Momentum investors have vigorously returned to the biotech space, and it's becoming clear that their aggregate buying is responsible for several of the monstrous price gains in the big cap (over $1 billion) names. As a testament to the velocity of the Mo' money, both MedImmune (MEDI) and Idec (IDEC) have doubled since mid-May, and Immunex (IMNX) is up 100 percent since February. Amgen (AMGN) and Biogen (BGEN) have both doubled since December. Genzyme (GENZ) is up more than 100 percent since last September.

It remains to be seen when the Mo' crowd will show its fickle side. But Franklin Funds portfolio manager Kurt von Emster believes the majority of the momentum money will stay in the sector longer than it has in the past, primarily because the fundamentals of the sector are much stronger this time around. "Big valuations are much more sustainable," he said. von Emster attributes the strength to the increasing number of products in late-stage development, strong sales of products such as MEDI's Synagis for RSV and IDPH's Rituxan for non-Hodgkin's lymphoma, and the upcoming conference season, "that will reaffirm the strength of the sector and give broader recognition to the biotech arena."