After two quarters of middling revenue growth, drugmaker King Pharmaceuticals (NYSE:KG) today reported blowout sales and operating cash flow for its fourth quarter.

Revenue was up 21% for the quarter and adjusted earnings had an 8% uptick to $0.41 a share, versus a year-ago level of $0.38. Operating cash flow performed much better, though, coming in at $168 million, which is 46% higher than the fourth quarter last year. Read here about why Fools care more about cash flow than earnings.

By far the biggest contributors to King's torrid sales growth were improved performances in its two top products, ACE inhibitor Altace and muscle relaxant Skelaxin. Both had much higher sales gains than in previous quarters.

Altace and Skelaxin Sales*

Y-O-Y Growth

Q4 2006

$294

34%

Q3 2006

$265

(8.6%)

Q2 2006

$251

8.7%
*In millions.

There are also some exciting pipeline developments coming in the next couple of months. King and partner Pain Therapeutics (NASDAQ:PTIE) will announce pivotal phase 3 results for an abuse-resistant version of oxycontin. While it's always difficult to handicap the odds of success for clinical trials, Pain Therapeutics and their contract research organization would have had to do something incredibly wrong to bungle this study. In the coming quarters, investors should watch the uptake in Shire Pharmaceuticals' (NASDAQ:SHPGY) abuse-resistant ADHD drug to get an idea of whether there's a market for abuse-resistant drugs like Remoxy and the other drugs King has in the pipeline for this program.

So now to the bigger question: Are shares of King cheap right now? Shares are trading at a piddling 11 times 2006 adjusted earnings per share, but the answer partly depends on how King uses its $1 billion in cash and investments. No doubt about it, King has been a smart acquirer of drugs in the past -- with Altace being its most notable steal, since it got it for a measly $360 million back in 1998 -- but can it pull a repeat with Remoxy? If King doesn't fiddle with its recipe for success, and the Remoxy results are positive, these shares could be just what the doctor ordered.

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Fool contributor Brian Lawler owns shares Pain Therapeutics but no other company mentioned in this article. The Fool has a disclosure policy.