Drug manufacturing giant Pfizer Inc has settled a class-action lawsuit with shareholders who were misled about risks associated with the antidepressant Pristiq. The cost to Pfizer will be a whopping $67.5 million.
The all-cash settlement was made public on November 9, one month after Pfizer settled a different lawsuit accusing the company of misleading investors about clinical trial results for the arthritis drug Celebrex; that settlement totaled $164 million.
The Pristiq lawsuit revolves around a large drop in the stock value of Wyeth shares (the company was acquired by Pfizer in 2009) that occurred on July 24, 2007. The drop, which caused a loss of over $7 billion of share value, was a result of the Food and Drug Administration’s refusal to approve Pristiq to treat "hot flashes" in post-menopausal women because of potential heart and liver problems associated with the drug.
Shareholders claim that Wyeth concealed these adverse side effects, knowingly allowing stock prices to be inflated between June 26, 2006 and July 24, 2007.
The settlement comes after almost six months of mediation. It is awaiting approval by U.S. District Judge Richard Sullivan in Manhattan.