Pfizer Inc. agreed to pay $67.5 million to settle a class-action lawsuit by former shareholders of Wyeth Inc. who said they were misled about risks associated with the antidepressant Pristiq. The settlement was disclosed on November 9th, one month after Pfizer agreed to pay $164 million to settle a separate lawsuit accusing it of misleading investors about clinical trial results for the arthritis drug Celebrex. Wyeth shares lost more than $7.6 billion of market value on July 24, 2007, after the company said the U.S. Food and Drug Administration would not approve Pristiq to treat “hot flashes” in post-menopausal women until it learned more about potential heart and liver problems associated with the drug.
Shareholders, led by the Pipefitters Union Local 537 Pension Fund in Boston, contended that Wyeth’s failure to reveal adverse effects sooner caused its stock price to be inflated during the class period (June 26, 2006, to July 24, 2007). Pfizer bought Wyeth in 2009. Several former Wyeth officials, including onetime Chief Executive Robert Essner, were also Defendants in the case.
Pristiq generated $461 million of sales from January to September for Pfizer. Analysts once believed annual sales would top $2 billion for the drug, whose chemical name is desvenlafaxine. The settlement came after nearly six months of mediation. It requires approval by U.S. District Judge Richard Sullivan in Manhattan, who certified the class action in September.
The case, which has a Michigan retirement system as the named Plaintiff, is City of Livonia Employees’ Retirement System v. Wyeth et al, U.S. District Court, Southern District of New York, No. 07-10329. Laurie Largent, with Robbins Geller Rudman & Dowd, located in San Diego, and David M. Rosenfeld, with Herrick Feinstein, a New York City firm, represented the Plaintiffs in this case. They did a very good job.
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