Drugmaker Merck blew past Wall Street expectations for third-quarter profit on Tuesday, as sales of its blockbuster immunotherapy Keytruda crossed the $3-billion mark for the first time in a quarter and beat lofty estimates.
Shares of the Kenilworth, New Jersey-based company rose 1.4% to $82.2 in early trading after the drugmaker raised its 2019 profit forecast.
Keytruda has driven much of Merck's recent growth, given its position as a mainstay treatment for newly diagnosed patients with advanced lung cancer, the most lucrative oncology market.
Besides lung cancer, Keytruda's strength was also powered by continued use of the drug in patients with certain types of kidney cancer, Merck said.
Sales of the therapy rose 62.5% to $3.07 billion in the third quarter, sweeping past estimates of $2.88 billion, according to five brokerages polled by Refinitiv.
Profit was also boosted by the company's line of vaccines for diseases, including chickenpox and measles, that brought in revenue of $2.5 billion, an increase of 17%.
Higher demand in China, along with higher prices in the United States, boosted sales of Gardasil, the company's vaccine to prevent cancer caused by human papillomavirus. Gardasil sales rose 26% to $1.32 billion and beat estimates of $994.3 million.
Total sales rose 14.9% to $12.40 billion, surging past estimates of $11.64 billion.
Sales of medicines in China grew by 90%, excluding the impact of a stronger dollar, helping overall revenue grow nearly 15% to $12.40 billion. Analysts had expected quarterly sales of $11.64 billion.
Merck raised its 2019 adjusted earnings forecast to between $5.12 and $5.17 per share from a prior range of $4.84 to $4.94. Analysts were expecting $4.92 per share.
Net income fell to $1.90 billion, or 74 cents per share, in the third quarter from $1.95 billion, or 73 cents per share, a year earlier.
Excluding items, Merck earned $1.51 per share, beating the average analyst estimate of $1.24.