Schoenebaum: Biotech P/Es Show 'Buying Signal' With Caveat; Amgen, Biogen, Celgene & Gilead Have Catalysts

Biotech stocks are in the midst of an "epic" selloff, Evercore ISI Mark Schoenebaum told CNBC on Monday.

Schoenebaum is known for his coverage of big pharma, including Gilead Sciences, Inc. GILD, Biogen Inc BIIB, Pfizer PFE and AbbVie Inc ABBV.

"What's happened fundamentally? Most people attribute the beginning of the selloff to Hillary Clinton's tweet back in October about drug pricing. That has just cast a shadow over the whole group that this set of companies just no longer has pricing power," the analyst said.

While the exact merits of this logic can be debated, Schoenebaum said the threat of regulation has caused groups of investors to avoid biotech until the Presidential elections are over.

He said that while sector Price-to-Earnings ratios are near bottom -- "typically a buying signal" -- there's a caveat. Biotechs have traded at these levels longer than Schoenebaum's seen in the past, giving credence to the possibility that prices remain depressed.

"Finally, we've had some product disappointments out of smaller companies," he explained. Past innovation and product developments drove the biotech bull market, and a lack of such could be another headwind facing investors.

Related Link: Why Are Analysts So Bullish On This Tumbling Biotech Company?

5 Catalysts That Could Be Coming

Rather than buying a basket of biotechs, Schoenebaum said it might make more sense to pick individual names that could have catalysts coming in 2016.

Amgen, Inc. AMGN is one name he mentioned. The company will have data for "very important" cholesterol lowering medication by mid-2016. "I expect that to be favorable data and should drive the stock at least modestly higher.

Biogen, meanwhile, is also expecting data later this year. If the drug anti-LINGO "were to work, it would absolutely transform the earnings trajectory of this stock," the analyst added. Biogen has about $20 per share downside based on this data, but $100 upside.

Celgene Corporation CELG's Revlimid data coming out mid-year, which "if successful...will push numbers a little bit higher," Schoenebaum said.

Gilead's Hep B development is a "long shot," and Wall Street doesn't expect it to work. However if the data were positive, "it would transform the company, and you're paying a single-digit P/E for that stock right now."

BioMarin Pharmaceutical Inc. BMRN has "lots of new drug [data]" coming out in the next three months -- "most of these will be positivie, and is likely to drive that stock higher." Schoenebaum said BioMarin's reward could outweigh the risk by three or four to one.

The iShares NASDAQ Biotechnology Index (ETF) IBB is down a little over 3 percent on Monday.