3 top biotech stocks with big upside: Pro

While biotech stocks saw an early selloff Friday, the shares of three companies in the sector have plenty of potential left, John Schroer of Allianz Global Investors said on CNBC.

Biogen Idec is his top pick.

"Leading company in the [multiple sclerosis] space. They have some very strong earnings growth, 20 to 25 percent earnings growth over the next three years. And we're looking at a valuation that's just below 25 times, so it's a very attractive name," said Schroer, who is U.S. sector head of health-care research and a portfolio manager at Allianz.

On "Halftime Report," he noted that the sector traded lower on news that Gilead—his second pick—could face pricing pressure on its hepatitis C drug.

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A multiple sclerosis drug is manufactured at the Biogen Idec plant in Cambridge, Mass.
Essdras M Suarez | The Boston Globe | Getty Images
A multiple sclerosis drug is manufactured at the Biogen Idec plant in Cambridge, Mass.

"I think this is a short-term event," Schroer said. "I would be a buyer of Gilead today."

That stock also was relatively cheap, he added, selling at 11 times consensus earnings.

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Schroer said that Gilead hit on several metrics.

"They continue to grow revenues, and they continue to deliver earnings, so those are the types of names that we look for," he said. "There are companies that trade at $200 billion [valuation], so that's not a ceiling."

Celgene is Schroer's third pick.

By CNBC's Bruno J. Navarro

Disclosure: Schroer's AllianzGI Wellness Fund owns shares of BIIB, GILD and CELG.