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(Reuters) - Merck & Co Inc (MRK.N) on Tuesday reported a higher-than-expected quarterly profit and raised its full-year forecast as demand for its diabetes and cancer drugs increased.
Combined sales of diabetes drug Januvia and a related pill called Janumet, which have struggled to grow in the past year, jumped 10 percent to $1.58 billion in the third quarter after only a 1 percent rise in the previous period.
Adam Schechter, Merck's head of global human health, said in a conference call with analysts that the treatments for type 2 diabetes got a $100 million boost from stocking by wholesalers. But he cautioned that the gain would hamper their sales in the fourth quarter and beyond.
Schechter said the volume of Januvia sales rose 4 percent in the quarter, which he called an encouraging trend.
Keytruda, the company's new advanced melanoma and lung cancer treatment from a promising class of immuno-oncology drugs, brought in sales of $159 million.
"Merck continues to execute well in oncology with Keytruda," BMO Capital Markets analyst Alex Arfaei said in a research note. He predicted the drug, which blocks a protein called PD-1 that allows tumors to hide from the immune system, would achieve annual sales of about $9 billion by 2023 as a treatment for multiple types of cancer.
Merck Chief Executive Officer Ken Frazier said negative media reports about Valeant Pharmaceuticals International (VRX.TO) (VRX.N) and other companies that have dramatically raised prices of their prescription drugs had created "a lot of noise" without seriously tarnishing the industry's reputation.
"People recognize the industry is important," Frazier said on the conference call. "Our innovations are critical to society."
Merck, whose shares were up 1.2 percent in morning trading, said its net income doubled to $1.83 billion, or 64 cents per share, from $895 million, or 31 cents per share, a year earlier.
Excluding special items, including restructuring and acquisitions, earnings of 96 cents per share exceeded the analysts' average estimate of 91 cents, according to Thomson Reuters I/B/E/S.
Revenue fell 5 percent to $10.07 billion, slightly below Wall Street forecasts of $10.08 billion.
Excluding the impact of a strong dollar and other factors, revenue would have risen 4 percent, Merck said.
Merck raised its 2015 profit forecast to a range of $3.55 to $3.60 per share. It had previously expected $3.45 to $3.55.
Reporting by Ransdell Pierson; Editing by Lisa Von Ahn