As Cold-fX makers defend the brand in court, its creator sells a new product – with a strikingly similar name
Edmonton's Jacqueline Shan, best known as the co-creator of Cold-fX, is still in the natural health product market, this time with an allergy remedy
by Alberta Venture Staff
Pollen season is upon us, and as the wheezy allergy-sufferers peruse the drugstore aisles, they may come across a remedy with a strikingly familiar name: Allergy-FX. Ring any bells? It sounds a lot like Cold-fX, doesn’t it? Well, apart from their name, the two products share one other thing in common: the woman behind them.
Jacqueline Shan, whose company Trusted Health Group sells Allergy-FX, is probably best known as the co-creator of Cold-fX, a product both celebrated by loyal consumers and mired in controversy. The brand’s owners have been in court many times over the years, most recently in B.C., where current owner Valeant is defending itself against accusations it made false claims about Cold-fX’s effectiveness.
Meanwhile, Shan has mostly stayed out of the firestorm while continuing her career creating and selling natural health products. First it was a line of supplements targeted at baby boomers and sold by her company Afinity. Recently, Afinity merged with Trusted Health, which acquired the allergy-relief remedy known today as Allergy-FX.
Shan declined a request for an interview. But when asked about the similarity between the two brand names, Afinity spokesperson Warren Michaels said, “We do not believe that consumers will be confused with the use of the product since our messaging for Allergy-FX is clearly for allergy relief.”
But University of Alberta marketing expert Kyle Murray says the company may risk associating its product with the negative attention Cold-fX has received.
“In general, if you have a product that failed or ran into trouble and then you launch another product that looks like a brand extension, it’s likely to carry over some of those associations,” Murray says.
But for all the bad press it has received, Cold-fX maintains a loyal following among those who don’t believe the negative hype, so Murray says a similar-sounding name may actually work in the company’s favour.
“For at least that segment of the population that bought Cold-fX and like Cold-fX and thought positively of it, an Allergy-FX is sort of piggybacking on that goodwill,” he says.
A Complicated History
In the early 1990s, Shan, who has a PhD in physiology from the University of Alberta and a Doctorate of Science in Pharmacology from Peking Union Medical College, launched her first biotechnology company, CV Technologies (later called Afexa Life Sciences) in Edmonton. The company soon released its first invention, which would later become the nation’s top-selling natural health product: Cold-fX.
The company advertised the ginseng-based supplement as a cold and flu remedy that can “stop a cold in its tracks.” CV Technologies did so well promoting it – winning the endorsements of hockey celebrities like Don Cherry and Mark Messier – that Marketing Magazine named the company the 2005 Marketer of the Year.
A year later, two academics from the University of British Columbia disputed the efficacy of Cold-fX, stating that it is a mere placebo. But that didn’t stop Afexa from releasing the product in the U.S.
Shortly after, Afexa admitted to it hadn’t made the proper disclosures to shareholders about sales in the U.S. As a result, Shan, who was the president, chief executive officer and the chief science officer of the firm, paid a $400,000 fine and was banned by the Alberta Securities Commission from serving in an officer or director position at any public company in the province for seven years. (She now serves as a director and chief science officer for Trusted Health, a private corporation.)
In 2010, two investors filed a $110 million class-action lawsuit in Ontario against CV Technologies, accusing the company of overestimating its revenue south of the border and misleading shareholders.
While Afexa and its senior executives scrambled to earn back their shareholders’ trust, Shan continued to market the supplement that kick-started her career, until the Laval-based Valeant acquired both her company and its signature product in 2011 for a reported $76 million.
Now Valeant is fighting another class-action lawsuit, which claims that the international pharmaceuticals company “knowingly, fraudulently and deceitfully misrepresented the capabilities and benefits” of Cold-fX.
On the other hand, with a large market – 73 per cent of Canadians take natural health products, according to a 2010 Health Canada survey – it’s no surprise that Cold-fX has remained strong despite the court battles and doubts raised by academics.