(Reuters) - Merck & Co Inc's quarterly profit and sales just missed expectations as its medicines faced competition from cheaper generics, but shares rose 1.5 percent on enthusiasm for newly announced cancer-drug partnerships with rival U.S. companies.
For the full year, Merck expected to earn $3.35 to $3.53 per share, excluding special items. The average analyst estimate was $3.48 per share.
"Overall, I view this guidance as 'good enough,' given fairly widespread Street concerns about a 'mega-miss,'" ISI Group analyst Mark Schoenebaum said, adding that investors remain more focused on prospects for the company's array of experimental drugs.
Separately on Wednesday, Merck said it plans to test its closely followed immuno-oncology drug MK-3475 in combination with medicines being developed by Pfizer Inc, Amgen Inc, Incyte Corp.
Shares were up 1.3 percent in premarket trading on Wednesday, after closing at $53.51 Tuesday on the New York Stock Exchange.
Schoenebaum said Merck shares jumped on news of the planned new studies of MK-3475, a so-called PD-1 inhibitor that works by harnessing the immune system to find and destroy cancer cells.
Industry analysts believe the medicine, if approved, could generate annual sales of billions of dollars and greatly improve treatment of melanoma and potentially other cancers.
The second-biggest U.S. drugmaker said on Wednesday it earned $781 million, or 26 cents per share, in the fourth quarter. That compared with $908 million, or 30 cents per share, in the year-earlier period.
Excluding special items, Merck earned 88 cents per share. The average analyst forecast was 89 cents per share, according to Thomson Reuters I/B/E/S.
Revenue fell 4 percent to $11.32 billion. Wall Street was expecting $11.36 billion.
Merck shares rose 22 percent in 2013, underperforming a 27 percent average gain for other large U.S. and European drugmakers, amid waning sales of its Januvia diabetes medicines and uncertainty about its drug pipeline.
The company is hoping that MK-3475 and other drugs will be approved and revive sales and earnings growth, following failures or setbacks over the past five years for its treatments for heart disease, osteoporosis and other diseases.
Sales of Januvia, Merck's biggest product, fell 1 percent to $1.12 billion in the fourth quarter, while sales of a related combination medicine called Janumet rose 11 percent to $503 million. Double-digit sales gains were seen for arthritis treatment Remicade and HIV treatment Isentress.
But sales of asthma drug, Singulair, now facing generics, tumbled 38 percent to $298 million.
Sales of the company's animal health products, which usually prop up results, slipped 3 percent to $871 million in the quarter. They were hurt by the company's voluntary suspension of sales earlier in the year of Zilmax, a feed supplement that some critics have alleged caused dangerous weight gains in cattle.
Editing by Jeffrey Benkoe and Bernadette Baum