Wyeth to Face Securities Class Action Lawsuit Over Pristiq

Wyeth to Face Securities Class Action Lawsuit Over Pristiq

By Matt O’Donnell

Wyeth shareholders will finally have their day in court after a U.S. judge gave the go-ahead for them to file a class action securities fraud lawsuit against the company, now a part of Pfizer, for failing to fully disclose data on the side effects of Pristiq (desvenlafaxine).

Shareholders allege in the Pristiq securities class action lawsuit that Wyeth failed to disclose potentially serious heart and liver side effects of Pristiq, an anti-depressant medication that was positioned to follow up the firm’s blockbuster antidepressant Effexor. Wyeth Chief Executive Robert Essner told investors in October 2006 that Pristiq had “multi-billion dollar potential,” and the drug was expected to help Wyeth withstand the 2010 loss of patent protection for Effexor.

Wyeth shares lost more than $7.6 billion of its market value in July 2007 after it was announced the U.S. Food and Drug Administration would not approve Pristiq to treat “hot flashes” and other symptoms in post-menopausal women until it received information about the potential liver problems and heart side effects linked to Pristiq.

Shareholders allege in the Pristiq securities class action lawsuit that Wyeth should have disclosed the adverse side effects of Pristiq sooner, and that its failure to do so caused its stock price to be inflated during the period of June 26, 2006 to July 24, 2007. Pfizer bought Wyeth in 2009.

Pristiq only generated $309 million in sales – falling way short of the predicted $2 billion in annual sales Wyeth said it expected.

According to the Pristiq stock class action lawsuit, shareholders relied on Wyeth’s alleged misrepresentations, and considered Pristiq an important key to Wyeth’s overall business.

U.S. District Judge Richard Sullivan certified the Pristiq class action lawsuit earlier this month, saying: “Under the facts currently before it, including Wyeth’s drug pipeline and the looming expiration of patents concerning other Wyeth drugs, the court concludes that the plaintiffs have sufficiently demonstrated the materiality of the allegedly omitted information.”

The Pristiq securities fraud class action lawsuit covers investors who purchased Wyeth shares between June 2006 and July 2007. Two employee pension funds are named as Plaintiffs.

The case is City of Livonia Employees’ Retirement System v. Wyeth, et al., Case No. 07-10329, U.S. District Court, Southern District of New York.

Were you a victim of stock fraud, securities fraud or investment fraud? You may have a case to file a class action lawsuit against the parties responsible. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation for more information.

Updated September 25th, 2012

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