Owner of Arizona Company Charged and Convicted of Introducing an Unapproved New Drug—Stem Cells—into Interstate Commerce

HOUSTON—The former owner of Global Laboratories LLC, located in Scottsdale, Ariz., has been convicted of unlawfully introducing stem cells into interstate commerce, United States Attorney José Angel Moreno announced today along with Special Agent in Charge Patrick J. Holland of the Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI), Kansas City Field Office and Cory B. Nelson, Special Agent in Charge of the FBI’s San Antonio Field Office.

Fredda Branyon, 57, of Scottsdale, Ariz., today pleaded guilty pursuant to a plea agreement to introducing an unapproved new drug into interstate commerce as alleged in count 12 of the criminal information filed under seal on July 26, 2011. The conviction arises from the introduction into interstate commerce of stem cells derived from umbilical cord and cord blood tissue for non-research purposes without FDA approval. The criminal information, which is now unsealed, alleges that in January 2009, Branyon was the owner of Global Laboratories LLC and that she, through her company, manufactured, sold and delivered stem cells into interstate commerce without FDA approval. The charges are the result of a joint investigation conducted by special agents of the FDA-OCI and the FBI Brownsville office, which is continuing.

“The public has a right to expect that the drugs, or in this case stem cells, introduced into the marketplace are safe for public consumption and meet strict FDA guidelines,” said Moreno. “The public has an equal right to expect that those who fail to meet those standards will be investigated and prosecuted.”

At a hearing today before United States District Judge Melinda Harmon, Branyon admitted that she knew that FDA approval was required to distribute and sells stem cells for non-research related purposes but nonetheless sold stem cells to an individual in Brownsville, Texas, who later performed medical procedures using the stems cells on patients suffering from autoimmune diseases. The stem cells were not created under FDA guidelines nor in an FDA approved facility. According the factual basis filed of record with the plea agreement, Branyon sold approximately 183 vials containing stems cells to the individual in Brownsville on 27 separate occasions between April 2009 and February 2010 and received approximately $300,000 for the sale of the stem cells. Branyon also admitted that beginning in August 2009, she began purchasing umbilical cords from a Del Rio, Texas birthing facility. Later, Braynon, who had no formal training regarding the creation of stem cells, employed a Charleston, S.C., medical school professor as a consultant to aid her in the creation of stem cells from the umbilical cord tissue.

“As evidenced by this investigation, protection of the public takes many forms, not the least of which is the aggressive pursuit of individuals or corporations who intentionally risk the public’s health for profit, said Nelson.”

“This criminal information demonstrates the commitment of the Food and Drug Administration to protect the American public from the harms inherent in being exposed to unapproved new drugs,” added Holland. “The FDA will continue to aggressively pursue perpetrators of such acts and ensure that they are punished to the full extent of the law.”

Branyon faces up to three years in prison and a fine of up to $10,000 for the conviction. Judge Harmon has set sentencing for Nov. 18, 2011. Branyon has been ordered released on a $50,000 personal recognizance bond pending sentencing.

This case is being prosecuted by Assistant United States Attorney Samuel Louis.