New York/Boston: Pfizer Inc is voluntarily recalling its drug to treat a life-threatening lung condition and will end studies of the pill after it was linked to potentially deadly liver toxicity.

The European Medicines Agency on Friday said the modest-selling drug, used to treat pulmonary arterial hypertension, was withdrawn due to “new information on two cases of fatal liver injury."

Pfizer spokesman Curtis Allen said the drug, called Thelin, which is not sold in the United States, was being recalled in Europe, Canada and Australia after being linked to a new liver problem “that occurs rarely and unpredictably in patients."

“The decision was based on a review of emerging safety information and post-marketing reporting," said Allen, referring to reports by doctors that have prescribed it.

Thelin and similar medicines already carry warnings of elevated liver enzymes, a marker for potential liver damage. But the new liver risk for Thelin now suggests its overall risks outweigh its potential benefit, Allen said.

Pfizer, the world’s biggest drugmaker, whose chief executive abruptly resigned on Sunday, scrapped US trials of Thelin for pulmonary arterial hypertension. Such patients have elevated blood pressure in lung arteries and veins that cause shortness of breath and other symptoms, which can lead to heart failure and early death.

About 1,100 patients have taken Thelin since it was launched in Europe in 2006 and in Australia and Canada the following year.

Pfizer in 2008 paid $195 million for the company that developed the product, Encysive Pharmaceuticals, even though the US Food and Drug Administration had repeatedly rejected the drug for lack of efficacy.

Pfizer had been counting on the US trials to ultimately prove Thelin’s worth. It is the latest in a long string of setbacks for Pfizer, whose labs have not generated any big-selling drugs for more than a decade.

“It’s another ding in their pipeline, though expectations for it (Thelin) had been fairly low," said Damien Conover, an analyst at Morningstar. “Had it been approved in the United States and didn’t have the safety side effect, you could have seen it just breaking into blockbuster sales at peak."

Conover said investors are more focused on Pfizer’s so-called JAK inhibitor, an oral treatment for rheumatoid arthritis, and its ALK inhibitor for a subset of patients with lung cancer. Both drugs, if successful in trials, could generate peak annual sales of more than $2 billion, he said.

Pfizer shares were up 1.3% to $16.98 in afternoon trade on the New York Stock Exchange. The stock has fallen nearly 18% from a 52-week high of $20.36 in January.

Thelin garnered sales of $44 million in the first nine months of 2010, making it a small product for Pfizer.

It competes with Tracleer, a drug made by Actelion Ltd that had sales of $1.4 billion in 2009. Thelin also competes with Letairis, made by Gilead Sciences Inc, which produced 2009 sales of $184 million.

Thelin, Tracleer and Letairis all block fragments of endothelin, a protein that causes blood vessels to tighten up.

Deutsche Bank analyst Richard Parkes said on Friday the new liver problem appears to be specific to Thelin.

“In contrast, Actelion has generated a large database of safety, showing that liver enzyme elevations with Tracleer can be safely managed," Parkes said in a research report.

Actelion shares rose 1.3%, as the recall of Thelin eliminated a rival to Tracleer.

Pfizer late last year bought US rival Wyeth in hopes Wyeth’s drugs would bolster Pfizer’s aging array of medicines, including the $11 billion-a-year cholesterol fighter Lipitor, which faces US generic competition in November 2011.

On Sunday, Pfizer CEO Jeffrey Kindler surprised Wall Street by announcing he would retire to “recharge his batteries." He handed the company’s reins to Ian Read, head of Pfizer’s global drug business.