Amgen vs. NovoCure: Which Health Care Stock Is a Better Buy in 2026?

Deciding between a pharmaceutical giant and a niche medical innovator depends on your risk tolerance. Amgen (NASDAQ:AMGN) and NovoCure (NASDAQ:NVCR) offer vastly different paths to potential growth in 2026.

Amgen is a global leader in drug manufacturing, focusing on large-scale treatments for chronic conditions. NovoCure specializes in proprietary wearable technology to treat various forms of cancer. Comparing them highlights the trade-off between the steady earnings of established healthcare giants and the high-stakes potential of specialized medical technology developers.

The case for Amgen

Amgen develops and sells innovative medicines for heart disease, obesity, and cancer. Its revenue is highly concentrated among three pharmaceutical wholesalers: McKesson (NYSE:MCK), Cencora (NYSE:COR), and Cardinal Health (NYSE:CAH). Customer concentration like this adds a layer of risk to the business.

In FY 2025, revenue reached nearly $36.8 billion, representing growth of approximately 10.1% compared to the previous year. The company reported net income of $7.7 billion during this period.

As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 6.3x. This ratio, which compares total debt to shareholders’ equity, indicates that the company relies heavily on borrowed funds. However, Amgen generated free cash flow of about $8.1 billion in FY 2025.

The case for NovoCure

NovoCure uses a direct-to-patient model for its proprietary therapy, a model unique among medical device stocks. This model generates revenue through monthly device fees for devices like Optune Gio, with a focus on patient accessibility and payer reimbursement. By bypassing traditional wholesalers, the company maintains a closer relationship with the patients using its equipment.

In FY 2025, revenue reached approximately $655.4 million, representing growth of about 8.3%. Despite the rising sales, the company reported a net loss of nearly $136.2 million for the year. This reflects the high costs associated with expanding its product reach.

Based on the December 2025 balance sheet, the company maintains a debt-to-equity ratio of nearly 0.9x. Free cash flow for FY 2025 was negative $75.7 million, indicating the business’s need for external funding to cover operating costs and capital investments.

Risk profile comparison

Amgen faces pressure from government regulation, particularly the Inflation Reduction Act, which mandates price setting for certain drugs. Ongoing tax disputes with the IRS and a $20.2 million judgment against its subsidiary create additional financial uncertainty. Furthermore, concentrated manufacturing in locations like Puerto Rico leaves the company vulnerable to natural disasters or infrastructure failures.

NovoCure relies heavily on regulatory approvals for new indications and compliance with strict international medical standards. Revenue is also tied to securing coverage from payers like Medicare, where claim denials can force the company to absorb costs. It also faces intense competition from companies developing alternative technologies and the eventual expiration of its own patents through 2041.

Valuation comparison

NovoCure currently trades at lower multiples relative to its sales and future earnings estimates than the larger, more profitable Amgen.

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Which stock would I buy in 2026?

Upstart biotech companies are exciting, and NovoCure is a no exception. The company recently got FDA approved for its Optune Pax, to treat patients with advanced localized pancreatic cancer. Its core product, Optune Gio, treats glioblastoma in people 22 or older. Both use alternating electrical fields, called Tumor Treating Fields, or TTF, to disrupt cancer growth and slow disease progression. That’s exciting.

But as a business to invest in NovoCure isn’t as exciting. For one, Wall Street doesn’t anticipate the company generating any free cash flow until fiscal 2028, meaning NovoCure will be under pressure to finance operations until then. While the company has real revenue, with $704 million projected for 2026, it’s not growing as fast as other biotech stocks.

Amgen, meanwhile, certainly isn’t a fast grower. Given its scale, it should be able to work out a roughly 3% revenue rise in 2026 to around $37.8 billion. But size forgives a lot in pharmaceuticals. For one, its billions in net income could allow Amgen to pursue growth in the future by acquiring other drugmakers. The business also has six drug franchises that generate $1 billion-plus in annual revenue. There is real value there.

Given concerns over NovoCure’s funding needs compared to Amgen’s bulk and the fact that the latter pays a nice dividend ($9.80 the past year), Amgen gets the nod.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amgen and NovoCure. The Motley Fool recommends McKesson. The Motley Fool has a disclosure policy.