Sales were a big disappointment as they came in 4% below estimates at $10.7 billion, which was over $500 million below expectations. Merck tried to lessen the blow from the earnings report by announcing a buyback on shares worth $15 billion in an attempt to hold the earnings per share up along with the stock price.

One Wall Street analyst said all the buyback amounted to was throwing a second bone to shareholders by management. The first was replacing the long time research head of the company Peter Kim with Peter Perlmutter the former Amgen head of R&D.

The disappointment in the quarter was due to poor sales from their drug Januvia, its best selling diabetes medication as well as Janumet, a pill that combines a generic medication with Januvia. Analysts expected it to be the world’s best selling drug one day. Januvia however, was a disappointment with sales that were 19% lower than analyst’s projections with Janumet 11% lower than was forecasted.

Not helping the drug maker was that currently Januvia along with other drugs are being reviewed currently by the U.S. Food and Drug Administration to determine if the risk of developing the painful and serious conditions pancreatitis is elevated through using the medication.

Healthcare

The Standard & Poor’s 500 Index closed at another record high but it fell short of reaching its all-time intraday high of 1,576.09. The Dow also reached another record high.

The US government announced it would drop the plans to slash payments for private Medicare Advantage insurers. It said that it would approve a 3.3 percent increase instead. The news helped shares of health insurers, including Humana that gets around two-thirds of its business from Medicare Advantage.

Humana’s stock increased 5.5 percent to $79.11. It was among the largest gainers on the S&P 500. UnitedHealth Group increased 4.7 percent to $61.74. The healthcare sector in the S&P 500 went up 1.4 percent.

The improving US data helped stocks rally since the beginning of 2013. US data showed factory orders in February increased 3 percent, which was above economists’ estimated. It came after a weak reading on US manufacturing last Monday that resulted to a pullback in stocks.

At present, the S&P 500 is up 10.1 percent since the start of 2013. The Dow Jones Industrial average increased 89.16 points for the day to 14,662.01. The S&P 500 Index went up 8.08 points to 1,570.25. The Nasdaq Composite Index increased 15.69 points to 3,254.86.

The S&P 500 overcame its 2007 closing record last Thursday while the Dow first broke its 2007 record last March 5. Stocks managed to pare gains late in the session. This made investors wonder whether the market can sustain its rally.

Healthcare sector stocks remained cheap compared to the overall market. Humana has a market cap of around $11.9 billion with a forward price-to-earnings ratio of 9.4, which is under the S&P P/E ratio of around 16.5.

U.S. officials agreed as part of the settlement not to file prosecution charges against UPS in exchange for UPS handing over the $40 million the company received from its business dealings with the illicit pharmacies operating online. Another requisite of the deal is that UPS implement a strict compliance program.

The Justice Department said that UPS had cooperated fully over the probe and had already taken the steps necessary to halt service for the illegal online pharmacies.

However, the Justice Department said that UPS had not implemented correct procedures to close shipping accounts of the pharmacies online despite employees from the online pharmacies putting them on notice during the years 2003 to 2010 that they were using UPS services to ship prescription drugs and controlled substances without any valid prescriptions.

FedEx, a rival of UPS in the package shipping business, said it was not sure of what laws that UPS might have violated. However, it noted that the company was confident it was in compliance with all federal laws.

FedEx, based in Memphis, Tennessee also said they stand ready to support and help law enforcement and urged the DEA to provide them with a list of the pharmacies believed to be in operation today, so they could immediately cut shipping services to them.

Sensipar, which is already approved for use by adults, is used to help lower calcium levels that are dangerously high in blood.

The FDA said it was in the process of collecting data on the teenager’s death. The regulatory agency said it did not know whether the Amgen drug was involved in the death of the teenager.

Amgen is the largest biotechnology business in the world and said last week that it had sent a letter to all healthcare providers alerting them of the halt in the clinical trials and of the death of the patient.

A statement provided by Amgen said it was working as quickly as possible to learn the circumstances of the teenager’s death. The analysis is continuing and will be concluded as rapidly as possible, said the company’s statement.

The drug works by lowering the release of the hormone parathyroid from the gland of the same name to lower the levels of calcium in the blood. High calcium levels in blood can lead to severe health problems.

Sensipar, with sales worldwide of over $950 million during 2012, has been approved for people 18 or over. The clinical trials were taking place to determine the efficacy and safety of the medication in patients who are younger.

The lawsuits were scheduled to go to trial on March 4. Plaintiff’s attorneys said the $688 million settlement was one of the top 25 of all time for call action litigation. Merck was hit with the lawsuits along with Schering-Plough its at the time partner when it delayed the release of results from a study because of what Merck says it thought was problems over data quality in the study. However, John Kastelein, an outside scientist, who was the head of the clinical trial, thought at the time the data was analyzable.

After public pressure become too much, Merck released the data in the beginning of 2008. The data indicated that Vytorin, a cholesterol drug, which is a combination of Zocor and Zetai, did not decrease readings from ultrasounds of the neck artery thickness any more than only Zocor did.

