Look out, cancer: There could be two new sheriffs in town. Not long ago, Amgen (NASDAQ:AMGN) presented early results from the first clinical trial with easy-to-swallow capsules that fight cancer in a way previously considered impossible. More recently, Mirati Therapeutics (NASDAQ:MRTX) set the Twitter-verse on fire with initial results (from a program similar to Amgen's) that appear competitive.

Shares of Amgen and Mirati could soar on the backs of their experimental cancer treatments, but that's about all they have in common. Let's stack these biotech stocks side by side to figure out which is the better buy right now.

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What the fuss is about

Several members of the RAS gene family make proteins that regulate cell growth, and mutations of these genes have been linked to particularly aggressive tumors. For decades, KRAS proteins with the G12C mutation have been at the top of the biopharmaceutical industry's most-wanted list because this mutation is the most common. For example, around 14% of non-small cell lung cancer tumors are driven by this particular KRAS mutation.

Unfortunately, KRAS proteins have been considered "undruggable," because their smooth shape has no opening that drugmakers can exploit to inhibit their activity. Even the most casual biotech industry observers have probably heard chatter regarding Amgen's AMG 510 and Mirati's MRTX849, a pair of experimental cancer drugs that appear to have accomplished the impossible. Both candidates are delivered via easy-to-swallow capsules, and quickly slide into position during the microseconds that KRAS proteins are changing shape when activated.

In June, Amgen told us AMG 510 shrank tumors for five of the first 10 lung cancer patients treated in an ascending-dose study, and four others remained stable. In September, Amgen showed us that seven of 13 lung cancer patients treated with the highest dose experienced tumor shrinkage, and the other six remained stable. These patients had already relapsed or failed to respond following at least two previous lines of treatment, so eliciting any responses should be considered an accomplishment.

More recently, Mirati Therapeutics showed us that the highest dosage of MRTX849 shrank tumors for three out of six lung cancer patients, while the rest remained stable. It's generally a bad idea to compare results from two different populations, but as far as we can tell, Amgen's candidate and Mirati's candidate are so similar that it looks like both companies are testing the same drug.

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Major differences

Amgen and Mirati might have experimental KRAS inhibitors that are similarly effective, but that's about all these biotech stocks have in common. Amgen's a biopharmaceutical goliath that reported $5.7 billion in sales in the third quarter, which was 3% less than the previous-year period. Mirati's still a clinical-stage company without any products to sell yet.

Amgen reported slightly less revenue in the third quarter because a handful of aging blockbusters in its product lineup have been losing ground to biosimilar competition. The company's top line has remained stable thanks to six relatively new products that grew sales by double-digit percentages.

Technically, Mirati's lead candidate is a kinase inhibitor called sitravatinib. The company is testing sitravatinib in combination with Opdivo, a cancer therapy from Bristol-Myers Squibb (NYSE:BMY) that prevents tumors from shutting down an attack by the immune system. Bristol's not shy about shoveling a lot of money toward drugmakers with candidates that could expand Opdivo's use. Following underwhelming results from a midstage clinical trial with the combination, though, Bristol-Myers decided to let Mirati sponsor late-stage studies of sitravatinib on its own.

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Looking ahead

Mirati hasn't reported third-quarter results yet, but at the end of June, the company had $485.5 million in cash on its balance sheet after burning through $90.4 million in the first half of the year. If MRTX849 doesn't continue to impress, shareholders could suffer heavy losses.

Further development of both the company's clinical-stage candidates will increase expenses, which means the company could need to visit the equity tap a couple of years from now. Sitravatinib probably isn't going anywhere, and if MRTX849 loses its luster for any reason, shareholders will suffer heavy losses.

In stark contrast, Amgen's operations generated a whopping $3.2 billion in free cash flow in the third quarter, and $9.2 billion over the past twelve months. In the third quarter alone, Amgen returned $2.1 billion to shareholders, in the form of share repurchases and a quarterly dividend that's increased 138% over the past five years.

The better buy

Amgen has more than doubled its quarterly dividend to its current level of $1.45 per share since 2014, and it could double that again by 2024. Those payouts (yielding about 2.5% at recent share prices) are yours to keep no matter what happens to AMG 510.

Mirati's market cap has risen to $3.7 billion, despite having zero products to sell yet; that means the slightest whiff of trouble for MRTX849 could bring it crashing down.

If Amgen's KRAS inhibitor succeeds, there's a pretty good chance that the stock will outperform the broad market. If AMG 510 flops for any reason, though, Amgen's share price would probably hover in place for another couple of years. If you have any aversion to risk, the bigger biotech is clearly the better buy right now.