Depomed Inc. (NASDAQ: DEPO) opened Monday on a loss of nearly 50%, as traders panned the company's clinical trial results for Serada. The drug, which is intended to treat hot flashes related to menopause, met only one one of four co-primary goals in late-stage trials after 12 weeks.

Depomed was hoping to prove that Serada could help patients achieve a "statistically significant reduction in the frequency and severity of menopausal hot flashes." However, the company confessed that the placebo effect was unexpectedly high in clinical studies.

The U.S. Food and Drug Administration (FDA) has some questions for Genzyme Corp. (NASDAQ: GENZ) regarding trial data for its leukemia drug, Clolar. Because Genzyme didn't follow the FDA's recommendations in conducting its main study of Clolar, the regulatory agency is reluctant to make a decision on the basis of the trial results.

In 2007, FDA staff advised Genzyme to conduct a randomized study in which participants receiving Clolar would be compared against a set of patients not receiving the drug. However, the drug company's primary tests did not include a control group; instead, the treatment was tested only on elderly patients with acute myeloid leukemia (AML).

Matrixx Initiatives (NASDAQ: MTXX), maker of the allegedly scent-stealing Zicam nasal swabs, tumbled to a new annual low this morning on news that the Securities and Exchange Commission (SEC) is launching an informal inquiry. The SEC is requesting documents and other information regarding the warning letter issued to Matrixx by the U.S. Food and Drug Administration.

Last week, the FDA told consumers to stop using certain nasally administered Zicam products after the agency received more than 130 complaints from users who lost their sense of smell. Matrixx has defended its homeopathic, over-the-counter offerings, calling the safety concerns "erroneous," but the firm settled hundreds of lawsuits in 2006 with consumers making the same allegations.

In yet another case of product contamination, Colgate-Palmolive (NYSE: CL) has discovered counterfeit packages of its Colgate-brand toothpaste on the shelves of discount stores in New York, New Jersey, Pennsylvania, and Maryland.

A statement noted that, "There are indications that this product does not contain fluoride and may contain [poisonous chemical] diethylene glycol." So . . . it won't clean your teeth, but it might make you sick or worse. Lose-lose.

Diethylene Glycol, used as a solvent and in antifreeze, has been "improperly used as a low-cost substitute for glycerin and propylene glycol in pharmaceutical preparations," according to a June 8 statement from the U.S. Food and Drug Administration (FDA). Certain toothpastes imported from China in recent weeks have been found to contain the potentially deadly substitute ingredient; the FDA is advising consumers to discard any toothpaste labeled as made in China.

Fortunately, there is clue for any concerned residents of the targeted states. The impostor Colgate tubes are labeled "Manufactured in South Africa" -- but CL does not import toothpaste into the U.S. Proving that criminals aren't always masterminds, the fake tubes have also been found to contain misspellings, such as the "South African Dental Assoxiation" or "SOUTH AFRLCA."

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.