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3 Top Biotech Stocks to Watch in November

By Alex Carchidi – Nov 15, 2020 at 6:57AM

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These three stocks are loaded with potential, but need to be watched carefully over the next few weeks.

Biotech stocks tend to move when companies report updates about their medicines in development. While we can't predict surprise announcements, there are still a handful of important news drops that are likely to occur in November. Especially for momentum investors, it's critical to be ready for whatever might happen in the aftermath.

Two of the companies I'll be discussing today are involved in coronavirus vaccine development, which means that reporting progress throughout November is likely to be pivotal for growth. But there's more going on in biotech than the development of a coronavirus vaccine, and investors should keep an eye out for lesser-known companies that might just be next year's rising stars.

A doctor prepares an injection labeled remdesivir.

Image source: Getty Images.

1. Surface Oncology may report its first wins in the clinic 

As the name implies, Surface Oncology (SURF -3.04%) develops immunotherapies that target the external and internal surfaces of solid tumors. This differentiates its scientific approach from other biotechs that don't explicitly develop therapies with the tumor microenvironment as a focus. Though it remains to be seen whether this approach is more effective at making medicines than other companies, Surface has already secured a collaboration with Novartis (NVS 0.61%), which suggests that it has some promise. Right now, Surface has a few early stage clinical trials in progress, including an antibody immunotherapy that's being investigated for effectiveness in treating breast cancer, ovarian cancer, and pancreatic cancer.

While November isn't exactly a pivotal month in Surface's long-term outlook, it is a chance for investors to judge whether the stock will be growing in the near-term. On Nov. 13, Surface provided more detailed updates on two of its lead programs in phase 1 trials. Both solid tumor treatment candidates, SRF617 and SRF388, are proceeding favorably. Surface also recently succeeded in earning Fast Track designation for SRF388 as a potential treatment for liver cancer. Investors should watch for any additional reports that might offer clues about how management will make the most out of the designation, which was announced on Nov. 11.

2. BioNTech's coronavirus vaccine could send its stock to the moon 

The German oncology company BioNTech (BNTX -2.05%) is best known for its coronavirus vaccine candidate, being developed in conjunction with Pfizer (PFE -0.20%). November isn't even halfway over, and it's already been a big month for the stock. After the companies announced preliminary results of the company's coronavirus vaccine candidate in late-stage clinical trials, BioNTech's stock made impressive gains on Nov. 9 and 10. More data on the vaccine's efficacy, which is currently estimated to be around 90%, will provide additional clues for investors.

Other updates later in November will likely include important information on scaling vaccine manufacturing capabilities, which are currently estimated to deliver around 1.3 billion doses by the end of 2021. An improved ability to produce larger volumes of its vaccine at a more rapid pace would be encouraging for investors; it would mean that they could expect returns from vaccine sales sooner than they originally thought.

Though it's unclear by how much more BioNTech's stock will expand in the aftermath of its impressive vaccine results, the company has doubtlessly achieved a critical validation for its scientific approach using mRNA vaccinations as well as its lipid nanoparticle vaccine delivery platform. Investors should also keep an eye out for any announcements regarding Pfizer's stake in the company. If Pfizer escalates its involvement with BioNTech beyond the coronavirus vaccine program, it'll be a bullish sign for the company's future. 

3. Moderna's interim vaccine data analysis could galvanize the stock even further

Moderna (MRNA -3.03%) may have a hectic few weeks ahead, especially since BioNTech appears to have beaten it to the punch on the coronavirus vaccine front. Sometime in November, the company will report its first preliminary analysis of its coronavirus vaccine candidate's efficacy after a complete set of doses. This data will be gathered from its ongoing phase 3 clinical trial, but it will also include some safety data that would typically be included in phase 1 trial results. The reason for this is that Moderna's coronavirus vaccine requires two doses, so safety data in the aftermath of the second dose is still being gathered. If the safety data is unfavorable, Moderna's stock will likely take a major hit, but things could swing strongly in the other direction if its candidate is shown to be both safe and effective.

If Moderna's results are what everyone is hoping for, the company claims that it will be ready to file for an Emergency Use Authorization (EUA) shortly after publication. Investors should be watching Moderna like a hawk, especially if they are on the fence about whether to buy its stock. Once Moderna moves its vaccine onto the market, it's unlikely that anyone will be catching the stock at a bargain in the next few years.

Alex Carchidi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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