(Reuters) - U.S. drug maker Pfizer is to continue buying back stock, with the board authorizing a new $11 billion (6.8 billion pounds) share repurchase plan, deflating expectations that it will make a new bid for AstraZeneca.

Shares in AstraZeneca fell 1.2 percent by 9:00 a.m. BST on Friday following the news.

The largest American pharmaceuticals company, whose shares gained more than 1 percent after the announcement late on Thursday, said the move was in addition to the $1.3 billion remaining on its current share buyback program.

Pfizer, which has a market valuation of about $180 billion, earlier this year failed in its $118 billion bid to buy British rival AstraZeneca. It has an opportunity to make a fresh run at its target from late November under British takeover rules.

Pfizer Chief Executive Ian Read has said the company is continuing to look at deals but investor hopes for a new bid have dwindled recently because of the introduction of new U.S. tax rules.

The U.S. government's tax proposals are designed to make it harder for American firms to shift their tax bases out of the country and into lower cost jurisdictions in Europe, as Pfizer would do by buying AstraZeneca.

The likelihood of Pfizer resuming its pursuit has also been diminished following the collapse of U.S. drug maker AbbVie's $55 billion plan to buy Dublin-based Shire, as a result of the new U.S. tax regulations.

But while investors may well view the big new share buyback as another blow to the idea of a Pfizer bid, ISI Group analyst Mark Schoenebaum cautioned against reading too much into it. "We cannot and should not necessarily make that read-across," he said in a note.