Anacor Pharmaceuticals Reports Second Quarter 2013 Financial Results
PALO ALTO, Calif. -- August 8, 2013
Anacor Pharmaceuticals (NASDAQ:ANAC) announced today its financial results for
the second quarter ended June 30, 2013.
“We had a busy second quarter as we finalized preparations for our NDA for
tavaborole, which was submitted on July 26^th. This is an exciting time at
Anacor as we begin to reap the benefits of the investments that we’ve made in
drug development over the last decade and plan the commercialization of our
later stage products,” said David Perry, Chief Executive Officer of Anacor
Second Quarter 2013 Highlights and Recent Developments
*Tavaborole – our lead topical antifungal product candidate for the
treatment of onychomycosis, a fungal infection of the nail and nail bed
that affects approximately 35 million people in the United States.
*On July 26, 2013, we submitted a New Drug Application (NDA) to the
U.S. Food and Drug Administration (FDA) for tavaborole, the first
drug in our clinical pipeline to reach this milestone.
*AN2728 – our lead topical anti-inflammatory product candidate for the
treatment of atopic dermatitis and psoriasis. Atopic dermatitis is a
chronic rash characterized by inflammation and itching and affects an
estimated 40 million people in the seven major pharmaceutical markets,
including approximately 10% to 20% of infants and young children.
*In July 2013, we initiated a MUSE (maximal use systemic exposure)
study in children with atopic dermatitis to measure blood levels when
AN2728 is applied under maximal use conditions.
On April 5, 2013, we entered into a research agreement with the Bill & Melinda
Gates Foundation (the Gates Foundation) to discover drug candidates intended
to treat two filarial worm diseases (onchocerciasis, or river blindness, and
lymphatic filariasis, commonly known as elephantiasis) and tuberculosis. Under
the agreement, the Gates Foundation will pay Anacor up to $17.7 million to
conduct research activities directed at discovering potential drug candidates
for these neglected diseases. In addition, the Gates Foundation purchased
shares of Anacor’s common stock for net proceeds of approximately $5.0
*In June 2013, we entered into a loan agreement with Hercules Technology
Growth Capital, Inc. and Hercules Technology III, L.P. (Hercules) to
provide up to $45.0 million in capital in three tranches. We borrowed the
first tranche of $30.0 million upon the execution of the loan agreement on
June 7, 2013 and used approximately $22.6 million to repay the remaining
obligations under our loan agreement with Oxford Finance LLC and Horizon
Technology Finance Corporation.
*In August 2013, we held our second Investor Day to highlight our two lead
products in development, tavaborole for onychomycosis and AN2728 for
atopic dermatitis. In addition to Anacor management presentations, the
following key opinion leaders in onychomycosis and atopic dermatitis gave
presentations on the disease areas:
*Ted Rosen, M.D., Professor of Dermatology at Baylor College of
Medicine and Chief of Dermatology at the Houston Veterans
Affairs Medical Center.
*Warren Joseph, D.P.M., Attending Physician and Consultant,
Roxborough Memorial Hospital, Philadelphia, Pennsylvania.
*Larry Eichenfield, M.D., Chief of Pediatric and Adolescent
Dermatology and Medical Director of Research at Rady Children's
Hospital, San Diego and Chief of Pediatric and Adolescent
Dermatology and Clinical Professor of Pediatrics and Medicine
(Dermatology) at the University of California, San Diego School
*Julie Block, President and CEO, National Eczema Association.
A webcast of the Investor Day is currently available on Anacor’s website.
Anticipated Milestones in the Next Six Months
*Tavaborole, our lead product candidate for the treatment of onychomycosis:
*We currently have a final hearing for our arbitration with Valeant
Pharmaceuticals International, Inc. (Valeant) scheduled in September
2013 and anticipate the resolution of the arbitration in the second
half of 2013.
*We expect to choose a path for commercialization of tavaborole in the
second half of 2013.
*AN2728, our lead product candidate for the treatment of atopic dermatitis:
*We expect to initiate a TQT (thorough QT) study in the third quarter
of 2013 to assess the effects of AN2728 on electrocardiograms (ECGs)
in approximately 180 healthy volunteers following multiple-dose
*We expect results from the MUSE and TQT studies in the second half of
*We expect to initiate a Phase 3 study in atopic dermatitis in the
fourth quarter of 2013 or the first quarter of 2014, with timing
dependent on the completion of the MUSE study.
Selected Second Quarter 2013 Financial Results
Revenues for the quarter ended June 30, 2013 were $3.4 million, compared to
$2.6 million for the comparable period in 2012. The increase in revenues from
2012 is primarily due to revenue for research services performed under the
Gates Foundation Agreement.
