Shares of Mylan Laboratories Inc. (MYL) fell 5 percent Monday, following regulatory scrutiny late last week of a key product and a day after financier Carl Icahn (search) offered to sell his stock in the company.

Icahn, who has offered to acquire Mylan, said his decision to offer 26.3 million shares was based partly on the news Friday that U.S. regulators are investigating deaths that may be linked to one of Mylan's most profitable products, a generic pain patch.

Mylan's current stock price and management's lack of clarification or comment on the pain patch probe further convinced Icahn to tender his stock, he said through a statement issued by one of his units.

"Icahn is still of the belief that shareholder value will be further enhanced if Mylan were put up for sale and consolidated with a larger company," the statement said.

Pittsburg-based Mylan is undergoing a realignment following its failed bid earlier this year to buy King Pharmaceuticals Inc. (KG) for $3.8 billion. Mylan recently said it would spin off its brand-name drug unit and license one of its promising blood pressure drugs to another drug maker.

Investors' "focus now shifts back to fundamentals, which remain underwhelming," CIBC World Markets Elliot Wilbur said in an analyst note.

"Beyond recent short-term gains, holders have little to show for the past 12 months of torment" other than a more debt-ridden and troubled company, he said.

On Sunday, Mylan said that it expects to buy back about 51.3 million shares at a price of $19.50 each.

Icahn, who had helped derail Mylan's bid to buy King earlier this year, has complained that the company has failed to engage in discussions with him about his earlier offer to acquire Mylan.

Mylan said it is working with the Food and Drug Administration (search), which is probing deaths that may be linked to its pain patch, sold under the Duragesic brand name by Johnson & Johnson.

Duragesic and the generic version of the pain patch include narcotics intended for patients with chronic pain who find short-acting painkillers inadequate.

Health officials issued an alert advising the public to follow directions on the patch exactly to avoid a dangerous overdose.

The FDA said it is examining whether the cases are due to overuse or "the quality of the product."

Shares of Mylan fell 92 cents at $18.48 on the New York Stock Exchange.