Merck shares fall on revenue miss, cautious outlook

Shares of U.S. pharmaceutical giant Merck (MRK) fell in Wednesday trading after the company fell short of Wall Street's revenue expectations and reported a cautious financial outlook for 2016.

The nation's second-largest drugmaker also said sales for its popular Januvia/Janumet diabetes medications fell 12%, while sales of some other drugs declined amid increased competition and financial impact from the strong U.S. dollar.

Shares of the Kenilworth, N.J. based company closed 36 cents or 0.71% lower at $50.05 in Wednesday trading after the earnings report.

Fourth-quarter Merck worldwide sales totaled $10.215 billion, down 3% from the $10.482 billion that the company reported for the same period in 2014. The company said the results included a 7% negative impact from foreign exchange currency rates and a 3% boost largely credited to Merck's 2015 acquisition of Cubist Pharmaceuticals.

Earnings per share were 93 cents, up from the 87 cents Merck reported for the Oct.-Dec. quarter in 2014.

The consensus forecast of financial analysts surveyed by S&P Capital IQ had projected $10.355 in Merck sales and earnings per share of 91 cents.

Merck reported that sales of Januvia and Janumet totaled $1.447 billion, down from $1.652 billion in 2014. The decline was driven in large part by the timing of customer purchases in the third quarter of 2015, the company said.

Additionally, the U.S. Food and Drug Administration warned in August that Januvia, Janumet and similar drugs may cause joint pain that could be severe and disabling.

Merck reported that overall fourth-quarter pharmaceutical sales fell 4% to $9 billion, attributed in part to an 8% negative impact from foreign exchange rates.

The decline also included a decrease in the company's Pneumovax 23 vaccine used to prevent pneumonia and meningitis. Merck said the decrease resulted from near-term market dynamics in the U.S. and the timing of vaccinations linked to Japan's national immunization program.

However, Merck said several of its drugs won key regulatory approvals during the fourth quarter. They include Keytruda, a medication the FDA in October approved for treating patients suffering from advanced non-small cell lung cancer that has progressed after other treatments.

Looking toward the new year, Merck said it anticipates 2016 revenues between $38.7 billion and $40.2 billion, based on mid-January currency exchange rates. The company forecast for full-year earnings per share of $1.96 to $2.23.

The consensus forecast of analysts surveyed by S&P Capital IQ projected nearly $40.15 billion in revenue and $3.72 in earnings per share.

"We will continue to invest resources to launch and grow our strongest brands, support the most promising internal assets, enhance our pipeline with the best available external science and maintain a balanced and differentiated portfolio with the goal of delivering long-term growth and shareholder value," Merck Chairman and CEO Kenneth Frazier said.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc.