Pharmacia Corporation Summary: The original complaint charges Pharmacia and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that according to Pharmacia, the unique feature of Celebrex was that, unlike aspirin or ibuprofen, it allowed Celebrex to retard pain and inflammation without the adverse side effects of stomach malaise or gastrointestinal bleeding. As defendants consistently stated, this critical feature of Celebrex, provided a tremendous market advantage because the use of traditional Nonsteroidal Anti-inflammatory Drug ("NSAIDs") resulted in as many as 100,000 hospitalizations each year and more than 15,000 deaths, related to gastrointestinal problems such as ulcers and bleeding.
In order to remove the FDA's warning label, Pharmacia was required to demonstrate that Celebrex provided an advantage over traditional NSAIDs. Pharmacia then commissioned the "Celecoxib Long-term Arthritis Safety Study" (the "CLASS" study) – a clinical study to compare the gastrointestinal problems of patients who used Celebrex to those of patients who used other NSAIDs. Pharmacia, together with its partner Pfizer, not only funded this study, but every one of the sixteen physicians who performed the study were either employees of or paid consultants for Pharmacia.
Because of its purportedly unique safety profile and its ready use by patients, Celebrex was perceived both by the medical and investment community as a very important product. The CLASS data was widely circulated and reviewed. One such review appeared in the prestigious Journal of the American Medical Association ("JAMA"), on September 13, 2000. Based on a review of the data supplied by Pharmacia, the authors of the JAMA article also reported that patients who took Celebrex had fewer symptomatic ulcers than those who took diclofenac or ibuprofen, two traditional NSAIDs.
However, on August 22, 2001, The Wall Street Journal reported that Celebrex caused higher incidence of cardiovascular problems. The Journal reported that noted cardiologists Eric J. Topol and Steven E. Nissen, chairman and vice chairman, respectively, of cardiovascular medicine at the Cleveland Clinic, issued a study on Celebrex which concluded that "'[c]urrent data would suggest that use of these so-called "COX-02 inhibitors" might lead to increased cardiovascular events.'" Further, the Cleveland Clinic doctors concluded that Celebrex was associated with a relatively high rate of heart attacks. This report was also published in the less widely circulated Journal of American Medicine at or about the same time. On this news, Pharmacia's stock declined to below $40 by August 30, 2001, from the 45 range the stock traded at in mid-August.
On August 12, 2003, the Court entered the Memorandum and Order granting the motion to appoint the Pension Fund Group II as lead plaintiffs and approve its choice of lead and liaison counsel. On August 19, 2003, the Court entered the Order granting the motion to consolidate the actions. On October 27, 2003, the plaintiffs filed a Consolidated Complaint, and the defendants responded by filing a motion to dismiss. On May 20, 2004, the Court entered the Order denying the motion to dismiss. On August 20, 2004, the plaintiffs filed a motion to certify the class which was later withdrawn by the Order entered on October 25, 2004. On April 3, 2006, the plaintiffs filed a motion to certify the class. On January 25, 2007, the motion was granted. On May 31, 2007, the defendants filed a motion for summary judgment.
According to an article dated October 31, 2007, a union pension plan's securities class action that accused Pfizer Inc. of misrepresenting clinical studies of hit arthritis painkiller Celebrex has been junked because, according to the New Jersey district judge who oversaw it, the plaintiffs dallied too long before filing it. Judge Anne Thompson said that for the type of Securities Exchange Act claims the Alaska Electrical pension Fund and others had filed in 2003, the statute of limitations was two years after the discovery of the facts constituting the violation. The date of that discovery, or inquiry notice, was to be based on when the plaintiffs had enough information to incite storm warnings of liable activity in any reasonable investor — in other words, the date the plaintiffs should have known about the alleged fraud, even if the plaintiffs claimed not to have known about it by that date.
On November 21, 2007, the plaintiffs filed a notice of appeal from the October 30, 2007 Memorandum and Order granting the defendants’ motion for summary judgment. On December 4, 2007, the defendants filed a notice of cross appeal. On January 30, 2009, the Court entered the Judgment from the U.S. Court of Appeals. According the Judgment, the Judgment of the District Court is vacated and this matter is remanded for further proceedings.
On May 7, 2009, the plaintiffs filed a motion to appoint co-class counsel, and on June 10, 2009, the motion was granted. Motley Rice LLP was approved As Co-Class Counsel. On June 23, 2009, the case was stayed pending the United States Supreme Court's resolution of the Merck Action and defendants’ pending petition to the United States Supreme Court for a Writ of Certiorari.
On May 14, 2012, the Court issued an Order denying the Defendants' Motion for Judgment on the Pleadings.
On October 5, 2012, the Parties entered into a Stipulation of Settlement. On October 12, 2012, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice.
On January 30, 2013, the Court issued an Order approving the plan of allocation for the Settlement. On the same date, the Court issued an Order awarding attorneys' fees and expenses. Finally, the Court issued a Final Judgment and Order of Dismissal with Prejudice, closing this case.
SIC Code: 2800
Industry: Biotechnology & Drugs
WARNING AND DISCLAIMER OF LIABILITY:
The information included on this Web site, whether provided by personnel employed by Stanford Law School or by third parties, is provided for research and teaching purposes only. Neither Stanford University, Stanford Law School, nor any of their employees, agents, contractors, or affiliates warrant the accuracy or completeness of the information or analyses displayed herein, and we caution all readers that inclusion of any information on this site does not constitute an endorsement of the truthfulness or accuracy of that information. In particular, this Web site contains complaints and other documents filed in federal and state courts, which make allegations that may or may not be accurate. No reader should, on the basis of information contained in or referenced by this Web site, assume that any of these allegations are truthful.
Go to Search page | Go to Case Index page | Back to Top