When the data was presented it caused shares of both pharmaceutical companies to fall. Vytorin also was hit hard as patients who had high cholesterol were switched medications by their doctors to others such as Crestor and Lipitor.

Even though the motive’s of the doctor’s may be pure and the medications are what is best for the patient’s sickness, patients need to be know about such payments to discuss them with the doctor and then decided for themselves if the participation by the doctor in the trial might cause his medical advice to be compromised.

The healthcare reform legislation has a provision that should bring transparency about the payments to doctors and other corporate benefits physicians receive. Included in those benefits are gifts, lavish dinners and conventions sponsored by pharmaceutical companies that are more of a luxury vacation than medical convention. The new provision will publish all the information in a database online.

The final regulations were supposed to be completed and published in October of 2011, with the database going live sometime during 2013. However, the regulations needed are over 15 months late.

Just as with the regulations for the food-safety act, most of the final regulations for this act have been help up in the Office of Management and Budget after being written up by an appropriate agency. On thought over the delay is President Obama did not want to issue the regulations prior to the election, when the healthcare reform law was a contentious issue with voters.

Most doctors put the well-being of their patients first, but a recent study has shown that physicians who are given food from a company are more apt to prescribe the products from that company, even though the doctor might not consciously being doing it.

Merck officials release the fourth quarter as well as full year results for last year. After the earnings report was released, shares of Merck fell by 3.3% to end at $41.82 for the week.

Singulair is taken by asthma patients once per day. In 2011, Singulair earned more than $5.49 billion and in the first half of 2012, the medication was earning its average of nearly $1.3 billion per quarter. Nevertheless, patent protection for the drug in the U.S. expired in early August and sales plummeted by over 96% in the last three months of the year, as the less expensive generic medication started to take hold in the market.

For 2012, sales at Merck worldwide for singular were just $3.9 billion, which represented a 30% drop from the previous year. At this time, Januavia is the current best selling drug for Merck. The drug is for people with diabetes and during the fourth quarter of 2011 sold $1.3 billion, while for the year sales were $4.1 billion.

Merck’s total revenue for 2011 was $47.29 billion, which represented a drop of 2% from revenue for 2011. However, Merck did turn a profit of over 6% for the year.

Prevnar 13 becomes the first and just the only Pneumococcal Conjugate Vaccine that has been approved for this particular age group. Pfizer announced the FDA’s approval for expanded use of the vaccine in a Friday press release. In this age group, the vaccine will be administered via a one-time only dose to those who have not received Prevnar 13 previously.

Pfizer said its extension of the use of Prevnar 13 to adolescents and older children between the ages of 6 and 17 reflects the company’s dedication to improving public health across the globe.

The approval from the FDA came after the regulatory agency reviewed a trial of 592 adolescents and older children who were given Prevnar 13. The study established a safety profile in the age group consistent with ones established in trials previously held in young children and infants.

The vaccine was first used in young children and infants in Europe in December of 2009 in the U.S. in February of 2010. It is presently approved for that use in over 120 countries. The vaccine is also part of regional and national immunization programs in over 60 countries.

Prevnar 13 was also approved previously to be used in people who are 50 or older in over 80 countries worldwide. It also is the first and just the only pneumococcal vaccine that has been given prequalification for the adult population by the World Health Organization.

If approved, the drug would be the first of a new type of medication in the United States that treats diabetes. Nevertheless, a number of the panel members raised concerns over the drug’s potential risks when used in patients suffering from impaired kidneys. They also were concerned with the cardiovascular risks the medication might have.

The drug is called canagliflozin and is one of a new type of drug that reduces the blood sugar level by causing the body’s sugar to be excreted in the urine. Existing treatments work by affecting insulin’s use or supply in the body.

Clinical trials performed by J&J of more than 10,000 participants around the world showed the new drug helped to improve blood sugar levels and led to some weight loss and a reduction in participants’ blood pressure. Adult patients with type 2 diabetes take the medication once every day. Medical experts predict that more than 26 million people in the United States suffer from type 2 diabetes.

Even some of the members of the advisory panel who voted for the drug’s approval voiced their concerns over side effects and urged the drug’s developer, Johnson & Johnson to follow closely the patients who were taking part in current long term safety studies. Some doctors have expressed worry about the drug being given to patients who suffer from moderate kidney disease.

Doctors also expressed their concern about a higher risk of suffering a stroke and a slight increase in heart attack risks.

The drug was approved by the U.S. regulatory agency for use in lowering the risk of stroke and blood clots in those who have arterial fibrillation, an arrhythmia in the heart that afflicts millions throughout the U.S.

The drug, which is also known by the name apixaban, is the third medicine of its kind for anti-clotting to be approved recently. Now the companies will market aggressively their product as the best alternative to the longstanding drug warfarin, which has been available for a sometime but requires intense monitoring. Warfarin is known as Coumadin.

Some medical experts said the new drug offered the best overall benefits versus risks, of any of its competitors. However, since no clinical trials have been completed that compare the different drugs, there is no way to make a distinction between the three to which one is the preferred, said one cardiologist.

