Tuesday, June 16, 2009

Criticism-phobic Drug Company Slapped Down by FDA

One of the creepier stories to emerge from the investing world involves a company called Matrixx Initiatives. Matrixx makes Zicam cold remedies, and nasty people on stock message boards were saying some years ago that these are bad products, that they hurt consumers, causing them to lose their sense of smell.

Matrixx hated what was being said about it so much that it sued a bunch of people--including Floyd Schneider, a well-known Internet whistleblower. Here's an example of the press coverage this suit occasionally generated.

In 2004, Dow Jones reporter Carol S. Remond reported that the FDA was investigating the safety of Zicam, specifically reports that people who use it lose their sense of smell. Preposterous, said Matrixx.

Here is a press release Matrixx issued, denying Carol's report. The title is "Matrixx Initiatives Reaffirms Safety of Intranasal Zicam Cold Remedy," and the release says that the company "is not aware of an FDA inquiry into the safety of our intranasal zinc-gluconate products."

Matrixx's position received a hearty endorsement from Judd Bagley, a former Florida Republican aide employed by Overstock.com CEO Patrick Byrne to stalk his critics--including Schneider and other investor advocates.

Bagley and other defenders of Matrixx said that companies are plagued by the likes of Schneider, that the companies and not their customers and investors are the real victims, and that the best thing all around is just believe the Matrixx Initiatives of this world and disbelieve Schneider, short sellers, and other corporate critics.

They are naughty people! And besides, who needs a sense of smell? I must say, not having a sense of smell is an asset when one is dealing with an odoriferous character like Bagley.

So, that's where matters have stood until today. Why lookee here: The FDA has issued a formal warning to the public to stop using Zicam, and flush what they have down the toilet, because it may cause them to lose their sense of smell. The FDA told Matrixx that "FDA has concluded that these products may pose a serious risk to consumers who use them."

How about that!

Here's what the FDA says:

The agency has received more than 130 reports of anosmia—the loss of sense of smell—associated with use of these three Zicam products.

Many people who experienced a loss of sense of smell say that the condition occurred with the first dose, although some people have reported loss of sense of smell after later doses. FDA is concerned that the loss of sense of smell may be permanent.

What steps did FDA take?
• FDA issued a public health advisory warning consumers to stop using and discard or return the Zicam zinc-containing intranasal products.

• The agency sent a warning letter to Matrixx Initiatives advising the firm that these products cannot be marketed without FDA approval. The warning letter also states that the products do not include adequate warnings about the risk of loss of sense of smell.

What should consumers do if they experience harm related to these products?
FDA recommends they contact their health care professional if they experience loss of sense of smell or other problems after using any zinc-containing products that are administered into the nose.

So let's give Matrixx Initiatives and its helper Judd Bagley a great big hand. By attacking and seeking to discredit activists like Floyd Schneider, they promoted a drug that lets the public escape the stench that comes regularly from that great cesspool called Corporate America.

P.S. Food for thought: Why did it take the FDA five years to conclude that Zicam was a dangerous drug?

© 2009 Gary Weiss. All rights reserved.

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