Merck & Co on Thursday reported higher-than-expected third-quarter sales and profit on surprisingly strong demand for its COVID-19 treatment, primarily in Japan.

The company posted sales of $15.96 billion in the quarter, up from $14.96 billion a year earlier. Analysts, on average, had expected sales of around $15.3 billion, according to LSEG data.

The U.S. drugmaker said it earned $5.4 billion, or $2.13 per share, in the quarter, excluding one-time items. Analysts were estimating earnings of $1.95 per share.

Sales of Merck's top-selling cancer immunotherapy Keytruda rose 17% to $6.34 billion for the quarter, while Gardasil, its vaccine to prevent cancers caused by the human papillomavirus (HPV) rose 13% to $2.59 billion.

Sales of molnupiravir, the COVID-19 antiviral pill sold under the brand name Lagevrio, jumped 47% to $640 million in the quarter, crushing Wall Street estimates of $120 million.

Molnupiravir was initially hailed as a potential breakthrough when few treatment options were available, but was soon eclipsed by Pfizer's rival treatment Paxlovid, which had more impressive data, and it fell out of favor.

Paxlovid dominates the out of hospital COVID treatment market in the United States and the EU regulator recommended against use of Merck's drug in the region. In Japan, however, the drug has been a market leader, Merck has said previously.

The company last quarter said it had already booked most of the 2023 sales it expected for Lagevrio in the first half of the year, so the increase comes as a surprise.

Merck raised its full-year forecast for Lagevrio sales to $1.3 billion.

The company now expects 2023 sales in the range of $59.7 billion to $60.2 billion, up from its previous forecast of $58.6 billion to $59.6 billion.

(Reporting by Michael Erman Editing by Bill Berkrot)