MANHATTAN (CN) - A federal judge refused to dismiss Pfizer and five of its executives from a securities class action that accuses them of concealing the results of studies of Celebrex and Bextra.
Lead plaintiff Teachers' Retirement System of Louisiana claimed that Pfizer and its top executives "violated federal securities laws by concealing the results of medical studies concerning two Pfizer drugs, Celebrex and Bextra, and by making misstatements and omissions in their public filings and statements concerning the company," according to the 9-page Memorandum Opinion and Order from U.A. District Judge Laura Taylor Swain.
The defendant corporate officers are Henry McKinnell, John LaMattina, Karen Katen, Joseph Feczko and Gail Cawkwell.
"In July 2008, the Court granted in part and denied in part defendants' motion to dismiss the Consolidated Class Action Complaint ('CCAC'). Relying on statements in the CCAC allegedly made by four former Pharmacia employees (the 'Quoted Former Employees'), the Court found that plaintiffs had adequately pleaded scienter, and sustained plaintiffs' claims ... . Defendants' now move for reconsideration ... contending that the statements attributed to the quoted former employees were taken out of context and misrepresented, and that the CCAC should be dismissed," Swain wrote.
Pfizer claimed that the "quoted former employees" were surprised to learn about the lawsuit, had no knowledge that the class action relied on their statements for claims of wrongdoing, that they were not employees of Pfizer and therefore and had no knowledge of what Pfizer or its employees were privy to, believed their statements were delivered to the court in a deceptive fashion, and never told anyone or believed that Pfizer concealed evidence that Bextra and Celebrex were unsafe
But Swain wrote: "Here, the CCAC represented that plaintiffs' counsel had been involved in communications to which they were not directly party, and took -- at a minimum -- an aggressive approach to inferences, in combination with selective quotations from identified individuals. These individuals -- some five years after the fact -- disagree vehemently with the inferences by the plaintiffs and are equivocal as to whether they made the statements attributed to them in the CCAC. Plaintiffs, in turn, proffer that there is evidence that the witnesses were not as removed from the events and reporting lines in question as they now claim, particularly in light of the witness involvement in co-promotion activities between Pharmacia and Pfizer with respect to the drugs in question. The situation, thus, is quite different from that in Boeing, [City of Livonia Employees' Retirement System b. The Boeing Co., N.D. Ill. March 7, 2011] where the court was persuaded that counsel had made fundamental factual misrepresentations, and where there was no evidence connecting the corroborating details proferred in the complaint to the individual to whom the confidential statements were attributed.
"The record now before the court is insufficient to warrant reconsideration of the decision denying the motion to dismiss the CCAC. Nor does it demonstrate clearly the level of bad faith conduct that might warrant the imposition of a terminal sanction dismissing the plaintiffs' claims. Accordingly, defendants' motion for reconsideration and their request for dismissal of the CCAC are denied, without prejudice to future summary judgment or other sanctions-related motion practice."
Bextra was pulled from the market in 2005, due to concerns about increased risk of heart attack and stroke. Celebrex, also a nonsteroidal anti-inflammatory drug, suffered adverse publicity when it was linked in the public mind to Bextra and another NSAID drug that was pulled from the shelves, Vioxx. Celebrex has not been pulled from the market. The plaintiffs in the securities class action claim Pfizer made misrepresentations and omissions in public filings and statements between Oct. 31, 2000 and Oct. 19, 2005.