If you're going to invest in Merck's (NYSE: MRK) turnaround, you'll need to be prepared for a bumpy ride. The company is removing its long-term guidance of high single-digit EPS growth.

In contrast to Pfizer (NYSE: PFE), which cut R&D spending to hit its targets and make investors happy, Merck said it wasn't willing to do the same.

I like it.

Drugmakers can't grow without bringing new drugs on the market, and that can't happen without R&D. You have to spend money to make money, as they say.

Merck, a company I once called a bloated garbage heap of stale drugs, will actually see revenue increase in 2011 compared to the flat sales growth it saw this past year. Merck is guiding for revenue growth in the low- to mid-single-digit percent range.

The guidance assumes that Merck will be able to hold on to its right to sell Johnson & Johnson's (NYSE: JNJ) Remicade and Simponi overseas. The companies have been in a bitter fight over the rights since Merck bought Schering-Plough.

Adjusted EPS for next year don't look too shabby at $3.64 to $3.76, which is a 6.4% to 9.9% increase over the 2010 level. The earnings guidance could have been higher had it not been for health care reform costs and pricing pressure in Europe cutting into margins.

Longer term, earnings will likely suffer from weak -- if any -- sales of vorapaxar. The drug appears to increase bleeding and likely won't be used in stroke patients. The drug is used in combination with Bristol-Myers Squibb's (NYSE: BMY) and sanofi-aventis' (NYSE: SNY) Plavix, but if it can't be used in stroke patients, that cuts into much of the Plavix's multibillion-dollar market.

There will be other drugs in the pipeline to take vorpaxar's place, but investors will have to sit tight and wait for their development.

Follow Merck as it enters the next chapter of the company's history. Click here to add it to My Watchlist, which will help you keep track of all our Foolish analysis on Merck.

Johnson & Johnson and Pfizer are Motley Fool Inside Value recommendations. Johnson & Johnson is a Motley Fool Income Investor selection. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of Johnson & Johnson. Motley Fool Alpha owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.