Amgen vs. Revolution Medicines: Which Healthcare Stock Is a Better Buy in 2026?

Investors choosing between Amgen (NASDAQ:AMGN) and Revolution Medicines (NASDAQ:RVMD) must weigh established cash flows against high-stakes clinical potential. Which of these healthcare players is the better addition to your portfolio today?

Amgen is a titan of the biotech world with a deep portfolio of marketed drugs and a history of returning capital to shareholders. Revolution Medicines represents the speculative side of the sector, focusing on breakthrough cancer research without any current revenue. Both companies offer exposure to medical innovation but through very different financial profiles.

The case for Amgen

Amgen focuses on developing and manufacturing therapies for serious illnesses in oncology, inflammation, and rare diseases. Within the biotech stocks landscape, the company primarily distributes its products through three major wholesalers: McKesson (NYSE:MCK), Cencora (NYSE:COR), and Cardinal Health (NYSE:CAH). Because these three customers account for nearly 77% of gross revenues, this customer concentration adds a layer of risk to the business.

In FY 2025, revenue reached nearly $36.7 billion, representing growth of approximately 9.9% over the previous year. Net income for the period was roughly $7.7 billion, which equals a net margin of 21%. This reflects a significant increase from the 12.2% net margin recorded in 2024, demonstrating the company's ability to maintain high profitability across its diverse drug portfolio.

As of its December 2025 balance sheet, the debt-to-equity ratio is roughly 6.3x. This ratio, which compares total debt to shareholder equity, indicates that the company carries significantly more debt than it has equity. The current ratio, which measures the ability to pay short-term debts with current assets, is approximately 1.1x. Free cash flow, which is the cash left after paying for capital projects, reached close to $8.1 billion in FY 2025.

The case for Revolution Medicines

Revolution Medicines is a global oncology company advancing a pipeline of therapies designed to target RAS-addicted cancers. It currently operates as a clinical-stage firm, meaning it has not yet brought a product to market or generated commercial sales. The company relies on strategic collaborations for development, including a partnership with BeOne Medicines and a royalty arrangement with Royalty Pharma (NASDAQ:RPRX).

In FY 2025, the company reported revenue of $0.0 because it does not yet have any approved products for sale. This resulted in a net loss of around $1.1 billion for the fiscal year as it expanded its clinical trials. This net loss grew compared to the prior year, reflecting the high costs associated with bringing new cancer treatments through the regulatory process.

As of its December 2025 balance sheet, the company maintains a debt-to-equity ratio of approximately 0.1x. This indicates a very low level of debt relative to its equity. The current ratio is quite high at roughly 9.5x, providing a substantial cushion for near-term operating expenses. However, free cash flow was negative at approximately $913.7 million in FY 2025, as is common for biotech firms in the research phase.

Risk profile comparison

Amgen faces significant pricing pressures from both government and commercial entities, including recent Medicare price-setting for major products like ENBREL. The company is also navigating ongoing tax disputes with the IRS regarding how it allocates profits between the United States and Puerto Rico. Additionally, Amgen must defend its intellectual property against biosimilar competitors while managing potential cybersecurity threats to its patient data systems.

Revolution Medicines carries the risks typical of a younger biotech, including a lack of approved products and a limited operating history. The company faces a high failure rate in its clinical trials and may encounter resistance mutations that limit the effectiveness of its therapies. It also competes against much larger pharmaceutical giants such as AstraZeneca (NYSE:AZN) and Pfizer (NYSE:PFE), which have significantly greater resources for research and marketing.

Which stock would I buy in 2026?

I'd go with Revolution Medicines, and this is an exciting pick. To give Amgen credit, it is a dependable, dividend-paying biotech with multiple brands growing at a double-digit rate and a raised full-year outlook. For investors who want steady, predictable healthcare exposure, it is a solid choice.

But Revolution Medicines just achieved something extraordinary. Daraxonrasib became the first targeted therapy ever approved for metastatic pancreatic cancer, one of the deadliest and hardest-to-treat cancers, after clinical data showed it cut the risk of death by more than half. This marks a potential paradigm shift in oncology. The pipeline extends into lung cancer and other RAS-driven tumors, and a new partnership with Royalty Pharma provides the funding to pursue those opportunities without diluting shareholders further.

The stock has surged and losses are widening as commercial investment ramps up. But if you're a long-term investor comfortable with biotech risk, this is an opportunity to own a company at the forefront of a genuine medical breakthrough. That's a much stronger bet than owning steady profitability alone.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen, AstraZeneca Plc, and Pfizer. The Motley Fool recommends McKesson. The Motley Fool has a disclosure policy.