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Law360, New York (September 08, 2014, 5:47 PM ET) -- A California federal judge on Friday refused to throw out a proposed class action claiming an Allergan Inc. subsidiary concealed from consumers that its anti-aging creams derived from human foreskin cells pose a cancer risk, finding the products could be considered drugs that haven’t received government approval.
In an order mostly denying the defendants’ motion to dismiss, U.S. District Judge David O. Carter ruled plaintiff Josette Ruhnke’s complaint sufficiently alleged that the sale of SkinMedica Inc.’s line of “Tissue Nutrient Solution” products containing the compound “NouriCel” is illegal, because the products haven’t received approval from the U.S. Food and Drug Administration.
The judge, however, also found that SkinMedica didn’t act as Allergan’s agent but allowed all other claims to continue.
TNS products are marketed for “skin rejuvenation” purposes, according to Ruhnke’s complaint. They contain a proprietary mix of human growth factors — derived from human foreskin tissue and trademarked as NouriCel — that have the ability to initiate cell division. According to the complaint, human growth factors are believed to contribute to the growth of tumor cells or other abnormalities.
Ruhnke filed suit in 2013, claiming potential safety concerns associated with TNS products were not disclosed to consumers and that, in addition to lacking FDA approval, SkinMedica had not performed required controlled safety studies before marketing TNS products.
Judge Carter rejected arguments from SkinMedica that TNS products aren’t drugs under the Federal Food, Drug and Cosmetic Act because the growth factors they contain are “naturally occurring.”
“SkinMedica promotes TNS Products as ‘cosmeceuticals’ containing a mix of endogenous ‘growth factors’ for skin rejuvenation. The term ‘cosmeceutical’ conveys that a product is both a cosmetic and pharmaceutical,” Judge Carter wrote. “A product which occurs naturally or is derived from natural ingredients is capable of regulation as a drug.”
Judge Carter also accepted the plaintiff’s argument that by selling TNS Products, the defendants implicitly represented to consumers that the required safety testing for FDA-approved drugs had been performed, when it allegedly has not.
In finding the complaint sufficiently stated allegations related to the potential health risks associated with TNS Products, Judge Carter noted a report from the creator of NouriCel saying that more double-blind and controlled studies are needed to confirm the preliminary clinical effects of growth factor products. Judge Carter also cited the fact that the complaint stated that the two FDA-approved products on the market containing human growth factors provide prominent safety warnings the TNS products lack.
“The thrust of defendants’ argument is essentially that the evidence does not support plaintiff’s claim,” Judge Carter wrote. “Plaintiff’s allegations, taken as true, suggest that there are serious safety concerns associated with TNS Products.”
Allergan and SkinMedica argued that the complaint had failed to sufficiently differentiate the companies to survive a motion to dismiss, but according to Judge Carter, the allegations of failing to disclose material facts about TNS products “unambiguously apply to SkinMedica,” and allegations of Allergan marketing SkinMedica products as safe after acquiring the company in 2012 were adequately stated by the plaintiff.
However, Judge Carter did find the plaintiff failed to sufficiently plead a principal-agent relationship between the companies, saying the complaint failed to allege any facts indicating that Allergan’s control of SkinMedica “purposely disregarded SkinMedica’s corporate existence.”
Claims for punitive damages were also allowed to remain in the suit.
Steve Berman of Hagens Berman Sobol Shapiro, who represents the plaintiffs, told Law360 he welcomed the court’s ruling.
“It basically green lights our case,” Berman said.
Attorneys for the defendants did not immediately respond to a request for comment from Law360.
Ruhnke is represented by Lee M. Gordon and Steve W. Berman of Hagens Berman Sobol Shapiro LLP.
SkinMedica Inc. and Allergan Inc. are represented by John C.Hueston, Steven N. Feldman and Andra Barmash Greene of Irell and Manella LLP, and by Alycia Degen of Sidley Austin LLP.
The case is Josette Ruhnke v. SkinMedica Inc., et al, case number 8:2014-cv-00420, in the U.S. District Court for the Central District of California.