On Friday, drugmaker Endo Pharmaceuticals (NASDAQ:ENDP) released another solid quarter of financial results.

Sales for the first quarter were up 24% versus the year-ago period, gross margins gained nearly five percentage points to hit 81%, and adjusted diluted earnings were up 15% to $0.47 per share for the quarter.

But not everything was so rosy for Endo this quarter. In March, Endo announced the FDA was extending its review of the supplemental New Drug Application (sNDA) it filed for migraine treatment Frova. The new PDUFA date goal for the Frova sNDA is Aug. 18.

Endo derives the vast majority of its revenues -- more than 60% -- from the pain patch Lidoderm. For the first quarter, sales of Lidoderm were up 23% year over year. Shares of Endo have been undervalued ever since it announced the possibility of generic competition for Lidoderm last October, dropping shares to the $29 range. For this unwarranted discount placed on its shares, Endo was one of my top drug stock picks for 2007.

Endo's guidance still calls for adjusted earnings per share of $1.68-$1.72 for the year. This values the stock at a very reasonable 19 times P/E ratio, considering the sales growth prospects of top drugs like Lidoderm and the increasingly important Opana ER pain drug (which is still relatively early in its launch).

As far as its top-line and leading-product sales are concerned, nothing is wrong with Endo at the moment. Year-over-year comparisons of its top-line growth look less healthy than they really are, as a result of issues with its generics business. But as the company begins to produce quarter after quarter of strong double-digit revenue growth, investors will slowly come to value shares closer to their true worth. Absent some adverse rulings with Lidoderm, Endo should continue to outperform.

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Fool contributor Brian Lawler does not own shares of any company mentioned in this article. The Fool has a disclosure policy.