Pfizer unit Wyeth is facing a class action after a US judge gave the go-ahead for shareholders to have their day in court over an alleged failure to fully disclose data on side-effects of its medicine Pristiq.
Shareholders have accused Wyeth of failing to disclose potentially serious heart and liver side effects linked with Pristiq (desvenlafaxine), which caused a significant delay to the drug's US approval for menopausal symptoms in women.
Pristiq was once pitted as the follow-up to the firm's blockbuster antidepressant Effexor that, with widely forecast peak sales of $2 billion, would help offset the generic erosion of its predecessor's revenues.
However, thus far the product has failed to live up to its expectations, pulling in sales of just over $158 million for the second quarter of the year.
More than $7.6 billion was wiped from the company's market value in July 2007 (according to Reuters) after US regulators refused to approve the antidepressant's separate New Drug Application for hot flashes and night sweats associated with menopause, asking for additional data on the potential side effects associated with the drug.
In giving the go-ahead for the suit, US District Judge Richard Sullivan agreed that shareholders had demonstrated they had relied on allegedly misleading information on the drug, and therefore believed Pristiq to be a key part of Wyeth's potential business when purchasing common stock.
Two pension funds are reportedly suing Wyeth on behalf of investors who has snapped up shares between June 2006 and July 2007, according to media reports.
A Pfizer spokesperson has told the media that the company will continue to defend itself vigorously against the allegations.