The drugmaker has inked a pact with Exelixis to work on two experimental compounds in the latest sign of big pharma turning to biotech to shore up a pipeline. The deal, of course, also reflects the need of biotechs to rely on big drugmakers as financing options grow dimmer.

Under the deal, Bristol-Myers will pay $195 million now and another $45 million in 2009 to codevelop the drugs, with several hundred million dollars in additional payments if milestones are met, making the upfront payment one of the biggest amounts a big drugmaker has paid in such agreements (here is the Bristol-Myers statement).

Nonetheless, a Bristol-Myers exec says the agreement reflects a competitive market for compounds viewed as especially promising. “We’re not the only company out there looking for good assets,” Jeremy Levin, senior vp at Bristol-Myers’s strategic transaction group, tells The Wall Street Journal. “This transaction is well valued. We’re not looking to buy cheap. We’re looking to create value.”