=DJ IN THE MONEY: FDA Warns Users Of Zicam Nasal Remedies
Tuesday, June 16, 2009 01:45:00 PM
By Carol S. Remond
A DOW JONES NEWSWIRES COLUMN
Five years after it began looking into complaints that cold remedy Zicam might cause some users to lose their sense of smell, the Food and Drug Administration has "concluded that these products may pose a serious risk to consumers."
In a June 16 warning letter published on its Web site, the FDA told Zicam manufacturer Matrixx Initiatives Inc. (MTXX) that it received 130 reports of anosmia associated with the use of Zicam Cold Remedy Nasal Gel, Zicam Cold Remedy Gel Swabs and Zicam Cold Remedy Swabs, Kid Size.
Matrixx's stock lost more than half its value Tuesday to $8.56 a share before trading was halted. An extraordinary 3.5 million shares of Matrixx changed hands before the stock was halted.
FDA and Matrixx representatives didn't return phone calls seeking comment.
Back in January 2004, Dow Jones Newswires was first to report that the FDA was investigating complaints that Zicam Cold Remedy, a spray designed to deliver a zinc gel into the nose, may cause anosmia in some users. Matrixx at the time said reports linking Zicam to a loss of smell were misleading and unfounded.
Zicam Cold Remedy intranasal products are over-the-counter common-cold medicine marketed as homeopathic drug products.
The FDA said in its warning letter that an approved new drug application, or NDA, is "required for the Zicam Cold Remedy intranasal products, regardless of their homeopathic status." The governmental agency noted that there are no NDAs on file with the FDA for any of the Zicam Cold Remedy intranasal products and that Matrixx markets them "without FDA approval." The FDA also said the products were misbranded "because the labeling does not bear adequate warnings regarding the risk of anosmia."
According to the letter, Matrixx has 15 days to respond and inform the FDA of "the specific steps" it has taken to correct violations identified in the letter.
It is unclear why it took so long for the FDA to complete its investigation.
Matrixx said in its most recent annual report filed with the Securities and Exchange Commission that while it believes that allegations contained in numerous lawsuits filed against the company are "without merit, they have resulted in significant legal defense and settlement costs, which have increased our expenses and lowered our earnings."
(Carol S. Remond, a special writer on the In The Money team, is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks. She can be reached at 303-997-5783 or carol.remond@dowjones.com.)
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(END) Dow Jones Newswires
06-16-09 1345ET
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