Merck & Co Inc (MRK.N) reported a better-than-expected quarterly profit and boosted its full-year earnings forecast as demand for its diabetes and cancer drugs increased.
The company also said it expects to reap benefits from its $8.4 billion purchase of Cubist Pharmaceuticals, the maker of blockbuster antibiotic Cubicin. Cubicin sales for the second quarter were $293 million.
Sales of Merck's diabetes drug, Januvia, rose 1.3 percent to $1.6 billion in the quarter ended June 30.
The company's cancer treatment from a promising class of new drugs, Keytruda, brought in sales of $110 million, helping the drugmaker edge past the average analyst estimate for revenue.
The 124-year-old company raised its forecast to $3.45-$3.55 per share from $3.35-$3.48 per share. Analysts on average were expecting $3.45 per share, according to Thomson Reuters I/B/E/S.
In the second quarter, Merck's net income fell nearly 66 percent to $687 million, or 24 cents per share, for the second quarter, from $2 billion, or 68 cents per share, from a year earlier.
The latest reported quarter included charges of $1.45 billion related to the Cubist deal.
Excluding items, the company earned 86 cents per share. Revenue fell 10.5 percent to $9.79 billion.
Analysts on average had expected a profit of 81 cents per share on revenue of $9.8 billion, according to Thomson Reuters I/B/E/S.
Separately, the company said it would buy privately held drug developer cCAM Biotherapeutics for $95 million to boost its immuno-oncology pipeline.
The deal also includes milestone payments of $510 million.
Merck's shares were up marginally at $57.50 on Tuesday in premarket trading. They had fallen about 1 percent this year through Monday's close, compared with a 9 percent rise in the S&P 500 healthcare index .SPXHC.