Matrixx Initiatives, the makers of Zicam, will argue today before the U.S. Supreme Court regarding what drugmakers, medical companies and other businesses tell investors about their products.
The issue involves whether Matrixx Initiatives violated securities laws when it didn't tell investors that some consumers complained that they lost their sense of smell after using Zicam Cold Remedy nasal spray and gel swabs.
The case is Matrixx Initiatives v. Siracusano, and the SCOTUS info and briefing is here.
The Arizona Republic has more:
Drugmakers, biotechnology groups and other business interests have lined up behind Matrixx Initiatives, arguing that widespread disclosure of medical complaints from people who take drugs or use medical devices would confuse investors and consumers. The U.S. Securities and Exchange Commission, AARP and others have sided with a Decatur, Ill.-based pension fund that sued the company.
The nation's high court will hear oral arguments today in the case, Matrixx Initiatives vs. Siracusano, and is expected to issue a ruling during its term that ends in June.
This case may outlast the company. Matrixx last month struck a $75.2 million deal to sell to a Miami-based private investment company, H.I.G. Capital LLC. Shareholders have been asked to accept the investment firm's tender offer of $8 per share before the end of January.
The pension fund sued Matrixx in 2004, alleging the company concealed reports that linked Zicam to loss of smell. In 2006, the U.S. District Court in Phoenix dismissed the case after Matrixx argued that the reports of smell loss were not "statistically significant" enough to show that Zicam was associated with smell loss as opposed to random chance.
The 9th U.S. Circuit Court of Appeals reversed the district court's ruling, triggering Matrixx's petition to the Supreme Court.
Read more:
http://www.azcentral.com/business/articles/2011/01/09/20110109supreme-court-hear-zicam-case-0110.html#ixzz1Ae5TF5mP
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