Credit Suisse's research team shared its top biotech ideas in a note to clients Wednesday.
"We are cautiously optimistic after a volatile 2017 from a fundamental perspective, but we have definitely not given up on the space and believe selective names can work big next year," analyst Alethia Young wrote in the report. "Consolidation/M&A remains the biggest theme across our entire large and small coverage universe. We believe that tax reform is a positive tailwind which could bring significant cash back onshore for many of our large cap biotech companies."
The iShares NASDAQ Biotechnology ETF is up 20 percent this year through Tuesday matching the S&P 500's gain.
Here are four outperform-rated companies Credit Suisse recommends for next year.