Biotech buzz
- Biotech strongest industry in health care sector this year
- SMID biotech has potential to outperform large caps
- Recent surge widens gap between silver and gold
Within the recently resurgent health care sector, biotech has been one of the industry standouts. Year to date, the S&P 500 biotech index is up more than 22%, nearly twice as much as the health care sector index itself.
Morgan Stanley & Co. recently outlined three factors that may be positioning a certain portion of the biotech industry—small- and mid-cap (SMID) companies—for potential longer-term outperformance:1
1. Growing revenue. Thirty-one of the 86 SMID biotech stocks the analysts cover have evolved from “capital consumers” into “capital producers.”
2. Misplaced regulatory concerns. Valuations of clinical-stage companies have been hurt by concerns about Food and Drug Administration (FDA) operations and obstacles to drug approvals, which the analysts believe will be temporary. (Rising competition from China biotech appears to be affecting the US administration's stance toward streamlining the drug-approval process.)
3. M&A potential. Large-cap biopharma's expected $176 billion loss of revenue (through 2030) because of expiring drug patents is fueling mergers and acquisition activity in the space.
The potential result: strong revenue growth across most of the analysts’ commercial-stage SMID Cap biotech names. Their report, “The Stars are Aligning for Moves in SMID Cap Biotech,” shows the stocks they’re watching, along with a list of key catalysts for many of them, including Kymera Therapeutics (KYMR) and Arcus Biosciences (RCUS):
Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)
Silver outshines gold
Precious metals may have traded to the downside on Tuesday, but it didn’t put much of a dent in their recent rallies. After a sharp sell-off from its late-October record high, gold climbed more than 5% in November. But as the following chart shows, silver—which had traded more or less in line with gold since the end of September—surged at the end of last month:
Source: Power E*TRADE. (For illustrative purposes. Not a recommendation.)
As of Tuesday, spot silver prices were up more than 101% for the year, while spot gold was up around 61%.
While Morgan Stanley & Co. strategists expect both metals to extend their rallies into 2026, they’ve voiced a preference for gold because of slowing demand for silver from the solar energy industry. But they added that silver could underperform gold if the economic growth outlook remains solid.2
Market Mover Update: Not only was the S&P 500’s (SPX) 3.7% rally last week its biggest Thanksgiving week gain since 2008, the index was three-for-three in terms of its historical “micro patterns” around the holiday: The SPX closed higher the day before and after Thanksgiving, and closed lower on Monday.
Today’s numbers include (all times ET): mortgage applications (7 a.m.), ADP Employment Report (8:15 a.m.), Import and Export Prices (8:30 a.m.), Industrial Production (9:15 a.m.), PMI Composite Final (9:45 a.m.), ISM Services Index (10 a.m.), EIA Petroleum Status Report (10:30 a.m.).
Today’s earnings include: Salesforce (CRM), Dollar Tree (DLTR), Five Below (FIVE), HealthEquity (HQY), Korn Ferry (KFY), Macy's (M), Snowflake (SNOW), Thor Industries (THO).
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1 MorganStanley.com. The Stars are Aligning for Moves in SMID Cap Biotech. 12/2/25.
2 MorganStanley.com. The Case For Precious Metals. 10/31/25.