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April 30 (Reuters) – Shares of GNC Holdings Inc and
Vitamin Shoppe Inc fell after U.S. health regulators
warned makers of dietary supplements against marketing products
containing an ingredient that lacked safety data.
The U.S. Food and Drug Administration on Friday issued
warning letters to ten manufacturers and distributors of
products containing dimethylamylamine (DMAA).
Though GNC and Vitamin Shoppe were not among the companies
to which the letters were sent, they are among the largest
retailers of nutritional products that contain DMAA.
“We estimate that products containing DMAA approach 6
percent of GNC’s company-owned retail sales,” Goldman Sachs
analyst Matthew Fassler said in a note.
“The number is likely lower for Vitamin Shoppe, given its
lower concentration of sports-linked product.”
The analyst estimated that lose of revenue from DMAA-related
products would reduce GNC’s pretax income by about 8 percent.
In its warning letter, the FDA said DMAA is known to narrow
blood vessels and arteries, which can elevate blood pressure and
may lead to cardiovascular events ranging from shortness of
breath and tightening in the chest to heart attack.
The products containing DMAA came under scrutiny after the
U.S. Department of Defense conducted a probe following the death
of two soldiers using those products.
The synthetically produced DMAA is commonly used by
bodybuilders because of its stimulating effects and is often
touted as a “natural” stimulant
Deutsche Bank analyst Charles Grom said GNC has reportedly
sold about 440 million doses of products containing DMAA since
2007 and only one serious adverse event was reported.
“While it adds uncertainty, (the issue) appears to be
manageable,” Grom said.
Shares of GNC dropped 8 percent to $37.66 and Vitamin Shoppe
4 percent to $46.85 on Monday on the New York Stock Exchange.
(Reporting by Shailesh Kuber in Bangalore; Editing by Maju
Samuel)
