Teva Pharmaceuticals (Nasdaq: TEVA) was riding high on two fronts yesterday, reporting that both its generic and branded drugs turned in a healthy first-quarter showing. The company's shares fell yesterday, but then again, so did almost everything else -- thanks, Europe! -- so I wouldn't read too much into it. Overall, the quarter looked solid for Teva.

Starting on the branded side, sales of Copaxone, the world's top multiple sclerosis treatment, rose 28%. The drug is clearly doing well, despite continued growth from Biogen Idec (Nasdaq: BIIB) and Elan's (NYSE: ELN) Tysabri. The bigger threat to Copaxone sales may come from oral multiple sclerosis drugs from Novartis (NYSE: NVS) and Merck KGaA, since they'll likely be used earlier in the disease progression than Tysabri. There's also the threat of generic competition from Mylan; the two are locked in a legal battle at the moment.

On the generic side, Teva launched a generic version of Boehringer Ingelheim's Parkinson's disease drug Mirapex last quarter, which helped boost North American sales by 20%. Generic versions of Shire's Adderall XR, AstraZeneca's (NYSE: AZN) Pulmicort Respules, Roche's Accutane, and sanofi-aventis' (NYSE: SNY) Eloxatin also had nice showings.

Teva's generic-drug business will continue to grow, now that the company has outbid Pfizer (NYSE: PFE) to purchase German generic-drug maker Ratiopharm. The acquisition will boost Teva's European presence, which makes up about a quarter of its current sales. The larger size also allows Teva to share R&D and fixed manufacturing costs over a larger revenue base, which should help pump up margins.

My biggest worry with Teva has been with its ability to continue its stellar growth record. There are a limited number of places left into which it can expand its generic-drug business, so it appears that long-term growth will have to come from branded drugs. Teva got one great home run in Copaxone, but it'll need to use some of its free cash to license others. It remains to be seen whether Teva can be as successful identifying potential branded-drug triumphs as it has been with making copycats of already-successful drugs.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.