(Bloomberg) -- AstraZeneca Plc shares surged after the UK drugmaker reported profit that outpaced expectations, buoyed by demand for its cancer blockbusters Imfinzi and Tagrisso as well as newcomer Enhertu. 

The stock rose as much as 6.5% in London trading, the most in more than 3 years, after Astra reported earnings per share excluding some items of $2.06 in the first quarter.

Astra has been on an acquisition spree, agreeing to buy Fusion Pharmaceuticals Inc. and Amolyt Pharma in March to beef up the flow of drugs it aims to bring to market. The pace of deals will likely slow now, according to Chief Executive Officer Pascal Soriot.  

“We’ll continue of course to look at business development,” he said in a conference call. “But for the technology side we have mostly what we need to build the future.”

Tagrisso and Enhertu, which just won new clearances in the US, and the rare-disease drug Ultomiris, helped revenue rise 17% last quarter. 

“This was the first quarter that both our biopharma business and our oncology business exceeded $5 billion in revenue,” Chief Financial Officer Aradhana Sarin said in a TV interview. “And our rare-disease business was over $2 billion. It’s not one or two medicines driving the growth, it’s a very broad base.” 

The drugmaker will discuss its pipeline — including the timing of future treatments and their revenue potential — at an investor day next month.  

The new RSV therapy Beyfortus delivered $46 million in revenue. Sanofi, Astra’s partner on the medicine, also reported rising profit and sales Thursday. Both drugmakers reiterated their guidance for the year. 

The strong results point to “material upside to consensus forecasts” if they are sustained, Morgan Stanley’s Mark Purcell wrote in a note to clients. 

What Bloomberg Intelligence Says:

AstraZeneca’s reiteration of full-year guidance following 1Q 7% sales and 9% EPS beats may indicate expectations of higher costs as 2024 progresses, or one-time 1Q boosts not yet detailed, but highlights its potential to exceed current targets. It may prefer to use its May 21 investor day to increase the 2024 targets.

— John Murphy, BI pharma analyst

Under Soriot Astra has invested heavily in cancer drugs but profit margins and spending on drug launches have been closely watched in recent months. The company’s operating margin shrank in the first quarter from the previous one.

Soriot’s salary has been under scrutiny, but shareholders backed his pay increase to almost £19 million ($23.8 million) earlier this month. The CEO on Thursday said that the question of his compensation is broader than him as a person. 

“At some point there will be a successor and our internal candidates, but also external candidates, will have to be offered a role that is attractive in itself but also compensated competitively,” he said. 

--With assistance from Lisa Pham, Sabah Meddings, Guy Johnson and Anna Edwards.

(Updates with CEO comments from third paragraph)

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