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UPDATE 3-AstraZeneca plans spin-offs as cancer progress fuels bid talk

* Plans to partner or sell infection, neuroscience drugs

* Anti-PD-L1 product and three other drugs into Phase III

* CEO silent on rumoured bid interest from Pfizer

* Shares up 5 percent, hitting record high

* Q1 core earnings per share $1.17 vs consensus $1.20

(Adds CEO comments on M&A, further analyst reaction, latest shares)

LONDON, April 24 (Reuters) - AstraZeneca announced faster-than-expected progress of its experimental cancer drugs and plans to spin off billions of dollars of non-core assets as it staked a claim for independence following reports of bid interest from Pfizer.

The British firm declined to comment on Thursday about a weekend newspaper report it had spurned a 60 billion pound ($101 billion) bid approach from Pfizer earlier this year.

Instead, Chief Executive Pascal Soriot said he remained focused on sharpening AstraZeneca's portfolio, and as part of that unveiled plans to sell or partner infection and neuroscience units with combined sales of $3.5 billion in 2013.

The drugs sector is in the grip of a wave of deal-making as firms strive to build up their best businesses and exit weaker ones, as highlighted by a multibillion-dollar asset swap between Novartis and GlaxoSmithKline.

AstraZeneca, battling to reverse a slide in profits due to patent losses, also said it would advance four important experimental medicines into late-stage clinical tests - two for cancer and two for breathing disorders, including the first of its closely-watched immunotherapy cancer drugs, MEDI4736.

Analysts were impressed with the speedy progress, which overshadowed a 17 percent drop in first-quarter core earnings per share, with the cancer drugs in particular believed to be a key draw for Pfizer.

"These numbers highlight why the interest (from Pfizer) is there. AstraZeneca has been in transition, with much business and product development underway but little as yet is really visible," said Edison Investment Research analyst Mick Cooper.

"We think AstraZeneca will return to growth faster than many believe, which underlines Pfizer's opportune timing."

At 1155 GMT, AstraZeneca shares were up 4.9 percent at 42.42 pounds after hitting a record high of 42.97 pounds.

Soriot, who took over in 2012, has been credited with rebuilding AstraZeneca's drug pipeline, although the new products will not come in time to halt a fall in sales and profits over the next three years due to generic competition.

"In our industry, all of us are trying to become more efficient," Soriot told reporters.

"One of the ways to become efficient is to focus on what you do well and then partner for other things. That's what you've seen with GSK and Novartis. It is a win-win for both companies and it the kind of thing we will ourselves be considering."

AstraZeneca said it was exploring a variety of options for its infection and neuroscience units that comprise established antibiotics and antipsychotics, as well as an experimental Alzheimer's drug Soriot said looked "very exciting".

The CEO told analysts he hoped to conclude deals quickly.

AHEAD OF SCHEDULE

AstraZeneca's decision to push ahead with Phase III testing of MEDI4736, which belongs to a class known as anti-PD-L1 treatments that boost the immune system, follows evaluation of positive Phase I data that will be presented at the May 30-June 3 American Society of Clinical Oncology conference in Chicago.

The first lung cancer patient is expected to be given the drug as part of the pivotal trial imminently.

Investors were impressed by the progress being made with MEDI4736 and Citi analyst Andrew Baum said the move into Phase III came at least six months ahead of his expectations.

Baum added AstraZeneca had been shrewd to focus on becoming first to market in stage III lung cancer, representing 30 percent of non-small cell lung cancer patients, rather than being fourth in stage IV disease, with 40 percent of patients.

AstraZeneca is also moving into Phase III another lung cancer treatment called AZD9291, as well benralizumab for chronic lung disease and tralokinumab for severe asthma.

The company reiterated that 2014 sales were likely to fall by a low-to-mid single digit percentage figure, with earnings declining "in the teens" as generic competition is expected to kick in for Nexium, its popular heartburn and ulcer drug.

First-quarter sales were flat at $6.42 billion, generating "core" earnings, which exclude certain items, of $1.17 a share. Core operating profit fell 16 percent to $1.95 billion.

Industry analysts, on average, had forecast sales in the quarter of $6.37 billion and earnings of $1.20 a share, according to Thomson Reuters.

The slightly better-than-expected sales reflected higher revenues than analysts had anticipated for Nexium and cholesterol fighter Crestor, both of which face looming loss of patent exclusivity. Sales of diabetes drugs, however, were "notably disappointing", Deutsche Bank analysts said.

($1 = 0.5960 British Pounds)

(Editing by Erica Billingham and Mark Potter)

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