Evercore's Schoenebaum Explains Biotech Boom on CNBC
NEW YORK (TheStreet) -- The NASDAQ biotech sector (IBB) rose 16% and the S&P 500 biotech index (XBI) gained 20% since June 27, CNBC's Scott Wapner reported on "Fast Money: Halftime Report" Thursday.
"Is this beaten up group of stocks really back for good?" Wapner asked.
"Things can't go up that much forever. Period," Evercore analyst Mark Schoenebaum replied.
The drug pricing issue brought up last year still lingers on the sector "but we're also getting used to it," Schoenebaum noted. He also referenced Democratic presidential nominee Hillary Clinton's efforts to stop "predatory" drug price hikes.
"It's still a real issue but there's not as much panic about that," he explained.
To continue driving the biotech sector rally, more companies need to make additional strides in discovering new drugs, according to Schoenebaum.
"That's what the space really, really needs and it's not clear we're going to get that this year," Schoenebaum said.
However, the biotech stocks are a good buy because they have "reasonable" valuation at this time, he added.
As for a top pick, Schoenebaum "really believes in" Biogen (BIIB) - Get Report , a Cambridge, MA-based biopharmaceutical company.
"I believe that Biogen has a high probability (of being) dominant in the Alzheimer's disease franchise come 2018-19 and Wall Street has come to forget about this for whatever reason," he stated.
Shares of Biogen are spiking by 7.56% to $282.26 this afternoon.