Dive Brief:

• Rising sales of Merck & Co.'s immunotherapy Keytruda again powered the pharma to strong year-over-year growth in the first quarter, spurring a significant bump to the company's sales forecasts for the year.
• Merck now expects sales to grow between 4% and 7%, up from previous guidance of a 2% to 6% increase. Keytruda remains the chief contributor to Merck's fortunes, posting first quarter sales of nearly $2.3 billion that handily outpaced those of Bristol-Myers Squibb's rival drug Opdivo. 
• "Overall, we believe the beat-and-raise quarter will help boost shares today, but over time we expect investors to remain focused on what other assets can help diversify the story and drive future growth beyond Keytruda and Gardasil," wrote Credit Suise analyst Vamil Divan in a Tuesday note to clients. Merck stock rose by nearly 2% in Tuesday morning trading. 

Dive Insight:

Sometime in the past several weeks, the 1,000th clinical study testing Keytruda (pembrolizumab) was posted on the federal database clinicaltrials.gov.

While not all of those trials are sponsored by Merck, the milestone illustrates the ever-expanding breadth of research centered on Keytruda, now easily the pharma's top-seller.

Sales of the immunotherapy grew by 55% year over year, and represented nearly a quarter of Merck's pharmaceutical revenues. 

Much of that commercial success stems from Keytruda's advantage in lung cancer, which accounts for 65% of the drug's sales. Merck has leaned on Keytruda's approvals in the cancer type to stake a commanding lead over Opdivo (nivolumab), Bristol-Myers Squibb's rival PD-1 inhibitor.

Merck expects results from eight major studies of Keytruda this year, including first-line trials in bladder, triple-negative and small cell lung cancers.

A recent approval of the drug in combination with Pfizer's Inlyta (axitinib) for kidney cancer could also help expand Merck's share of the immunotherapy market. 

But, as with all success, Wall Street is hoping for more from Merck. On an earnings call Tuesday, analysts pressed executives on business development beyond Keytruda and Gardasil. 

Merck CEO Ken Frazier noted that a rising market has lifted biotech valuations in recent months, and reiterated a desire to "stay disciplined." 

In February, the drugmaker did put down $300 million to buy Immune Design and its vaccine development chops. But as its rival Bristol-Myers completes one of the largest deals in pharma history, bigger ticket M&A has mostly been missing from Merck's plans. 

Business development ranks as third among Merck's corporate priorities, after R&D and capital spending, according to a company presentation. But over the past 12 months, the pharma has spent far more on share repurchases and a dividend program that Merck is increasing by 15% in 2019.