Matrixx Woes Continue (MTXX)
Matrixx Initiatives Inc. (NASDAQ: MTXX) gave an update at the Annual Meeting of Stockholders regarding the future of the company now that the issues have been brought up in its Zicam cold remedy. Those hoping that the matter was going to just clear itself up found another day of disappointment. While the company said its goal is to reverse this market withdrawal, we have yet to find many who believe this is coming back any time soon. The firm has said that it may cost the company $4 million to $5 million annually for Matrixx to defend itself against claims related to its Zicam Cold Remedy nasal products.
The company had a very bright future before this development came to light, but the June 16 FDA warning on its cold remedy’s loss of smell in some cases. The company also noted that it has taken steps to limit some of its legal expenses. While it said that the expense level might take a couple of quarters before litigation costs reach that $4 to $5 million range, the problem is that this issue is not going away by the sound of it. And any forward sales have effectively been removed from earnings models by investors.
Matrixx voluntarily pulled the products off of store shelves after the FDA warning letter, and the company said that other Zicam products weren’t affected by the FDA action. The company had previously maintained that these reports were misleading and unfounded. Matrixx’s response appears to be due mid-next week after an extension for it to respond and the company has maintained that it was surprised by return of this development and that the ultimate goal is to reverse the withdrawal and market ban.
Matrixx withdraws guidance, says recall could cost $10 mln (MTXX)
The Matrixx Initiatives (MTXX) conference call at 11 a.m. Eastern simply didn’t have answers to all shareholder questions about why an FDA decision led the company to temporarily pull two products from the market that account for about 40% of its sales.
On the call, the company withdrew its sales and earnings guidance for 2009, and said the temporary recall of two Zicam-brand products could cost it $10 million.
One of the most interesting call questions came from an analyst who wanted to know why the FDA allowed the product to be on the market for 10 years, then suddenly started raising concerns. Company officials couldn’t explain it, but seemed to suggest that personnel changes at the FDA might have played a role.
The stock price had risen from yesterday’s close, but has fallen from the $6.50 area to below $6 following the call. The stock has declined more than 70% since the FDA concerns were announced.
Matrixx shares rise premarket, company to address FDA letter (MTXX)
Matrixx Initiatives (MTXX) shares are up nearly 6% and among the most active premarket stocks after the company announced a conference call at 11 a.m. Eastern today to discuss the FDA warning letter that sent its shares tumbling in the previous session.
On Wednesday, Matrix announced it had received an FDA warning letter that it failed to file a new drug application for its Zicam Cold Remedy Nasal Gel and Zicam Cold Remedy Gel Swabs, and that the products were mislabled. Both products contribute about 40% of the company’s revenue. The FDA also said it had received customer complaints about anosmia after taking the products. As a result, the company voluntarily pulled them from the market.
Matrixx Begins FDA Response Process (MTXX)
Matrixx Initiatives, Inc. (Nasdaq: MTXX) has confirmed the receipt of the FDA Warning Letter today, and it is also making at least a first response to the issues. The FDA asserted that the Company is in violation of its regulations by failing to file a new drug application for its Zicam Cold Remedy Nasal Gel and Zicam Cold Remedy Gel Swabs and that those products are misbranded under their regulations for failing to adequately warn of risks. The FDA referred to numerous complaints it has received of anosmia associated with the use of these products.
In response, Matrixx believes these products are safe and do not cause anosmia. Its position is supported by the cumulative science that has been confirmed by a multi-disciplinary panel of scientists. Matrixx said that it believes the FDA action is unwarranted and the company is in the process of determining its response, which may include removing these products from the marketplace.
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Matrixx Crushed Over FDA Warning Letter for ZICAM (MTXX)
Matrixx Initiatives, Inc. (NASDAQ: MTXX) has just seen a major volume explosion from selling after an FDA WARNING LETTER over its Zicam products. Shares have been cut in half and we would expect a trading halt very soon. The FDA is having all ZICAM products pulled from shelves……
According to its annual report, Matrixx had $79 million of its $111.6 million in trailing 12-month sales listed as “cold remedy” in its annual report.
Below is a copy of the FDA WARNING LETTER:
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