Generic-drug maker Teva Pharmaceuticals (NASDAQ:TEVA) has been a good defensive play during the severe downturn in the market. The stock has fallen by only about 10% over the past year, and this quarter's earnings report show why.

Sales rose 20% on strong sales of generic versions of GlaxoSmithKline's (NYSE:GSK) epilepsy treatment Lamictal and antidepressant Wellbutrin XL, Johnson & Johnson's (NYSE:JNJ) antipsychotic Risperdal, and Novartis' (NYSE:NVS) hypertension fighter Lotrel. Teva's branded multiple sclerosis drug Copaxone also helped increase sales by growing 28% year over year.

Some of the increased contribution to the top line may be due to the woes that Biogen Idec (NASDAQ:BIIB) and Elan (NYSE:ELN) have been experiencing with reports of additional cases of progressive multifocal leukoencephalopathy associated with MS drug Tysabri. However, much of the boost also has to do with a change in accounting from ending its agreement last spring with Sanofi-Aventis (NYSE:SNY) to market the drug Copaxone in North America. Teva now records more revenue from Copaxone -- although it's largely offset by payments to Sanofi-Aventis -- and the payments will last for the next few quarters.

Adjusted earnings per share came in up 13% year over year, excluding charges for the acquisition of Bentley Pharmaceuticals and some issues with auction rate securities. That's some nice, steady growth for sure.

Teva has generated $2.2 billion in free cash flow over the past 12 months. Trading at about 15.3 times FCF, Teva is certainly not cheap, but the big question is whether it can beat the market from here. There are a lot of deeply discounted stocks out there, and I have a hard time seeing a defensive stock like Teva doing extraordinarily well once the economy starts booming again. Depending on when you think that'll happen will probably determine whether Teva is right for your portfolio.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Biogen Idec is a Motley Fool Stock Advisor recommendation. The Fool has a disclosure policy.