Shareholders are to sue drug firm for not disclosing adverse reactions even though number wasn’t significant

The US Supreme Court has unanimously cleared the way for investors in a company that makes an over the counter cold remedy to go ahead with a lawsuit against it for failing to disclose reports that the product caused adverse effects, even though the number of reports fell short of statistical significance.

Shares in the US based Matrixx Initiatives plummeted in 2004 after media reports that some users of its Zicam nasal spray, whose active ingredient was zinc gluconate, had lost their sense of smell. Investors filed a class action alleging securities fraud, on the basis that the company had failed to disclose …