Merck report keys on new drugs Drugmaker Merck & Co., the world's third-biggest drugmaker by revenue and a Dow component, will tout recent drug approvals and progress on creating new drugs when it reports its fourth-quarter results before the stock market opens Thursday. WHAT TO WATCH FOR: CEO Kenneth Frazier, at the helm for a year, will discuss development of key experimental drugs among Merck's 20 compounds in late-stage testing. He'll likely note the company, based in Whitehouse Station, N.J., got five products approved last year, including breakthrough hepatitis C drug Victrelis. Frazier likely will discuss progress on his strategy to boost revenue and profit by limiting spending, launching new drugs and increasing sales of existing ones, growing sales in emerging markets and expanding the consumer and animal health businesses. Merck, the maker of Januvia, the top-selling pill for Type 2 diabetes, has been expanding that $3 billion-a-year-plus franchise. Its Janumet pill combines widely used generic metformin with Januvia, which increases insulin production and decreases the liver's glucose production. In October, Merck got approval for Juvisync, the first combination pill for the millions who have both diabetes and high cholesterol. The company is expecting a Food and Drug Administration decision this quarter on whether it can sell an extended-release form of Janumet. Frazier will note the company plans during 2012 and 2013 to apply for approval of five major products in the U.S. and other countries. Those are osteoporosis drug odanacatib, insomnia treatment suvorexant, Bridion for reversing anesthesia after surgery, Tredaptive for blocking hardening of the arteries and a vaccine known as V503. That shot covers more strains of cancer-causing human papilloma virus, which is sexually transmitted, than Merck's blockbuster Gardasil vaccine. Merck will give its first financial forecast for 2012. Frazier said in November that the company hopes to keep 2012 revenue about the same as in 2011, when sales over the first nine months grew about 5 percent from the prior year. During the last quarter, Merck got approval for marketing its HIV drug Isentress to children aged 2 through 17, plus a recommendation from U.S. government advisers for giving all males aged 11 through 21 Gardasil shots. It also won approval to expand use of cholesterol drug Vytorin to patients with kidney disease, but not those on dialysis. Analysts may ask about Frazier's recent comments that the company is shifting strategy from pursuing acquisitions and licensing agreements for drugs in early testing to ones in later testing, when deals are more expensive. That could indicate worries about the strength of the company's pipeline. Last year, bleeding risks led Merck to end a late-stage study of blood thinner vorapaxar, and it halted a study of a vaccine for dangerous Staph infections because more people in the group getting that vaccine were dying. Analysts may ask whether the end is in sight for litigation over its recalled painkiller Vioxx, after Merck recently settled patient lawsuits in Canada for about $37 million and agreed to pay 43 states a combined $950 million to end charges of improper marketing. WHY IT MATTERS: Merck's revenue has taken a hit from generic competition to its blockbuster osteoporosis, blood pressure and cholesterol drugs. Its current top seller, $5 billion-a-year allergy and asthma drug Singulair, gets U.S. generic competition this August. Analysts will be watching to see whether the Januvia franchise and other new medicines can pick up the slack. Frazier said earlier this month that he's increasing cost-cutting efforts, and analysts will be watching for details. That was after Merck told employees in September that it was speeding up layoffs in the U.S. so it could meet its goal of cutting up to 13,000 jobs by 2015. Merck has been continually downsizing since its November 2009 acquisition of Schering-Plough Corp., although it's still hiring for positions in growth areas. WHAT'S EXPECTED: Analysts surveyed by FactSet forecast earnings per share of 95 cents and revenue of $12.52 billion. LAST YEAR'S QUARTER: Merck reported a net loss of 17 cents per share, but would have made 88 cents per share without $3.9 billion in restructuring and other charges. It had revenue of $12.09 billion.