The outlook on biotechnology is finally turning positive, according to Evercore ISI, which launched coverage of the sector with “an increasingly constructive view” as it expects more room for upside ahead. “After 3 years of painful underperformance, winter is finally thawing and spring just might be in the air,” analyst Cory Kasimov wrote in a Monday note. Biotech stocks broadly peaked in early 2021 when interest rates were at a trough, Kasimov noted. Since then, the sector has declined 49%. While biotech stocks are sensitive to interest rates, the analyst believes most of the group’s other catalysts รขยย such as mergers and access to capital รขยย remain “relatively consistent.” XBI YTD mountain SPDR S & P Biotech ETF performance year to date The sector is opportune for investors looking for “a stock picker’s market,” according to Kasimov. With this in mind, he named seven stocks to his core initial list, which he named “The Magnificent Seven.” “We favor names and are initially launching on cos with clear clinical narratives and/or commercial upside. We’ve got our hands in all the hot areas รขยยฆ oncology, neuro, rare, cardiometabolic, etc.,” Kasimov said. The analyst is overweight on five companies: Regeneron , BioMarin , Neurocrine , BridgeBio and Arcellx . He forecasts strong earnings and cash flows for Regernon and highlighted its broad pipeline. That stock has climbed nearly 11% from the start of the year. Rare diseases company Neurocrine also has meaningful catalysts ahead, according to Kasimov. To be sure, he noted the company’s hemophilia A gene therapy Roctavian is underperforming. Nonetheless, its Huntington disease treatment Ingrezza’s growth and the investigational treatment crinecerfont’s “blockbuster potential” have created a positive backdrop for Neurocrine, per Kasimov. Neurocrine shares have only inched up 3% year to date. Kasimov also initiated in-line ratings for BioNTech and Moderna . รขยยCNBC’s Michael Bloom contributed to this report.