[Beginning of Cramer's verbatim comments for this segment...]

Jim:          We've already heard from the CEO of Allos Therapeutics, Inc. (ALTH)... I really like that story. That's part of Cancer Research Week today. And now I want to dig even deeper into the cancer stocks with two names that we believe are possible takeover candidates... that could exist on their own... and that's Dendreon Corp. (DNDN) and Onyx Pharmaceuticals Inc. (ONXX). These are two high-profile biotech specs. They are loved by Lightning Round viewers worldwide.

Remember, we never speculate on takeovers on Mad Money unless the fundamentals are sound, and we think both Dendreon and Onyx pass that key litmus test...

We know that Bristol-Myers Squibb Co. (BMY*) is on the hunt for oncology acquisitions, and just this Tuesday, the president of Merck Research Labs said the company will continue to make acquisitions even in the wake of its $41 billion takeover of Schering-Plough... thank you, Fred Hassen (CEO of Schering) for making our viewers so much money.

Dendreon and Onyx are two strong oncology names that could help big pharmaceutical companies grow again if they are acquired...

Let's take a look at Dendreon first...

This is a $3 billion biotech company that develops drugs which help your immune system target and attack cancer cells. Its main product is called "Provenge"... Provenge is a prostate cancer drug that's in late-stage development, and it could be huge as more than 540,000 men in the U.S. suffer from prostate cancer. Just this Monday, Dendreon announced that it's completed its submission of its supplemental biologics license application for Provenge to the FDA. The stock didn't really pop. The analysts who cover this stock expect that Provenge will receive a six-month review. This thing could be commercialized by mid-2010 if it's approved. The drug could potentially do $730 million in sales in 2011. Remember, it's already a $3 billion company though. Perhaps it could have, though, $4 billion in sales in peak sales in 2020... So, a $3 billion company may be okay then.

Three years ago, the FDA wasn't all that positive on Provenge... at least one of the committees... so I was negative on it too. I was pilloried for that... but both the FDA and I have switched directions... maybe not early enough, mind you... I know that... but I did switch. Provenge isn't the only drug Dendreon has in the works. Its company should be starting a clinical trial for a bladder cancer drug a year from now. But Provenge is by far the real opportunity.

Now there's a real element here for speculation, because Provenge still needs FDA approval, and that's what you're betting on if you buy Dendreon. Now, also the stock is up 507% from $4.58... in a year... thanks to positive clinical trial data... but it could go even higher if the FDA approves Provenge. That's how these small biotech stocks work.

How about Onyx?...

This one's a $1.5 billion bio pharma name that's developing therapies to target the molecular mechanisms that cause cancer. Onyx's main drug is called Nexavar. It's for kidney and liver cancer. Nexavar, which the company sells in partnership with Bayer, is the drug that inhibits the growth of blood vessels that typically support tumors and allow them to expand. This is breakthrough... Onyx's big drug did $678 million in 2008 alone. $229 million was just last quarter, which was up 27% year over year. Nexavar is also being tested on several other cancers, including breast and thyroid cancer, so it could have more indications than it does already.

Now Onyx just reported a better-than-expected quarter on Tuesday and people yawned. It delivered 35 cents per share... that's 13 cents more than what the Street was expecting... and revenues of $69 million, or $3 more than the Street's consensus. Onyx is making money. It's turning a profit. It's already got a major cancer drug on the market... and that makes it substantially less speculative than Dendreon. On October 12th, Onyx announced plans to acquire Proteolix. Now Proteolix is a privately-held biotech name, with a very promising multiple myeloma drug in late-stage development... a solid pipeline of drugs for treating blood cancer... It's a deal that could cost the company up to $850 million. You see, the stock hasn't acted well, because when the acquisiton was announced, people thought it was less likely that Onyx would be taken over, maybe by Bayer... But I think the deal makes sense for the company to be standalone, as doctors are very excited by Proteolix's multiple myeloma drug... plus the acquisition's allowing Onyx to make several presentations at the same conference that I keep referring to... that American Society of Hematology Conference that's running from December 5th to December 8th, and we heard from Mr. Berns how important that conference is. He is the fellow from Allos...

A big catalyst coming for Onyx in the form of the Chinese government's national reimbursement drug list. That comes out later this month. If the Chinese government includes Nexavar on the list, that would be huge for Onyx, though it's a tall order, given that the drug is priced at $7000 per month in the People's Republic. But the company's partnered with Bayer on Nexavar, and Bayer, which just happens to be the largest multinational pharma company in China, has been lobbying the Chinese government to include this drug for several months. Hey, speaking of Bayer... it really wouldn't shock me if, after all these approvals, the big German pharmaceutical didn't buy this company, Onyx, outright.

The stock had run to as high as $60 in November of 2007, when Nexavar was approved for liver cancer. It has since pulled back heavily. It now trades at $26.57. That's less than $5 above its 52-week-low. The stock is very out of favor. It's down 22% year to date. Given how well the market is, and the Nasdaq... it's pretty cheap.

Here's the bottom line...

Read Jim's next Segment here  

Market Results today: Dow:  + 204 Nasdaq:  + 50 S&P 500:  + 20 1 2 3 4 6 See all of tonight's stocks mentioned on Yahoo! Finance, here...