Merck & Co. posted an unexpected increase in revenue as new cancer and hepatitis treatments bolstered results.

The drugmaker also updated its guidance for the year, which is mostly in-line with analyst forecasts.

The quarter's pharmaceutical revenue increased 1.6% to $8.7 billion driven by growth in cancer treatments, hospital acute care, cardiovascular treatments and vaccines.

Cancer drug Keytruda posted sales of $314 million in the most recent quarter, compared with $110 million in the same quarter last year. Merck is continuing to develop and launch the drug for different types of cancers, and its development program includes 30 tumor types across more than 300 clinical trials.

In January, the U.S. Food and Drug Administration approved Merck's new treatment, Zepatier, for hepatitis C, the latest entrant in a booming market for drugs for the viral infection—a market now dominated by Gilead Sciences Inc. Zepatier had sales of $112 million, compared with $50 million in the first quarter.

Nasonex sales fell 53% in the first quarter from the year prior. A generic version of the treatment became available in the U.S. in March, and the company has said it expects significant losses in future sales.

Sales of Remicade, a treatment for inflammatory diseases, decreased 26% because of a loss of exclusivity and the accelerating impact of competition by biosimilar drugs.

Combined sales of Type 2 diabetes treatments Januvia and Janumet increased 2%, while combined sales of cardiovascular drugs Zetia and Vytorin grew 4% on price increases.

I.V. antibiotic Cubicin posted 22% sales growth to $357 million on price increases, but Merck said it had lost patent protection in June and that it expects a significant decline in sales.

HPV vaccines Gardasil and Gardasil 9 fell 8% to $393 million due to the timing of public sector purchases.

Earlier this month, Merck said it planned to lay off research-and-development workers at three East Coast sites in a shake-up of its early-stage drug-hunting efforts. At the same time, Merck plans to start new laboratories in Cambridge, Mass., and the San Francisco Bay Area, as part of a trend among large drugmakers to try to tap into hot clusters of biotechnology startup activity and academic research.

For the quarter, the company posted a profit of $1.21 billion, or 43 cents a share, up from $687 million, or 24 cents a share, a year prior. Excluding restructuring and acquisition-related costs, per-share earnings rose to 93 cents from 86 cents.

Sales grew 0.6% to $9.84 billion.

Analysts polled by Thomson Reuters had forecast per-share earnings of 91 cents a share on revenue of $9.78 billion.

For the year, Merck now projects per-share adjusted earnings between $3.67 and $3.77 on revenue between $39.1 billion and $40.1 billion. Analysts had expected adjusted earnings of $3.72 a share on revenue of $39.49 billion.

Shares, which have grown 6.6% in the last three months, grew 1.7% in premarket trading.

Write to Austen Hufford at austen.hufford@wsj.com

 

(END) Dow Jones Newswires

July 29, 2016 08:25 ET (12:25 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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