In 2014, Gilead Sciences (GILD 0.29%) revolutionized hepatitis C treatment with a new class of drugs that functionally cured the disease, virtually eliminating the risk of life-threatening liver failure. The drugs were so game-changing that they -- and the drugs that followed in their footsteps -- quickly became billion-dollar-per-year blockbusters, hauling in $20 billion in annualized sales at their peak.

Gilead Sciences' skyrocketing sales and profit made it one of biotech's best-performing stocks in 2015, but it's been a different story since then. Curing patients has shrunk the addressable market, and competition from AbbVie (ABBV 1.62%) has caused a profit-busting price war. As a result, Gilead Sciences' trailing 12-month revenue has dropped to $22 billion from about $33 billion in 2016 at its peak, and its share price has fallen to about $67 per share from highs over $120 in the summer of 2015. So far, the company's struggled to replace declining hepatitis C revenue, but Gilead Sciences' first-quarter financials suggest its struggle may be ending. If so, it could be a good time to buy its shares again.

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Finding a floor

Gilead Sciences makes most of its money marketing HIV drugs, and it's launched a slate of new HIV therapies that are helping increase HIV revenue. The strength of its HIV products, however, has been more than offset by declining hepatitis C revenue, up until now.

In the first quarter, HIV revenue grew 14% year over year, to $3.6 billion, an increase that was largely due to Biktarvy and strong U.S. sales. A three-drug combination therapy, Biktarvy racked up $793 million in sales last quarter, up from $35 million in Q1 2018, which contributed to a U.S. HIV revenue increase of 19% year over year to $2.8 billion.

That performance, plus growing demand for Yescarta, a non-Hodgkin lymphoma gene therapy, more than offset a 24% drop in the company's hepatitis C sales. Yescarta sales were $96 million in Q1, more than double the $40 million reported one year ago.

Overall, Gilead Sciences' revenue inched up 3.7% year over year to $5.3 billion, marking the first year-over-year growth management reported in three years. A return to revenue growth resulted in adjusted earnings per share of $1.76 in the quarter, up a healthy 18.9% from the first quarter of 2018.

More to come?

Gilead Sciences named former Roche Holdings veteran Daniel O'Day as CEO in March, and CFO Robin Washington announced she'll be leaving the company early next year. O'Day is just getting acclimated and Washington is on the way out, but they still struck an optimistic tone on the company's quarterly conference call, and that's encouraging.

O'Day announced that Kite Pharma will operate as a separate business, led by its own to-be-named CEO. In O'Day's words, that move will give it more autonomy to "foster agility, innovation, and entrepreneurialism," something he feels is key to Gilead's long-term goal to become a leader in cancer treatment. 

Management also reminded investors that it has a shot of adding another drug to its product lineup soon. Following positive results from phase 3 trials evaluating filgotinib, a selective JAK-inhibitor licensed from Galapagos, the company plans to file for European approval in rheumatoid arthritis later this year. Gilead Sciences aims to meet with the FDA to determine a timeline for a U.S. filing this year, and trials are ongoing that could pave the way for filgotinib's use in other inflammatory disorders, too.

In addition, data from a mid-stage trial evaluating a combination of drugs for non-alcoholic steteohepatitis, an increasingly common cause of liver transplant, is expected later this year. Results from a study of KTE-X19, a gene therapy targeting relapsed/refractory mantle cell lymphoma, are also on tap in 2019. A win in NASH could inform future trials that enable Gilead Sciences to secure a foothold in what could be a major market someday, while a win for KTE-X19 could result in an FDA application for approval in the fourth quarter of 2019. 

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Is it time to buy?

Investors shouldn't expect much top-line growth in 2019, because Gilead Sciences is guiding for net product sales of only between $21.3 billion and $21.8 billion, roughly unchanged from net product sales of $21.7 billion in 2018. Nevertheless, there's reason for optimism. 

Gilead Sciences is making headway with payers, including Medicare and Medicaid, to increase access to Yescarta, which should help its sales continue higher over the coming year or two. KTE-X19 and filgotinib could begin generating meaningful revenue as early as 2020, if regulators cooperate.

If sales stabilize this year and then start growing again next year, then the company should kick off plenty of shareholder-friendly cash flow to fuel dividends, buybacks, and acquisitions. It already has over $30 billion in cash at its disposal, and last quarter it reaffirmed its commitment to returning money to shareholders by paying out $817 million in dividends and buying back $834 million of its stock.

Given Gilead Sciences' financial flexibility, the potential for new product launches in 2020, and arguably bargain-basement share prices, I think patient investors can begin buying shares again.