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Dietary Supplement Stocks Getting Killed By DoJ, FDA's Forthcoming Press Conference

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Dietary Supplement Stocks Getting Killed By DoJ, FDA's Forthcoming Press Conference

  • Dietary supplement companies like GNC Holdings Inc (NYSE: GNC), Herbalife Ltd. (NYSE: HLF) and Vitamin Shoppe Inc (NYSE: VSI) saw their stocks tumbling Tuesday.
  • The decline was triggered by actions the U.S. Department of Justice (DoJ), the Food and Drug Administration (FDA) and other U.S. agencies plan to take against the companies.
  • Later on Tuesday, the aforementioned institutions will announce criminal and civil actions relating to “unlawful advertising and sale of dietary supplements,” Reuters informed.
  • Shares of GNC Holdings were trading down roughly 10.8 percent on Tuesday afternoon. Herbalife’s stocks lost more than 3.7 percent and Vitamin Shoppe, about 8 percent.

    The declines followed the announcement that several U.S. federal agencies plan to pursue criminal and civil enforcement actions over the publicity and sale of dietary supplements.

    A press conference is scheduled for Tuesday at 3:30 p.m. ET in Washington, D.C.

    Since no specific companies or individuals were singled out in the press release, the sector as a whole seemed to be reacting to the news.

    Related Link: Herbalife Spokesperson Alan Hoffman Tells Benzinga He Doesn't Believe Co. Mentioned In DoJ Report

    Not The First

    This is not the first investigation that companies in the industry have faced this year. A few months ago, GNC met scrutiny related to the ingredients it used in certain herbal supplements. The company said it had reached an agreement with the office of New York Attorney General Eric Schneiderman in March.

    Last month, the state of Oregon also sued the company for the alleged use of illegal ingredients in its supplements.

    Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

    Image Credit: Public Domain

    Posted-In: dietary supplements Eric SchneidermanNews Health Care Legal Movers Trading Ideas General Best of Benzinga

     

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