Courtesy of Creative Commons, Flickr

https://www.flickr.com/photos/markyharky/10630737725/in/photolist-hcpiXt-b4T91Z-nW57e-58yRJn-5j7ekh-9pbrVc-4KJWBy-4KEEHa-cURCRh-9s2Kvn-pSwRGC-9s5ZyA-cHDiXs-9s34oc-cVmHBm-9s36vn-9s2R6k-9s5TGu-3sSTtt-9s2TkR-9s5r3G-9s2wBX-vNiD2E-8zfNZJ-9s5VCC-9s2r4z-9s2yjD-9s5FVf-9s2NPX-9s5AXQ-9s5hwY-9s5y4d-yic5kg-HpY2p-cTujGQ-amRsm-f1dve-dU2hKr-5ZooTX-etDoeE-88aGbP-4fqn8Y-ZqpRg-4P3D61-bJcB9g-f1dsD-9MNYQD-4r9F6-f1doi-bBSC5p

Yikes! A few weeks into February, and the indiscriminate selloff in biotech just keeps getting more unnerving.   

But here's the good news. With virtually ever biotech getting dinged, there's growing upside for investors able to discern the value from the junk in the sector. While a bigger drop could certainly be ahead, a lot of the downside risk is likely baked in for companies with big catalysts ahead.

But what about all the political posturing about drug pricing? Won't that continue to weigh? Here's what the market is missing. Proposals to cut drug pricing have been discussed for many years, and the chances of changes materializing in the coming years seems slim. In addition, recent high-profile concerns have focused on the pricing for older pharmaceutical drugs--not the kind of breakthrough treatments many biotechs are pursuing.  

Biotechs are not for the risk-averse, since they drop or pop on a whisper. But maintaining a small position in a few well-chosen biotechs also adds a lot more potential upside to a well diversified portfolio. With that in mind, three of our contributors pinpoint stocks that could help boost your portfolio through 2016 and beyond.

Selena Maranjian: One biotech stock that seems quite likely to snap back from its recent slump is Celgene Corporation (CELG). The stock was recently down more than 17% over the past 12 months -- in part due to a disappointing quarter -- but it has been a very strong long-term performer, averaging annual returns of over the past decade and 28% over the past 20 years. That kind of growth has gotten it to a market value that recently topped $75 billion. It seems very likely to exceed that and keep growing because it has successful drugs on the market and, more importantly, a promising pipeline of drugs in development -- as well as plans to gain additional approvals for existing blockbuster drugs, to treat additional conditions.

That last aim is a powerful way to boost earnings and to prolong patent protections, too. Celgene's current big sellers include Revlimid, Pomalyst, and Otezla, which together generated $9.2 billion in 2015, with $10.5 billion expected in 2016. Thanks to the company's purchase of Receptos last year, it stands to possibly rake in or more eventually, from the immune-inflammatory drug Ozanimod. The rest of its pipeline is promising, too, addressing anemia, solid tumors, inflammation and immunology, among other things. Celgene has also partnered with many other drug developers, giving it many more potential wins. With annual free cash flow topping $2 billion, double-digit net profit margins, and a forward-looking P/E ratio only near 14, well below its five-year average of 38, Celgene looks very appealing.

Brian Feroldi: A biotech stock that I think is poised to bounce back nicely in 2016 is Vertex Pharmaceuticals (VRTX 0.93%), a large cap biotechnology company that specializes in treating cystic fibrosis, or CF. Vertex's sales have been growing quickly over the past few years on the back on Kalydeco, one of its two approved CF treatments. Sales of Kalydeco grew 36% in 2015 to $632 million, and given that it grabbed several label expansions, the odds look good that 2016 will be another year of good growth for the drug.

 
However, while the Kalydeco opportunity looks good, Vertex's newest CF drug Orkambi really looks poised for big things in 2016. Orkambi only recently won approval in both the U.S. and the European Union but it is already having a big impact on Vertex's financial statement. Sales of Orkambi hit $220 million in the fourth quarter, its second quarter on the market, which already means that it is outselling Kalydeco. That's owed to the fact that Orkambi enjoys a larger addressable market than Kalydeco did, which has helped it to get off to a fast start. Its also worth knowing that Orkambi has yet to pull in any revenue from Europe as Vertex is still lining up reimbursement in the region, so as more countries come online its revenue growth should soar.
 
And yet, despite the fact that Orkambi and Kalydeco are poised to have very prosperous years, shares of Vertex have been crushed recently and they are down about 35% from their summer time highs. That's despite the fact that analyst's believe that the company's revenue will grow to more than $2.2 billion in 2016, up 114% over the prior year, and to more than $3.3 billion the year after.
 
If the company's 2016 results show that it is on pace to successfully deliver on those results, than I could easily see shares resuming their long term growth trajectory.
 
Cheryl Swanson: My favorite candidate for Comeback Kid in biotechs right now is Biogen (BIIB -1.57%). Several big coming catalysts could send Biogen's share price sharply upward in 2016--assuming that all goes well.
 
Biogen expects data this year on a treatment with the odd name of LINGO, potentially the first drug to restore nerve damage caused by multiple sclerosis. Admittedly, LINGO is a long shot and even more risky is Biogen's Alzheimer's drug aducanumab. But the possibility that aducanumab could become an approvable therapy seems to be completely written out of Biogen's price, so any positive results could skyrocket this stock.
 
Data on two other Alzheimer's treatments earlier in development could also boost shares. Meanwhile, Biogen's joint venture with South Korean-based Samsung in biosimilars is starting to look like a real business. The venture notched its first win with a biosimilar version of Amgen's (AMGN 0.82%) rheumatoid arthritis drug Embrel. A second big win could come if EU regulators approve a biosimilar of Johnson & Johnson's (JNJ -2.71%) blockbuster Remicade.
 
Biogen's stock was beaten to its knees last year, but earnings blew past Wall Street estimates in the recent quarter. Management also eased concerns about Tecfidera, saying U.S. demand has stabilized, while sales are growing in Europe. The company announced 11% growth in annual revenues, and a significant cash stockpile of $3.4 billion. The size of that war chest gives Biogen ample ammunition for some price moving acquisitions this year, of either companies or drugs.