January has been a busy month for generic-drug maker Mylan Laboratories (NYSE:MYL). In addition to several product marketing approvals and the closing of its controlling stake in Matrix Laboratories, it also reported third-quarter financials last week.

Sales and income numbers for generic-drug manufacturers are always very lumpy because of the six-month oligopoly that is granted for being the first to challenge a branded drug's patents. Mylan is no exception to this axiom, with sales up 29% year over year in the fourth quarter after bringing to market generic versions of the $380 million-a-year Johnson & Johnson (NYSE:JNJ) drug Ditropan. Non-GAAP earnings rose $0.20 to $0.45 per share, and gross margins were also a more pharmaceutical-like 56% in the quarter.

Mylan shortened its 2007 adjusted EPS guidance to a range of $1.50 to $1.55 for the year -- 25% higher than what it was guiding for back in May. Based on these estimates, this puts the upcoming fiscal fourth-quarter earnings at $0.30 a share on the low end.

With profits at all-time highs for many generic-drug makers and balance sheets full of cash, Mylan and Barr's (NYSE:BRL) recent transactions prove that the consolidation that has occurred in the generic-drug industry over the past two years is not over, as all of the generic manufacturers attempt to expand their geographic sales and marketing reach.

Mylan has nearly $700 million in long-term debt, compared with $460 million in cash and marketable securities. So although it may take a year or two for many of the generic firms such as Mylan to deleverage their balance sheets, the merger boom in the industry isn't over, as the generic companies compete for the estimated $72 billion worth of pharmaceutical products that are expected to lose patent protection in the coming years. In the year ahead, investors should pay careful attention to this changing industry landscape and to how well Mylan integrates Matrix Labs into its fold.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article.