Two of the biggest biotechs on the market are undergoing big changes right now. Biogen Inc. (NASDAQ:BIIB) has expanded beyond multiple sclerosis (MS) into other key neurological indications. Gilead Sciences, Inc. (NASDAQ:GILD) is now a leader in treating cancer through cell therapy after years of focusing first on HIV, and then on hepatitis C. 

Biogen has turned in a better stock performance in recent years, although the two biotech stocks are neck and neck so far in 2018. Which is the better pick for investors now? Here's how Biogen and Gilead stack up against each other.

Male and female scientists in lab

Image source: Getty Images.

The case for Biogen

Probably the most compelling reason to buy Biogen stock is that the biotech could be on the way to becoming an unstoppable juggernaut in neurology. Biogen's credentials in MS are already solid, with blockbuster drugs Tecfidera, Tysabri, and Avonex. But the company's biggest growth driver these days isn't an MS drug.

Biogen partnered with Ionis Pharmaceuticals in 2012 on spinal muscular atrophy (SMA) drug Spinraza. That move has paid off in a big way, with Spinraza getting off to a fast start in 2017, its first full year on the market. Sales for the SMA drug more than doubled year over year in the second quarter.

The next major opportunity for Biogen could be in treating Alzheimer's disease. Biogen's lead Alzheimer's candidate, aducanumab, recently completed enrollment in a phase 3 clinical study. Market research firm EvaluatePharma ranks the drug as the third most valuable pipeline asset in the biopharmaceutical industry

Biogen and partner Eisai are co-developing another late-stage candidate targeting Alzheimer's disease, E2609. But there has been more excitement recently for another Alzheimer's drug the two companies are developing together -- BAN2401. Biogen and Eisai announced encouraging results a few weeks ago from a phase 2 study of BAN2401 that showed slowing progression of the disease and a significant reduction of amyloid accumulations in the brain.

It's true that Biogen does face increasing competition in MS for its current lineup. Some of that competition is coming from Ocrevus, a drug that Biogen originally developed but licensed to Roche. However, Biogen could have a promising prodrug for treating MS on the way in BIIB098, which is in phase 3 clinical testing. 

Over the longer term, Biogen could have more winners. The company's phase 2 pipeline includes several candidates targeting MS, focal epilepsy, idiopathic pulmonary fibrosis, lupus, stroke, and other indications.

The case for Gilead Sciences

If you're looking to buy a stock that appears to be headed for nice rebound, Gilead Sciences could be a great pick. The stock has been pummeled over the last few years as sales for Gilead's hepatitis C virus (HCV) franchise plunged. Now, though, there are signs that the worst could be over on the HCV front

As HCV sales stabilize, Gilead's positives should receive much more attention. The biotech launched Biktarvy earlier this year. Gilead thinks the drug is on its way to having the best launch of any HIV treatment ever. The company's other Descovy-based HIV therapies also continue to enjoy strong momentum.

Sales for Yescarta were only $68 million in the second quarter, which amounts to only a drop in the bucket for Gilead. However, the biotech is clearly one of the leaders in cell therapy for treating cancer. Yescarta is expected to become a blockbuster in the not-too-distant future. Gilead has also beefed up its expertise in cell therapy through seven acquisitions or partnerships since buying Kite Pharma last year.

Gilead's pipeline is another reason for investors to like the stock. The biotech should soon report results from a phase 3 study of filgotinib in treating rheumatoid arthritis. The prospects for the JAK inhibitor look quite good. If approved, filgotinib could position Gilead to be a major player in immunology.

Perhaps the greatest potential for Gilead, though, lies in treating non-alcoholic steatohepatitis (NASH). Gilead could file for approval of NASH drug selonsertib next year if two current phase 3 studies are successful. There are currently no FDA-approved treatments for NASH. Gilead also has a couple of other NASH candidates in phase 2 studies.

In addition, Gilead is in great financial shape. The company reported cash, cash equivalents, and marketable securities totaling $31.7 billion. The biotech also claims a solid dividend that currently yields a little over 3%.

Better buy

Biogen could be an enormous winner if its Alzheimer's disease drugs succeed in clinical testing and gain regulatory approval. The problem, though, is that there's still a long way to go in an indication that has been notoriously difficult in the past to achieve success. In the meantime, Biogen faces challenges for its MS franchise and will soon probably have competition for Spinraza.

Gilead, on the other hand, looks better than it has in a while. HCV sales appear to be stabilizing. Biktarvy is ascending. Yescarta is picking up momentum. Potential blockbuster immunology and NASH drugs could be on the way. 

In my view, Biogen is a bet that could pay off in a big way -- but it's a risky bet. Gilead's level of risk seems lower now than it has in recent years. I think Gilead is the better buy.