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Six Zicam Lawsuits Filed Over Loss of Smell

Jul 7, 2009 | Parker Waichman LLP

Zicam maker Matrixx Initiatives is facing six class action lawsuits connected to recalled nasal versions of the cold remedy.  According to the Associated Press, Matrixx disclosed the lawsuits late last Thursday after the financial markets closed, but even though the news had time to sink in during the long holiday weekend, Matrixx's stock was still hammered when markets opened yesterday morning.

Last month, the Food & Drug Administration (FDA) warned consumers not to use three Zicam nasal cold remedies.  The agency said had received 130 reports of anosmia - loss of sense of smell - in people who had used the product. Following the FDA alert, Matrixx Initiatives recalled two of the products - Zicam Cold Remedy Nasal Gel and Zicam Cold Remedy Swabs. The company had already withdrawn Zicam Cold Remedy Swabs, Kids Size, the third product named by the FDA.

According to the Associated Press, Matrixx announced late Thursday that it had been named in six class action lawsuits involving the three Zicam products.  The lawsuits, which involved at least 117 plaintiffs,  claim among other things  that the company concealed or omitted material information regarding the safety of the nasal gel products.

At the time the FDA issued its Zicam warning, it also disclosed that Matrixx had failed to inform it of 800 anosmia reports linked to the recalled cold remedies.  Matrixx has admitted that it did not pass along those reports to the FDA, but has maintained that it was advised by legal counsel that it was not required to forward those reports to the agency.

On Monday, investors reacted strongly to news of the Zicam lawsuits.  Shares closed yesterday at $6.05, down 6.6% from the previous session.  According to the Associated Press, Matrixx stock has ranged from $4.39 to $19.74 over the past year.

Matrixx continues to maintain that Zicam nasal products are safe, and said it will vigorously defend each lawsuit.

This is not the first time Matrixx has faced lawsuits over Zicam.  In 2006, Matrixx agreed to pay $12 million to settle claims by 340 plaintiffs who said they lost their sense of smell after using the product.

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