Bravado Could Come Back to Haunt Pfizer

Now, Pfizer (PFE Quote) is causing some hearts to pound.

The giant drugmaker on Friday warned that its popular painkiller Celebrex has been linked to heart attacks in a new study. The announcement comes less than three months after rival Merck (MRK Quote) withdrew a similar blockbuster, Vioxx, because of cardiac risks.

At the time of the Vioxx recall, Pfizer expressed confidence in the safety of its own Celebrex and even recommended the drug as "an appropriate treatment alternative" for Vioxx users seeking new medication. Jake Dollarhide, CEO of Longbow Asset Management in Tulsa, Okla., remembers cringing at the "foolish" comments by the company.

"Pfizer walked a very dangerous tightrope when it proclaimed, just after Merck's shocking announcement about the Vioxx withdrawal, that Celebrex had a clean bill of health," said Dollarhide, whose clients own Pfizer shares. "I hoped those words would not come back to haunt them."

They did.

Pfizer's stock plunged 14% to $24.97 -- a new 52-week low -- on Friday's news. Merck suffered sympathy pains, falling 3.8% to $30.57.

Despite concerns about Vioxx-like painkillers -- which, by design, can reportedly cause blood clotting -- Pfizer has consistently portrayed Celebrex as safe. But one of two long-term studies has now shown a 2.5-fold increase in heart attacks among patients using high doses of the drug. Pfizer CEO Hank McKinnell described the findings as both "unexpected" and "not consistent" with other results, including those released this week that showed no increased cardiac risk among patients on normal doses of the drug.

"Pfizer is taking immediate steps to fully understand the results," McKinnell said, "and rapidly communicate new information to regulators, physicians and patients around the world."

Pfizer is not, however, following in Merck's footsteps by yanking the drug from the market. At least one attorney, who is representing thousands of Vioxx plaintiffs, believes the company should.