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MRK.US
id: 1496
Merck (MRK) Gardasil Demand and Revenue Misrepresentation Case
D. New Jersey
Court2:25-cv-01208
Case number02/03/2022
Class period Start02/03/2025
Class period End04/14/2025
Lead Plaintiff motion deadline- $MRK investors filed a lawsuit against Merck, alleging the company misled shareholders about the demand for its Gardasil vaccine in China and its ability to meet long-term revenue targets.
- On February 4, 2025, Merck revealed it was halting Gardasil shipments to China due to excess inventory. Following this news, $MRK dropped over 9%.
Case Details:
Between February 3, 2022, and February 3, 2025, Merck assured investors that demand for Gardasil in China was strong and that it was on track to reach $11 billion in sales by 2030. The company pointed to marketing efforts, consumer education, and male vaccination expansion as key growth drivers.
However, Merck failed to disclose that it had little visibility into actual demand in China. By mid-2024, its main Chinese distributor, Zhifei, had built up excess inventory due to lower-than-expected vaccine uptake. Despite this, Merck continued to downplay risks and insisted its sales targets were achievable.
On July 30, 2024, Merck admitted that Gardasil sales in China were declining and that inventory levels had risen above normal, warning that shipments might not meet contracted levels. This caused $MRK to drop nearly 10%.
During its October 31, 2024, earnings call, Merck maintained confidence in Gardasil’s long-term growth, claiming inventory levels were improving and that demand would recover with promotional efforts.
However, on February 4, 2025, Merck abruptly halted all Gardasil shipments to China, admitting that demand had not recovered and that excess inventory needed to be cleared. The company withdrew its $11 billion sales projection for 2030, citing uncertainty in China’s market. Following this news, $MRK dropped over 9%.
Based on these events, $MRK investors filed a lawsuit against Merck, claiming the company:
- It misled investors about Gardasil’s demand in China and the risks posed by excess distributor inventory.
- It downplayed the impact of slowing vaccine uptake and competition on its long-term revenue targets.
Investors believe Merck misrepresented Gardasil’s demand in China while downplaying inventory risks and competitive challenges.
Case Status
Lead Plaintiff Submission
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Fraud,
Failure to Disclose
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
02/04/2025
Filing date
02/12/2025
Lead Plaintiff Deadline
04/14/2025