Mattrixx CEO: FDA Warning 'Unprecedented'

(Update: Updates the stock price.)

Matrixx Initiatives(MTXX Quote) continued to beat the drum of its innocence Thursday as it faces the very real prospect of losing almost half its business because of a Food and Drug Administration warning.

Maker of the now-infamous Zicam nasal sprays that the FDA says may eradicate your sense of smell, Matrixx convened a conference call with analysts and investors Thursday to defend itself and begin the process of totting up the financial damage.

"Let me state for the record: Neither the company nor I would ever market a product we knew to be a safety concern," said Matrixx boss William Hemelt. Later on, he added, "I can't stress this enough: We believe our products are safe and effective."

The FDA told consumers to stop using the swabs and sprays, citing 130 reports from Zicam users that they'd lost their sense of smell, a condition known as anosmia. In some cases, the FDA said, Zicam led to anosmia that "may be long lasting or permanent."

In the call, Hemelt also continued to maintain that he and his company were blindsided by the FDA's letter of warning, sent to the company Tuesday morning and publicized by the agency simultaneously as a kind of public service announcement. "According to everyone we've talked to," Hemelt said, "the letter is unprecedented."

He appeared to be referring to the timing of the FDA's decision to warn consumers about the Zicam nasal products -- so-called homeopathic remedies that, in Zicam's case, are marketed as effective in preventing the common cold. To Hemelt, the decision was arbitrary and overharsh. There was "never any indication that they would issue a letter," he said.