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Wider-Than-Expected Loss at Anacor

Zacks Equity Research

Anacor Pharmaceuticals, Inc. (ANAC) reported first quarter 2013 net loss per share of 42 cents, wider than the Zacks Consensus Estimate of a loss of 34 cents but narrower than the year-ago loss of 48 cents per share.

First quarter revenues were $1.7 million, compared with $2.4 million in the year-ago quarter. Revenues missed the Zacks Consensus Estimate of $3 million.

Research and development expenses fell 11.8% year over year to $11.2 million. The decline was due to lower clinical expenses for tavaborole and also a fall in research and development related to the Medicis collaboration.

Selling, general and administrative expenses increased 38.2% year over year to $4.7 million, primarily driven by higher legal fees relating to disputes with Valeant Pharmaceuticals (VRX).

Pipeline Update

In the first quarter of 2013, the company announced positive results from two phase III studies on its topical antifungal candidate, tavaborole (AN2690). The studies, 301 and 302, evaluated the candidate for the prevention of onychomycosis. They were conducted under the US Food and Drug Administration’s (:FDA) Special Protocol Assessment (SPA) program. Anacor intends to seek US approval for the candidate in the indication in mid-2013.

Meanwhile, data from the ongoing phase II dose-ranging study in adolescents for its atopic dermatitis candidate, AN2728, was revealed in Mar 2013. This study showed a clear dose response with AN2728 ointment. For AN2728, before starting a phase III study in atopic dermatitis in the fourth quarter of 2013 or first quarter of 2014, Anacor will commence two additional safety studies, namely, MUSE (maximal use systemic exposure) and TQT (thorough QT).

Anacor carries a Zacks Rank #3 (Hold). Currently, companies like Santarus, Inc. (SNTS) and Catalyst Pharmaceutical Partners Inc. (CPRX)  look more attractive with a Zacks Rank #1 (Strong Buy).

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