Big Pharma like Phizer and Merck don’t have as strong a pipeline of drugs as they would like so they are going to take their best asset and use it. Cash and Stock. They are going out and finding small Pharma to gobble up or sign licensing deals. They are looking for companies with a small market value but good potential drugs that would fit well with their specialty or their other drugs. They are also offering the cash that the small companies are craving to get their drug to the market. Pfizer the world’s biggest drug maker, signed a deal Thursday with the German drug maker Noxxon Pharma AG for a worldwide license on the company’s Spiegelmer technology to develop weight loss drug NOX-B11, which is in preclinical trials. Pfizer will make upfront payments, as well as payments for research and development and milestones. The licensing deals are good for both companies as Big Pharma can add drugs to their pipelines for $10-15 million without having the risk of buying the entire company. In return the small company can get some quick return and cash to operate. Both companies win. In the long run it would be better for the small guy to go on its own so they don’t have to share the profits, but in some cases they need money bad to keep up the trials. When looking for companies that are to be gobbled up just look for a good drug in the works and a operating loss. The two together usually spells buyout or licensing deal.