New drug approvals and the rollout of just-commercialized products will be the catalysts that send these undervalued stocks rallying. Negative sentiment has dropped their prices so low that any rally from these prices could return investors explosive gains.

Despite four straight weeks of gains in the S&P 500, the biotech sector continues to be mired in its deepest and longest bear market since the financial crisis ended in 2009. The industry has not been helped by all the election-driven focus, tweets, and congressional hearings on drug price “gouging” as well as a dearth of IPOs and Merger & Acquisition activity so far in 2016 compared with previous years.

I continue to advocate that 50% to 75% of one’s overall biotech holdings should be in the large cap names within the sector, depending on an individuals’ risk preferences. This will lower the overall volatility of your portfolio and make it easier to weather this type of downturn that occurs frequently in this lucrative but volatile market of the market. This is especially true now as large cap names are selling at a discount to the overall market and are at their lowest valuations since at least 2011.

The small cap portion of the biotech sector has absolutely been decimated over the past six to seven months with many names down 50% to 75% simply because sentiment has gone ice cold on concerns in this most volatile part of the biotech complex. I am finding some great values here with much more attractive risk/reward profiles than have been available since the last bear market around biotech in the first quarter of 2014. I am primarily focusing on small cap companies with upcoming catalysts that could substantially trigger a rise in their stocks. Here are a few I have either purchased or added to core stakes in recent months.

Let’s start with Dynavax Technologies (NASDAQ: DVAX). The company should file a New Drug Application (NDA) with the Food & Drug Administration any day now for its hepatitis B vaccine HEPLISAV – B. The company has stated previously this would be submitted by the first quarter of this year. This is a superior treatment to the current standard hepatitis B vaccine which is marketed and distributed by drug giant GlaxoSmithKline (NYSE: GSK).Not only did HEPLISAV-B clearly demonstrate superior protection levels in a recent over 8,000 subject trial but it is also administrable in two doses instead of the three doses for Glaxo’s product. I expect the treatment to be on the market by the end of 2016 and to eventually garner the lion’s portion of the $600 million to $700 million annual market.