Natural Foods Merchandiser

Zicam president banks on the support of retailers

As the makers of Zicam cold remedy products pull Zinc-containing nasal products off the shelves following a stern Food and Drug Administration warning that the products may be associated with loss of smell, William Hemelt, president of Matrixx Initiatives Inc., said he's optimistic he can state his case to the FDA, get the products back on the shelves and maintain retailers' trust.

If not, he'll have to "shrink the company," he said, as initial estimates of losses hover around $10 million.

"Our retail customers have been responsive," Hemelt said, during a conference call with investors and the media. "They understand the situation and want to make sure they don't have holes on the shelves before the cold season, and we're talking to them now about adding additional products, if they're not already carrying a full line of Zicam products."

Matrixx will try to transition its nasal customers to oral forms of its cold products. The company began recalling Zicam Cold Remedy Nasal Gel and Zicam Cold Remedy Swabs following a warning issued last week by the FDA. A third product named by the FDA — Zicam Cold Remedy Swabs, Kids Size — had been discontinued, but the agency warned that consumers may still have the over-the-counter product in their homes.

FDA officials said they issued the warning after the agency received more than 130 reports of loss of the sense of smell and taste associated with the products and reviewed study-related evidence. The agency also claims that Matrixx failed to turn over hundreds of complaints it has received.

"During an inspection of the Matrixx facility in May 2009, we discovered approximately 800 adverse event reports that Matrixx had not submitted to the FDA as required," said FDA spokeswoman Siobhan DeLancey. "It is the responsibility of the company to perform (and) bring a safe and effective product to market."

Hemelt said company lawyers advised against handing the complaints over to the FDA. It was their interpretation of the regulations that said only written notifications were required.

Matrixx has 15 days to respond to the FDA. Hemelt described the FDA letter as "a complete surprise to us." He said he hopes to be able to convince the agency that the charges are erroneous, based on other studies paid for by the company.

"In no clinical trial of intranasal Zicam has there ever been a single report of lost or diminished olfactory function," Hemelt said. "We believe our products are safe and effective."

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