CAMBRIDGE, Mass. ( TheStreet) -- GlaxoSmithKline ( GSK - Get Report) has cracked down on two of its U.S. executives for selling the anti-aging supplement resveratrol without the company's knowledge or permission, and by doing so, conceivably undermining Glaxo's nearly $1 billion investment in resveratrol drug research. The U.K.-based pharmaceutical giant ordered Cristoph Westphal and Michelle Dipp Thursday to cease selling a resveratrol dietary supplement through a nonprofit venture known as the Healthy Lifespan Institute that the two executives helped establish last year, TheStreet has learned. Westphal and Dipp were both principal executives at Sirtris Pharmaceuticals when Glaxo acquired the company in 2008 for $720 million. Glaxo bought Sirtris for its expertise in developing drugs based on resveratrol, a chemical found in red wine which some research suggests may ramp up the metabolic activity in cells and could one day be used to treat diabetes, cancer and many other diseases. Westphal and Dipp joined Glaxo after the Sirtris acquisition and continued to direct Glaxo's continuing efforts into resveratrol drug development. Unbeknownst to Glaxo, the two executives were also moonlighting as purveyors of their own custom-made dietary formulation of resveratrol. The resveratrol sold by Westphal and Dipp is formulated differently and is less potent than Glaxo's resveratrol drugs, according to the company. Consumers could purchase resveratrol online from the Healthy LifeSpan Institute run by Westphal and Dipp at a cost of $540 for a one-year supply. The web site Xconomy first reported on Westphal and Dipp's extra-curricular activities Thursday. Westphal and Dipp informed Glaxo about the formation of the Healthy Lifespan Institute, but "GSK
Glaxo was not aware that the Healthy Lifespan Institute was selling a resveratrol formulation on the Internet. The company has instructed the GSK employees to cease their association with this activity and Michelle Dipp and Christoph Westphal will be resigning their positions on the board of Healthy Lifespan," said Glaxo spokeswoman Sarah Alspach in a statement emailed to TheStreet. Westphal, who is also a partner in a venture capital firm based in Boston, would not answer questions, according to his spokeswoman. Dipp could not be reached. Resveratrol is a natural compound and can therefore be sold via retail channels as a dietary supplement without regulatory approval. Glaxo, however, spent $720 million to acquire Sirtris with the hope that a prescription drug made from resveratrol would one day be approved by U.S. or European regulators with a specific medical claim to treat or cure a disease like diabetes or cancer.
A resveratrol drug like that could potentially generate billions of dollars in sales for Glaxo. To succeed, the pharmaceutical giant would have to argue successfully that only its prescription formulation of resveratrol -- and not the similar substances sold on the Internet, in health food stores or TV infomercials -- provide real therapeutic benefit. Yet, Glaxo's huge investment in resveratrol drug research is potentially undermined, even jeopardized, by the Sirtris-turned-Glaxo executives who sold them on the idea but then turned around and started selling their own cheap resveratrol over the Internet. Glaxo's Alspach had no further comment. Glaxo's decision to acquire Sirtris for $720 million was a gamble because at that time, Sirtris had very little clinical data to support its theory that resveratrol drugs could extend life or treat and cure disease. In fact, no clinical trial in humans to date has substantiated the anti-aging or disease-modifying claims made about resveratrol In April, Glaxo terminated a clinical trial of its resveratrol drug SRT501 in multiple myeloma after some patients developed kidney damage. Other studies of Glaxo's resveratrol drugs have either been completed or are still enrolling patients. Dipp told Xconomy that her Healthy Lifespan Institute was selling the custom-made resveratrol formulation web site at cost and was not profiting from sales. Dipp was one the first employees at Sirtris and is now senior vice president of Glaxo's Center of Excellence for External Drug Discovery, responsible for helping Glaxo form drug development partnerships with smaller biotech firms. Westphal was the CEO of Sirtris both before and after Glaxo's acquisition. He now runs SR One, Glaxo's internal venture investing unit. Dipp and Westphal are also founding partners of Longwood Founders Fund, a Boston-based venture capital firm in which Glaxo is an investor. -- Reported by Adam Feuerstein in Boston. Follow Adam Feuerstein on Twitter.