Celgene Corp. is placing a big bet on the cancer stem cell space in typical Celgene fashion by paying handsomely for options to programs that the smaller biotech partner is given the freedom and resources to continue developing. For OncoMed Pharmaceuticals Inc., the deal got investors back into a stock that had tumbled since its July IPO, and could mean the company may never need to do another capital raise.

Option deals have become a specialty for Celgene, which has entered into at least 17 such arrangements over the past six years. Last week's deal with OncoMed is the first Celgene has disclosed in the cancer stem cell space.