Biotech stocks are already making some big waves this year. That’s because M&A activity is already surging. Drawn by some big-time values, some of the world’s biggest pharmaceutical firms have gone shopping for beaten-down biotech bargains.

Already, we’ve seen Bristol-Meyers (NYSE:BMY)  score Celgene (NASDAQ:CELG) for a cool $74 billion in a game-changing acquisition. More recently, Eli Lilly (NYSE:LLY) announced that it was pushing harder into cancer treatments with an $8 billion offer for Loxo Oncology (NASDAQ:LOXO).

The question on everyone’s minds is “who is next?”

With plenty of biotech stocks still trading for peanuts and coffers overflowing at the major pharma’s, more M&A activity is guaranteed. And while betting on a buyout may be a fool’s errand, there are plenty of biotech stocks out there are on my best stocks to invest in list anyway. A buyout would be icing on the cake.

But which ones have the potential to snagged up because they are so good? Here are five biotech stocks that could be buy-out candidates. 

Seattle Genetics (SGEN)

With oncology and cancer on the minds of many of the biggest names pharma, biotech stock Seattle Genetics (NASDAQ:SGEN) could once again be in play.

SGEN has one drug available for patients — Adcetris — which is used to treat Stage III/IV classical Hodgkin lymphoma. Sales of Adcetris continue to grow rapidly. In the last reported quarter, revenues for the drug jumped by over 60% year-over-year. Even better is that number of indications, combinations and other uses for Adcetris have grown like weeds. SGEN continue to rack up more approvals and “breakthrough” designations for the drug. All of this has only made the medicine more lucrative for the biotech stock.

As if that wasn’t enough for big pharma to be salivating at the firm, Seattle Genetics has been able to pivot its technology towards other forms of cancer. The firm has numerous drugs targeting urothelial, cervical, breast and multiple myeloma cancer varieties. Here again, SGEN has been quite successful in moving its drugs through the FDA’s hoops.

Given growing sales of Adcetris and its heavy-duty cancer-focused pipeline, any biopharma looking to make a splash in oncology would seriously be considering SGEN stock. With a market cap of just over $11 billion, Seattle Genetics could one of the next biotech stocks to be bought out.

Agios Pharmaceuticals (AGIO)

Keeping with the cancer buy-out theme, Agios Pharmaceuticals (NASDAQ:AGIO) makes an intriguing biotech buyout candidate.

AGIO has two cancer therapies on the market. Its latest, Tibsovo, has been approved for those acute myeloid leukemia patients with an IDH1 mutation. The other — Idhifa — is for acute myeloid leukemia patients who also test positive for an IDH2 mutation. The firm basically has a one-two punch for this specific variety of leukemia. And while the drugs are new, prescriptions are growing, with Tibsovo seeing a 100% quarter-over-quarter increase in its short life span. That makes it a buyout candidate alone.

Tibsovo is wholly owned by Agios. However, the real kicker is that Idhifa came via a partnership with Celgene. Celgene — soon to be Bristol Meyers — must continue to pay royalties on sales from the drug via a tiered structure that gets into the mid-teens. Given its buyout of CELG, BMY may just want to control the whole pie, and with AGIO’s market cap sitting at just over $3 billion, it’s an easy pill to swallow.

And with the two medicines, BMY would be getting a healthy pipeline of additional cancer therapies as well as some rare disease work for a song.

Given that, there’s a good chance that AGIO gets the nod. No wonder why shares have jumped higher since both CELG’s and LOXO’s buyout bids.

Jazz Pharmaceuticals (JAZZ)

It’s very rare to find biotech stocks trading for bargain-basement valuations. But that’s just what is happening at Jazz Pharmaceuticals (NASDAQ:JAZZ). Today, you can snag JAZZ stock for forward P/E of under 10.

JAZZ has five drugs on the market, with narcolepsy drug Xyrem being a blockbuster. Sales of Xyrem continue to grow and are expected to surpass $1.4 billion this year. At the same time, its portfolio of hematology/oncology drugs are proven to be winners as well and are helping JAZZ realize a double-digit EPS growth rate. Acute myeloid leukemia treatment Vyxeos, which only launched last year, is set to pull in roughly $100 million in sales for the full year 2018 and more than $200 million this year.

Adding to this is JAZZ’s pending March approval for its new drug covering excessive daytime sleepiness associated with narcolepsy or obstructive sleep apnea. Another late-stage candidate for cataplexy in narcolepsy should hit regulatory approval at the end of the year.

With a rich drug portfolio and pipeline, JAZZ is a rarity among biotech stocks. It’s profitable — so much so that the firm has authorized a $400 million buyback program. That’s after it already repurchased over $600 million in shares. Analysts estimate that a dividend could even be coming next.

Featuring a market cap of less than $8 billion, JAZZ would be an easy and profitable tuck-in for almost any big pharma stock.

Neurocrine Biosciences (NBIX)

A rare miss for Neurocrine Biosciences (NASDAQ:NBIX) sent shares crashing this year and left the firm with a $7.5 billion market cap. But NBIX’s pain could end up being AbbVie’s (NASDAQ:ABBV) gain.

Over the summer, NBIX and ABBV received an FDA approval for their drug Orilissa, which is used in the treatment of pain associated with endometriosis. The drug is currently wrapping up trials for the treatment of uterine fibroids. Analysts think the drug has blockbuster potential with annual sales of around $1 billion.

On its own, NBIX has a blockbuster in Ingrezza. The drug is used to treat tardive dyskinesia — which is marked by jerky movements of the face and body out of a patient’s control. The problem is tardive dyskinesia is a side effect of many depression, schizophrenia and other mental health drugs. This is a huge market, and Ingrezza sales are taking off. Management at Neurocrine estimates that they’ll be able to pull in over  $400 million in Ingrezza sales in 2018. And NBIX has a full pipeline of other drugs in various stages of trials.

With a buyout, ABBV gets full access to Orilissa without royalty and milestone fees for future indications. Secondly, Ingrezza is quickly becoming a major money marker for NBIX. That would fill a nice hole in AbbVie’s revenue stream and would help pay for the deal over the long haul.

All in all, given its low market cap, hefty cash balance and marketed drugs, AbbVie may end up swallowing NBIX whole.

BioMarin Pharmaceutical (BMRN)

When politicians and pundits often talk about the high price of drugs and mention therapies costing more than $400,000 per year, odds are, they are talking about rare and orphan diseases. For biotech stocks, targeting these diseases — which sometimes can affect very small population sizes — it can mean plenty of long-term revenues down the road. Given the research required to crack these afflictions, the high drug prices are more than justified.

BioMarin (NASDAQ:BMRN) is one biotech stock that has made rare diseases its specialty.

The firm has seven drugs on the market targeting illnesses such as phenylketonuria and Batten disease. Rare disease medications come with longer exclusivity rights and by focusing here, BMRN basically ensures patient protection versus generic competition. At the same time, these drugs pull in some big-time revenues. For example, this year, BioMarin expects to make more than $1.5 billion in sales with its top five drugs.

Meanwhile, the biotech stocks pipeline is rich as well with drugs for hemophilia and sanfilippo in late-stage trials.

Because of its focus, profitability and rich rare disease pipeline, BioMarin has long been considered a buy candidate. With big pharma finally starting to spend some dough, that takeover may finally happen.

At the time of writing, Aaron Levitt had a long position in CELG and JAZZ