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Little can be said with certainty about AstraZeneca PLC except that its rebuilding will be expensive and long. Monday's announcement of its purchase of Pearl Therapeutics for as much as $1.15-billion (U.S.) illustrates the first point nicely. Privately-held Pearl has two potential treatments for respiratory diseases in development, including one in late-stage clinical trials. These fit with AstraZeneca's existing respiratory stable, which accounted for 16 per cent of the group's $28-billion revenue in 2012. Half the price is dependent on the future success of Pearl's products: it will need to be pretty good to justify what AstraZeneca is paying.

AstraZeneca's revenues shrank 15 per cent in 2012 due to patent expiries and the lack of a strong pipeline. The Pearl acquisition is a start at rebuilding that pipeline; chief executive Pascal Soriot has identified the respiratory area as one of the company's five key growth platforms. (Last month's $440-million purchase of Omthera does something similar for its cardiovascular stable.) Respiratory was AstraZeneca's third biggest segment last year and also its most robust – revenues were flat, compared to declines across the rest of its portfolio. Pearl's products will not immediately give a revenue boost – they are unlikely to make any meaningful contribution before 2018, according to Panmure Gordon.

AstraZeneca has outperformed the FTSE 100 by roughly 100 per cent this year, reflecting both a rally in the pharma sector and investor confidence that Mr. Soriot can deliver on his recovery plan. His bigger challenge will be to ensure that research and development starts to deliver. Making expensive bolt-on acquisitions will not by itself justify the cautious optimism visible in its shares. Getting both the R&D and the acquisition strategy right will be tough, but there is a justified groundswell of support among investors for AstraZeneca to succeed.

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