The manufacturer of Zicam Cold Remedy has agreed to pay $12 million to settle 340 lawsuits brought by consumers who claim the popular over-the-counter zinc nasal gel damaged or destroyed their sense of smell.

The Phoenix-based manufacturer, Matrixx Initiatives, says the agreement is not an admission of liability, but rather an effort to end most of the litigation over the homeopathic remedy.

In the past two years, Murphy said, Matrixx has spent about $12 million in legal fees defending its flagship product, which has sold more than 10 million bottles since its debut in 1999.

Five months ago Matrixx settled the only Zicam lawsuit that has gone to trial, brought by a 42-year-old Los Angeles computer consultant, with an undisclosed payment.

About 400 lawsuits have been filed against Zicam since 2003, some by users who say they lost ability to smell and taste after using the product only once. Matrixx has denied the allegations, saying no study has linked the spray with loss of smell, also known as anosmia. The company says the likely culprit is a virus, the most common cause of anosmia.

Under the terms of the agreement, 95 percent of eligible plaintiffs must accept the Arizona settlement; the average payment after legal fees would be about $21,000. The settlement does not cover about two dozen claims involving Zicam nasal swabs, which also contain zinc gluconate, or 32 lawsuits outside Arizona.

Plaintiffs who reject the settlement are free to pursue their lawsuits but are likely to have trouble finding a lawyer to represent them.

Plaintiffs have argued that Zicam destroyed delicate smell tissue when the drug's pump bottles drove the viscous gel into the top of the nose with propulsive force. Zinc is used to destroy smell in laboratory animals and can be toxic to the sense of smell in people.