AstraZeneca pours cash into research and development as it hikes sales forecasts

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Drugs giant AstraZeneca has hiked 2014 sales forecasts for the second consecutive quarter as the FTSE 100 company settles down to normality after rebuffing a £69billion takeover approach from US rival Pfizer.

Boss Pascal Soriot, who defended the company’s independence by arguing its pipeline of potential new drugs was worth much more than Pfizer was offering, is pouring cash into Astra’s research and development operations.

The group has been boosted by a delayed US launch of copycat versions of its Nexium heartburn and ulcer medicine.

Investments: Drugs giant AstraZeneca has hiked 2014 sales forecasts for the second consecutive quarter

Soriot also said that recent changes to the US tax regime had removed the rationale for firms such as Pfizer to buy overseas companies in so-called inversion deals to shift their tax bases abroad. Pfizer could, however, still come back with a revised bid after November 26.

Astra said sales in the third quarter rose 5 per cent to £4.1billion. It is now expecting sales to grow in low single digit figures at constant exchange rates this year, having previously predicted annual sales would be flat.

Analyst Ketan Patel at Ecclesiastical Investment Management said the shift in Astra’s R&D strategy ‘looks set to deliver growth in 2017 and beyond for the company’ but added the speculation on Pfizer returning to make another bid would continue up to and beyond the lock-out period.

Like all big drug companies, patent expiries continue to worry investors, with top-selling cholesterol treatment Crestor due to lose protection in 2016. Astra has also been building up its cancer business.

Shares slipped 28.5p to 4591.5p.