US biotech is a hot pick for Goldman Sachs, which said the sector offers investors some “very attractive” entry points. Luke Barrs, head of fundamental equity, EMEA at Goldman Sachs Asset Management, told CNBC there is a “transformational change” happening in healthcare, particularly in genomic technology, a developing area of medicine that can personalize treatments to patients. Barrs flagged that the SPDR S&P Biotech ETF (XBI) was “underperforming very materially versus the broader market.” XBI is down over 4% this year, and has been around 53% over the last 12 months. The S&P 500, by comparison, is down 21% year-to-date and 11.7% on a 12-month timeframe. Some companies in the sector have “immediate challenges,” according to Barrs, such as developing drugs to be approved by regulators, which is expensive. However, he added: “A third of that universe is trading below cash on balance sheet, so you’re looking at companies in negative enterprise value position. That seems like a very attractive entry point, if you buy into the long-term growth story.” Such firms are ripe for takeover, Barrs said. “If you think about the exit strategy for some of these businesses, clearly the opportunity for M & A in this space — where large pharma companies could step in and acquire some of these unique and new technologies — is very attractive.” The 12 largest pharmaceuticals firms currently have around $600 billion in cash on their balance sheets, Barrs added. “The large pharma industry could easily come in and take out a lot of those new and unique technologies, giving you a very interesting upside exit point, if you are committed to some of those new and unique technologies.” Other banks noted opportunities in biotech firms earlier this month. Piper Sandler analyst Christopher Raymond pointed to Cogent Biosciences as his favorite “under-the-radar” small cap pick, with an overweight rating, while Morgan Stanley’s Matthew Harrison likes BioMarin Pharmaceutical. – CNBC’s Christina Cheddar Berk contributed to this report.