Pfizer, which last week agreed to sell its baby formula business for almost $12 billion, is on the hunt for companies with promising new treatments for diabetes, cancer and neurological conditions, and willing to spend $4 billion or more apiece, company Chief Executive Ian Read said.

"I have no interest in a massive consolidating deal," Read said in an interview, referring to giant transactions like Pfizer's $67 billion purchase of rival U.S. drugmaker Wyeth in 2009, or its $60 billion merger with Pharmacia in 2003.

Read said Pfizer has an eye out for smaller "bolt-on" deals of roughly the same size as its $3.6 billion purchase of King Pharmaceuticals last year for its roster of pain medicines.

"That's not a hard number -- around that (amount) or a multiple of that if it was an attractive asset," Read said in an interview after Pfizer reported solid quarterly earnings despite generic competition that battered sales of its Lipitor cholesterol fighter.

King Pharma was the last major purchase by the global drugmaker. Its new search could help fuel a health-care industry buying spree that has seen four major deals announced in the last month. At least three more companies are said to be exploring a sale -- Amylin Pharmaceuticals, Human Genome Sciences and Warner Chilcott.

"We continue to see emerging markets as an opportunity area," Pfizer Chief Financial Officer Frank D'Amelio said, noting a profusion of recent deals that have beefed up the number of company medicines and consumer products in fast-growing South American and Asian markets.

Overseas demand accounted for 61% of Pfizer's first-quarter sales, up from 57% in the year-earlier quarter, with the increase due mainly to Lipitor's loss of U.S. patent protection in late November. The drug's global sales plunged 42% to $1.4 billion, with U.S. sales falling 71% during its first full quarter of exposure to generics.

But Pfizer's quarterly earnings topped Wall Street expectations as improved profit margins and strong sales of its Lyrica nerve-pain drug partly compensated for Lipitor's plunge.

"The story here is that Pfizer is dealing with its Lipitor patent loss surprisingly well," said Morningstar analyst Damien Conover. "When you lose the biggest medicine in the world and your earnings per share only fall 3%, that's a lot better than people expected a few years ago. Pfizer is mitigating the patent loss by cutting costs and bringing in good new drugs."

Squeezing growth from older drugs

Pfizer earned $1.79 billion, or 24 cents per share, in the first quarter. That compared with $2.2 billion, or 28 cents per share, a year earlier.

Excluding special charges to boost productivity and address legal matters, Pfizer earned 58 cents per share, from 60 cents a year ago. Analysts on average had expected 56 cents, according to Thomson Reuters I/B/E/S.

Total company revenue fell 7% to $15.41 billion, a bit below Wall Street expectations of $15.47 billion.

Citibank analyst Jon Boris said in a research note that U.S. pharmaceuticals sales of $5.19 billion were "solid," coming in about $290 million above his forecast. Overseas pharmaceuticals sales of $7.88 billion, down 1% from a year ago, were $230 million below his expectations.

Pfizer, whose research laboratories have produced few big-selling drugs in the past decade, is now eagerly awaiting U.S. approvals of two potential blockbuster treatments: blood clot preventer Eliquis and tofacitinib to treat rheumatoid arthritis.

In the meantime, it is squeezing good growth out of older medicines, including Lyrica, whose sales jumped 16% to $955 million in the quarter, fueled by growing demand in Japan.

Sales of painkiller Celebrex rose 7% to $634 million, while sales of arthritis treatment Enbrel rose 3% to $899 million. Premarin, its line of female hormone replacement drugs, topped forecasts, with sales rising 11% to $261 million.

But sales of its Prevnar vaccines against pneumonia and other infections fell 6% to $941 million due to fewer children getting booster shots during the period and a lower U.S. birth rate for eligible patients versus a year ago.

The New York-based drugmaker agreed last week to sell its baby formula business to Nestle for $11.85 billion to focus on its core pharmaceuticals business. On Tuesday, Pfizer said it planned to allocate proceeds from the deal to share repurchases and possibly other uses.

In the meantime, Pfizer said it still intends to decide this year whether to divest its animal health unit, with any separation of the business taking place between this July and July 2013. The unit's sales rose 4% in the quarter to $1.03 billion.

Should it part with the business, Pfizer has said it would probably be in the form of an initial public offering, a route that would avoid hefty taxes.

Pfizer, noting that it will consider its baby formula business a discontinued operation beginning in the second quarter, trimmed its full year-earnings forecast accordingly. It now expects earnings, excluding special items, of $2.14 to $2.24 per share, from its earlier view of $2.20 to $2.30 per share.