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Sales of Merck's cancer drug soar, company raises forecast

[NEW YORK] Merck & Co raised its full-year guidance after sales of its cancer drug Keytruda more than doubled in the first quarter.

Sales of Keytruda, which harnesses the immune system to attack tumors, more than doubled to US$584 million, though they fell short of analysts' expectations. Merck is gaining in its race against Bristol-Myers Squibb Co, which has a rival immune system-based drug that has suffered setbacks.

While Keytruda has been approved for new uses, Bristol-Myers's drug Opdivo last year failed in a major trial of lung cancer patients. Sales of Opdivo declined in the first quarter, compared to a quarter before, while Merck's drug keeps growing.

"The continued momentum of Keytruda in oncology, along with the strength of the vaccine and other franchises and animal health, helped to drive revenue growth in the quarter," CEO Ken Frazier said in a statement.

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Adjusted earnings this year will be US$3.76 per share to US$3.88 a share, Merck said in a statement Tuesday, up from a previous forecast of US$3.72 to US$3.87. The shares were up less than 1 per cent to US$62.62 at 7:49am in New York.

Merck is increasingly reliant on Keytruda to become its next major blockbuster as its diabetes business starts to come under pressure. Sales of the company's biggest-selling product, the diabetes drug Januvia and a sister pill Janumet, fell 5.5 per cent per cent from a year before, to US$1.34 billion.

The decline in Januvia sales makes Merck the latest drugmaker to report a slowdown for diabetes drugs, after Johnson & Johnson and AstraZeneca Plc both blamed price pressures for hurting sales in the first quarter. Merck said the diabetes sales decline was due to the timing of purchases.

Merck also increased its revenue forecast to US$39.1 billion to US$40.3 billion, from US$38.6 billion to US$40.1 billion. First-quarter earnings, excluding some items, were 88 US cents a share, beating the 83-US cent average of analysts' estimates compiled by Bloomberg.