May 12, 2017 / 9:14 AM / 3 months ago

Britain's FTSE heads for third straight week of gains as AstraZeneca rises

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* FTSE 100 up 0.2 pct

* AstraZeneca jumps after positive drug trial

* Upgrades boost IAG, Standard Life

* Hikma extends losses

By Kit Rees

LONDON, May 12 (Reuters) - Britain's top share index rose on Friday, on track for its third successive week of gains as pharmaceutical stock AstraZeneca rose after a positive drug trial and broker upgrades buoyed individual firms.

The blue chip FTSE 100 index was up 0.2 percent at 7,0402.40 points by 0854 GMT, hitting its highest level in seven weeks.

AstraZeneca was the biggest gainer, jumping 4.5 percent after its key immunotherapy drug durvalumab was shown to reduce the risk of death from lung cancer in a trial.

The hope is that the drug, which offers an alternative to chemotherapy, will become a blockbuster drug for AstraZeneca.

"Their pacific lung cancer trial ... has been taken very well as it's seen as being quite positive for the upcoming readouts of the MYSTIC trial, which is what really we're waiting on from them," Dafydd Davies, partner at Charles Hanover Investments, said, referring to another of AstraZeneca's cancer drug trials.

"As the generic drugs have started to bite into some of their profitability, (it) is very key these new drugs that are in the pipeline do start making some significant progress, which is what we are starting to see."

Shares in peer Shire also rose 1.4 percent.

Broker upgrades also helped support gains in companies such as British Airways owner IAG, which was up 1.3 percent after Kepler Cheuvreux upped the stock to a "buy" from "hold".

"Despite the weaker start to the year, we expect IAG to outperform in terms of RASK over the coming quarters, based on its network exposure (higher exposure to Americas) and lower share of transfer traffic," Ruxandra Haradau-Doser, head of airports and airlines at Kepler Cheuvreux, said, referring to unit revenue per available seat kilometre.

Likewise shares in Standard Life also rose 1.3 percent after RBC raised its rating on the insurer to "outperform".

RBC analysts said that, following the release of the prospectus for Standard Life's merger with Aberdeen Asset Management, they had greater conviction that the insurance business will be sold, which they expect would unlock value.

Healthcare firm Hikma was among the weakest blue chip performers, however, down at a five-month low and taking losses to nearly 10 percent over the past two sessions after U.S. approval for its generic drug Advair was delayed on Thursday. Brokers J.P. Morgan and Stifel both reduced their target prices for the stock.

Outside the blue chips, moves were fairly muted among British mid caps, with the FTSE 250 trading flat in percentage terms. (Editing by Catherine Evans)

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