For shareholders of Gilead Sciences (NASDAQ:GILD) it's practically been a dream year. Shares rose close to 40%, tacking on roughly $45 billion in market value, following the successful approval and launch of oral hepatitis C drugs Sovaldi and Harvoni.

Source: Gilead Sciences.

Gilead's giant leap forward
Sovaldi and Harvoni both represent major breakthroughs in HCV patient quality of care in that neither Sovaldi (geared toward genotype 2 and 3 HCV) nor Harvoni (targeted at genotype 1) require the use of IV interferon, a medicine that commonly causes flu-like symptoms in users for the duration of treatment (often 12 to 24 weeks). Additionally, Harvoni, which is nothing more than a cocktail drug of Sovaldi and ledipasvir, can be given without the need for a ribavirin. In short, we're seeing convenience improve and side effects lessen in a big way.

Yet, Sovaldi and Harvoni brought something else to the table that was sorely needed for HCV patients: improved efficacy. In many instances Sovaldi and Harvoni delivered sustained virologic responses of 90% or higher. In other words, patients had a good chance of being cured of HCV, a chronic and potentially debilitating disease, compared to perhaps half of all patients just three years ago based on the old standard of care.

Because Harvoni was approved in mid-October, we don't have specific sales data on it as of yet. However, Sovaldi sales have been off the charts. In just its first nine months on pharmacy shelves, Sovaldi has delivered $8.55 billion in sales, the fastest ramp-up on record. Furthermore, at the pace Sovaldi sales are on this year, it could wind up being the second best selling drug of 2014. What's more, it's possible that Harvoni could be the better selling drug of the two once it's fully ramped up.

This hepatitis drug developer crushed Gilead in 2014
Despite Gilead's incredible performance, one hepatitis C drug developer had its stock perform even better.

Before reading any further, do you have any guesses?

Did you say AbbVie or Enanta Pharmaceuticals? If so, keep guessing.

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Maybe Merck with its combo of MK-5172 and MK-8742? Not quite. Bristol-Myers Squibb with daclatasvir? Nope! Johnson & Johnson with Olysio? Still not it!

Give up?

With a gain year-to-date of 328% -- that's three hundred and twenty eight percent -- clinical-stage HCV-focused Achillion Pharmaceuticals (NASDAQ:ACHN) absolutely crushed Gilead in total return this year. Amazingly, it did so without having a single product on pharmacy shelves.

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Why Achillion scorched higher in 2014
There are a number of reasons why Achillion shares have found new life in 2014 after struggling mightily in the previous year.

First, hepatitis C is a global disease that affects 150 million people according to the World Health Organization. Even Gilead, AbbVie, Bristol-Myers Squibb, Merck, and Achillion combined couldn't treat everyone in a matter of just one or two years. In just the first nine months since the entry of Sovaldi, Gilead managed to treat just 117,000 patients. Therefore the implication is the market potential exists for a handful of players, including Achillion, to prosper.

Source: Achillion Pharmaceuticals, June 2014.

Secondly, the results for Achillion's NS5A inhibitor ACH-3102 have been fantastic thus far, even if the patient pool is small. In November Achillion announced a combination study involving ACH-3102 and Gilead's Sovaldi that was administered without ribavirin to 12 genotype 1 patients. As presented at the American Association for the Study of Liver Diseases annual meeting, all 12 patients experienced a sustained virologic response (i.e., no detectable levels of disease) after a 12-week treatment course.

Lastly, Achillion has received what I refer to as a "buyers boost" since all of its complementary clinical-stage rivals have now been bought out. Gilead Sciences purchased Pharmasset in 2011, netting it Sovaldi; Bristol-Myers Squibb purchased Inhibitex and got burned badly on that deal since its lead drug wound up being scrapped for safety reasons; and Merck gobbled up Idenix Pharmaceuticals for a 239% premium from its prior-day closing price. The opinion among investors is that Achillion is next to be purchased. Considering its steady phase 2 combination results and the massive scope of the HCV market, the idea of a buyout isn't out of the question.

Caveat emptor
While Achillion was an absolute superstar in 2014, there's a chance it may not fare as well next year.

Source: Flickr user Eugene Zemlyanskly.

For starters, it's never a good idea to allow a rumor to be the basis of your investment thesis. Although many of its peers have been bought out, there are no guarantees that Achillion will find a suitor willing to pay a premium for ACH-3102 and the company's remaining HCV pipeline. Many large pharmaceutical companies are already working on HCV products of their own, meaning Achillion's pipeline may not be needed. If the buyout rumors surrounding Achillion die down, its share price could falter.

Also, Achilion's had a shaky past with the Food and Drug Administration. Achillion's sovaprevir wound up on clinical hold by the FDA for nearly a year due to safety concerns, echoing similar problems experienced by rival Idenix. It's concerning that the company has yet to successfully get any of its developing drugs past phrase 2.

That being said, Achillion is clearly a name to watch going forward, especially if ACH-3102 meets or exceeds current expectations. I, for one, won't be looking for a repeat performance in 2015 and much prefer Gilead Sciences here. Still, there's big move potential for both buyers and short-sellers that should command the attention of Wall Street and investors.