MRK Merck and Co Inc

Merck & Co. posted increases in revenue and profit as a closely watched cancer treatment and vaccines bolstered results.

Shares rose 2.5% in premarket trading as results beat analysts' expectations.

Pharmaceutical revenue for the third quarter increased 5.8% to $9.44 billion, driven by growth in vaccines, oncology, cardiovascular drugs and hospital acute care.

Cancer drug Keytruda posted sales of $356 million in the most recent quarter, compared with $159 million in the same quarter last year.

Monday, the drug received U.S. Food and Drug Administration approval as a first-line treatment for certain lung cancer patients, a big-win for the drug as it had typically been used as a secondary-treatment.

Merck is continuing to develop and launch the drug for different types of cancers, and its development program includes more than 30 tumor types and 360 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 $164 million, compared with $112 million in the second quarter and $50 million in the first quarter.

Vaccine sales grew in the quarter. HPV treatments Gardasil and Gardasil 9 jumped 38% to $860 million amid increased pricing and demand in the U.S. Sales of proquad, a measles, mumps, rubella and varicella virus vaccine, increased 27% as the U.S. Centers for Disease Control and Prevention bought the drug for its pediatric vaccine stockpile.

Sales of Remicade, a treatment for inflammatory diseases, dropped 30% due to the impact of competition by biosimilar drugs in Europe.

Animal Health sales revenue increased 5% to $865 million on flea-and-tick treatment bravecto.

Gross margin increased to 67.6% from 62.7% last year.

Research and development costs increased 11% to $1.7 billion in on higher clinical development spending.

In all for the quarter, the company posted a profit of $2.18 billion, or 78 cents a share, up from $1.83 billion, or 64 cents a share, a year prior. Excluding restructuring and acquisition-related costs and other items, per-share earnings rose to $1.07 from 96 cents.

Sales grew 4.6% to $10.54 billion.

Analysts polled by Thomson Reuters had forecast per-share earnings of 99 cents a share on revenue of $10.18 billion.

The drugmaker also updated its guidance for the year, which is mostly in-line with Wall Street's forecasts.

For the year, Merck now projects per-share adjusted earnings between $3.71 and $3.78 on revenue between $39.7 billion and $40.2 billion. It had previously expected earnings of $3.67 to $3.77 and revenue of $39.1 billion to $40.1 billion.

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

(END) Dow Jones Newswires

October 25, 2016 08:05 ET (12:05 GMT)

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