The U.S. Food and Drug Administration said on Tuesday certain samples of sitagliptin, a compound in Merck's diabetes drug Januvia, were contaminated with a possible carcinogen.
The agency said it would not object to the temporary distribution of sitagliptin containing the impurity above the acceptable intake limit to avoid a shortage.
Shares of Merck, which was not immediately available for comment, fell sharply before recovering to trade up 0.8 percent at $89.27.
Sales of Januvia and a related combination medicine called Janumet totaled $1.23 billion in the second quarter.
The impurity Nitroso-STG-19, also known as NTTP, belongs to the nitrosamine class of compounds, some of which are classified as probable or possible human carcinogens, based on laboratory tests, the agency said.
Agency scientists evaluated the risk of exposure to NTTP at interim acceptable intake levels up to 246.7 nanogram per day and determined that it presents minimal additional cancer risk when compared to a lifetime of exposure to NTTP at the 37 nanogram per day level.