4. Watson Pharmaceuticals

By Tracy Staton

2011 generic drug sales: $3.32 billion
Growth rate 2011: 46%
Growth rate 2010: 38%

Watson Pharmaceuticals ($WPI) is already one of the biggest fish in the generics pool. And in recent years, it's been getting bigger by snapping up smaller fish. Last year was no exception: One reason the company posted enviable sales growth of 46% is that it made a couple of deals along the way.

Take Specifar. Watson nabbed the Greek company for $562 million in May 2011. Seventy percent of Specifar's $120 million in annual sales come from outside Greece, where the cash-strapped government has left plenty of unpaid pharma bills.

But most of Watson's 2011 increase came from one product launch after another, some of them under exclusive arrangements with branded drugmakers. In May, Watson rolled out an authorized version of Johnson & Johnson's ($JNJ) ADHD treatment Concerta, and at the end of November launched an authorized generic form of Pfizer's ($PFE) megablockbuster cholesterol drug Lipitor. The company also hit the market with a version of Seasonique, as part of its ongoing expansion in women's health and contraceptives.

Copycat Lipitor helped push up Watson's fourth-quarter generic drug sales 81%, to $1.17 billion--and this with only one month on the market. By the fourth quarter, Concerta had already become one of the company's biggest-selling generics, too.

Watson's biggest growth leap is yet to come. The company agreed earlier this year to buy Swiss-based Actavis, one of its biggest generics competitors. The €4.25 billion deal ($5.16 billion) would create the third-largest generics company in the world, with estimated 2012 revenue of about $8 billion.

4. Watson Pharmaceuticals