AstraZeneca - FT.com The noise at AstraZeneca is the sound of knives being sharpened. The London-listed pharmaceuticals group's shareholders are not happy. Its patent cliff is higher than for most rivals: about half of its $33bn of annual revenue will disappear because of drug patent expiries by 2016. Fantastically profitable, multibillion-dollar products such as Seroquel, Nexium and Crestor may be impossible to replace. AstraZeneca needs growth; instead, investors fret, chief executive David Brennan seems to be managing decline. His strategy is to cut expenditure (21,000 jobs gone since 2007 with a further 7,300 to come) and return cash to shareholders through dividends and share repurchases ($9.4bn in 2011). Mr Brennan has also pushed into emerging markets, targeting a quarter of revenues from them by 2014, compared with a sixth today. Yet AstraZeneca's shares trade at seven times earnings, against an industry average of 11. Mr Brennan is facing calls to act or quit. His response is to promise more of the same: outsourcing ever more R&D while buying off investors with dividends and buybacks. At best, this barely moves the needle. At worst, it risks creating a hollowed-out AstraZeneca, undermining its attractions as a takeover target. The company could buy growth. It has ample firepower: net cash of nearly $3bn and strong free cash flow generation. But Mr Brennan has long insisted that large-scale acquisitions are not the answer, and in any case investors should be careful what they wish for. His last big acquisition, the $15bn purchase of Medimmune in 2007, has not halted the decline. Perhaps he feels burned by the experience. Chief executives should never say never, though, and AstraZeneca must find a path to future expansion - perhaps through several smaller acquisitions. The pharma industry faces a global squeeze as governments cut health budgets and big-selling new drugs become rarer and pricier. More consolidation seems inevitable. If AstraZeneca starts to shrink, it risks being left on the shelf.