On Friday, a joint statement was released by Bristol-Myers and Pfizer that said the two were pleased with the approval given their drug by the FDA. The drug had been approved in November by the European regulator agency for use across that continent.

Eliquis and its other competitors have great promise, but medical experts have cautioned doctors not to prescribe the drug too enthusiastically.

Silva is said to be perusing other interests but the transition should be mostly seamless due to being involved with the company throughout the rest of 2012. Silva’s remaining tenure with VRX should wrap up by the expected acquisition completion of Medicis Pharmaceutical (NYSE:MRX).

The person expected to fill Silva’s shoes are estimated to be a Medicis executive.

“The Board of Directors and I appreciate the significant contributions Rajiv has made these past few years since joining me on this journey to create a new pharmaceutical operating model,” said J. Michael Pearson, chairman and chief executive officer. “Under Rajiv’s leadership, we have become a leader in the U.S. dermatology space and transformed our operations in Canada and Australia. And although his leadership will be missed, the company has created and developed a strong management team with Rajiv’s assistance that I am confident will lead us successfully through this transition period and into the future.”

“The last four years at Valeant has been an extraordinary experience,” said Rajiv De Silva. “It has been a privilege to work with Mike, other members of the management team, and the Board on this journey.”

Shares of VRX last closed up +0.41% at $58.64 per share.

Hudson Global will be situated under Draftfcb and the company said that the acquisition will “create a top 5 healthcare offering in the United States.”

“Our acquisition of Hudson is part of a long-term plan to make strategic acquisitions that will bolster our clients’ businesses and strengthen our agency’s offerings in those markets that offer the greatest opportunity,” said Laurence Boschetto, global CEO and president of Draftfcb.

Hudson Global employs approximately 55 plus employees and will retain its company named and remain based in its Tarrytown, NY location. Hudson will also retain its senior management team.

Shares of Interpublic (IPG) are up +3.17% during intraday trading at $11.56 per share as of 3:00 P.M., Eastern.

“This transaction furthers our mission to improve patients’ lives by growing our portfolio of specialty therapies that address significant medical needs,” said Bruce Cozadd, chairman and chief executive officer of Jazz Pharmaceuticals. “The addition of EUSA Pharma as our new international business also expands our global footprint and brings additional marketed products and development opportunities to the company.  We are also pleased to bring new talent to the company from EUSA Pharma to help us pursue our goals as a specialty biopharmaceutical company dedicated to reaching patients who have very specific needs.”

Jazz Pharmaceuticals is slated to provide new guidance for the combined company with the upcoming announcement of its Q2 2012 financial results.  The EUSA Pharma transaction is expected to be accretive to earnings in 2012, adding expected incremental revenue of $90 million to $100 million and an estimated additional $0.25 to $0.30 in adjusted earnings per share.

JAZZ is trading at $41.76 per share with a daily high of $42.13 to a low of $40.38 just past noon, Eastern.

Randall Lipps, chairman, president and CEO of Omnicell had the following to say, “Providing medication management solutions across the entire spectrum of health care is aligned with the needs of our customers to increase efficiency by reducing recurrences of patient treatment needs.  We believe that the addition of MTS to the existing Omnicell solutions uniquely positions Omnicell in the industry to supply the new demands for tracking and managing treatment beyond the acute care setting and use these capabilities to cut costs and improve outcomes.”

“Increasingly, health systems have strong financial and patient satisfaction incentives to actively work to reduce hospital readmissions, and medication adherence is a key component. With the addition of MTS, Omnicell is in a stronger-than-ever position to partner with healthcare organizations across the full continuum of patient care delivery,” added Mr. Lipps. “For example, Omnicell will now be able to address the costly, critical issue of non-adherence head-on, through medication packaging solutions and consumables that help patients and caregivers adhere to the prescribed medication regimen. We believe the new end-to-end Omnicell portfolio of innovations brings unmatched value to safe, effective medication management for healthcare organizations in both acute and non-acute care environments.”

Shares of OMCL closed down 1.94% to $14.19 per share at the end of trading today.

Founded in the year 1993, ZsBio provides testing products (pathology) within their domestic Chinese market, such as oncology diagnostics.

OriGene had the following to say regarding today’s acquisition, “With its leadership position in the Chinese pathology testing market, ZsBio is the ideal partner for OriGene,” said Wei-Wu He, CEO of OriGene.  “ZsBio is already a leader in pathology products for cancer applications and has a wide range of market-leading diagnostics products used in hospitals and laboratories in China. In turn, OriGene brings to ZsBio innovative highly specific monoclonal antibodies and assays to complement and strengthen ZsBio’s portfolio of products.”

In a market that has experienced double-digit market growth annually, OriGene hopes the acquisition of ZsBio bolsters their bottom-line.

OriGene Technologies, Inc., is a biosciences company dedicated to develop gene centric innovative products and services to improve the quality of healthcare diagnostics and treatments while ZsBio has more than 25 years of pathology diagnostics experience in China.