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Eli Lilly has dropped a lower-than-expected 2016 forecast on Wall Street after wrapping up a year in which its stock soared above the broader market. ... Lilly, also known for the erectile dysfunction drug Cialis and its portfolio of cancer treatments, has been recovering from the loss of patents protecting key products like the antidepressant Cymbalta from cheaper generic drugs. (1/5)

Merck's chief executive says the drugmaker is "raring to go" on deals this year, particularly for small and midsize acquisitions of companies or their experimental drugs. CEO Kenneth Frazier, speaking Tuesday at a Goldman Sachs conference of CEOs of health care companies in Boston, also said he expects more approvals and growing sales from new cancer drug Keytruda. (1/5)

21st Century Oncology Holdings Inc., the cancer-care giant that was recently embroiled in a Medicare billing investigation, on Tuesday withdrew its long-delayed initial public offering. In a regulatory filing, 21st Century Oncology said it had decided not to pursue the offering at this time. The company didn’t provide further detail. (Dulaney and Carreyrou, 1/5)

Valeant shares dropped 4.8 percent to $96 in late trading after the Journal report. Through Tuesday’s close, they had fallen 12 percent since Pearson’s hospitalization was disclosed on Christmas Day. ... The drugmaker announced that Pearson was taking a medical leave of absence starting on Dec. 28, and that the company would be run by a team of three executives, including General Counsel Robert Chai-Onn, Executive Vice President Ari Kellen and CFO Rosiello. Valeant board members Schiller, Robert Ingram and Mason Morfit were tapped to oversee the executives. (Armstrong, 1/5)