The decision to pair up with Bristol-Myers Squibb Co to buy diabetes specialist Amylin Pharmaceuticals Inc shows the Anglo-Swedish drugmaker is stepping up its deal-making, despite the management hiatus at the top of the company.

AstraZeneca is chipping in $3.4 billion for a half share in Amylin's products for the fast-growing type 2 diabetes market.

"The strategy is clear and this acquisition and collaboration is bang in the middle of that strategy," Lowth said in an interview on Saturday.

"We can drop Amylin straight into the portfolio of our existing global diabetes alliance with Bristol-Myers and, of course, we also share the capital cost, which gives us strength to pursue further opportunities."

The deal is AstraZeneca's biggest since its poorly received purchase of another U.S. biotechnology company, MedImmune, for $15.6 billion in 2007. And, importantly, it signals that new chairman Leif Johansson endorses the group's renewed focus on external deals.

Faced with one of the steepest "patent cliffs" in the pharmaceutical industry, which will savage sales of its current top-selling medicines over the next five years, AstraZeneca has been under mounting pressure to do something to shore up its business.

Investor dissatisfaction led to the abrupt departure of previous CEO David Brennan and the early appointment of Johansson, a former boss of truckmaker Volvo, as non-executive chairman from June 1.

There has been intense investor debate, however, as to whether AstraZeneca should step up acquisitions, in order to bolster its line-up of established and pipeline medicines, or simply shrink its operations to maximize cash returns.

On its own, a half share in Amylin is not enough to reverse AstraZeneca's fortunes. So Lowth is looking to bolt on more such deals, most likely with a price tag of a similar size or less.

"We do see continued opportunities," he said. "Clearly, if there are compelling opportunities that are larger than this we would look at them, but the assets we're most interested in tend to be of this size or perhaps smaller."

In April, AstraZeneca agreed to buy Ardea BioSciences for $1.26 billion, giving it a new gout drug to swell its thin pipeline. The same month it also clinched a deal to jointly develop and sell five of Amgen Inc's experimental drugs.

Bidding for Amylin was highly competitive, with Sanofi SA, Merck & Co Inc and Novartis AG also interested in the company, sources familiar with the situation earlier told Reuters.

The eventual price paid of $5.3 billion, or $31 a share, a premium of 10 percent to the closing price on Friday, may be seen as steep, given the shares were already inflated by takeover speculation. Bristol-Myers will also pay an additional $1.7 billion to cover Amylin's debt and its obligations to Eli Lilly Co from ending an earlier collaboration.

But AstraZeneca hopes the joint approach with Bristol-Myers will deflect potential criticism of having over-paid - an accusation that haunted former CEO Brennan over his buy of MedImmune.

"The two companies undertook parallel but independent due diligence and the process therefore brings with it the validation of two sets of eyes," Lowth said.

AstraZeneca will also seeking to reassure investors with a commitment to maintain its progressive dividend policy, despite the fact the deal is set to dilute earnings in 2012 and 2013 before yielding benefits in 2014.

(Editing by Sophie Walker)

• A Permanent Economic Emergency