Mattrixx CEO: FDA Warning 'Unprecedented'

But, according to longtime FDA policy, it never pre-notifies companies of warning letters for what the agency calls "trade reasons." That's bureaucrat-ese for insider trading, or the potential for it.

Members of the media weren't allowed to ask questions during the conference call. Neither the company nor its PR firm, Golin Harris, responded to a request for an interview.

Regardless, so convinced are Hemelt and his colleagues of Zicam's safety that they plan to meet with FDA officials in order to present evidence in an attempt to convince the agency to, in effect, change its mind. The company has 15 days from the date of the warning to respond officially to the issues raised by the FDA. An agency spokesperson declined to comment until Matrixx had done so.

Even while defending the safety of Zicam, Matrixx has said all along that it will fully comply with the FDA's warning, which serves as a de facto recall. Even now, the company is in the process of withdrawing Zicam nasal gells and swabs from the market. Those products account for 40% of the company's approximately $100 million in annual sales, and as much as 60% of its profits, according to one stock analyst.

For starters, Hemelt said it will likely spend $10 million to perform the recall, including the cost of pulling the products from stores and reimbursing customers.

But the much bigger worry for Matrixx was that publicity from the FDA warning would damage the Zicam brand name enough to permanently hurt sales of its oral cold-remedy products (also marketed as Zicam, but not the subject of any regulatory scrutiny). "Withdrawal of these products will have significant repercussions on our business," Hemelt said. "At this time, we can't speculate on what effect it will have on total sales, or the sales of our other products."