If u soar high and high, what happens? You come tumbling down. The same holds true for the biotech sector which had a hellish second-half 2015 after a heady bull run. And the picture of the first quarter of 2016 is no different either with the Nasdaq Biotechnology Index declining 20.4% year to date. Biotech majors like Amgen Inc. (AMGN - Analyst Report) and Gilead Sciences Inc. (GILD -Analyst Report) among others are weighing heavily on the index with their share prices falling sharply year to date.

The bear run was sparked off by one "price gouging" tweet from Democratic Presidential candidate Hillary Clinton, which particularly had an adverse impact on biotech stocks. And it’s not just that. Strained balance sheets and macro economic factors are adding to investors’ anxiety.

But who knows that the year ahead could turn out be a promising one for the biotech industry? There are reasons enough to back this thesis.

First, the entry of the first FDA-approved biosimilar, Zarxio, a biosimilar version of Amgen’s blockbuster drug, Neupogen, into the market last year has left biotech companies vying to enter this high revenue generating space. Biosimilars it seems are the next big thing in the making.

Second, with several products gaining approval last year like Imlygic, Ibrance, Strensiq, Genvoya and, PCSK9 inhibitors, Praluent and Repatha, all eyes will be on their performance. Meanwhile, the companies would continue to work on label expansion of existing drugs to boost their commercial potential.

Finally, the dovish outlook of the Federal Reserve and Janet Yellen stating that they will “proceed cautiously” with interest rate hikes, the sector should continue to see a flurry of merger and acquisition (M&A) deals. With Shire Plc (SHPG -Analyst Report) and Baxalta Incorporated (BXLT - Analyst Report) agreeing to combine at the start of the year in a deal worth about $32 billion, rumors are doing the rounds of a few biotech companies hunting for lucrative deals.

Large-cap and development-stage companies should also continue to partner across different therapeutic areas like cardiovascular, immuno-oncology and hepatitis C virus.

Against this positive backdrop, which one of these biotech stocks were the winners of the first quarter of 2016. Though there were a number of biotech stocks who found the going rough, we have picked four potential winners using our Zacks Stock Screener. Not only do these stocks have a Zacks Rank #1 (Strong Buy) or #2 (Buy), but also have rallied 5% or more year to date.

Actelion Ltd. (ALIOF - Snapshot Report): This Switzerland-based company is focused on the development and commercialization of drugs targeting unmet medical needs. The company generates revenues from pulmonary arterial hypertension (PAH) products like Opsumit, Tracleer and Uptravi among others. This Zacks Rank #1 stock, with a strong hold in the PAH market, has seen its share price increase 6.2% year to date.

Mesoblast Limited (MESO - Snapshot Report): This Zacks Rank #2 company is working on developing a cell-based product portfolio utilizing its proprietary cell technology platform. It has a robust late-stage pipeline of candidates targeting cardiovascular conditions, orthopedic disorders, immunologic and inflammatory disorders and oncologic/hematologic conditions. Mesoblast has its corporate headquarters in Australia and U.S. headquarters in New York. Its stock has shot up 43.1% year to date.

Kindred Biosciences, Inc. (KIN - Snapshot Report): California-based Kindred Biosciences is a development-stage company with a focus on saving and improving the lives of pets. In addition to having multiple candidates in pipeline, the company has one candidate in regulatory stage and the other in a pivotal efficacy study. This Zacks Rank #2 stock has seen its share price increase 5% year to date.

CorMedix, Inc. (CRMD - Snapshot Report): This Zacks Rank #2 company has a focus on in-licensing, developing and commercializing prophylactic and therapeutic products for the prevention and treatment of infectious and inflammatory diseases. The company derives revenues from commercializing Neutrolin (an anti-infective solution) in Europe. It also intends to expand commercialization into the U.S., Asia, the Middle East, South America and Africa upon regulatory approval. This New Jersey based company’s stock has escalated 19.7% year to date.

Looking Forward

While product approvals, label expansions, pipeline updates, constant M&As and biosimilars are expected to be in the headlines, discussions around exorbitant drug prices will also remain in focus. In this scenario, don’t miss to bet on the above mentioned biotech stocks.