According to the Associated Press (AP), the US Food and Drug Administration (FDA) issued a health alert earlier this summer with regard to the zinc contained in Zicam potentially impacting an individual's sense of smell either temporarily, or permanently.
Matrixx, the manufacturer of Zicam, initiated a voluntary recall of the product June 24th.
Now, a Matrixx investor has filed a proposed securities class action lawsuit against the manufacturer on behalf of investors who purchased stock in Matrixx between December 22, 2007 and June 15th of this year.
According to a press release issued by Shareholders Foundation, the plaintiff cites the manufacturer for failure to disclose material adverse facts pertaining to the company's operational well-being and future prospects. In so doing, the complaint alleges, Matrixx violated federal laws governing securities.
According to the complaint, the FDA issued a health alert June 13th with regard to certain Zicam products.
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The FDA warning letter said Matrixx appeared to have more than 800 adverse reaction reports. The FDA directed the company to submit all reports to the FDA and to "indicate which of these reports have been previously submitted…"
Various class action and personal injury lawsuits have been filed and the company told AP that it expects more.
In tandem with these troubles Matrixx stock value has tumbled from a 52-week high of $19.74 per share, to $6.05 per share at the close of trading July 6th. AP reports the stock has traded as low as $4.39 and as high as $21.50 in 2007.
The proposed securities lawsuit was filed in US District Court for the District of Arizona. Matrixx, meanwhile, stands behind its product.