2013 was a seriously hot year for Gilead (GILD 0.10%), Alexion (ALXN), and Biogen (BIIB 0.10%).

All three stocks outperformed the NASDAQ and the S&P 500, and in the case of Gilead and Biogen, it was a very comfortable outperformance, too. Indeed, Gilead delivered share price gains of over 100%, and Biogen posted increases of 91.4% in 2013, leaving the NASDAQ and S&P 500 for dust as they gained 41.1% and 31.8%, respectively. Meanwhile, Alexion just beat the NASDAQ as it rose 43.9% during 2013.

However, 2014 has seen something of a role reversal, with Alexion now heading this pack of biotechnology stocks (by some distance) as it has gained a considerable 35.9% in the first six weeks of 2014, leaving Biogen (+17.4%) and Gilead (+8.1%) in its wake. The NASDAQ and S&P are further behind, at +1.6% and -0.5% respectively.

So, will the rest of 2014 see Alexion and Biogen climb further ahead of their rival, or will it be a reversion to 2014 when Gilead was the top stock of the three?

A strong fourth quarter
Fourth quarter earnings updates from the three companies were positive. For Alexion, the company's share price jumped more than 20% following the results release because it upgraded its own forecasts for sales of Soliris. Alexion now expects Soliris sales to be over $2 billion in 2014 -- considerably higher than the $1.55 billion in sales that was recorded in 2013.

This follows on from Alexion seeking further marketing approvals for Soliris, a drug that was first approved in 2007 for the treatment of paroxysmal nocturnal hemoglobinuria, which causes a breakdown of red blood cells and leads to anemia. Indeed, just last month, U.S. regulators deemed Soliris an orphan treatment for the prevention of delayed graft function, a complication for kidney transplant patients.

Meanwhile, Gilead also posted a strong fourth quarter. It beat consensus estimates of revenue and profit growth, with the top line increasing by 20% versus the fourth quarter of 2012. A key reason for this was strong sales of its flagship HIV drugs, with the latest addition to its HIV drugs offering, Stribild, recording sales growth of over 400%. In addition, sales of its hepatitis C drug, Sovaldi, totalled $140 million despite it only being approved in December.

Not to be outdone by its peers, Biogen delivered fourth quarter results that were highly impressive. Fourth quarter revenue increased by 39% compared to the fourth quarter of 2012, with earnings per share (EPS) rising by 56% over the same period. A key reason for this was, of course, Biogen's recording of 100% of Tysabri revenues following its acquisition of the complete rights for the therapy in the second quarter of 2013.

Still, the results are very strong, and Biogen also reported a number of encouraging pipeline developments in the quarter, including a positive opinion from The Committee for Medicinal Products For Human Use (CHMP) of the European Medicines Agency that the dimethyl fumarate in Tecfidera qualifies as a new active substance, which provides 10 years of regulatory exclusivity for Tecfidera in the European Union.

Looking ahead
The earnings growth potential of the three companies is also highly impressive. For instance, Gilead is forecast to increase EPS by 83% in 2014. While Biogen and Alexion's EPS forecasts are some way behind this (they are both expected to increase EPS by 26% in 2014), they remain well in excess of the market average and are very impressive numbers in their own right.

There also remains considerable opportunity for all three companies in 2014 regarding their drug pipelines. As mentioned, the three companies have had considerable success in recent months with positive updates, and 2014 looks set to be an exciting year on this front. While there will inevitably be some disappointment along the way, their pipelines are relatively strong and, as such, should produce positive surprises over the medium to long term.

The verdict
All three stocks have had strong quarterly results and have a considerable amount of potential via their pipelines. Although it's a close call, the superior EPS growth forecasts of Gilead could mean that 2014 is a particularly strong year for the stock and, as such, it looks set to narrow the performance gap that has emerged thus far in 2014. In other words, Gilead is unlikely to remain as far behind Biogen and Alexion as it currently is, and looks set to catch up to its rivals during the year.