Updated from 10:54 a.m. EST

Shares of

Pfizer

(PFE) - Get Report

fell Monday after the drug giant's disclosure that New York Attorney General Eliot Spitzer has asked for information relating to its clinical trials and marketing of certain unnamed drugs.

In addition, Pfizer said it is in negotiations with the Food and Drug Administration for toughening the label on one of its arthritis drugs, Bextra, which has been linked to a rare, aggressive and sometimes fatal skin rash.

Both disclosures came in a third-quarter financial statement filed late Friday afternoon with the

Securities and Exchange Commission

. The stock was off 77 cents, or 2.7%, to $28.02 and close to the 52-week low of $27.20.

Analysts had cautious responses to the latest disclosures. James Kelly, of Goldman Sachs, told clients that the new label "raises potential questions about the commercial potential" of the drug. "We now have Bextra falling 8% globally instead of growing 20%" next year, said Kelly, who has an outperform rating on Pfizer's stock. (He doesn't own shares; his firm has an investment banking relationship).

Some analysts said the new information wasn't enough to merit a change in ratings or price targets; but they added that they will keep a close watch on prescription trends. "No change in our forecasts," said Barbara Ryan, of Deutsche Bank Securities, in a brief note to clients on Monday, as she maintained a buy rating on Pfizer.

Ryan said she already had assumed that Pfizer would put "all of its marketing muscle behind Celebrex and de-emphasize Bextra anyway." Celebrex and Bextra belong to the same class of drugs known as COX-2 inhibitors. Test results show Celebrex has a better cardiovascular safety profile, said Ryan. (She doesn't own shares; her firm says it "does and seeks to do business" with companies mentioned in research reports.)

More Government Inquiries

Pfizer is the fourth major drug company in recent months to receive a request for information or be sued by Spitzer over the publication of clinical trials or marketing of drugs for so-called off-label uses. Federal law allows doctors to prescribe a drug for any disease once the FDA has approved a product for a single use. But companies can't promote drugs for treating diseases that the FDA hasn't approved.

Spitzer is seeking information about testing and "possible promotion" of drugs for uses that haven't been approved by the FDA, the SEC filing says. Connecticut's attorney general also has requested "similar materials" concerning the antidepressant Zoloft, the SEC document says.

In mid-May, the federal government said Pfizer had agreed to plead guilty and pay fines and charges totaling $430 million regarding the allegations of off-label marketing of the epilepsy drug Neurontin. The drug was the subject of federal and state investigations triggered by an employee of Warner-Lambert, who sued Warner-Lambert and its Parke-Davis division in 1996 alleging that they had promoted Neurontin for diseases that hadn't been approved by the FDA. Pfizer bought Warner-Lambert in 2000.

However, Pfizer's Neurontin marketing problem isn't over. Pfizer said it is still the subject of many civil suits filed in state and federal courts "alleging claims arising from the promotion and the sale" of Neurontin. The SEC filing says that on Oct. 26 many of the pending federal court suits had been consolidated in a federal district court in Massachusetts.

Companies Under Scrutiny

In early June, Spitzer sued

GlaxoSmithKline

(GSK) - Get Report

for "repeated and persistent fraud," saying it withheld from physicians and patients several studies about the antidepressant Paxil. A settlement was reached in late August even though the company said Spitzer's charges were "unfounded." The company said it agreed to pay the state $2.5 million "to avoid the high costs and time required to defend itself in protracted litigation."

Spitzer had accused GlaxoSmithKline of failing to disclose information about what he said were four negative tests on Paxil's effects on children and adolescents. The FDA hasn't approved Paxil for children, but the federal "off-label use" law allows doctors to prescribe it.

GlaxoSmithKline said it had "voluntarily posted" on its corporate Web site on June 10 "full study reports" of all company-sponsored tests of Paxil being given to children and adolescents. The company said it was acting "in response to public concern about the access" of Paxil test data involving depressed children and adolescents with depression.

In mid-October, the FDA ordered the makers of all antidepressants -- including Paxil, Zoloft and

Forest Laboratories'

(FRX)

Celexa and Lexapro -- to post tougher warning labels. These "black box warnings" represent the alerts.

Forest also was the subject of a Spitzer inquiry. In late June, he asked the company for documents related to any off-label clinical trials and marketing of certain drugs, including Celexa and Lexapro. In early September, both sides announced an agreement in which Forest agreed to post on its Web site information about clinical studies on the use of Lexapro and Celexa in children and adolescents.

Also, in late July, Spitzer asked

Johnson & Johnson

(JNJ) - Get Report

to produce documents covering the promotion, sales and clinical trials of six drugs, including the anemia drug Procrit. Last month, J&J said it had received a subpoena from the Department of Health and Human Services for documents related to sales and marketing of Procrit.

More Arthritis Drug Issues

Pfizer's latest comments about a tougher label for Bextra add more detail to the unfolding disclosures and increased postmarketing surveillance of the COX-2 inhibitor drugs. The SEC document says Pfizer's talks with the FDA about a revised Bextra label "likely will include the addition of a black-box" warning about the rare and occasionally fatal skin-rash side-effect. The black box warning is the FDA's strongest warning, and it probably will hurt Bextra's sales and will restrict certain advertising.

The current Bextra label alerts doctors and patients to this side-effect known as Stevens-Johnson syndrome. This warning was inserted in 2002, a year after Bextra was approved by the FDA. "Fatalities due to Stevens-Johnson syndrome ... have been reported," the current label says. "Bextra should be discontinued at the first appearance of skin rash or any other sign of hypersensitivity."

Pfizer said the skin-rash side-effect "exists with many other medications," adding that the Bextra-linked risk occurs primarily within the first two weeks of therapy. Although such reactions are rare, "they have been detected at a reported rate greater than other COX-2 products, such as Celebrex," Pfizer said.

Pfizer reported on Oct. 15 that it "is working with regulatory authorities around the world to update the Bextra product label," due to the rare skin reaction. It has written doctors about its efforts. The Oct. 15 press release didn't mention the prospects of a black-box label. In fact, it focused more on Pfizer's decision to conduct long-term tests of the drug's cardiovascular effects.

Although clinical trials involving nearly 8,000 patients showed no cardiovascular impairment among people who took the drug for six weeks to 52 weeks, Pfizer said two clinical trials involving heart bypass-surgery patients showed Bextra was linked to a greater risk of heart-related side-effects. The two studies showed the risk existed among patients who took Bextra alone or Bextra in conjunction with an experimental COX-2 drug. Bextra isn't approved for use in the U.S. for surgery patients. The SEC document said the increased risk was not statistically significant for heart bypass patients receiving only Bextra.

Pfizer's comments about Bextra come during a time when the company has released several studies showing no cardiovascular risk for another COX-2 drug, Celebrex, and has announced it would conduct tests assessing the long-term cardiovascular impact of Celebrex.

Pfizer has stepped up its defense of Celebrex and Bextra since

Merck

(MRK) - Get Report

announced on Sept. 30 that it was withdrawing its COX-2 arthritis drug Vioxx from the market. Merck said a recent company-sponsored study showed that patients who took Vioxx for more than 18 months had a higher risk of cardiovascular problems than patients taking a placebo. However, there was no statistically significant risk among patients taking Vioxx or placebo for less than 18 months, Merck said.