Tuesday, June 16, 2009

Zicam Cold-Remedy Maker Matrixx Dives, After U.S Warns of Risk

Matrixx Initiatives Inc., maker of Zicam Cold Remedy products sold in drugstores, lost more than half its value in Nasdaq trading after U.S. regulators warned its products may cause users to lose their sense of smell.

Matrixx, based in Scottsdale, Arizona, fell $10.68, or 56 percent, to $8.56 before Nasdaq Stock Market trading was halted. That’s the biggest intraday decline since its 1996 initial public offering.

The Food and Drug Administration warned the company today its homeopathic Zicam Cold Remedy Nasal Gel, Gel Swabs and Kids Size swabs have been linked to more than 130 reports of people losing their sense of smell. The FDA letter says many homeopathic products can be sold without U.S. approval. Because of “a significant and growing body of evidence” that the Zicam products “may pose a serious risk to consumers,” the agency said Matrixx must get FDA approval for its remedies.