There are few companies in the world whose safety record is more scrutinised than Adial Pharmaceuticals.
The UK’s leading manufacturer of insulin pumps and intravenous lines has been caught in an ethical scandal involving a series of false lab tests.
The tests, which have been linked to a spike in the deaths of patients, have been blamed on a “miscommunication” between a company and a hospital.
Adial’s chief executive, Richard Hall, is currently under investigation by the US Food and Drug Administration (FDA) over allegations that the tests have been used to mislead consumers.
But he has defended his company’s reputation and its ability to innovate.
He told The Independent that Adial has “no record of safety problems with our products, and we’ve been running trials and trials and it’s been an incredible journey.
And we’ve had some pretty great results.”
In 2015, Adial completed a $30 million investment to develop a treatment for patients with diabetes and obesity who suffer from heart disease and kidney failure.
In February this year, Adical announced a $1.6 billion investment in a diabetes drug development programme that aims to make the treatment cheaper, faster and easier to use for patients in developing countries.
The drug, which is currently undergoing trials in the US and South Africa, is designed to reduce blood sugar by up to 20 per cent and lower the risk of death and complications from diabetes.
“We want to make diabetes easier for people and better for people,” said Hall, who was previously the company’s vice-president of marketing and communications.
“The key for us is to make sure the patient gets the drug, and it works for them.”
The company has also spent $1 billion on clinical trials of an insulin pump that could treat diabetes patients, but it is yet to launch any clinical trials.
The controversy surrounding Adial, which was founded by pharmaceutical entrepreneur Martin Shkreli, has come at a time when the company is already facing the possibility of a potential US$2.5 billion fine from the government.
In June, Shkrellis former partner, Peter Thiel, resigned as Adial CEO over the company, which has also been implicated in the downfall of the former hedge fund manager Anthony Scaramucci.
Thiel’s exit came as he was preparing to plead guilty to insider trading charges.
A number of Adial investors, including Thiel, have criticised the company for failing to do enough to protect investors and shareholders.
In a statement, Thiel’s lawyers defended his decision to leave, saying the financial situation was “irreversible”.
“The company has made the decision to suspend its leadership and has not taken any further action on our behalf, but the company has been under tremendous pressure,” the statement read.
A spokesman for the US Attorney for the Southern District of New York, Daniel B. Conley, said: “We have taken action against Mr Shkrellis partner and co-founder of Adical Pharma. “
While the board is unable to make any immediate decisions, we will continue to work with the SEC and the company to ensure that Adially meets its obligations.”
A spokesman for the US Attorney for the Southern District of New York, Daniel B. Conley, said: “We have taken action against Mr Shkrellis partner and co-founder of Adical Pharma.
In a separate statement, Adal’s lawyers said that Shkrestis departure “is part of an ongoing review of the company” and that “the company’s actions were in line with the Company’s corporate governance, transparency and ethics policies”. “
It is unfortunate that Mr Shklts decision to quit is now causing financial distress to investors and our clients, and the SEC is now investigating his financial arrangements.”
In a separate statement, Adal’s lawyers said that Shkrestis departure “is part of an ongoing review of the company” and that “the company’s actions were in line with the Company’s corporate governance, transparency and ethics policies”.
In a press release, Shklstis’ lawyers said the company “has already taken appropriate steps to correct the problems and restore the trust of its shareholders”.
“As part of its investigation, the SEC has contacted Adal to determine whether it has sufficient information to file a civil or criminal charge,” the release read.
Adal declined to comment.
In April, Adalian Holdings, Adi Pharmaceuticals’ parent company, said it was planning to close the company and “close Adial up and out”.
Adal said it had “invested in several initiatives” and “is in a very difficult situation”.
“We are not going to have enough capital to continue with the business, we are not in a position to continue, and so we are making a strategic change,” it said.