What's one clue that the drug industry is in flux? Most of the top generic drug producers have gobbled up a smaller rival in the past two years. Barr Pharmaceuticals (NYSE:BRL) got in on the action after it won a $2.5 billion bidding war for Croatian drugmaker Pliva. Today, Barr announced its first quarterly financial numbers with Pliva's operations in its fold.

Trying to compare Barr's financials between periods is not fair at this point, considering this is the first quarter that Pliva's operations have shown up on the financial statements. Revenues for the quarter were $584 million, and earnings per share adjusted to exclude charges related to the acquisition were $0.83 for the quarter.

To grab moderately sized Pliva from the clutches of Actavis last year, Barr had to leverage its balance sheet to the hilt, and it now has $2.7 billion worth of debt compared to almost none last year. That much debt may be scary to some investors, but if Barr can generate enough cash flow to pay the debt down over time, then this acquisition may be just the generic drug the doctor ordered.

For the last two quarters of the year, Barr already more than doubled its free cash flow to $155 million, so it looks like it will have no problem covering its interest payments. Going forward, Barr is guiding for adjusted earnings per share in the range of $3 to $3.30 for 2007 and revenues of $2.3 billion to $2.4 billion.

Barr's management understandably made it sound like it would take some time to completely digest the Pliva acquisition and realize all the benefits from the deal, such as moving drug production to cheaper locations and gaining access to new markets. The other nice thing about the Pliva acquisition is that Barr is expecting more than $100 million in cost savings from the combined company in 2009. Shares of Barr are not the cheapest of the generic manufacturers out there, trading at 17 times forward earnings, but investors who are patient enough to give Barr a chance to reap the rewards from the Pliva acquisition may be pleasantly rewarded.

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