Anacor, Gates Foundation Collaborate

Zacks

Anacor Pharmaceuticals, Inc. (ANAC) inked a deal with the Bill & Melinda Gates Foundation for the discovery of drug candidates for the treatment of two filarial worm diseases (onchocerciasis / river blindness and lymphatic filariasis (elephantiasis)) and tuberculosis (:TB). 

Anacor will also create an expanded library of boron compounds which will screen additional potential drug candidates for the treatment of neglected diseases. The Gates Foundation will have access to this expanded library.

As per the terms of the agreement, the Gates Foundation will make a $17.7 million payment to Anacor. Anacor issued 809,061 shares at a purchase price of $6.18 per share. In addition to $17.7million, the Gates Foundation bought these shares which aggregates to $5 million.

Our Take

We are positive on the research collaboration as it provides Anacor with the required monetary support to continue its research on neglected diseases. As per the information provided by Anacor, river blindness afflicts more than 37 million people, mainly in Africa. It is the second most common cause of infectious blindness. In Nov 2010, Anacor had signed a research and development collaboration agreement with the Sandler Center to discover new therapies for river blindness.

Even TB has a good market potential with more than 1.6 million people dying from TB globally each year.

Anacor Pharma carries a Zacks Rank #3 (Hold). Currently, companies like UCB (UCBJF) and QLT Inc. (QLTI) carry a Zacks Rank #1 (Strong Buy) while Avanir Pharmaceuticals, Inc. (AVNR) holds a Zacks Rank #2 (Buy).

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