(Adds Opdivo sales, background on Keytruda, shares)
By Saumya Joseph and Manas Mishra
Oct 25 (Reuters) - Merck & Co Inc said on Thursday sales of its blockbuster cancer immunotherapy Keytruda nearly doubled in the third quarter, helping the drugmaker beat profit estimates and lift its adjusted earnings forecast for the year.
The company also announced a $10 billion share buyback and raised its quarterly dividend by 15 percent, pushing its shares up about 1 percent.
Keytruda has been amassing approvals as a standalone therapy and in combination with other drugs to treat several forms of cancers. It is the leading immunotherapy for treating lung cancer, ahead of rival drugs from Bristol-Myers Squibb, Roche and AstraZeneca.
Sales of Keytruda, which helps the immune system fight cancer, rose 80.4 percent to $1.89 billion from a year earlier and topped estimates of $1.87 billion, according to six analysts polled by Refinitiv.
Keytruda sales exceeded those of rival Bristol-Myers Squibb's drug Opdivo for the second straight quarter. Opdivo brought in sales of $1.79 billion for Bristol in the third quarter.
"Expectations were high coming into the quarter but we think these results should still be well received and allow for continued confidence in the story and upside in the stock as we move into fourth quarter," Credit Suisse analyst Vamil Divan said in a note.
The company raised its full-year adjusted earnings forecast to a range $4.30 to $4.36 per share, from its prior view of $4.22 to $4.30. The forecast was largely above analysts' estimates, according to Refinitiv data.
However, Merck narrowed its full-year revenue forecast to between $42.1 billion and $42.7 billion from its previous forecast range of $42 billion to $42.8 billion, to account for a hit from a stronger dollar.
Merck reported net income of $1.95 billion, compared with a loss of $56 million, or 2 cents per share, a year earlier.
The company had taken a $2.35 billion charge in connection with the formation of a collaboration with AstraZeneca Plc in 2017.
Excluding items, Merck earned $1.19 per share, beating analysts' average estimate of $1.14, according to Refinitiv data.
Revenue rose 4.5 percent to $10.79 billion, but missed Wall Street expectation of $10.88 billion.
Sales of diabetes drug Januvia and related Janumet fell 2.3 percent to $1.49 billion, also missing estimates of about $1.51 billion. (Reporting by Saumya Sibi Joseph and Manas Mishra in Bengaluru; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty)