Last call! The Federal Reserve is signaling that they may pull the punch bowl, and investors are not waiting around to find out when.
Since May 22, markets have been volatile, and rates are decidedly ticking up. Pundits now chirp that we've seen the bottom in rates, and winners and losers are being identified. Dividend payers are "out," growth is "in." Buy cyclicals, sell health care, is what many people suggest.
Independent of the debate on the Fed and rates, I will argue that pharma and biotech stocks can continue to do well.
(Read More: Here's Who Wins and Who Loses From Fed Taper Talk)
In the case of the former, pharmaceutical stocks are more than just high-dividend yielders. They now have the potential for multiple expansion as top- and bottom-line earnings-per-share growth recovers. The patent cliff is behind them, and the industry is leaner, and more focused on driving higher returns. Most importantly, pipelines are improving, and the Food and Drug Administration is more accommodative.
Big news at the recent American Society of Clinical Oncology of advances in cancer treatment moved the stocks of companies large and small; Merck, Bristol-Meyers Squibb, Celgene and Tesaro, to name a few.
In hepatitis C virus research, new all-oral 12-week drug regimens have the potential to cure 90 percent of HCV patients, and many companies are playing in that space; Gilead Sciences, Bristol-Myers, Merck and AbbVie.
(Read More: Fed Shakes Global Markets as Interest Rates Rise)
Those new drugs are just what the doctor ordered for higher biopharma stock multiples.
Bottom line, the stocks are more than just high-yielding bonds, there is an equity kicker as EPS and multiples improve. And biotech's gains can likely keep pace with cyclicals leveraged to an economic recovery (especially since no one is calling for the hockey stick variety).
All this means, I suggest that the pharma-biotech sector will not be a proxy for rates, and trade in sympathy, but rather can stand on their own.
Barbara Ryan is a managing director in the FTI Consulting strategic communications consulting practice and a CNBC contributor. She has more than 31 years of Wall Street experience as a sell-side research analyst covering the pharmaceutical industry. She has worked at Bear Stearns, Prudential, Alex Brown and Deutsche Bank. In 2012, Ryan founded Barbara Ryan Advisors, a pharmaceutical consulting firm providing services to pharma companies, investment banks and institutional investors. Ryan is widely recognized as an authority on the trends and outlook for the global pharmaceutical industry and has been publishing her analysis throughout her career.