The move by these healthcare mega-caps comes at a time when credit and funding are scarce for the development-stage and early stage companies which need cash and partnerships to fund their R&D efforts. The ETF Innovators (ETFI) Index of Cosmetic & Reconstructive Medicine (CRM) of 53 companies includes several which are poised to benefit from the move of Pfizer and its peers into the space in an effort to bolster their pipelines and product offerings.

Osiris Therapeutics (OSIR) is a leading CRM company which recently signed a blockbuster deal worth up to $1.4B with a more established company in the index, Genzyme (GENZ), aimed at achieving regulatory approval for two late-stage products called Prochymal and Chondrogen. The deal included two upfront payments with $75M paid out immediately and another $55M due in July 2009 plus the potential for $1.25B in additional milestone payments. With a gain of about 38% in the past year, Osiris is valued at about $500M, which means Genzyme could end up just buying its smaller partner if the clinical development proceeds as planned.

Some other companies in the CRM Index to watch for deals and partnerships in the coming months include companies with products already on the market such as Cytori Therapeutics (CYTX), RTI Biologics (RTIX), and CryoLife (CRY) in addition to development-stage companies such as StemCells (STEM), BioMimetic Therapeutics (BMTI), Geron (GERN), Mesoblast (MBLTY), and Aastrom Biosciences (ASTM).