The drugmaker, which also reported better-than-expected fourth-quarter results on strong Keytruda sales, has already inked multiple deals over the last year, including a $5.5 billion payout to Japan's Daiichi Sankyo (4568.T) for the right to co-develop three antibody drug conjugate cancer drugs.
"While I feel very good about the progress we've made and the growing portfolio, the diverse and deep portfolio we have in our pipeline, we do continue to believe we need more, and we will continue to prioritize business development," Chief Executive Officer Rob Davis said on a conference call.
In addition to deals, Davis said Merck would look for more collaborations similar to the Daiichi Sankyo transactions.
Merck's shares were up about 2.5% in early trading.
Keytruda generated $25 billion in 2023 sales, surpassing peak sales of AbbVie's (ABBV.N) blockbuster arthritis drug Humira.
Keytruda is forecast to top $30 billion in sales by 2026. However, the drug is set to lose its patent protection by the end of the decade.
The company's 2023 transactions are already significantly improving Merck's own outlook for future revenue. Merck said it now expects $20 billion from new oncology products in development by the mid-2030s, nearly double its prior oncology pipeline forecast for over $10 billion.
It also lifted its mid-2030s outlook for new cardiometabolic products to about $15 billion from more than $10 billion.
Merck reported adjusted earnings of 3 cents a share in the fourth quarter, despite taking a charge of $1.69 a share to account for the Daiichi deal. Analysts had expected a loss of 11 cents a share, according to LSEG data.
Revenue for the quarter rose 6% to $14.6 billion, compared with estimates of $14.5 billion.
Keytruda sales jumped 21% to $6.6 billion as the company was able to increase use of the drug in earlier stage cancers, topping analyst forecast of $6.5 billion.
The company forecast 2024 sales between $62.7 billion and $64.2 billion. Analysts, on average, are estimating 2024 sales of $63.5 billion.
The New Jersey-based drugmaker expects 2024 earnings of $8.44 to $8.59 per share, above Wall Street estimates of $8.42.
Merck also said it has launched a restructuring program to optimize its manufacturing operations related to human and animal health, and expects to complete the program by the end of 2031.
Merck expects to record about $4 billion in cumulative pre-tax costs to implement the program. It took a $190 million charge related to the program in the fourth quarter.
