PanTheryx sues competitor over purity advertising

BOULDER and BROOKINGS, S.D.  — PanTheryx Inc., a Boulder company that produces health products from colostrum, is suing one of its largest competitors over alleged unfair advertising practices.

In the lawsuit filed in the U.S. District Court of Colorado, PanTheryx’s subsidiaries APS BioGroup Inc. and La Belle Associates Inc. accuse Brookings, South Dakota-based Sterling Technology Inc. of spreading false rumors about the two companies’ production scale and how much dairy powder is blended into certain products.

Colostrum is the milk produced by a mother cow after giving birth. Newborn calves need a certain amount to survive and gain the strength to walk under their own power. PanTheryx and other colostrum companies take the excess colostrum produced by mothers for its purported antidiarrheal properties and other intestinal tract benefits.

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The two companies operate colostrum processing plants in Arizona and California as part of PanTheryx’s vertical integration strategy and sell the milk to outside companies. PanTheryx took a $50 million equity investment in June and plans to start clinical trials for some of its medical product candidates by first quarter of 2020.

The suit alleges that Sterling executives admitted that some products advertised as “pure” colostrum as far back as last November when confronted by PanTheryx, and contained as much as 80 percent dairy powder in a recent sample test. Sterling is continuing to advertise its products as pure, despite saying it would change its labeling, the suit claims.

The two companies also claim that Sterling’s sales representative in China told customers there that PanTheryx’s production scale isn’t large enough to fill orders. While PanTheryx said its supply network was “significantly larger” than Sterling’s, it didn’t specify how much the two companies could produce.

PanTheryx’s subsidiaries are asking the court to order Sterling to change its labelling and stop it from disparaging the company in China, and for damages to be awarded via jury trial.

Calls for comment to Sterling ownership were not returned Thursday morning. The company has yet to register an attorney of record in the case.