AstraZeneca doubled its 2010 share buyback program on Thursday, after posting strong results and winning an endorsement from a U.S. advisory panel for its potential blockbuster heart drug Brilinta.

News of the vote backing the experimental blood thinner, which came late on Wednesday, overshadowed quarterly results showing a better-than-expected 9 percent rise in earnings per share, allowing the group to raise its full-year outlook.

Brilinta, with expected annual sales of more than a billion dollars, is key to future growth at AstraZeneca, which is struggling with falling sales of older drugs as patents expire.

AstraZeneca faces a tougher second half as generic competition increases but the company was able to increase 2010 forecasts, in part due to the lack so far of generic copies of its ulcer pill Nexium in Europe.

It also dodged a bullet last month when a judge upheld the U.S. patent on cholesterol fighter Crestor, giving it confidence to double its 2010 share buyback program to $2 billion.

FORECASTS SET TO RISE

Consensus 2010 EPS forecasts look set to continue to rise, given a strong second quarter and the announced doubling of the buyback, said Morgan Stanley analyst Andrew Baum.

AstraZeneca raised its prediction for 2010 core EPS by 30 cents to $6.35 to $6.65, against 2009's $6.32, helping drive a 4 percent rise in the shares by 0800 GMT. The stock had already rallied in late U.S. trading on the Brilinta news.

AstraZeneca is not alone among major drug companies in facing rising competition from cut-price generics but it is starring over a particularly steep patent cliff. It has adapted by shrinking its operations, with the loss of thousands of jobs.

For the current year, however, it is operating above expectations -- a confident showing echoing solid results from rivals such as Sanofi-Aventis , Novartis and Bristol-Myers Squibb , despite pressure on drug prices in Europe.

British rival GlaxoSmithKline saw its quarterly profits tumble on a big legal charge but its underlying performance was also broadly in line with forecasts.

Sales in the quarter were driven by Crestor -- now AstraZeneca's biggest seller, raking in $1.43 billion in the three months to June -- and strong demand for medicines in emerging markets, a priority growth area for the group.

But AstraZeneca needs to find more products to fill a looming sales gap as previous blockbusters like Nexium and schizophrenia medicine Seroquel face a steep decline -- hence the high stakes now riding on Brilinta.

BRILINTA CONTROVERSY

Many industry analysts were surprised by the strong 7-1 vote in favor of Brilinta at the U.S. advisory panel, although Tim Anderson of Sanford Bernstein said this masked a degree of controversy over the product that could last through its launch.

The lack of benefit seen with the drug in a relatively small number of North American patients in a overall positive clinical trial remains unexplained.

We continue to feel that Brilinta will face meaningful commercial hurdles. Competitors will have marketing materials pointing to the unfavorable U.S. data and payers may block the product just like they've done with (Eli Lilly's ) Effient, Anderson said.

The Food and Drug Administration is supposed to make a final decision on Brilinta by September 16. The agency usually follows panel recommendations.

AstraZeneca's core pretax profit, excluding certain restructuring costs and charges, rose 5 percent in the second quarter to $3.53 billion, equivalent to earnings per share of $1.79, on sales up 3 percent at $8.18 billion.

The mean consensus forecasts had been for EPS of $1.53 and sales of $8.1 billion, according to Thomson Reuters I/B/E/S.

(Editing by Paul Sandle)