UPDATE 2-Matrixx to settle certain suits related to cold remedy

* Says total payout to plaintiffs won’t exceed $35,000

* Deal relates to suits alleging drug misrepresentation

* Personal injury-related suits remain unsettled

* Shares rise as much as 14 pct
(Adds details, background, updates stock movement)

By Krishnakali Sengupta

BANGALORE, Aug 20 (BestGrowthStock) – Matrixx Initiatives Inc
(MTXX.O: ) agreed to settle lawsuits that alleged the U.S.
company misrepresented the safety and efficacy of its Zicam
cold drug, which was withdrawn from the market last year after
regulators warned it could cause loss of smell.

Shares of the maker of over-the-counter healthcare
products, which had shed 15 percent in the last one year,
closed up 10 percent at $5.05 Friday on Nasdaq. They had hit a
high of $5.40 earlier in the day.

The agreement signed on Thursday settles certain claims of
monetary damage to plaintiffs who bought the product, but
leaves unresolved other claims of personal injury caused by the
drug.

“They settled on these misrepresentation claims but it is
relatively minor compared to the product liability lawsuit,”
Gabelli & Co analyst Kevin Kedra said.

In June last year, the company withdrew the products —
which accounted for about 40 percent of its then revenue —
after the U.S. Food and Drug Administration issued its warning.
[ID:nN24151638]

Since 2003, several product liability lawsuits have been
filed against the company alleging that two Zicam products
caused the permanent loss or diminishment of the sense of smell
and taste.

As of Aug. 1, the company had 231 pending product liability
lawsuits against it, involving 794 plaintiffs.

Thursday’s deal saw the Phoenix, Arizona-based company
settling 18 of the lawsuits related to economic injury from
misrepresentation.

Subject to court approval, the deal will see company pay
named plaintiffs in the 18 class action suits a total amount
not exceeding $35,000, Matrixx said in a regulatory filing.

Additionally, Matrixx will have to pay the plaintiffs’
attorneys fees and costs for the litigation in an amount that
will be decided by the court, it said in the filing Friday.

The company said it also agreed to add certain
clarifications to its packaging regarding the use and status of
several current products.
(Reporting by Krishnakali Sengupta in Bangalore; Editing by
Prem Udayabhanu, Anthony Kurian)

UPDATE 2-Matrixx to settle certain suits related to cold remedy