Merck & Co. (NYSE:MRK) must now attract glass-is-half-full types as stockholders.

Who else but supreme optimists would buy stock in a drug maker facing more than 27,000 lawsuits regarding Vioxx, not including the Pennsylvania woman who recently dropped hers? Their faith that Merck will beat these cases is evident in the stock price.

Shares of Merck have jumped more than 39% over the past year, outperforming Pfizer Inc. (NYSE:PFE) Novartis AG (NYSE:NVS) and Schering-Plough Corp. (NYSE:SGP). Granted, beating Pfizer isn't that much of a victory, but still, that's a decent move.

Wall Street, which is awaiting Merck's fourth quarter results Jan. 30, expects the stock to climb further. The median target for Wall Street analysts is $48.50, according to Thomson Financial. Opinion, though, remains divided. Eleven analysts consider the shares either a strong buy or buy, 10 rate it a hold, and 3 a sell.

Merck has already said earnings this year are going to be lackluster and Wall Street is taking the company at its word. Analysts are forecasting earnings of 50 cents on sales of $5.38 billion, according to Thomson Financial. A year earlier, the company had a profit of 64 cents and revenue of $5.77 billion.

As Douglas McIntyre pointed out, Merck needs to convince investors that it's not Pfizer in the wake of that company's failed anti-cholesterol drugs. The Whitehouse, New Jersey-based company said last month that it will seek approvals for three important drugs this year and would have four more drugs in late-stage trials by mid-2007.

Also check out some other earnings reports that we're following, and let us know your thoughts on earnings expectations.

Pfizer Inc. (NYSE:PFE) announced today that it would cut some 10% of its worldwide work force -- 10,000 jobs -- in an effort to stem costs. The company, which announced better than expected earnings today, hopes to cut up to $2 billion in annual costs to help curtail losses due to generic competition.

It said it will also close three research sites in Michigan and two manufacturing plants in New York and Nebraska. It may also sell another manufacturing site in Germany, and close research sites in Japan and France, according to an Associated Press story in Forbes.

Pfizer, which became a household name in 1998 when it introduced Viagra, is in many ways a textbook example of what happens when a pharmaceutical company becomes reliant on one or two blockbuster drugs to drive growth. Drugs only have patent protection for so long, after which they can fall prey to much cheaper generic versions. By the end of this year, Pfizer will have suffered through patent protection losses on several of its big name drugs, including the anti-depressant Zoloft and blood pressure pill Norvasc.

The company suffered a giant setback recently when it had to pull the plug on clinical trials for its "good cholesterol" drug Torcetrapib, which it had hoped would be in place in time to help bolster revenues lost when its blockbuster drug Lipitor loses patent protection in 2010. Lipitor brings in some $12 billion in revenues.

With nothing sexy coming down its pipeline anytime soon, analysts have said they doubt Pfizer has the virility to push major sales growth going forward. Its only recourse looks to be slashing costs, via layoffs and plant closings, or through acquisitions. The fourth quarter already saw CEO Jeffrey Kindler slashing the U.S. sales force by some 20%.

Bristol-Myers Squibb (BMY) is expecting a competitor to produce a generic version of their popular drug Plavix, and is putting out the word it will vigorously defend its patent rights in the United States and abroad, they said in their quarterly filing with the SEC.

Shares fell $1.56, or 6.9%, to $21.21 in premarket activity after the comments were made. This follows a rough couple weeks for BMY as shares have dropped over 12% since the launching of a investigation in alleged anti-trust activity around this same drug. [The shares have remained at about $20.20 most of the day.]