It wasn't the large deal that we've been waiting for, but BioMarin (NASDAQ:BMRN) did ink a collaboration agreement. Yesterday, the Rule Breakers pick signed a deal with privately held IGAN Biosciences to develop drug candidates for a rare disease.

The arrangement with IGAN Biosciences is a discovery-stage deal, which means that the drug candidates the companies will be working to develop are not yet in phase 1 testing. Fitting in perfectly with BioMarin's business model of focusing on orphan indications, the two companies will work together to find compounds to treat Berger's disease -- a rare ailment that causes kidney nephropathy (damage).

With only one clinical-stage drug candidate in its pipeline, BioMarin has been looking for acquisition targets on which to spend its $587 million in balance-sheet cash. This deal likely uses none of that cash, though; BioMarin didn't announce the terms of the deal, which means that it will have an immaterial effect on its balance sheet. 

There's a bounty of big pharma cash sloshing around the sector; drugmakers Pfizer (NYSE:PFE) and Cephalon (NYSE:CEPH) have $22.3 billion and $731 million of cash on their balance sheets, respectively. BioMarin would have no chance of outbidding them for the most attractive acquisition targets in pharmaland.

The only way BioMarin could get good pipeline assets is to acquire them very early in their development -- before the other drugmakers start looking for or finding compounds in niche indications on which they're not currently focused. Yesterday's deal is a good example of BioMarin doing both.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. Pfizer is an active Inside Value pick. The Fool has a very balanced disclosure policy.