Last week, one of my favorite drug developers for 2007, Endo Pharmaceuticals (NASDAQ:ENDP), released its third-quarter financial results.

This year has been a mixed one for Endo. On the financial side of things it has performed well. Sales in the third quarter were up 24% year over year, and net income climbed 32% thanks to continued double-digit prescription growth with pain patch Lidoderm.

Even more niche drugs, like its Percocet and Opana opioid franchise, developed by partner Penwest Pharmaceuticals (NASDAQ:PPCO), chipped in respectable year-over-year sales growth numbers. Adjusted earnings were $0.46 per share for the quarter.

Endo has performed the worst of my three drug stock picks for 2007, down 5% since I first mentioned it. My development stage drugmaker pick, Pain Therapeutics (NASDAQ:PTIE), has performed well due to positive expectations for a study of its lead drug, and my large-cap pharma pick, GlaxoSmithKline (NYSE:GSK), is flat for the year as a result of unexpected safety concerns with one of its drugs balancing out strong marketing launches of other compounds.

Despite the decline in shares of Endo this year, it has continued to grow its top and bottom line numbers and the only material hit it took to its 2008 financial outlook was the not-approvable letter for Frova it received in September.

Ironically though, after Frova didn't get its expected label expansion, Endo was able to raise its earnings guidance for the year as a result of lower expected marketing costs for the drug. Endo's adjusted earnings are now expected to be $0.04 higher to the $1.79 to $1.84 a share range.

On the research and development and regulatory fronts, 2007 has not been a good year at all for Endo, but its approved drugs are experiencing strong sales growth. As long as Endo continues to perform this well with its marketed products, everything will be fine with its shares in the future.

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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.