Cancer drug helps spark Merck’s second-quarter surge

Sales of its cancer blockbuster and vaccines helped drive Merck’s second-quarter profit up 54%, way past Wall Street expectations and cheering investors.

The maker of cancer immunotherapy drug Keytruda and diabetes pill Januvia also benefited from slightly reduced spending on research and restructuring.

The Kenilworth, New Jersey, company raised its revenue forecast for the year, but reduced its earnings per share forecast due to a charge for the just-closed acquisition of Peloton Therapeutics.

During the quarter, Merck also bought a second company developing cancer therapies, Tilos Therapeutics, and a third developing ways to boost the immune system to fight diseases.

Until five years ago, Merck had little presence in cancer other than Emend for treating nausea and vomiting caused by chemotherapy. But Keytruda’s dominance in the market — it’s now approved for treating 20 cancer types and patient groups — has shifted much of Merck’s research and revenue to oncology.

Keytruda sales jumped 58% to $2.63 billion in the quarter, as the biologic drug continues to rack up more approvals, most recently for patients with advanced small cell lung cancer, and as initial treatment for advanced head and neck cancer.

“We estimate Keytruda sales will exceed $16 billion by 2022,” Edward Jones analyst Ashtyn Evans wrote to investors.

Revenue also is growing from partnerships with other companies to jointly sell Lynparza for ovarian cancer and Lenvima for liver, kidney and thyroid cancer.

Meanwhile, sales continue to wane for older drugs for more common conditions including diabetes, high cholesterol, asthma and allergies.