Pfizer Inc (NYSE: PFE) Investor Securities Class Action Lawsuit 12/06/2006

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Company Name(s): 
Pfizer
Case Name: 
Pfizer Shareholder Class Action Lawsuit 12/06/2006
Case Status: 
Case Dismissed
Affected Securities
NYSE: PFE
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
12/06/2006
Class Period Begin: 
01/19/2005
Class Period End: 
12/02/2006
Court of Filing: 
U.S. District Court for the Southern District of New York
Deadline To File for Lead: 
02/05/2007
Case Dismissed: 
02/28/2008
Summary: 

February 28, 2008 - The court granted to defendants' motion to dismiss and denied plaintiff's request for leave to amend without prejudice.

May 18, 2007 - The defendants filed a motion to dismiss.

April 2, 2007 - The lead plaintiff filed an amended complaint on behalf of investors who purchased Pfizer Inc (NYSE: PFE) common shares between January 19, 2005 to December 2, 2006. The plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between January 19, 2005 to December 2, 2006.

February 23, 2007 - Lead plaintiff and lead counsel were appointed and all cases were consolidated.

February 5, 2007 - Lead plaintiff motion was filed.

December 6, 2006 - An investor in shares of Pfizer Inc (NYSE: PFE) filed a lawsuit in the U.S. District Court for the Southern District of New York against Pfizer Inc over alleged violations of Federal Securities Laws.

The complaint alleges that during July 20, 2006 and December 2, 2006, defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making materially false and misleading statements to artificially inflate the value of Pfizer Inc stock. Specifically, it is alleged that beginning in July 2006, the defendants repeatedly touted the safety and effectiveness of a newly-developed drug, "torcetrapib," that, in combination with Pfizer Inc's cholesterol-reducing Lipitor, purportedly would increase a patient's "good" cholesterol, or HDL. However, unbeknownst to Pfizer Inc shareholders, the product performed much worse than touted. The complaint alleges that these statements were false and misleading when made because the defendants failed to disclose or indicate that they knew that the torcetrapib was having adverse affects on patients' health, including knowledge that in clinical testing of 15,000 patients, 82 patients died taking torcetrapib/Lipitor combination as compared to only 51 patients taking Lipitor alone, and patients taking torcetrapib showed an increase in angina, congestive heart failure and procedures to clear clogged arteries.

Surprising the market, on December 2, 2006, a mere two days after the Company expressed optimism about prospects for torcetrapib, Pfizer Inc suddenly announced that it was immediately suspending development of torcetrapib following clinical testing of 15,000 patients found that 82 patients taking torcetrapib/Lipitor combination died as compared to 51 patients taking Lipitor alone. These statements were false and misleading when made because the defendants failed to disclose or indicate that they knew that the option grant process was deficient and could cause the Company to restate its financial statements.

The market reacted quickly to these announcements. Pfizer Inc's stock price plummeted to $24.90 per share from its prior trading day close of $27.86 per share, a 10.62% drop in one day, on massive volume of 289,209,504 shares, more than seven times more than the prior day's volume of 40,177,600.