Sales at Teva Pharmaceuticals (NASDAQ:TEVA) were up 22% year over year, but don't bust out the champagne just yet. The increase was mostly due to last year's acquisition of Barr Pharmaceuticals.

Revenue from the combined company was down slightly compared to the sum of the two companies' top-line results in the first quarter of last year. The exchange rate had a negative effect on sales, but that was washed out by an accounting increase in the recorded sales of its branded multiple sclerosis drug, Copaxone. The company's now recording all U.S. Copaxone sales after rejiggering its marketing agreement with sanofi-aventis (NYSE:SNY).

While Teva is mostly a generic-drug company, it's important to keep an eye on its branded products, because they bring in much higher gross margins. Copaxone continues to hold its own against other multiple-sclerosis drugs such as Rebif from EMD Serono, or Pfizer (NYSE:PFE) and Biogen Idec's (NASDAQ:BIIB) Avonex. Much smaller Azilect, which treats Parkinson's disease, saw a nice 50% jump after a clinical trial showed that it was able to slow the disease. And Barr also contributed some branded products in women's health, which grew at a solid 39% clip.

While adjusted income was up 4%, adjusted earnings per share were down 4%, thanks to the extra shares Teva took on to complete the acquisition. Naturally, that's the downside to acquisitions: Until the synergies begin to pay off, there's almost always a period in which the acquisition hurts the bottom line.

Teva says it's not done with acquisitions, either. While that makes it hard to do year-over-year comparisons, extrinsic growth sounds like a good plan to me. Continued growth will help keep margins high enough to compete with the other large players, such as Mylan (NASDAQ:MYL) and Novartis' (NYSE:NVS) Sandoz. Teva's willingness to buy could mean a nice acquisition premium for smaller players like Watson Pharmaceuticals (NYSE:WPI) or Par Pharmaceutical. However, I believe it's more likely that Teva will look abroad for growth, which won't benefit companies on the U.S. exchanges.

The pressure on health-care costs will surely benefit Teva and the rest of the generic drugmakers in the future, but in the meantime, investors will have to deal with the transition to a larger company, and hope that Teva can produce the synergies it claims are available.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool's disclosure policy has no therapeutic equivalent.