(Bloomberg) -- Merck & Co. raised its annual profit and revenue forecast as the blockbuster cancer drug Keytruda continued to dominate the treatment landscape.

Adjusted earnings for the year will be $8.53 to $8.65 a share, the company said in a statement, up from the $8.44 to $8.59 guidance it gave in February. Keytruda sales for the quarter rose 20% to $6.9 billion, ahead of the $6.7 billion average foreseen by analysts. Revenue and profit beat expectations.

Merck’s shares rose 2.4% to $130 at 9:33 a.m. in New York. They are up 16% this year through Wednesday’s close, more than double the S&P 500’s gain.

Merck has been seeking new sources of growth as Keytruda, an immune therapy for many types of cancer, faces price pressure later this decade. Last year, it bought Prometheus Biosciences Inc., which develops drugs for autoimmune disorders, for $10.8 billion and made a pact with Daiichi Sankyo Co. worth up to $22 billion to sell three of its cancer compounds. Last month, it closed a smaller deal to buy Harpoon Therapeutics Inc., which is testing immune therapy drugs for cancer. 

The company’s most important new catalyst may come from one of Chief Executive Officer Rob Davis’s first deals. In late March, Merck won US approval for Winrevair, a new drug for a rare form of high blood pressure that’s expected to become a multibillion-dollar blockbuster. Merck obtained the drug through its $11 billion acquisition of Acceleron Pharma Inc. in 2021.

It’s the first new treatment in almost a decade for pulmonary arterial hypertension, a dangerous increase in blood pressure in the lungs. Merck is now in the process of launching the medicine. On a call with analysts, Merck executives said they’re seeing high interest in the drug from patients and that several insurers plan to cover it.

“We continue to view Merck as having one of the cleanest paths to upside,” JPMorgan Chase & Co. analyst Chris Schott said in a note. The results are “consistent with the recent solid trends” from Merck’s business, he said, predicting a rapid uptake for the lung hypertension drug in the second half of the year.

For the quarter, adjusted earnings of $2.07 a share easily beat analysts’ expectations of $1.86 on sales that were more than half a billion dollars above the average estimate.

Demand for Keytruda continued to grow for triple-negative breast cancer and kidney cancer, among other tumors, Merck said. The company’s vaccine portfolio also did well. Its biggest-selling vaccine, Gardasil for human papillomavirus, reported 14% revenue growth, while sales of a newer shot against pneumococcal bacteria called Vaxneuvance more than doubled. 

(Adds share move and details on insurer coverage of new hypertension drug starting in third paragraph.)

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