Pfizer Inc. (NYSE:PFE) is in the process of settling a securities class-action lawsuit by investors who claimed that the company left them in the dark concerning the risks of arthritis drugs, Celebrex and Bextra. Investors claimed that the company’s officials left them uninformed about studies suggesting the use of the drug might increase the risks of heart attacks and strokes.
The settlement comes only one month after a federal circuit court of appeals in New York reinstated the case on appeal. A couple of year earlier it had appeared as if Pfizer might be free of this litigation when a federal judge rejected the suit after refusing to listen to testimonies from experts used by shareholders to show how much they had lost and the damages they should be paid.
NehaWadhwa, a spokeswoman for Pfizer, noted that by the company agreeing to settle, it was not admitting to any wrongdoing. Wadhwa also noted that the agreement is only pending court approval and the terms are confidential until a formal agreement has been approved. She further noted that the company and all defendants denied any wrongdoing.
Pfizer’s litigations on the two drugs dates back to 2004, when separate actions were filed claiming that the company had information about the drug’s cardiovascular risk. When more information regarding this claim where made public, the company’ share prices dropped. The suit that Pfizer is currently settling, involves those who held Pfizer shares between Oct 31, 2000 and Oct 19, 2005,the year when Pfizer pulled Bextra out of the market.
The two drugs had made the company a lot of money, with at one time being among the company’s bestselling drugs. However, the controversy over the risk cost it high payouts. For instance in 2009, the company agreed to hand over $2.3 billion to settle a U.S. Department of Justice probe into its marketing of Bextra and other drugs. Last year, the company also settled another related investor’s suit for $400 million.