A general view of Anglo-Swedish pharmaceutical company AstraZeneca is pictured in Macclesfield in northwest England. - 

The hot tip in pharmaceuticals: cancer drugs.


This morning, drug maker AstraZeneca scooped up a biotech company for its treatments to help the immune system fight cancer.


Yesterday, Amgen bought out a firm with a cancer drug that could generate $1 billion dollars in sales by 2015.


Imagine for a moment that you are a small biotech firm, and you manufacture drugs to treat cancer. University of Michigan’s Erik Gordon says pharmaceutical giants may soon be knocking.


“What’s going on now is there have been so many product failures at big companies where the drugs they are trying to develop themselves haven’t panned out, that they end up going for whoever has a drug that looks pretty good,” says Gordon.


According to the firm EvaluatePharma, cancer drugs made up $84 billion in global sales last year, only trailing treatments to the central nervous system.


Bloomberg Industries Andrew Berens says cancer drugs are so hot because many primary care diseases, like high blood pressure, have gone generic. And, Berens says companies can charge a premium for cancer treatments.


“It’s not a chronic therapy. It’s a life-threatening disease… for a very definitive period of time. So you don’t see payers really pushing back on those types of diseases,” he says.

Berens says that since prices can run $10,000 or more a month, he expects big pharma to snap up as many cancer drugs as it can.


Follow Dan Gorenstein at @dmgorenstein