Pfizer Stock Falls on Rumors of Whistle-Blowers’ Plans

The stock of Pfizer Inc. fell sharply Monday on rumors that former company employees are planning to testify before Congress that the firm tried to cover up problems related to heart valves made by Shiley Inc., an Irvine subsidiary.

The price of Pfizer stock dropped $2.375 to close at $59.375 in trading on the New York Stock Exchange. A spokesman for Pfizer, a giant New York-based pharmaceutical company, said there was “no basis” to the allegations of a cover-up.

Two heart valve models Shiley manufactured have been the subject of recent hearings before Congress. The valves, which are no longer on the market, have malfunctioned and have been linked to 272 deaths. More than 85,000 Bjork Shiley heart valves of the kinds that have failed were sold between 1979 and 1986.

Pfizer’s stock has been volatile in recent weeks as word circulated that a subcommittee chaired by Rep. John D. Dingell (D-Michigan) would release derogatory information about the company. In a recent report, the subcommittee concluded that Pfizer had failed to maintain acceptable manufacturing and safety standards.

The subcommittee also put blame on the Food and Drug Administration for taking too long to force the valve off the market, and it criticized Pfizer for dragging its feet in reporting incidents of valve failures to the FDA.

Monday’s stock activity was linked to rumors that Prudential-Bache drug analyst Barbara Ryan reported that she had been contacted by an ex-Pfizer employee who said a group of former employees planned to provide information about a cover-up to a congressional subcommittee investigating the Shiley valve.

The identities of the whistle-blowers rumored to have more information to give the subcommittee are apparently not known even to Prudential-Bache, which could not be reached Monday for comment.

Bruce Finzen, a lawyer in the Michigan office of Robins, Kaplan, Miller & Ciresi, a law firm representing numerous patients with valve implants who are suing Pfizer, said Barbara Dreyfus, an assistant to Ryan, called Monday to ask whether he knew who the ex-employees were who had contacted Ryan. He told her he did not.

Reuters contributed to this report.