toxins. And as with Cold-FX, Shan’s team plans to complete extensive clinical studies identifying the active compounds in natural products and their efficacy.

“There’s a great opportunity using the science approach so that people can get consistent quality and show health benefits,” Shan says. “We’re analyzing to make sure our molecules are pure and creating maximum efficacy.” According to Norman Oliver, senior vice-president of sales and marketing for Afinix, this will be key to their marketing and sales strategy. “Jackie’s been able to identify not only products that work, but also identify why they work in the body,” he says. “Being able to offer a quality product and being able to explain – not only to the pharmacists, but to the consumers – brings a lot of credibility.”

But Afinity’s credibility could be called into question, given the history of Cold-FX. The product, created in a University of Alberta lab in the early 1990s, has become so trusted in Canada that it outsells even mega-brands like as Tylenol. Afexa Life Sciences (formerly CV Technologies), Cold-FX’s parent company, carefully marketed the product by leveraging Shan’s medical background (she holds a PhD in physiology and a Doctor of Science in pharmacology) and using celebrity ambassadors like Don Cherry who memorably invited customers to “trust the science.”

But all the positive publicity for the Edmonton startup came to a halt in 2006, when the Vancouver Sun published an article disputing the effectiveness of the magical ginseng tablets. James McCormack, a professor at the University of British Columbia who specializes in interpreting clinical drug trials, evaluated the evidence. He determined that studies suggested the ingredients in Cold-FX were potentially only a placebo. Even for the small effect it did have, it certainly wasn’t worth the hefty price tag of $0.50 per tablet.

“Taking two studies that don’t show a benefit and then adding them together to get a positive result is a form of data mining. It’s torturing the data until it confesses,” he told the Sun. Subsequent clinical trials have come to similar conclusions. McCormack says Cold-FX’s definitive trial, which was done in 2006 in 720 patients across Canada, had similar results. “It literally found almost nothing,” he says, noting that the trial was published in an obscure medical journal.

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“It’s not that their research is bad. My hat is off to them because most companies that look at the herbal type of things don’t do this. They actually did really well-designed trials – but the problem is that they didn’t show a heck of a lot.” Although the product claims it can help to “stop a cold in its tracks,” no trials have actually ever been conducted to prove that, either.

The negative press didn’t stop Afexa from launching Cold-FX in the U.S. in 2006, reporting $3 million in sales for the quarter ending December 31, 2006. But that figure was deceiving, as it reflected the amount of product sold to retailers, not consumers. Those retailers soon began to return massive quantities of unsold Cold-FX, with one sending back $10 million worth. Oliver says the product flopped south of the border because of labelling restrictions. Without approval from the U.S. Food and Drug Administration to market it as a cold and flu remedy, Cold-FX had to be classified and sold as a dietary supplement. “Unfortunately, we weren’t able to express what [Cold-FX] actually did to the degree that we could in Canada,” he says. “So you’re talking about it ‘may’ support the immune system – and that wasn’t as compelling as what we were able to say in Canada.”

When they finally came clean to shareholders about the misleading sales figures in March 2007, nearly all the “profits” turned into losses. Afexa admitted that it hadn’t made proper disclosures, and in addition to paying a $400,000 fine, the Alberta Securities Commission banned Shan from serving as an officer or director of any public company in Alberta until 2014. Yet the Cold-FX brand remained relatively unscathed. In 2007, Health Canada gave Cold-FX its stamp of approval and a Natural Health Product Number – a license that verified the product met federal requirements and was able to support medical claims – after reviewing clinical trials. In 2010, the company reported $56.1 million in revenue, and a bidding war for Afexa began between Paladin Labs and Valeant Pharmaceuticals. In 2011, Valeant acquired Afexa and the Cold-FX brand for a reported $76 million.


Read Trust the Ambition, Alberta Venture’s
January 2007 profile of Afexa

Shan’s reputation also appears to have remained intact – among investors, at least. When she decided to launch Afinix, which she calls the “second chapter of [her] personal career,” there was no shortage of financial backing. The National Research Council of Canada provided funding, while AVAC Ltd, a private Alberta company, invested $1.5 million. Investors, it seems, weren’t buying into a particular product, they were buying into Jacqueline Shan. “Jackie is well-regarded as an innovator in the industry,” Oliver says.

“I think that’s based on her background. Science is sort of the pedigree of the company.”

But when it comes to Afinity, should consumers trust the science, even if they trust Shan? Afinity’s glossy brochure highlights existing studies that support its claims, and plans are underway to complete their own product efficacy trials. But despite the pervasiveness of omega-3s in supermarket aisles, recent studies are revealing that links once made between fish oil supplements and health benefits are weak. Although studies in the early 1990s linked fish oil capsules to a reduction in sudden cardiac death, subsequent trials show little evidence to support that. A 2012 Canadian study published in the New England Journal of Medicine showed that the supplements didn’t reduce death and disease rates for people with heart problems, while a study of nearly 70,000 patients published in the Journal of the American Medical Association came to a similar conclusion. A 2012 study comparing three high-quality trials of more than 3,500 participants concluded that there was no cognitive benefit to taking the supplements. Closer to home, the Alberta College of Family Physicians concluded, based on three high-quality trials in over 20,000 patients, that “although guidelines recommend increased dietary omega-3 consumption, evidence does not support using omega-3 fatty acid supplements.” (Recent research suggests, however, some benefit from omega-3 for inflamation.)

Afinity has already been approved by Health Canada, but while the standards for reviewing prescription drugs are rigorously enforced, the standards for natural health products are less stringent. “The problem is that when Health Canada looks at things, they don’t look to see if the effect is important,” McCormack says. “They just look to see ‘Does it do something?’ Even if the ‘something’ is very small, they still have to say that it does something.”

Likewise, while the government and the Pharmaceutical Advertising Board tightly regulate advertising for prescription medications, the same standards aren’t applied to natural health products. “The area of regulation and advertising is just the tip of the iceberg – whether or not the product should be sold at all are the concerns for us right now,” Eng says. And it’s not just misleading advertising that consumers need to be aware of. In the case of supplements for conditions that are naturally fluctuating, such as arthritis, McCormack cautions that users will sing the product’s praises, but anecdotal evidence is just that – anecdotal. “My entire concern with this whole supplements stuff is you’ve got to try and sell fear and then hope,” he says. “We should just be saying, ‘Look, be physically active and eat a Mediterranean sort of diet and stop taking the holy supplements.’”

Still, when Afinity roles out across Canada in early 2014 – Oliver has yet to confirm the celebrity ambassador, but there certainly will be one – there will undoubtedly be customers. And while the critics will be waiting, Shan’s ready for them. “When you do more research there’s more questions, there’s a lot of criticism. Sometimes it’s easier, it’s safer to not do anything,” she says. “But I don’t think that’s the right way for the industry as a whole to improve their quality, reputation and credibility.”

Oliver agrees. “I think there are always people taking shots at certain brands,” he says. “But Jackie had a vision and she wanted to perform formal clinical trials on a compound that was natural and she won’t change from that. If anything she’ll continue to do more research and make sure we can back up any of our claims. Our foundation is science and evidence-based products – I think to do anything different would not be doing the brand justice.”

When it comes to marketing Afinity, Afinix won’t distance itself from the Cold-FX brand or its history. Instead, they’ll use it to leverage sales. For retailers, if nothing else, Shan has proven that her products are profitable. “The retail partners know that we were very successful – we ended up creating the number one selling product in the category,” Oliver says. And as demonstrated by Cold-FX’s success, the results of the clinical trials might not even matter.

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