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Anacor Pharmaceuticals Announces Favorable Ruling in Its Arbitration With Valeant Pharmaceuticals

  Anacor Pharmaceuticals Announces Favorable Ruling in Its Arbitration With
  Valeant Pharmaceuticals

                    Anacor Awarded $100 Million in Damages

Business Wire

PALO ALTO, Calif. -- October 17, 2013

Anacor Pharmaceuticals (NASDAQ:ANAC) today announced that the arbitrator
appointed to resolve its dispute with Valeant Pharmaceuticals, Inc. (Valeant),
successor in interest to Dow Pharmaceutical Sciences,Inc. (DPS), has issued
an Interim Final Award in favor of Anacor, awarding Anacor $100 million in
damages as well as all costs of the arbitration and reasonable attorney’s
fees.

The parties may apprise the arbitrator of any issues not resolved in the
Interim Final Award order within ten days, and responses to any such
submission are due within fifteen days of the date of the Interim Final Award.
If no submissions are made, this Interim Final Award will become final

The Final Award will be submitted to the court of appropriate jurisdiction for
confirmation and enforcement. The timeframe for this legal process is subject
to the court’s time schedule; however, Anacor currently expects confirmation
of the award before year-end 2013 at which point the judgment will become
enforceable. Valeant will likely have 60 to 100 days, but in no event more
than 180 days, from the date of confirmation to appeal the decision to confirm
the award. In order to reverse the Arbitrator’s decision, under California law
the courts would have to determine the occurrence of one of the events
described under Section 1286.2(a) of the California Code of Civil Procedure.

In addition to the claims related to this ruling, Anacor believes it has
additional claims against Valeant related to separate contractual rights and
intellectual property rights and is evaluating options for pursuing those
claims independently of this decision.

Background on the Arbitration

On October24, 2012, Anacor provided notice to Valeant seeking to commence
arbitration with JAMS of a breach of contract dispute under a master services
agreement dated March26, 2004 between Anacor and DPS. This agreement related
to certain development services provided by DPS in connection with Anacor’s
efforts to develop its topical antifungal product candidate for the treatment
of onychomycosis. Anacor’s assertions included breach of contract, breach of
implied covenant of good faith and fair dealing, misappropriation of trade
secrets and unfair competition.

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. Anacor has also discovered three
other compounds that have been out-licensed for further development — one is
licensed to Eli Lilly and Company for the treatment of an animal health
indication, the second 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), and the third compound is
licensed to GlaxoSmithKline for development in tuberculosis. Anacor also has a
pipeline of other internally discovered topical and systemic boron-based
compounds in development. For more information, visit http://www.anacor.com.

Forward-Looking Statements

This press release contains forward-looking statements with respect to the
timing of the Interim Final Award in Anacor’s arbitration with Valeant being
rendered final, the timing of confirmation and enforcement of the arbitrator’s
award, the timing of a potential appeal of the award by Valeant, and the
potential for Anacor to pursue additional claims against Valeant. These
forward looking statements involve known and unknown risks, uncertainties and
other factors that could cause actual levels of activity, performance or
achievement to differ materially from those expressed or implied by these
forward-looking statements, including risks related to the legal processes for
rendering a final award, for confirming and enforcing the arbitrator’s award
and for appealing the award and risks inherent to the litigation process
should additional claims be pursued. Reference should be made to Anacor's
Annual Report on Form 10-K for the year endedDecember 31, 2012, filed with
theSecurities and Exchange Commissionunder the heading "Risk Factors" and
Anacor's subsequent Quarterly Reports on Form 10-Q for a more detailed
description of such factors. These statements reflect the views of Anacor as
of the date of this press release with respect to future events and, except as
required by law, it undertakes no obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise after the date of this press release.

Contact:

Anacor Pharmaceuticals
DeDe Sheel, 650-543-7575
Director, Investor Relations and Corporate Communications
 
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