Pfizer Inc. (PFE:US), the world’s biggest drugmaker, lost a court bid to dismiss investors’ claims that company executives misled them about the prospects for arthritis drugs Celebrex and Bextra.
U.S. District Judge Laura Taylor Swain in New York concluded yesterday that shareholders can proceed with claims that Pfizer officials made misleading statements about the safety of Celebrex and Bextra. Stockholders allege Pfizer executives deliberately hid or misrepresented the results of studies that suggested the drugs may have adverse cardiovascular effects.
The judge said “factual issues” precluded her from throwing out investors’ claims “on the issue of whether there were material misstatements or omissions.” She threw out shareholders (PFE:US)’ claims on other issues.
The decision clears the way for the shareholder suits, which have been combined into a class-action case, to go to trial. Celebrex, with almost $2.5 billion in annual sales, is one of Pfizer’s best-selling medicines. Pfizer officials pulled Bextra off the market in 2005 after it was linked to an increased risk of heart attacks and a rare skin condition.
Chris Loder, a spokesman for New York-based Pfizer, said the drugmaker’s lawyers are ready to defend against the investors’ claims in court.
‘Presenting the Case’
“We appreciate the court’s decision narrowing the claims and look forward to presenting our case at trial,” Loder said yesterday in a telephone interview.
Celebrex was linked to heart risks at high doses in research released in November 2004, sending shares down as much as 7.6 percent. Bextra was among the drugs that a U.S. Food and Drug Administration reviewer identified as unsafe that same month.
In 2009, Pfizer agreed to pay $2.3 billion to settle a U.S. government probe into claims the drugmaker improperly marketed Bextra and other drugs. As part of the deal, Pfizer agreed to pay a $1.3 billion criminal penalty over its Bextra marketing and $1 billion in civil fines in connection with improper sales of other medicines.
Lawyers for Pfizer investors said they are still collecting evidence on their claims that company officials duped stockholders about the drugs’ safety profiles in their public statements.
“We are very pleased the judge has upheld the vast bulk of our claims and we look forward to trying the case on behalf of the class,” Jay Eisenhofer, a partner in Wilmington, Delaware- based Grant & Eisenhofer, said in an e-mailed statement.
Swain said investors could proceed with allegations that senior Pfizer executives knew in March 2004 that researchers found the drugs posed an increased heart-attack risk in some patients and didn’t disclose the study results for seven months.
Shareholders contend the executives were improperly touting Celebrex and Bextra as safer than competing drugs during that period and those statements artificially inflated the company’s stock price..
She barred claims against individual Pfizer officials based on some statements about the drug’s safety profile made to news outlets in Canada and the U.S. in 2004.
The investor cases are In Re Pfizer Inc Securities Litigation, 04-cv-09866, 05-MD-1688, U.S. District Court, Southern District of New York (Manhattan).
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