New data raising safety concerns for Pfizer Inc's experimental arthritis drug sent its shares down 3 percent, while lifting shares of rival drugmaker Abbott Laboratories, analysts said.
Wells Fargo analyst Larry Biegelsen in a research report on Thursday said four deaths were seen in one late-stage study of tofacitinib, Pfizer's oral drug for rheumatoid arthritis, which has been considered a potential rival to Abbott's big-selling Humira.
It was not clear from a brief description of the study, called an abstract, that the drug caused the deaths, Biegelsen said. But the report of the fatalities spooked investors.
The abstract from a 792-patient study to be presented at a meeting of the European League against Rheumatism said four patients who had been taking the 10-milligram dose of the Pfizer drug had died, including one from heart failure.
Pfizer said in a statement late on Thursday that the investigator reported only one of the four deaths -- the case of respiratory failure -- as study-drug related.
The drugmaker also said that the mortality rate from all causes across its drug development program, including this study, is within the range of rates reported for all biologic therapies for rheumatoid arthritis.
Pfizer's pill, from a new class of medicines called JAK inhibitors, has shown great promise in clinical trials as a potential alternative to widely-used injectable treatments.
Some analysts have been forecasting multibillion-dollar sales for tofacitinib, which is well ahead of similar drugs in development, if approved.
"Now that you're doing longer trials and you see some deaths, the cardiovascular scrutiny here is going to be really tight because the FDA obviously doesn't want another Vioxx issue," said Hapoalim Securities analyst Jon Lecroy, referring to the widely used Merck & Co pain drug that was pulled from the market after it was found to increase the risk of heart attacks.
Pfizer had released partial data from the study saying its drug was successful in significantly reducing symptoms of rheumatoid arthritis and that "no new safety signals" had emerged from the trial.
JP Morgan analyst Christopher Schott, in a research note, called the Pfizer sell-off an overreaction.
He noted that only two of the four deaths happened while patients were taking the Pfizer drug -- one from heart failure and one from respiratory failure.
The other two deaths occurred in patients after they had stopped taking tofacitinib, noted Schott, who forecast $1.2 billion in sales of the JAK inhibitor in 2015.
In an earlier study there were other heart failure reports and the drug has been shown to raise LDL cholesterol.
"It's had cardiovascular issues in other trials," Lecroy said.
Pfizer shares closed down 3 percent at $19.79, while Abbott closed up 1.9 percent at $51.80, both on the New York Stock Exchange.