Pharmaceutical companies not developing drugs for billion-dollar indications tend to fly under the radar of most investors. Yet lots of drug companies fit this description, and if there's such a thing as a pharmaceutical value investor, these would be pharma value stocks.

One of my favorite "pharma value stocks," MGI Pharma (NASDAQ:MOGN), definitely fits the description. It trades for less than 5 times its 2006 sales estimates, compared with the usual 7 to 9 times sales at which most pharmaceutical companies with several drugs early in their life cycle trade.

MGI released its third-quarter results last week. Revenues for the quarter were $97 million, a 43% increase over the $68 million earned in Q3 2005. MGI derives most of its revenues -- $70 million, to be precise -- from a drug called Aloxi to treat cancer-related side effects, and it recently launched another drug, Dacogen, that pulled in $12 million in sales its first full quarter on the market. Even at the high point of its revenue forecast, Aloxi sales will grow by only 2% compared with Q4 2005, but Dacogen sales should continue to grow nicely. It leads overall revenues to grow 18%-25% to $330 million-$350 million for 2006, according to management's estimates.

Not including one-time charges, earnings came in at $3 million and earnings per share at $0.04 for the quarter. Earnings would have been much higher for the quarter, but MGI ramped up its research-and-development spending by 50% to $21 million and increased sales, general, and administrative expenses by 124% or $22 million so as to build out its sales force, which will drive higher sales growth next year. Going forward, sales increases should outstrip expense growth, and earnings should rise at a faster rate once the seasonally slow fourth quarter is completed.

Of all of the pharmaceutical companies, MGI may be one of the least recognized, despite already bringing two drugs onto the market and possibly rolling out one more next year. There was a recent regulatory stumble with another drug. But MGI's management is smartly focusing the company on one main niche -- the treatment of cancer-related side effects -- and it has not wasted valuable cash acquiring drugs outside this focal point. With late-stage drugs in its pipeline, growing revenues, and a reasonable valuation, MGI deserves a look from any investor seeking value in the pharmaceutical sector.

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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 .