Merck & Co. (NYSE:MRK) shares jumped today after the company announced third quarter proits that soared 62% on improved sales of asthma and diabetes drugs and a lower reserve for product liability litigation. The move marks a continued turnaround for the once-struggling drug company.

"The momentum Merck began to build last year continues, as proven by the strong performance this last quarter," said chief executive Richard Clark during a conference call Monday. "In an increasingly difficult health-care environment, our company has been resilient."

Merck's revenues jumped to $6.07 billion from $5.41 billion a year ago while the company's net earnings came in at 75 cents per share compared to 51 cents a share a year earlier. The company's strongest drug is its asthma treating drug Singulair, which is expected to earn at least $4 billion in 2007.

The big surprise was Gardasil - a vaccine to prevent cervical cancer that was introduced last year. The drug experienced sales of $418 million compared with $70 million a year earlier with year-to-date sales exceeding $1.1 billion. This sets the drug on track to be a blockbuster after only nine months - a great achievement in drug development.

In the end, this is all great news for Merck shareholders. The future success of the company will depend on their ability to launch successful drugs in a harder market while losing some of their key drugs that are expiring. Combined, these factors make MRK a stock worth watching!

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