Oct 30 (Reuters) - Merck & Co ( MRK ) posted higher

third-quarter revenue on Thursday, as growth from its

blockbuster cancer drug Keytruda offset falling sales from human

papillomavirus vaccine Gardasil in China.

However, shares fell nearly 2% after Merck ( MRK ) lowered the high

end of its revenue forecast for the full year. It now expects

revenue of $64.5 billion to $65.0 billion compared with its

prior view of $64.3 billion to $65.3 billion.

J.P.Morgan analysts called the quarterly beat "modest,"

adding the annual forecasts were "largely reiterated."

Merck ( MRK ) shares have fallen about 5% so far in 2025, as

investors weigh the company's efforts to grow beyond Keytruda

against broader industry headwinds, including potential U.S.

drug pricing reforms.

"We do expect continued growth in Keytruda, albeit at a

slightly slower pace than we've seen as we are getting to peak

penetration in some of the indications, and we do expect some

headwind from price in our ex-U.S. markets," said CFO Caroline

Litchfield.

Merck ( MRK ) is working to add new drugs to its pipeline before

Keytruda faces competition from cheaper biosimilars later this

decade.

The company is focusing on newer drugs, including lung

disease treatments Winrevair, from its 2021 acquisition of

Acceleron Pharma, and Ohtuvayre, which was recently acquired in

a $10 billion takeover of UK-based Verona Pharma.

Sales of Winrevair rose 141% to $360 million in the quarter.

However, Bernstein analyst Courtney Breen said the drug's

sales were materially below expectations, calling it "not a good

sign for a key growth driver for the company."

Merck ( MRK ) posted revenue of $17.28 billion in the quarter,

compared with analyst estimates of $16.96 billion, according to

LSEG data.

On an adjusted basis, the company earned $2.58 per share,

topping Wall Street estimates by 23 cents.

Sales of immunotherapy Keytruda rose 10% to $8.1 billion in

the quarter. Gardasil sales fell to $1.75 billion, but came in

ahead of the Wall Street forecast of $1.66 billion.

The company has not been making new shipments of the vaccine

for China. It has said distributors there are working through

their inventories after a fall in demand due to pressure on

consumer spending in the country.

Excluding China, Gardasil sales fell 3%, mainly due to lower

sales in Japan following the end of reimbursement for the

catch-up vaccination program.

Merck ( MRK ) said it expects full-year earnings of $8.93 to $8.98 a

share, compared with its prior forecast of $8.87 to $8.97.