In March 2022, Merrick Biotech issued a favorable press release about the prospects of its new drug Beau-Tox. Its CEO sold five million Merrick Biotech shares for $5.3 million during the same month.

In May 2022, Merrick Biotech held a press conference concerning the health risks posed by Beau-Tox after several patients using the drug suffered both facial disfigurements and even death, prompting a product recall. Merrick Biotechs CEO explained that the drug was a success during trials but that Merrick Biotechs corporate partner, Rawls Research Corp., unexpectedly decided to pull out of the venture. Merrick Biotechs CEO expressed optimism that a new replacement drug could be lined up, but refused to answer any questions from the financial analysts and investors listening in on the conference call.

Class action lawsuits were filed by Merrick Biotechs shareholders in May 2022, alleging that the company had issued false information in March.

Merrick Biotechs shares lost half of their value in the few days following the May press conference.