"Analysts estimate the worldwide market for generics will increase from $75 billion to $125 billion by 2012," says Michael Shulman.

In his ChangeWave Biotech Investor he states, "The key question for us is: Who is going to make the most money from these expirations? And the 800-pound gorilla in this market is our long-time holding, Teva Pharmaceuticals (NASDAQ: TEVA).

"Teva is the largest and best generics company in the world with $9.4 billion in sales in 2007 and the gap between it and its competitors is growing. Teva has 331 products on the market, 65% more than its closest competitor.

"More importantly, based on its business model of a mix of proprietary and generic drugs, the company's operating margins are 10 points higher than competitors and that gap is widening. In fact, in the United States, the number of prescriptions filled with Teva generics is 50% more than its closest competitor.

"Be clear on this point: When it comes to generics, size does matter. The more a company sells, the more profit and cash it has available to do research and acquire more generics to add to its product list -- and the beat goes on.