There’s a reason Merck hasn’t made a big acquisition lately. And it’s not because it doesn’t want to.

"We’re very active," CEO Ken Frazier said during a Monday afternoon fireside chat at the J.P. Morgan Healthcare Conference, adding "the fact that you haven’t seen a large deal coming out of Merck recently is not reflective of the fact that we’re not looking at those large acquisitions."

So what’s been the holdup for the New Jersey drugmaker, which Frazier has said has the capacity to do deals "of all sizes and all types?"

"We actually tried to consummate some deals that haven’t worked because we haven’t had a willing seller or the asset was too robustly competitive," he said.

Frazier and co. are looking for ways to bolster Merck’s growth prospects, which largely revolve around superstar immuno-oncology agent Keytruda. While the company has inked a couple of well-regarded oncology partnerships—securing it half-ownership of AstraZeneca’s Lynparza and Eisai’s Lenvima—investors are still looking for broader diversification from the pharma giant.

The thing is, Merck already has a diverse set of businesses—but industry watchers don't seem to be terribly fond of them. They’ve pressed the company repeatedly to consider divesting its animal health business, for instance, as some of its peers have done to great success.

The way Frazier sees it, though, Merck has benefited from keeping animal health and pharma under the same roof. And the unit has benefited, too.

"The animal health business is, in fact, the market leader when it comes to growth, when it comes to profit margins," he said. "That business has not suffered being a part of Merck."

Skeptics will likely take comfort, however, in the fact that Merck isn’t "stubbornly focused on maintaining" animal health, Frazier said, adding that "we have to constantly challenge ourselves" to review Merck’s portfolio and "make sure we are thinking about it from the standpoint of what’s best" for the health of the company and for shareholders over the long term.

Meanwhile, sinking valuations across the industry could come in handy for the wannabe deal-maker as it looks to follow big M&A moves from rivals GlaxoSmithKline, Bristol-Myers Squibb and Eli Lilly in recent weeks.

"Broadly speaking, I think with the valuations coming down, it creates more possibilities," Frazier said.