Maker of ginseng-based remedy pays off angry investors over its dubious financial reporting
If you don’t have a cure, sometimes it’s best to treat the symptoms. So it was that Afexa Life Sciences Inc., the newly renamed company that makes Cold-fX, has agreed to pay $7 million to investors who filed a class-action suit over the firm’s botched launch of its product in the U.S. It’s the latest blow to Afexa (formerly CV Technologies), which has had a rough ride the past few years. The suit came after the company got in trouble for stating consignment deliveries to U.S. retailers as revenue. Last month, five senior officers of the company stepped down and were forced, under a settlement with the Alberta Securities Commission, to pay $740,000 in fines. Underlying all this is growing doubt about the company’s future, as data crunchers and clinical experts have questioned whether its ginseng-based products actually work. Could be a long winter for Afexa.