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One of the best performing industries this year has been biotechnology. The S&P biotechnology ETF (NYSEARCA:XBI) and the Nasdaq Biotech ETF (NASDAQ:IBB) have returned 27% and 18% year-to-date, respectively.

Those returns are nicely ahead of the 14% return clocked by the broader S&P 500 index ETF (NYSEARCA:SPY). But, they only hint at returns from individual biotech stocks, including Gilead Sciences (NASDAQ:GILD), the company best known for its HIV drugs.

Gilead's shares have jumped 43% this year as investor enthusiasm has grown for its hepatitis C drug sofosbuvir -- a drug Gilead obtained in its $11.2 billion acquisition of Pharmasset in January 2012.

The excitement surrounding sofosbuvir is tied to oral dosing and a shorter treatment schedule.

In April, strong data from Phase 3 trials prompted Gilead to file sofosbuvir as a treatment to be used in combination with ribavirin for genotype 2 and 3 HCV patients. The filing also seeks approval for sofosbuvir, combined with ribavirin and interferon, for the more common genotype 1.

However, the ultimate goal of Gilead's Hep C program is the elimination of interferon as a treatment for type 1 HCV. The market for an all oral dosing solution without the side-effect laden interferon would be welcomed by patients and likely grab considerable share of the $20 billion hepatitis C market.

To meet this end, the company's Ion 1 and Ion 2 Phase 3 sofosbuvir trials are evaluating 12 and 24 week dosing without the use of interferon.

If successful, sofosbuvir would gain a valuable leg up in winning share from both Vertex (NASDAQ:VRTX) and Merck (NYSE:MRK), both of which have drugs on the market that need to be combined with interferon.

Gilead is also starting a new Ion 3 trial evaluating sofosbuvir cure rates in as little as 8 weeks.

This study was prompted by positive data from Gilead's Phase II Lonestar trial and if results from a larger phase 3 trial are similar, it could mean a treatment advantage for Gilead.

The market opportunity for Gilead is big.

Overall, 3.2 million people are infected with Hepatitis C in the United States and 180 million people are infected globally, resulting in 350k deaths each year.

Currently, two dominant players in the treatment of the disease are Vertex, with its drug Incivek, and Merck, with its drug Victrelis.

In Q1, the two drugs generated sales of $234 million and $110 million, respectively.

However, those sales numbers have slumped as doctors and patients await the next class of oral drugs. For example, Incivek generated sales of $371 million in Q1, 2012.

Additionally, Merck's PegIntron generated sales of $653 million in 2012 and $126 million in Q1, 2013.

Combined, these three drugs generated $470 million in sales last quarter alone.

Gilead's HIV and Cardiology franchise remains strong.

Any success with sofosbuvir will complement sales strength in Gilead's existing product portfolio.

Currently, the lion's share of Gilead's revenue comes from its anti-viral drugs.

Those drugs, which include Complera, generated $2.06 billion of the $2.39 billion in Q1 product sales, up 8% from a year ago.

Complera sales were up an impressive 184% to $148 million in the first quarter, offsetting an 8% drop in Truvada sales of $700 million. And, sales of the company's newly launched combination AIDS therapy Stribild generated sales of $92 million in the quarter too.

Revenue from Gilead's cardiovascular drugs climbed too, increasing 26% to $217 million. Sales of Letairis, a treatment for pulmonary arterial hypertension, and Ranexa, a treatment for angina, saw revenue improve by 35% and 16%, respectively.

Overall, the company's existing drugs and royalties generated nearly $2.4 billion in Q1 sales, up 11%.

Earnings grew a tamer 7%, thanks to ramped up spending developing the company pipeline. However, the growth still helped the company finish the quarter with a healthy $2.63 billion in cash, up from $1.5 billion a year ago.

According to the Seasonal Investor, shares historically trend higher into summer. On the heels of the company's FDA filing for sofosbuvir and likely additional positive data from its ongoing trials, tailwinds suggest this may make this a good time to consider Gilead.

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Source: Gilead's Hepatitis C Drug Sofosbuvir Offers Upside