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Biotech's torrid run may not be over, analyst says

Biotech's big outlook

Biotech's "great run" will continue despite a bumpy April, one industry analyst said Friday.

The sector's struggles last month can be seen in the iShares Nasdaq Biotechnology ETF, ticker IBB, which fell roughly 2 percent in that span. The drop "wasn't surprising" considering the category's strong performance, and "fundamentals still look really good," said Corey Davis, specialty pharmaceuticals analyst at Canaccord Genuity.

The ETF's 3 percent pop on Friday shows that the sector may keep climbing, he contended.

"I think it's going to continue from here," Davis said in a CNBC "Power Lunch" interview.

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In the last two years, the Nasdaq Biotechnology ETF has jumped about 100 percent compared to 30 percent for the . Many market watchers have seen a bubble in the wake of that climb.

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Davis, however, believes the sector has upside. His favorite stock in the space is Valeant, which he called "underestimated" and "misunderstood."

The pharmaceutical company's shares have soared more than 50 percent this year and were up 2.6 percent in late trading Friday.