Bristol-Myers Squibb made a $4.5B bid for the shares of ImClone it doesn't already own. Roche Holdings made a $44B offer for the shares of Genetech it doesn't own.

Both targets want the bid prices raised. Barron's Lawrence Strauss says these are just the two latest examples of an increasingly common biotech strategy to use mergers, buyouts, and takeovers as a way to fatten product pipeline (and profit) by acquiring promising and pre-tested biotech drugs.

Big Pharma is feeling the need to find new products with blockbuster potential as several important drugs approach the expiration of their patent protection. This, of course, will open the market to cheaper, generic versions of the drug, cutting into Big Pharma profit. Leading the pack will be Pfizer's cholesterol drug, Lipitor, which generated more than $12B in global sales last year. Other companies with expiring blockbuster patents include Wyeth  Merck , and Eli Lilly  Jay Markowitz, a T. Rowe Price health-care analyst, notes "a number of companies are facing a significant patent cliff, where billions in revenues are going to disappear."

Many large pharmaceuticals have lots of cash on their balance sheets, making acquisitions an affordable option. The weaker dollar has also made U.S. companies look more attractive to biotech and pharmaceutical firms abroad. Another major factor is the difficult process of receiving FDA approval. This lengthy and grueling process provides an additional incentive to buy companies that have already received FDA approval on their drugs, ensuring smooth pipeline production going forward.

Potential buyout targets to keep an eye on: Amylin Pharmaceuticals (AMLN), United Therapeutics (UTHR),  Alexion Pharmaceuticals (ALXN), Onyx Pharmaceuticals (ONXX), Vertex Pharmaceuticals (VRTX).