BOSTON ( TheStreet) -- The biotech sector proved once again in 2011 that picking the right stocks to own (or trade) produced outsized profits.

Eleven biotech stocks more than doubled their value this year, producing returns well in excess of the 7% performance of the Nasdaq Biotechnology Index. The S&P 500 is down 3% this year.

Here are the five biggest drug-stock winners of 2011:

No. 5: Pharmacyclics ( PCYC)

Investors who clued into the potential of Pharmacyclics' experimental B-cell lymphoma drug PCI-32765 last year were rewarded big time this year when Johnson & Johnson ( JNJ) paid handsomely to secure licensing rights to the drug in December.

The stock: Pharmacyclics is up 140% this year through Dec. 16. The stock's performance this year, particularly two strong runs in the spring and late fall, illustrate how investors love to buy biotech stocks ahead of big drug research meetings.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

No. 4: Questcor Pharmaceuticals ( QCOR)

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

Once again, selling a high-priced drug to relatively small groups of patients proves to be a winning formula for Questcor. Sales of H.P. Acthar Gel are surging and so are Questcor's profit.

The stock: This is the second consecutive year that Questcor lands on the list of best-performing biopharmaceutical stocks. Questcor shares are 197% since Dec. 16. Earnings are expected to double this year over 2010 and grow another 60% in 2012.

No. 3: Medivation ( MDVN)

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

One day, Medivation shares are up 9% for the year. Twenty-four hours later, Medivation is up 162%. This sudden and spectacular jump in market value -- akin to winning the lottery -- is what makes biotech stocks irresistible for so many investors. Medivation's spark was the November announcement of a successful phase III study for its prostate cancer drug MDV3100.

The stock: Medivation shares weren't done moving higher after that very good, early November day. As of Dec. 16, Medivation is up 199% for the year.

No. 2: Inhibitex ( INHX)

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

It's fitting that the two top-performing biopharmaceutical stocks of 2011 are both focused on developing new drugs for hepatitis C. It's also telling that Inhibitex, clocking in at No. 2 this year, is still years away from (possibly) pushing a drug across the finish line and making it to the market.

The stock: Inhibitex shares are up 302% as of Dec. 16.

No. 1: Pharmasset ( VRUS)

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

No surprise, right? Pharmasset's $11 billion ($137-per-share) takeover by Gilead Sciences ( GILD) last month was just icing on Pharmasset's very sweet year. The company's experimental pill PSI-7977, with its potential to eliminate the need for weekly interferon injections from hepatitis C therapy, could soon dominate a $20 billion treatment market.

The stock: Pharmasset shares rose a stunning 468% this year, as of Dec. 16.

>>To see these stocks in action, visit the Five Drug Stock Winners of 2011 portfolio on Stockpickr.

--Written by Adam Feuerstein in Boston.

>To contact the writer of this article, click here: Adam Feuerstein.

>To follow the writer on Twitter, go to http://twitter.com/adamfeuerstein.

>To submit a news tip, send an email to: tips@thestreet.com.

Follow TheStreet on Twitter and become a fan on Facebook.
Adam Feuerstein writes regularly for TheStreet. In keeping with company editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet. He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback; click here to send him an email.