Pfizer may still be eager to buy generic drugmakers, after being outbid for Germany's Ratiopharm in an effort to shore up revenue as it braces for evaporating sales of its blockbuster Lipitor cholesterol treatment.

The world's largest drugmaker showed fiscal discipline in avoiding an even pricier attempt for Ratiopharm, which was won by Teva Pharmaceutical Industries Ltd for about $5 billion, analysts said.

"To me it speaks a little bit to more sound capital allocation judgments that Pfizer might be making as it is approaching its major patent cliff," Morningstar analyst Damien Conover said, referring to the looming patent expiration of Lipitor - the world's biggest selling drug.

"For Pfizer to go ahead and let it go is a bit different than what we've seen in the past, where we've seen Pfizer make some pretty aggressive bids."

Despite missing out on Ratiopharm, Conover said Pfizer will likely give priority to deals that can augment revenue, as opposed to riskier deals for biotech companies with promising experimental medicines that might or might not become profitable products.Targets that fit the bill are generic drugmakers as well as those focused on consumer products that could add to Pfizer's presence in emerging markets, he said.

"I definitely think they're going to try to look for more of an established firm where they can get some of those top-line revenues relatively quickly," Conover said.

Pfizer is currently more bullish on its prospects for revenue in 2012 - when it will be in the midst of coping with the loss of Lipitor - than Wall Street is. Pfizer in January said it was targeting revenue of $66 billion to $68.5 billion in 2012, while analysts project $61.8 billion, according to Thomson Reuters I/B/E/S.

"There is a discrepancy between Pfizer's guidance and analyst expectations right now, so there could be other acquisitions," Edward Jones analyst Linda Bannister said.

On the heels of completing its $67 billion acquisition of U.S. rival Wyeth last year, Bannister said big deals are doubtful, with those under $5 billion seeming more likely.

Like several other pharmaceutical companies facing major patent expirations, Pfizer has sought out a stronger presence in generics to help fill the gaps. The New York-based drugmaker has struck collaborations with Indian companies to increase its portfolio of generic oral and injectable medicines.

Sources told Reuters earlier that Pfizer will now likely train its sights on German generic drugmaker Stada.

"We continue to see a move into generics as making sense for Pfizer and would not be surprised if the company pursued additional generic assets," JP Morgan analyst Chris Schott said in a research note.

Martin Mackay, a top Pfizer research executive, told Reuters that the company is committed to building up its presence in generics as part of its diversification strategy.

"The majority of our revenues, for sure, will still come from our pharmaceutical business, but it makes complete sense from the enterprise perspective to be in other areas," Mackay said.

Indeed, pulling out more success from its research labs would help mitigate the need to strike deals. Despite its nearly $8 billion research budget, Pfizer has recently suffered clinical disappointments with products to treat cancer and Alzheimer's disease.

"All of this becomes a non-issue if they can get their R&D engine moving again and if we can see some successes from their pipeline," Bannister said. "That's the key for long-term sustainable growth for this entire industry. That's what these companies need to focus on and that's what they need to deliver on."