Merck & Co reported quarterly earnings slightly above the Wall Street forecasts, helped by cost controls, but revenue trailed expectations on generic competition and reduced proceeds from a joint venture with British drugmaker AstraZeneca. The No. 2 US drugmaker said global revenue rose 1 per cent to $11.73 billion, compared with Wall Street expectations of $11.82 billion. Revenue would have risen 2 per cent if not for the stronger dollar, which hurts the value of sales in overseas markets. Sales of the asthma treatment Singulair, whose US patent lapses in August, edged 1 per cent higher to $1.34 billion in the quarter. That marks a slowdown for Merck’s biggest product, whose sales jumped 8 per cent in the prior quarter. Singulair could lose half or more of its sales soon after cheaper generics arrive. But the company has a lineup of promising medicines in clinical trials that it hopes will be approved, and help fill the revenue gap. They include a new type of insomnia treatment called suvorexant, osteoporosis treatment odanacatib and two drugs that have been delayed by regulators: Bridion, to reverse the effects of anesthesia, and Tredaptive, a form of niacin meant to raise “good” HDL cholesterol without causing facial flushing. “Beyond earnings, we continue to believe Merck’s late-stage pipeline updates in 2012 and 2013 represent key drivers for the stock,” JP Morgan analyst Chris Schott said in a research note, referring to expected progress reports on the drugs. Schott said Merck could generate compound annual earnings growth of 7 per cent through 2017, the highest gains of any major drug company he covers. Even so, he said Merck shares are trading at only 10 times the company’s expected 2012 per-share earnings, a discount to most rival large drugmakers. Merck reported quarterly net income attributable to the company of $1.74 billion, or 56 cents per share. That compared with $1.04 billion, or 34 cents per share, a year earlier. Excluding special items, the company earned 99 cents a share. Analysts, on average, had expected 98 cents, according to Thomson Reuters. Results were hurt by a 42 per cent decline in revenue, to $186 million, from its longstanding alliance with AstraZeneca. Merck books some sales of AstraZeneca’s Nexium heartburn treatment, and manufactures some of the drug for AstraZeneca. But Merck’s proceeds from the joint venture fell during the quarter due to sharply lower sales of Nexium, and the timing of orders from AstraZeneca for the medicine. In a call with analysts, Merck officials said the company expects to remain in the venture at least through the first half of 2012. But they noted AstraZeneca has the right to buy out its stake and could exercise that option later this year. Sales of Merck’s Januvia diabetes medicine rose 24 per cent to $919 million, while a related treatment called Janumet jumped 29 per cent to $392 million. The Januvia diabetes franchise has become Merck’s biggest growth engine, and its biggest hope of offsetting looming declines of Singulair. HIV treatment Isentress, whose sales rose 15 per cent to $337 million, slightly lagged analyst estimates, as did sales of arthritis treatment Remicade. Its sales plunged 31 per cent to $519 million, following arbitration that assigned rival drugmaker Johnson & Johnson a wider sales territory for the costly injectable drug. Merck acquired Remicade in 2009 through its acquisition of Schering Plough, which had sold it for years under an arrangement with J&J. Cozaar, a blood pressure drug now facing generics, also dampened results, with sales falling 21 per cent to $336 million. Sales of Gardasil, a vaccine to prevent cervical cancer, jumped 33 per cent to $284 million, helped by its introduction in Japan and increased vaccination of males aged 9 through 26. With vaccinations, boys are less likely to become infected with the human papillomavirus and sexually transmit it to others. Animal health products were a bright spot in the earnings report, growing 8 per cent to $821 million. Consumer healthcare products also stood out, growing 7 per cent to $554 million.