If in fact the generic-drug business reached a cyclical peak in 2004, IVAX (AMEX:IVX) certainly decided to go out with a bang. This Miami-based generic-drug maker posted results that handily beat the Wall Street guesstimates for both revenue and earnings, and the market took the stock more than 12% higher in response.

Sales climbed 28% for the quarter, while operating income grew more than 61%. Though IVAX does not break out product performance for its shareholders, the company did acknowledge that new generics such as metformin ER, glyburide/metformin, and gabapentin all contributed to the company's growth. It's also probably reasonable for investors to assume that other generic products such as paclitaxel, clozapine, and verapamil also did their part.

Interestingly, IVAX showed the greatest sales growth (44%) in its largest market -- North America. The global businesses were no slouches, though; the market in Europe grew 18%, while Latin America grew 15%.

Although management's guidance for 2005 was lukewarm, there's plenty of reason to be optimistic about the future. The company has 60 Abbreviated New Drug Applications on file with the Food and Drug Administration. That makes the company, along with Teva Pharmaceuticals (NASDAQ:TEVA), one of the most prolific generics companies -- and it gives IVAX the possibility to be the first to file on 12 compounds with branded sales of roughly $14 billion.

What's more, the company has been very aggressive in challenging the patents of some pharmaceutical companies. IVAX is currently going after Lilly's (NYSE:LLY) Zyprexa (with roughly $2.5 billion in sales) patent and Forest Labs' (NYSE:FRX) Lexapro ($1.7 billion in sales) depression drug.

Although these challenges are a crapshoot and investors shouldn't expect IVAX to win, the generics companies occasionally do prevail -- as in the case of Teva's successful attack on Merck's (NYSE:MRK) Fosamax patent -- and any success would be a major boon to the company's business.

In addition, the company should get FDA approval to sell a generic version of Flonase -- GlaxoSmithKline's (NYSE:GSK) $900 million allergy drug -- sometime in 2005, and exclusivity for generics of popular drugs Zoloft and Proscar will help in 2006.

Investors considering IVAX shares may need to be patient and willing to look ahead to 2006, when the company expects between $1.35 and $1.55 in earnings -- far above the prior Wall Street guesstimate. That said, a return on equity in excess of 16%, strong insider ownership, and a robust pipeline of future generic drugs could make this a stock worth owning. For Fools who won't be rattled by what could be a turbulent 2005, IVAX merits a further look.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned.