Promisia shares tumble on Medsafe warning but company stands by product

(BusinessDesk) - Promisia Integrative [NZX:PIL] shares slumped 72 percent after Medsafe warned its Arthrem product could cause potential liver damage. The company said the number of reported cases is "extremely small" and it stands by its product.

On Monday, MedSafe said the Centre for Adverse Reactions Monitoring (CARM) received 20 notifications between February 2016 and December 31, 2017, 14 of which described harm to the liver. Arthrem is a dietary supplement for joint support for humans. The proprietary extract made from the medicine herb Artemisia annua was originally tested as a malaria treatment in Papua New Guinea. It is grown for Promisia on a farm in Tanzania. Medsafe is the Ministry of Health unit responsible for the regulation of therapeutic products.

"Medsafe wants to ensure all New Zealanders who are using this product are aware of the serious risk it may pose. In some of the cases reported to CARM the patient required hospital care," it said. All 14 patients have stopped taking Arthrem, and have since either recovered or are improving.

The company's NZX-listed stock fell 1.3 cents to 0.5 cents, pulling its market capitalisation down to $2.8 million versus $10 million prior to the market opening.

Promisia said is taking the advisory "very seriously" and is taking additional steps to ensure any users are well informed of potential risks. However, "I think it needs to be put in context," chief executive Rene de Wit said in an interview.

"We have sold a quarter of a million jars within that time and as a percentage that is a 0.007 percent adverse reaction, which is considered by World Health Organization guidelines as very rare and more than acceptable."

De Wit said that safety is key and has always been a top priority for the company and "that's why this business has invested so heavily in clinical trials and safety studies, just to ensure the product we are marketing is safe."

According to Promisia, the product has been clinically and safety trialled, with both trials conducted by Otago University. Those trials informed the product formulation and dosage advice. "Taking 150 mg of the product twice a day is the safest - that is what we promote," said de Wit. He did not have information about what dosage the 14 notifications had involved.

Promisia said in addition to communication with pharmacies, retailers and health professionals it is updating its bottle labelling to note that "in rare circumstances Artemisia annua may be associated with liver harm." Until new labels are available, a sticker will be produced and sent to all pharmacies.

It is also amending the advice on its website to note the potential but rare risk of liver harm, identifying potential symptoms including nausea, stomach pain, pale stools, dark urine, itching and jaundice.

It also said it will amend all its messages to "stress that the product must be taken strictly as directed."

The company recently successfully raised $955,000 in a private placement of 47,750,000 shares and has also received funds from Callaghan Innovation for extensive in vitro studies and the human clinical trial of Arthrem from 2013-2015. It received further support for a new supplement for canines which was recently launched.

"That is going really well, but obviously it's early days as we only started advertising less than a month ago," said de Wit.