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Mannatech May Distance Itself from Study Author, President Says

by David Evans


©1999 Bloomberg, LP
August 9, 1999

Mannatech Inc. may distance itself from the author of a disputed study it has used to sell its nutritional supplements, President Samuel Caster said in a conference call with distributors.

"We probably will be disassociated" with Dr. Darryl See, a former associate clinical professor at the University of California, whose study was used by more than 400,000 Mannatech distributors to market the company's products, Caster said during the call.

Mannatech will continue using the study to promote its products. The study ranked the company's pills, including Ambrotose, among the top five of 196 nutritional supplements tested.

Shares of the Coppell, Texas-based company have dropped for six days, falling 20 percent in that time. They fell 1/2 to 9 5/8 today. The slump began after the company warned its distributors that Bloomberg News was preparing a story about the company.

Bloomberg reported last week that See's study was neither conducted under the auspices of UC Irvine Medical School nor funded by a federal grant, contrary to the company's statements. Bloomberg also reported that See failed to disclose that his wife has been a Mannatech distributor since 1997 and that he received more than $100,000 from the company in speakers fees and research grants since 1998.

"We're not retreating," said Caster. "We're not backing off. This doesn't discourage us one bit."

He said a study by See of additional Mannatech products, scheduled for release next month, may be delayed. "It's probably not coming out when we thought it would be."

Mannatech said last week it's conducting an internal investigation of the issues raised by the Bloomberg report. Castor said the company is meeting with lawyers tomorrow to develop an official response to questions about See and hopes to have a formal statement by week's end.

"We're investigating what may be some misrepresentations," said Steve Fenstermacher, vice president of accounting and controller, in an interview after the conference call.

The Journal of the American Nutraceutical Association, which published See's article, put a letter from See on its Web site last Thursday. The letter stated that the study wasn't federally funded and that he submitted it to the journal after leaving U.C. Irvine.

See also said in the letter that his wife sold products covered by the study and that he was a paid consultant to a company whose products were examined in the study. He didn't identify any companies in his letter.

See has recommended Mannatech's supplements for treatment of diseases such as AIDS and cancer.