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In my column last week, I laid out the current landscape in Biotech land. I ended the piece saying that M&A activity, which has been dormant in 2017 and at multi-year lows, will pick up markedly in 2018. In this second part, I am looking at the players that are likely to be the most active in that space.

Venture capital-funded new biotech startups have garnered nearly $10 billion so far this year, an all-time record. I base my thesis that M&A will spring to life in 2018 on these three key observations:

1. There is little organic growth at the major drug and biotech giants. They desperately need to replenish developmental pipelines and find new growth engines. Raising prices on existing drugs, especially those off patent, is no longer a viable option to boost growth.
2. For the most part, industry leaders have robust cash flow and balance sheets that give them plenty of financial "firepower". Amgen (AMGN) recently stated it could do $40 billion in acquisitions if it found the right deals. These entities also have hundreds of billions of dollars "stranded" in their overseas operations.
3. One way or another, everyone should know what the outcome of the current tax reform efforts are in D.C., either late this year or early next. This clarity could get the deals flowing.

There are a variety of players that should be active in the M&A space next year. New management at Alexion Pharmaceuticals (ALXN) has made it known they will be a player in M&A, either as a target or as an acquirer, as they desperately look for ways to lessen their overwhelming dependence on Soliris. This compound accounts for nearly 100% of revenues and earnings at the company.

If the company wants to be the "hunter", fellow smaller rare disease concerns like Amicus Therapeutics (FOLD) or Sarepta Therapeutics (SRPT) might make sense. Both have wholly owned and approved drugs and would be less than $5 billion deals.

If the company wants to do something much larger and almost a "merger of equals", BioMarin Pharmaceuticals (BMRN) could fit the bill. It is one of true mid-caps in the biotech space, with a market cap of $15 billion, and is also focused on rare diseases. Shire (SHPG) bought out Baxalta back in early 2016 for over $30 billion. The new CEO and some managers at Alexion came over from Baxalta. But Alexion is probably too big a lift for Shire at the present, as it still is integrating the Baxalta purchase.

I also think Gilead Sciences (GILD) will be an active suitor in 2018, as the company's flagship hepatitis C drugs continue to see declining sales. The company bought Kite Pharma (KITE) for some $12 billion in late August of this year to expand its footprint in oncology. I expect future acquisitions will be smaller, given management guidance.

If Gilead wants to continue to expand into the disease area, something like Tesaro (TSRO) might fit well. The company recently launched Zejula, targeting ovarian cancer, and the management seem receptive to offers. Also, the stock is selling for half its levels earlier in the year.

Outside oncology, Galapagos (GLPG) might be a target. Gilead owns a good chunk of this name already, through a collaboration agreement to develop Filgotinib, which is currently being evaluated in three Phase 3 trials for rheumatoid arthritis and six Phase 2s in other indications. A "standstill" agreement between the two companies ends at the close of 2017.

Investors should keep their eye on these 10 stocks, should M&A pick up in 2018 as I expect.

-- This article originally appeared Nov. 22 on Real Money Pro, our dynamic market information service for active traders. Click here to get more articles like this from Bret Jensen, Doug Kass and others each day.