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Zicam Maker Investor Lawsuit Headed to Supreme Court

When reports started popping up a few years back that some users of Zicam Cold Remedy claimed the drug led them to lose their sense of smell, it made big news. But some investors in Matrixx, Zicam's manufacturer, felt they learned of the alleged side effect a little too late. Now Matrixx's challenge to the investors' 2004 lawsuit will have its day in court.

The Supreme Court granted cert Monday in Matrixx Initiatives v. Siracusano. Matrixx petitioned for cert after the 9th Circuit revived the suit in 2009. Matrixx claims that if investors were to win this suit, it would have a chilling effect on the drug industry because companies would be forced to disclose even a few adverse reactions to a drug.

The investors who filed the original suit, on the other hand, claim Matrixx continued to tout the benefits of Zicam even though the company received 12 reports of bad reactions related to loss of smell between 1999 and 2003. Those positive reports allegedly led to an inflated price for Matrixx's stock.

The Food and Drug Administration issued a warning letter in June 2009 that said Zicam could pose a health-risk to its users. Matrixx responded to the letter by recalling Zicam from the market.

The Supreme Court is expected to hear the case this fall.

Associate Editor

Lauren Williamson

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