Lucrative Prospects

For "Speculation Friday," Cramer recommended Inspire Pharmaceuticals ( ISPH), the last in his series of biotech companies with blockbuster drug potential.

Cramer said investors have two ways to win with Inspire. First, he said the company is a likely takeover target by Allergan ( AGN). Inspire is already in a close partnership with Allergan for two drugs to treat dry eyes and pink eye. Cramer said it makes sense for Allergan, a much larger company, just to buy all of Inspire, rather than continue licensing it's products.

Even more attractive however is Inspire's pulmonary business and its treatment for cystic fibrosis, which is currently in phase III testing. Cramer said Inspire's treatment is unlike any other, and just received orphan status from the government, meaning it will have no competition. Cramer said the drug, due for approval in the second half of 2011, could be a $300 million to $500 million opportunity.

Cramer said with $106 million in cash on the books, Inspire is not going belly up anytime soon. Cramer said he'd be a buyer of Inspire with so many lucrative prospects.

Going With Teva

Continuing his biotech theme, Cramer honed in on muscular sclerosis, a disease affecting 350,000 people in the U.S., and the companies working towards a cure.

Cramer said MS drugs currently weigh in at $10 billion annually, with estimates upwards of $15 billion over the next 10 years. Cramer said while Biogen Idec ( BIIB) remains a favorite in this space, he'd be a seller of the company, as increased competition is on the horizon.

Cramer explained that new treatments are on the way, including ones that come in pill form, as opposed to an injection, and ones that offer fewer serious side effects. He said the extent to which these new drugs will affect Biogen's business have not been factored into the stock.

But Cramer said he is a fan of Teva Pharmacueticals ( TEVA), the world's largest generic drug maker, which also happens to have a great branded drug business, one quarter of which is dedicated to MS. Teva is also a stock which he also owns for his Action Alerts PLUS portfolio.

Cramer said Teva is the smart, safe way to play MS, as Teva's MS drug will not be affected by new competition. He said the stock took a big hit back in July on patent expiration fears, but those fears were unfounded, as the company's patents remain in good shape through 2014.

Trading at just 10 times earnings, Cramer said Teva is a terrific risk reward, especially given its projected 14% growth rate and healthy drug pipeline.

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