* Lawsuit contends drug company misled investors
* Big investors sue separately from class action case
By Nate Raymond
NEW YORK, Nov 16 A dozen large investors have
sued Pfizer Inc for securities fraud, distancing
themselves from a long-running shareholder class action over
allegations the company misled them about the safety of the pain
relievers Celebrex and Bextra.
The plaintiffs in the new case, filed late Thursday in U.S.
District Court in Manhattan, include the California Public
Employees' Retirement System (Calpers), the biggest U.S. public
pension fund, the California State Teachers' Retirement System
(Calstrs), and several mutual funds.
"Opting out" of securities class actions has become a
growing trend, as some plaintiffs gamble they can do better by
suing solo or in a small group instead of joining a larger case.
The plaintiffs in the new case said in September that they
would not be part of the pending class action. The class action,
led by the Teachers' Retirement System of Louisiana, grew out of
lawsuits that started in 2004 following a study on the
cardiovascular risks of Celebrex and Bextra.
Pfizer said it will fight the new case, as well as another
opt-out case and the larger class action.
"The company believes these cases and the original class
action lawsuit have no merit based on the undisputed facts in
the record and the governing federal securities law," said
Pfizer spokesman Chris Loder.
He said both drugs "were rigorously studied and tested" by
the company and independent experts, and that the U.S.
government, doctors, patients, and investors received accurate
information on the risks and benefits of the medications.
Revenues from Celebrex and Bextra dropped by over $2 billion
in the first nine months of 2005 after the safety concerns were
made public, while Pfizer saw a $68.4 billion loss in stock
market value between October 2004 and October 2005, according to
allegations by investors.
In September 2009, Pfizer agreed to pay $2.3 billion to
settle a U.S. Department of Justice probe into the marketing of
drugs including Bextra.
Plaintiffs have opted out of past securities fraud class
actions, including cases involving Countrywide Financial Corp
and stemming from the collapse of WorldCom.
"Opt-outs are a major trend, probably reflecting the
increased competition within the plaintiff's bar," said John
Coffee, a law professor and securities law expert at Columbia
University Law School. He said large institutional investors
"can settle for more in cases in which they are not submerged in
a huge class with smaller investors."
Other public pension funds in Thursday's lawsuit include the
Teacher Retirement System of Texas, the Montana Board of
Investments and the Arizona State Retirement System. Thrivent
Financial for Lutherans and American Century Investment
Management are also among the plaintiffs.
The complaint seeks compensatory and punitive damages, as
well as interest and attorneys fees.
The plaintiffs are represented by Bernstein Litowitz Berger
& Grossmann, a New York law firm that often leads class actions.
Other investors also have opted out of the Pfizer class
action. Wolf Opportunity Fund Ltd and Okumus Capital LLC sued
Pfizer on Wednesday, making similar allegations of fraud.
Matthew Siben, a lawyer for Wolf and Okumus with law firm
Dietrich Siben Thorpe, did not respond to a request for comment
Jay Eisenhofer, a lawyer for the lead plaintiff in the class
action, declined to comment on the new cases.
The case is Montana Board of Investments, et al. v. Pfizer
Inc., et al., U.S. District Court, Southern District of New
York, No. 12-cv-9379 .