BOSTON, Mass. ( TheStreet) -- Look for U.S. pharmaceutical companies to ratchet up acquisition activity -- the target being biotech and specialty drug firms, according to Credit Suisse pharmaceuticals analyst Catherine Arnold, in a research note published Thursday morning.

Arnold believes that the cost-saving mega-mergers between Big Pharma are largely done, so now Big Pharma will focus on boosting revenue growth through smaller acquisitions.

So, who's going to buy whom, according to Arnold?

Appetizing takeover targets include Alexion Pharmaceuticals ( ALXN), Amylin Pharmaceuticals ( AMLN), Vertex Pharmaceuticals ( VRTX), BioMarin ( BMRN), Rigel ( RIGL) and Salix Pharmaceuticals ( SLXP).

The potential buyers include Abbott Labs ( ABT), Bristol-Myers Squibb ( BMY), Eli Lilly ( LLY), Johnson & Johnson ( JNJ), Gilead Sciences ( GILD) and Forest Labs ( FRX).

Where is Rigel Partner in Wake of Stock Sale?

Rigel Pharmaceuticals is selling more stock, but wasn't the small drug maker supposed to raise money by partnering its experimental rheumatoid arthritis drug?

Announced Wednesday after the close, Rigel said it intends to sell 6 million shares with an over-allotment option for another 900,000-shares. At Wednesday's closing price, the offering would gross just under $53 million.

Rigel ended the second quarter with about $80 million in cash, enough to get the company into the middle of next year.

The new offering will bolster the company's bank account and could help it at the negotiating table as it seeks a partner for R788, a novel pill for rheumatoid arthritis.

Or, does this new offering signal that Rigel is having trouble finding a partner interested in R788?

The drug is certainly not without controversy. An oral pill for rheumatoid arthritis could be a very big deal given that current medicines -- most notably the so-called "anti-TNFs" like Amgen's ( AMGN) Enbrel and Abbott Labs' Humira -- are given by injection.

But in July, Rigel reported negative results from a phase II study in which R788 failed to improve the rheumatoid arthritis of patients who had previously failed anti-TNF medicines. The setback sent Rigel shares sharply lower and raised questions about the future of the drug. Two previous phase II studies of R788 in patients who had not yet been treated with anti-TNFs yielded more positive results.

Rigel downplayed the negative results from this most recent phase II study, insisting that the primary goal was to develop R788 first as drug that would compete head to head against the anti-TNFs like Enbrel and Humira. This is where the drug has shown more promise in phase II studies.

The challenge of that approach is that Enbrel and Humira are very effective drugs with well-known safety records, and a potential partner may not feel comfortable funding trials that try to directly unseat these very well established therapies. Moreover, R788 still has unresolved safety questions, including an elevated high blood pressure risk.

Rigel shares closed Wednesday at $7.66.

Vivus, Insiders Selling Stock

Staying on the subject of eyebrow-raising fund-raising, obesity drug maker Vivus ( VVUS) also said Wednesday that it plans to sell 9 million shares of company stock with an over-allotment option for another 1.35 million shares. All in, Vivus could gross about $112 million, based on the company's current stock price.

Again, what's interesting here is that Vivus is seeking a partner for its obesity drug Qnexa, which just demonstrated impressive weight loss in a pivotal phase III study last week. Vivus shares soared when those study results were announced, so of course the company is out raising money because that's what small biotech and drug companies do.

One more sidenote: Vivus' intention to sell stock comes just days after company executives cashed out as well. Among the insider selling: CEO Leland Wilson, who sold 200,000 shares of company's stock on Sept. 11, netting him $2.25 million. Wilson's sale came under a 10b5-1 trading plan.

Auxilium Drug Sails Through FDA Panel

An advisory panel to the Food and Drug Administration voted 12-0 to recommend approval of Auxilium Pharmaceutical's ( AUXL) drug Xiaflex as a treatment for Dupuytren's disease, a condition that renders fingers permanently bent.

The FDA has not indicated when it will issue a final approval decision on Xiaflex.

-- Reported by Adam Feuerstein in Boston
Adam Feuerstein writes regularly for TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.