Even as biotech indices surpass all-time highs, investors are saying there is more room to run. While buysiders and bankers do expect the pace of growth to slow in the coming year, they think the biotech sector could continue to outperform the broader markets for at least a few more quarters.

The run now is being driven by momentum investors seeking beta before year end in an economic environment that favors equities. Investors and bankers said mid- and small cap names should be prime targets for fund managers looking to beat their benchmarks.