A new lawsuit alleges anti-aging startup Elysium Health hasn’t paid its sole supplier

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Chromadex, the sole supplier of anti-aging startup Elysium Health‘s two main product ingredients pterostilbene and Nicotinamide Riboside (NR), is suing the startup for failure to make payments on those ingredients and for breach of a trademark and royalties agreement.

According to a document on Chromadex’s website, dated December 29, 2016, Elysium “made false promises and representations to induce ChromaDex into providing large supplies of pTeroPure and NIAGEN.”

Elysium uses pterostilbene and NR (or NIAGEN) — a patented and proprietary ingredient made by ChromaDex — in its Basis product. The suit alleges Elysium agreed to order these products through ChromaDex in February of 2014. However, the startup supposedly broke that agreement by failing to pay shortly after in June of 2014.

ChromaDex normally supplies its NR ingredient to about a dozen consumer brands under the NIAGEN trademark but had worked out a special deal with Elysium so the startup did not have to mention where its ingredients came from. The document further alleges Elysium failed to pay for and is in breach of a trademark and royalties agreement for the NIAGEN product and now ChromaDex is seeking “punitive damages, money damages and interest,” for an unspecified amount, the lawsuit reads.

Despite the non-payment issues, it seems the two companies carried on with their partnership. Then Elysium suddenly quadrupled its order of the products from Chromadex in June of 2016.

The price which Elysium demanded in the much larger June order was about half of the originally agreed upon amount and ChromaDex says Elysium would have known that lower price would not be accepted. ChromaDex says it reached out to discuss the matter with Elysium and the suit says Elysium, though not happy, agreed to order more.

Then Elysium proceeded to hire Mark Morris, ChromaDex’s VP of business development, away from the company last August, naming him Elysium’s new head of scientific technology. Elysium stopped ordering from the company thereafter.

The lawsuit says ChromaDex CEO Frank Jaksch tried to reach out to resolve these and the non-payment issues but Elysium ignored his efforts.

ChromaDex declined to comment on the lawsuit except to say the suit had been filed and was listed on its website in accordance with SEC public filing records.

The legal action poses a serious problem for Elysium. ChromaDex is the only source for NR. And, as mentioned before, this is one of the only two ingredients used in Basis, Elysium’s only product in the market.

Further, Elysium has taken time and resources to begin studying these two ingredients and their effects on humans.

Though Elysium touts its Basis product as a pill to “support the long-term health of your cells” it didn’t know if it actually worked on humans when it first started out as the studies on these two ingredients had only previously been done on mice. It has since conducted a small sampling on 120 humans between the ages of 60 and 80.

Elysium now says its preliminary test proves its ingredients work (improving and increasing NAD+ levels by 40 percent). NAD+ is a bit complicated to explain, but it’s believed to be a precursor to anti-aging in cells and Elysium says its ingredients increase these levels. There are now at least 12 other human clinical trials outside of Elysium being conducted to see if NR has any anti-aging effects on humans.

But Elysium may not be able to continue the testing once its supply runs out. Then what will it do? There are lots of other anti-aging supplements out there and the company could supposedly switch out its proprietary supply, but that’s a lot of time and effort (and marketing dollars) wasted just as the company seems to be ramping up.

We’ve reached out to Elysium but have yet to hear back to find out. We’ll be sure to update you if and when we do.

Update from an Elysium spokesperson:

“While we don’t comment on litigation, you can add that our customers can have 100% confidence in our ability to supply them with Basis now and in the future.”

Does that mean Elysium will offer a different ingredient in the future? Who knows but NIAGEN is a patented product so it’s not likely the startup will be using NR after the supply runs out.