Given research setbacks and the known quantity that its melanoma therapy lambrolizumab is unlikely to receive approval prior to 2015, merger and acquisition activity will be critical to Merck’s (MRK-$47.96) pipeline expansion strategy and subsequent sales growth objectives in the next decade. Though the company has ample liquidity – with $16 billion in available cash and short term investments, free cash flow of $8.2 billion (trailing twelve months), and manageable debt–to-equity ratio of 0.31 times – some $6 billion in debt will need to be refinanced through 2015. Additionally, as Merck is looking to keep investors happy with its $1.72 per share dividend and an expanded stock buyback program, the company is unlikely to get involved in a premium bidding war for the likes of an Onyx.
See more at YCharts: Merck Needs Acquisitions - Here's the List
Editor David J Phillips does not hold a financial interest in any stocks mentioned in this article. The 10Q Detective has a Full Disclosure Policy.