Cramer's 'Mad Money' Recap: Dressed for Succession

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"My new favorite stock in the biotech development space is Arena Pharmaceuticals (ARNA Quote)," Jim Cramer told viewers of his "Mad Money" TV show Tuesday.

Back on his Jan. 11 show, Cramer told viewers there were two biotech stocks that people had to own. One of them, ZymoGenetics (ZGEN Quote) is down since he recommended it, but Cramer still likes this stock.

The other biotech play Cramer advised market players to get into was Myogen (MYOG Quote). Since that time, Myogen is up more than 50%.

Gilead Sciences (GILD Quote), which has agreed to acquire Myogen, "is smart in making this deal, and I would buy it here," Cramer said.

The next Myogen could be Arena, which is a little biotech company like Myogen that could get taken over because of its pipeline, he said. Arena has a "hot product" in its pipeline -- a weight-loss drug that should be "a huge revenue generator."

"People desperately want to look good," Cramer said.

The need to be thin is at least as important as it is to have wrinkle-free skin, and Arena is the play on this mentality, he said. Two-thirds of Americans in this country are overweight and Cramer believes Arena has the best obesity pill.

However, as Arena is a "tiny little company," he emphasized people use limit orders. The fact that it is small also means it could be swallowed by another company, such as Big Pharma companies that are "desperate" for something like Arena, Cramer said.

"Even if it doesn't get a bid, it has enough money to stay afloat," he added. "And its obesity drug could make you some money."