Biopharma Play That May Bypass FDA Roulette

Charles River Laboratories CEO on Drug Development

Charles River Laboratories CEO James Foster discusses competition in the drug market, drug patents and where his business is headed in 2013.

Wouldn't it be nice if there was a way to profit from small cap biotech without being at the mercy of the FDA and its drug's approval process? Maybe there is.

But before we go any further – it's important to note that "Owning small, speculative drug stocks is a very high risk game," said Cramer. "The space is not for everyone."

However if you're willing to assume a little more risk there may be a way to play the space without playing FDA roulette.

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"How about owning supplier to the pharmaceutical business? I'm talking about Charles River Labs, TICKER:CRL, an outfit that provides biopharma companies and universities with everything they need to discover new drugs and conduct early stage clinical trials."

With this stock, you won't have to bet on which drug will get approved next and which one won't – instead, it's simply a bet that the search for speculative new drugs will be ongoing.

Wayne Parry

In this May 21, 2012, photo, a dealer at Revel prepares for another round of roulette at the Atlantic City, N.J., casino as patrons await the result. Revel won $14.9 million from gamblers in June, its third month of operation, keeping it mired in eighth place out of Atlantic City's 12 casinos in terms of gambling revenue. (AP Photo/Wayne Parry)

"Charles River's tools make it easier and more efficient to discover new drugs," Cramer added. "And they enable their clients to more quickly decide whether an early-stage compound is worth trying to develop."

"Plus, as biopharma companies outsource more and more of their lab work, Charles River sees a major opportunity to take share over the next several years."

"If drug companies outsource to us we can do the work as fast or faster, as well or better and always a lot a lower price point because our facilities are built for efficiency," explained James Foster, the Chairman and CEO of Charles River Laboratories on Mad Money.

Although the stock has shot up more than 20% in 6 months, and climbed 5% in only the past week, Cramer thinks it could have more upside. "I like the current posture. It's a good company. And I think the latter part of 2013 will be big for them."

Read More: These Stocks Don't Stay Down Long, Says Cramer

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