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Is Now a Good Time to Buy Merck & Co., Inc. (MRK) Stock?

Merck & Co., Inc. (NYSE:MRK)

Merck & Co., Inc. (NYSE:MRK) has had its fair share of bad news recently. Shares have pulled back around 5% in June. Could this bad news actually present a good time to buy Merck & Co., Inc. (NYSE:MRK) stock? Let’s take a look.

Bad news
The Food and Drug Administration hinted at potential bad news for Merck & Co., Inc. (NYSE:MRK) other companies earlier in June. Some type 2 diabetes drugmakers could be required to collect more data to determine if their products could result in pancreatic cancer. Merck & Co., Inc. (NYSE:MRK)’s Januvia, Novo Nordisk A/S (ADR) (NYSE:NVO)‘s Victoza, and Bristol Myers Squibb Co. (NYSE:BMY)‘s Byetta are included among the drugs that could require more study.

All three companies have undertaken efforts to demonstrate the safety of their drugs. Merck & Co., Inc. (NYSE:MRK) presented updated information about Januvia’s safety using data from 25 different clinical trials during a meeting of the National Institutes for Health. The company also issued a statement confirming its willingness to be part of an independent review of data that has been urged by the American Diabetes Association.

Novo Nordisk A/S (ADR) (NYSE:NVO) also presented interim safety data at the NIH meeting for Victoza. The company is roughly halfway through a five-year epidemiological review of health claims looking for incidence of pancreatitis, thyroid cancer, and other cancers.

Bristol Myers Squibb Co. (NYSE:BMY) has two studies under way exploring pancreatic risks of Byetta. The first results are expected to be announced later this year. Bristol Myers Squibb Co. (NYSE:BMY), like Merck & Co., Inc. (NYSE:MRK) and Novo Nordisk A/S (ADR) (NYSE:NVO), also has studies in progress related to the heart safety of its diabetes drug.

On a different note, Merck & Co., Inc. (NYSE:MRK)’s new research head announced job cuts as part of a turnaround effort. Roger Perlmutter came on board in April. Some of his first moves included eliminating several senior management positions and implementing a new structure. The company said that further cuts could be on the way. All of this comes after a few big setbacks for Merck’s pipeline over the past couple of years, including disappointing clinical results for Tredaptive and vorapaxar.

Add to those woes a distracting lawsuit. One of the company’s senior sales representatives has sued Merck for alleged discrimination against female employees. The lawsuit seeks $100 million in damages for what was referred to as Merck’s “systematic, companywide discriminatory treatment of its female employees on the basis of their gender and their taking federal and state-protected pregnancy leave.”

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