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Biotech blues: political noise or correction?

With the biotech sector on pace for one of its worse days, analysts were divided Monday on whether the sell-off was nothing but "political noise" or a sign of correction.

"We're seeing some global concerns, you're seeing the entire market come off, and then the commentary from Hillary [Clinton] about pricing has absolutely fueled the fire here," David Seaburg, head of sales and trading at Cowen & Co. said Monday on CNBC's "Power Lunch." "We're seeing some large-cap names being totally dismantled for the wrong reasons."

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The Nasdaq closed down 3 percent Monday afternoon after pressure from the biotechnology sector pushed stocks lower. One biotech ETF, the iShares Nasdaq biotechnology ETF (IBB), was priced more than 20 percent lower than its 52-week high.

The plunge came after a week of losses as policymakers scrutinized the sector.

Reports of large price hikes on pharmaceutical products like Daraprim sparked outrage from presidential candidate Clinton last week. Democrats called Monday for a review of other biotechnology companies such as Valeant.

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With any legal changes to drug regulation at least three years away, Seaburg institutional investors have not been hit with the same panic that has retail investors selling their shares. He also said there is still growth opportunity and innovation in the biotech sector.

"You're looking at a setup ... that could be one of the best buying opportunities for the whole year," Seaburg said.

Jerry Castellini, president and CIO of CastleArk Management, was more bearish, and said he expects several months of consolidation in the industry.

Rather than buy on the dip, Castellini told CNBC he would "step away and let the dust settle" from the biotech fallout.

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