Investors don’t need to find the pharma company with the next big drug if they want to trade the war against cancer. The M&A market could offer returns that are just as good.

Both Bristol-Myers Squibb [ BMY 25.89  -0.07 (-0.27%) ] and Merck [ MRK 37.16  +0.28 (+0.76%) ] are on the hunt for acquisitions, Cramer said, and Dendreon [ DNDN 36.75  +0.74 (+2.05%) ] and Onyx Pharmaceuticals [ ONXX 30.86  -0.08 (-0.26%) ] make great targets. Of course these latter two either make powerful cancer treatments or have them in the pipeline, but that’s only part of the play.

Dendreon is probably best known for Provenge, its prostate-cancer drug that’s in late-state development. Analysts expect the Food & Drug Administration to review the drug for the next six months before it reaches the commercial market in mid-2010, if Provenge is approved. Sales could reach as reach as high as $730 million in 2011 and maybe more than $4 billion in 2020.

Provenge isn’t Dendreon’s only cancer franchise, but right now it’s the most important. So the stock almost lives and dies based on FDA’s blessing. DNDN is up 507% year-to-date thanks to the positive clinical-trial data released so far, Cramer said, and “it could go even higher” if the feds give it a thumbs-up.

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