It's unusual for Gilead Sciences' (NASDAQ:GILD) quarterly update to be the third-biggest story for the company. But that's exactly what happened this week.

Gilead announced its first-quarter results after the market closed on Thursday. However, the day before, the biotech reported encouraging results from the first of two late-stage studies evaluating remdesivir in treating novel coronavirus disease COVID-19. Also on Wednesday, the National Institute of Allergy and Infectious Diseases (NIAID) released positive data from another late-stage study of remdesivir.

The two simultaneous updates for Gilead's antiviral drug kind of overshadowed the company's Q1 results. Don't overlook the biotech's Q1 numbers, though. Here are three big stories in Gilead's Q1 update that you'll really want to know about.

Gloved hand holding a beaker with a $100 bill in it and $100 bills underneath it

Image source: Getty Images.

1. A revenue beat thanks to COVID-19

Gilead reported first-quarter revenue of $5.55 billion, up 5% year over year. This result topped the consensus analyst revenue estimate of $5.45 billion.

You might think that Gilead's revenue beat was due mainly to momentum for HIV drug Biktarvy. The drug delivered impressive sales growth in Q1, more than doubling year over year and rising nearly 8% quarter over quarter to $1.69 billion. But it wasn't Biktarvy by itself that enabled Gilead to beat revenue estimates.

Instead, you can thank the COVID-19 pandemic. Gilead stated that total product sales in Q1 were around $200 million higher due to increased buying associated with the coronavirus outbreak. Without this boost, the company would have missed Wall Street revenue estimates.

Gilead continued to face headwinds for several of its products. Hepatitis C virus (HCV) sales sank nearly 8% year over year to $729 million, due primarily to lower selling prices. Sales plunged for Letairis and Ranexa in the wake of generic competition. The biotech's older HIV drugs Atripla and Truvada also lost significant market share in the first quarter.

2. Better-than-expected earnings weighed down by remdesivir

The solid revenue growth made an impact on Gilead's bottom line. The company reported net income for the first quarter of $1.6 billion, or $1.22 per diluted share, based on generally accepted accounting principles (GAAP). This reflected a year-over-year decline of 21%.

However, Gilead's adjusted non-GAAP earnings came in at $2.1 billion, or $1.68 per share. This result was basically flat compared to the prior-year period but was well above the average analysts' adjusted earnings estimate of $1.57 per share.

What's especially notable with Gilead's earnings beat is that it could have been even better were it not for remdesivir. The company reported that its research and development (R&D) expenses rose $44 million, or 4%, year over year to $1.1 billion. Around $50 million of the increased R&D expenses stemmed from ramping up testing and manufacturing for remdesivir. This added cost was partially offset by Gilead's temporary pausing and postponing some clinical trials due to the pandemic.

3. Smart investments

Gilead continued to generate impressive operating cash flow in Q1 totaling $1.4 billion. The company used nearly all of this cash flow on buying back shares, spending $1.3 billion in the quarter on stock repurchases. In addition, Gilead tapped into its massive cash stockpile to repay $500 million of debt and pay dividends of $874 million.

Although some criticize corporate stock buybacks, Gilead's Q1 share repurchases turned out to be smart investments. The biotech stock has soared nearly 28% since the beginning of the first quarter and is up almost 11% since the end of the quarter. 

Even with Gilead's buybacks, debt reduction, and dividend payments, the company still ended the first quarter with cash, cash equivalents, and marketable debt securities totaling $24.3 billion. Gilead has less cash now, though, after completing its $4.9 billion acquisition of Forty Seven in April.

Looking ahead

All eyes will be on remdesivir in the immediate future. Gilead expects to announce results soon from its second late-stage study of the drug in treating more moderate cases of COVID-19. The company is scrambling to expand its manufacturing capacity to produce more than 1 million treatment courses by the end of this year and millions more in 2021.

Gilead also awaits several key regulatory decisions in the U.S. and Europe for cell therapy KTE-X19 in treating mantle cell lymphoma, and for filgotinib in treating rheumatoid arthritis. Potential approvals for these drugs are important milestones for Gilead in achieving its goal to bring at least 10 transformative therapies to patients over the next 10 years.