Bear Stalking Biotech Sector

Amgen reported earnings that were 16 cents ahead of estimates, thanks to strong sales across several drug franchises, including Aranesp, Neulasta, Neupogen and Enbrel. Genentech topped estimates by 4 cents with the help of better-than-expected sales of Avastin and Herceptin. Genzyme also turned in a profit that was 4 cents better than estimates, thanks to gross margin improvements.

Schoenebaum views Amgen's ongoing pipeline positively, pointing to the experimental postmenopausal osteoporosis drug AMG-162 as an important drug in development. Additionally, he sees Genentech reporting solid second-half profits, buoyed by Avastin and Herceptin, despite possible manufacturing constraints.

Although he admits he doesn't love Genzyme, Schoenebaum sees an upside once 2006 arrives -- that's when the Medicare prescription drug program is expected to cover the kidney disease drug Renagel, and the analyst says the coverage isn't fully considered in to the company's sales projections.

Schoenebaum has a peer perform rating on Amgen. Genentech, Genzyme, Idenix (IDIX - Cramer's Take - Stockpickr) and Nabi (NABI - Cramer's Take - Stockpickr) are rated outperform.

Also, the analyst says that among the stocks with peer perform designations, he and his team "see modest potential upside this year" for MedImmune (MEDI - Cramer's Take - Stockpickr).