Merck & Co

On July 30, 2024, Merck released its second quarter 2024 financial report and disclosed a significant reduction in Gardasil vaccinations, resulting in an overabundance of inventory at Merck’s Chinese distributor. The Company announced that its shipments of Gardasil to China may fall below contracted levels for 2024.

On this news, Merck’s stock price fell $12.53, or 9.8%, to close at $115.25 per share on July 30, 2024, thereby injuring investors.

Then, on February 4, 2025, Merck disclosed that it would entirely cease shipments of Gardasil to China “through at least midyear” to facilitate a “rapid reduction of inventory,” citing a continued over-inflation of channel inventories as demand in China had “not recovered to the level [the Company] had expected.” Merck also announced that it would no longer achieve its long-forecasted $11 billion in sales of Gardasil by 2030.

On this news, Merck’s stock price fell $9.05, or 9.1%, to close at $90.74 per share on February 4, 2025, thereby injuring investors further.

The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Merck lacked visibility into demand for Gardasil in China among eligible and otherwise targeted populations, resulting in the inflated inventory of its distributor; and (2) as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.