April 21 (Bloomberg) -- Merck & Co., the third-largest U.S. drugmaker, said profit almost doubled on a $2.2 billion payment from AstraZeneca Plc and sales of its newest products, the diabetes pill Januvia and the cervical cancer vaccine Gardasil.

First-quarter net income rose to $3.3 billion, or $1.52 a share, in the first quarter from $1.7 billion, or 78 cents, a year earlier, Merck said today in a statement. Excluding some costs, Merck beat analysts' estimates by four cents.

Revenue rose about 1 percent to $5.8 billion, as sales of Januvia and Gardasil helped offset a 37 percent drop in sales of osteoporosis drug Fosamax because of generic competition. Though price increases boosted revenue from the cholesterol pills Vytorin and Zetia, the company projected sales of the drugs would fall by as much as $700 million this year.

``Even though Merck faces generic competition, they may continue to get some growth,'' Damien Conover, an analyst with Morningstar Investment Services Inc., said in an interview with Bloomberg Television today. Gardasil ``is a key component for them going forward. Their two top products should help growth, even though they are facing generic competition.''

Excluding certain one-time items, Merck earned 89 cents a share, beating the 85-cent estimate by 14 analysts surveyed by Bloomberg.

Merck fell 13 cents, or less than 1 percent, to $39.63 at 4 p.m. in New York Stock Exchange composite trading. The company has fallen 23 percent in the past 12 months on the New York Stock Exchange.

Vytorin, Zetia

Merck reaffirmed its 2008 earnings forecast of $3.28 to $3.38 a share, excluding certain costs.

The AstraZeneca payment is related to a development partnership between the companies on blood-pressure drugs and a treatment for Crohn's disease. The company also posted a $249 million gain from the sale of its anticoagulant drug Aggrastat to Iroko Pharmaceuticals.

Revenue from cholesterol medicines Vytorin and Zetia increased 6 percent to $1.2 billion. Merck shares the revenue with Schering-Plough Corp.

A price increase of 5.5 percent for both drugs helped offset declining prescriptions in the U.S., said Bear Stearns & Co. analyst John Boris in an April 18 note to clients. Prescriptions for Vytorin fell 7 percent and Zetia fell 10 percent in the first quarter after a study showed Vytorin, a combination of Zetia and Merck's Zocor, worked no better than Zocor alone.

Likely to Decline

Sales of the drug are likely to decline this year after a panel of doctors said on March 30 at a meeting of cardiologists in Chicago that the medicines should be used only as a last resort. Goldman, Sachs & Co. analyst Jim Kelly said sales of the two drugs, which reached more than $5 billion last year, could fall by 24 percent this year and 20 percent next year.

Merck and Schering-Plough have received subpoenas from the attorneys general in New Jersey, Connecticut, and New York for information over how the study, called Enhance, was handled, Merck said. The companies have received 115 civil lawsuits over Zetia and Vytorin alleging consumer fraud and personal injury. A Merck shareholder has also filed a lawsuit against Chief Executive Officer Richard Clark.

Clark today said he will accelerate plant closings and other cost cuts as the company braces for declining Vytorin and Zetia sales.

Gardasil generated $390 million worldwide in the quarter, an increase of 7 percent. The total is less than the estimate of Bear Stearns's Boris, who was expecting that much in the U.S. alone.

Gardasil Sales

The company sees Gardasil sales reaching $1.9 billion to $2.1 billion this year. The vaccine was introduced in 2006 and is designed to prevent infection from the sexually transmitted human papillomavirus, or HPV, a cause of cervical cancer.

Merck is asking U.S. regulators to expand the use of the vaccine for women up to age 45, from 9 to 26 years, which would double the market size.

The company, which has cut jobs and closed plants to lower costs, said it reduced material and production expenses by 19 percent. Sales also benefited by 4 percent from currency- exchange rates.

``Merck's strong base business performance has been, and will continue to be, driven by cost cutting via restructuring, and strong sales of new products, namely Gardasil and Januvia,'' said Deutsche Bank analyst Barbara Ryan in a note to clients.

To contact the reporter on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net

Last Updated: April 21, 2008 16:32 EDT