The maker of Cholestin, a dietary supplement that targets cholesterol, can continue to import a key ingredient pending a resolution of its legal dispute with the Food and Drug Administration.

U.S. District Judge Dale A. Kimball issued that ruling Tuesday afternoon in Salt Lake City, saying Pharmanex Inc. could be forced out of business if the FDA ban on the import of red yeast rice isn't lifted.Pharmanex, a California-based company that encapsulates the Cholestin product in Farmington, has battled the FDA in federal court since April 1997. It has also taken its case to the court of public opinion with a public relations blitz and a flurry of press releases that have generated national news coverage.

At issue is where Cholestin's key ingredient, mevinolin, is a naturally occurring product or the equivalent of the synthetic drug lovastatin contained in Merck's prescription drug Mevacor.

The legal battle between Pharmanex and the FDA is being billed as the first test of the Dietery Supplement Health Education Act of 1994. Co-sponsored by Sen. Orrin Hatch, R-Utah, the act governs the sale and marketing claims of natural food products as dietary supplements rather than drugs. Dietary supplements are a $1 billion industry in Utah.

Pharmanex imports tons of red yeast rice from China each year for the production of its cholesterol inhibitor, which is sold in 35,000 stores throughout the country. Cholestin is primarily intended for consumers with moderately high cholesterol levels - 200 to 240 - where prescription treatments may not be warranted.

Company officials say Cholestin is made entirely of the red yeast rice through a natural fermentation process that dates back hundreds of years. They note it is also used in sake and other food products long available in the United States.

But the FDA contends the yeast in Cholestin is not the traditional strain but rather a lovastatin. On May 20, the agency declared it an unapproved drug and barred further imports of the red yeast rice. That brought the two sides back to court on Monday, with Pharmanex arguing the FDA ban threatened its survival and violated the 1994 act.

In his order lifting the FDA ban, Kimball noted the FDA "has never at any time considered issues of safety to be implicated in this matter." And with safety not an issue, Pharmanex would likely suffer greater harm if the ban remained in effect, he said.

The judge said Pharmanex had raised "substantial and serious questions" regarding the FDA's interpretation of the term "article approved as a new drug" in the 1994 act. The FDA reads "article" to mean an active ingredient in an approved drug product.

"This question merits further consideration as do the questions of whether FDA's factual findings with respect to the composition, manufacture and marketing of Cholestin and with respect to red yeast rice and the historical marketing thereof are arbitrary and capricious," Kimball added.

With that issue pending, the judge held that for the time being, Cholestin is a "dietary supplement, and not a drug" within the meaning of federal law and that the FDA may regulate it as such.

In a statement issued from Pharmanex headquarters in Simi Valley, Calif., company president Bill McGlashan hailed the ruling as a victory for consumers and the dietary supplement industry.

"We are thrilled with the court's decision and believe it is a reflection of the weakness of the FDA's legal and factual position and importance of the issues that are at stake in this case," McGlashan said.

"Natural dietary supplements such as Cholestin play an important role in maintaining and promoting good health in a cost-effective manner, and Congress passed the (1994 act) to ensure access to these products."