Don't panic over biotech selloff, Bernstein Research says

|By:, SA News Editor

Biotech stocks suffer a third straight day of heavy losses after recording their worst selloff in two years yesterday, but Bernstein’s Geoffrey Porges says it's not time to panic.

Stocks with major uncertain events looming, such as MDVN, or with significant revenue upside already built into valuation, such as PCYC, were among the most severely affected, Porges says, but "nothing changed in the environment to suggest that those events were any more or less likely to have positive outcomes yesterday, or to suggest that revenue potential was any more or less likely to be achieved than was previously expected."

Still, investors shouldn’t buy the sector willy-nilly; Porges recommends Celgene (CELG) and Gilead (GILD) among large caps, and notes that less-pricey stocks such as Amgen (AMGN) should hold up better, as should midcaps with earnings and products, such as Alexion (ALXN).

ETFs: IBB, XBI, FBT, PBE, BBH, BIB, BIS.