Wall Street's No. 1 biotech analyst Umer Raffat has two names at the top of his buy list —Allergan and Dermira.
Shares of Allergan closed 2 percent higher on Tuesday but are down more than 14 percent from a year ago.
Raffat, who was named the best biotech analyst in 2017 by Institutional Investor on Tuesday, believes Allergan is trading like it has nothing in the pipeline.
However, it "is about to enter a fairly heavy phase of pipeline readouts starting in 2018," the senior managing director at Evercore ISI said in an interview with CNBC's "Closing Bell" on Tuesday.
Plus, compared with the rest of the large-cap therapeutics in his coverage space, Allergan's top-line growth is much more diversified and much less patent-risk dependent, Raffat noted.
"I also think the quality of growth comes from the highest margin parts of the business."
Meanwhile, Dermira has a "huge catalyst" due potentially in the next six months — a phase three trial in acne treatment.
"We tend to think that they have a pretty good shot going into this upcoming phase three and that wasn't necessarily the case for some of the recent trials that failed."
Shares of Dermira closed up more than 5 percent on Tuesday.