Still, in a note Friday, the firm presents evidence for the industry being in in a bubble, and other evidence that it definitely isn't.
The signs that there's a bubble, they wrote, are that the NYSE Biotech Index has gained 204% versus 64% for the S&P 500 since January 2011. Additionally, the number of biotechs worth over $2 billion has mushroomed over the years.
However, the sector is now in 'Biotech 2.0.' Biotech 1.0 was the "hopes and dreams model," where the big selling point for companies was their ability to tout drugs for rare diseases at high prices. Biotech 2.0 is about being able to combine these great medical breakthroughs with growth and profitability.
Via Credit Suisse, here's everything that biotechs have in their favor, and what could bring their valuations crashing to the ground in 2015.
Credit Suisse