WHITEHOUSE STATION, N.J. (AP) — Merck's third-quarter net income fell mostly because of large costs tied to acquisitions and divestitures.
But the drugmaker's adjusted earnings topped Wall Street's view, and it narrowed its full-year adjusted earnings forecast on Monday.
Merck also announced on Monday that the Food and Drug Administration gave breakthrough therapy designation to Keytruda for advanced non-small cell lung cancer that has progressed on or following platinum-based chemotherapy.
The designation is intended to speed the approval process for drugs that treat diseases that have no or inadequate treatments.
Merck's shares edged lower in morning trading.
The company earned $895 million, or 31 cents per share, during the July-September quarter. A year earlier it earned $1.12 billion, or 38 cents per share.
Removing costs related to acquisitions, divestitures, restructuring and other items, earnings were 90 cents per share.
Analysts surveyed by Zacks Investment Research expected earnings of 88 cents per share.
Revenue declined to $10.56 billion from $11.03 billion partly on divestitures and the termination of a joint venture with AstraZeneca.
Zacks was calling for higher revenue of $10.69 billion.
Pharmaceutical revenue slipped 4 percent to $9.1 billion on product divestitures and the loss of market exclusivity for some products such as oral chemotherapy drug Temodar and asthma and allergy pill Singulair.
Merck now foresees full-year adjusted earnings in a range of $3.46 to $3.50 per share. Revenue is expected between $42.4 billion and $42.8 billion. The Whitehouse Station, New Jersey company's prior guidance was for adjusted earnings in a range of $3.43 to $3.53 per share on revenue between $42.4 billion and $43.2 billion.
Analysts polled by FactSet predict earnings of $3.47 per share on revenue of $42.5 billion.
Keytruda, a genetically engineered drug known chemically as pembrolizumab, is part of a hot, promising new class of antibody-based drugs. They work by taking a brake off the immune system so it can better recognize and attack cancer cells.
In September, the FDA granted accelerated approval to Merck for Keytruda for treating melanoma that has spread or can't be surgically removed in patients previously treated with another melanoma drug called Yervoy.
Merck & Co. is not affiliated with the German drugmaker Merck KGaA.
Its stock slipped 89 cents, or 1.5 percent, to $56.72 in morning trading. Its shares have risen more than 21 percent over the past year.