Research and development expenses were $10.1 million for the second quarter of
2013, compared to $14.1 million for the same quarter in 2012. The decrease in
research and development expenses from 2012 is comprised of a decrease in
clinical expenses for tavaborole and preclinical studies for AN2728, offset by
an increase in research expenses under our new research agreement with the
General and administrative expenses for the second quarter of 2013 were $5.1
million, compared to $2.7 million for the comparable period in 2012. The
increase from 2012 is primarily due to an increase in legal fees resulting
from the legal proceedings for our disputes with Valeant.
Cash, cash equivalents, short-term investments and restricted investments
totaled $51.1 million, including restricted investments of $5.3 million, at
June 30, 2013.
2013 Financial Outlook
We believe that our existing capital resources, including the available funds
under our debt facility with Hercules, will be sufficient to meet our
anticipated operating requirements until mid-2014.
Conference Call and Webcast
Anacor will host a conference call at 5:00 p.m. ET / 2:00 p.m. PT today,
during which management will discuss the Company’s financial results and
recent developments. The call can be accessed by dialing (877) 291-1367
(domestic) and (914) 495-8534 (international) five minutes prior to the start
of the call. The call will also be webcast live and can be accessed on the
Events and Presentations page, under Investors, on the Company’s website at
www.anacor.com and will be available for three months following the call.
About Anacor Pharmaceuticals
Anacor is a biopharmaceutical company focused on discovering, developing and
commercializing novel small-molecule therapeutics derived from its boron
chemistry platform. Anacor has discovered eight compounds that are currently
in development. Its two lead product candidates are topically administered
dermatologic compounds — tavaborole, an antifungal for the treatment of
onychomycosis, and AN2728, an anti-inflammatory PDE-4 inhibitor for the
treatment of atopic dermatitis and psoriasis. In addition to its two lead
programs, Anacor has discovered three other wholly-owned clinical product
candidates — AN2718 and AN2898, which are backup compounds to tavaborole and
AN2728, respectively, and AN3365, an antibiotic for the treatment of
infections caused by Gram-negative bacteria. We have also discovered three
other compounds that we have out-licensed for further development — two are
licensed to Eli Lilly and Company for the treatment of animal health
indications and the third compound, AN5568, also referred to as SCYX-7158, is
licensed to Drugs for Neglected Diseases initiative, or DNDi, for human
African trypanosomiasis (HAT, or sleeping sickness). We also have a pipeline
of other internally discovered topical and systemic boron-based compounds in
development. For more information, visit http://www.anacor.com.
This release contains forward-looking statements, including statements
regarding our milestones, clinical plans and financial projections. Our actual
results may differ materially from those indicated in these forward-looking
statements due to risks and uncertainties, including the timing and potential
outcome of our arbitration with Valeant; the timing of data from our safety
studies and the initiation of a Phase 3 study for AN2728; risks relating to
patient accrual and execution on clinical plans; the potential for success of
tavaborole and our AN2728 compound; financial projections related to our cash
balance and use of cash as well as our ability to fund operations as currently
conducted through mid-2014; and other matters that are described in Anacor’s
Annual Report on Form 10-K for the year ended December 31, 2012, and
subsequent Quarterly Reports on Form 10-Q filed with the Securities and
Exchange Commission, including the risk factors set forth in that filing.
Investors are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this release and we undertake
no obligation to update any forward-looking statement in this press release
except as required by law.
ANACOR PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and per share data)
Three Months Ended Six Months Ended
2013 2012 2013 2012
Contract revenue $3,424 $2,562 $5,132 $4,979
Total revenues 3,424 2,562 5,132 4,979
Research and 10,146 14,100 21,305 26,768
General and 5,086 2,671 9,802 6,101
Total operating 15,232 16,771 31,107 32,869
Loss from (11,808 ) (14,209 ) (25,975 ) (27,890 )
Interest income 14 19 28 40
Interest expense (903 ) (638 ) (1,814 ) (1,292 )
Other expense (18 ) (12 ) (32 ) (25 )
Loss on early
extinguishment of (1,381 ) –– (1,381 ) ––
Net loss $(14,096 ) $(14,840 ) $(29,174 ) $(29,167 )
Net loss per
common share – $(0.36 ) $(0.47 ) $(0.78 ) $(0.95 )
basic and diluted
number of common
shares used in
calculating net 39,273,330 31,504,723 37,569,275 30,706,036
loss per common
share – basic and
(1) Includes the following noncash, stock-based compensation expenses:
development $741 $510 $1,166 $988
administrative 514 390 848 870
ANACOR PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEET DATA
June 30, December 31,
2013 2012 (1)
Cash, cash equivalents and short-term $45,822 $45,516
Restricted investments 5,289 197
Total assets 56,971 51,071
Notes payable 27,714 25,667
Accumulated deficit (244,385 ) (215,211 )
Total stockholders’ equity 2,457 4,811
Derived from the audited financial statements included in the
(1) Company’s Annual Report on Form 10-K for the year ended December
Anacor Pharmaceuticals, Inc.
Geoff Parker, 650-543-7516
Chief Financial Officer
DeDe Sheel, 650-543-7575
Director, Investor Relations and Corporate Communications
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