Anacor Pharmaceuticals is a biopharmaceutical company developing novel small-molecule therapeutics derived from its boron chemistry platform to treat infectious and inflammatory diseases. Anacor's most advanced product candidate is AN2690, a novel topical antifungal for the treatment of toenail onychomycosis, a fungal infection of the nail and nail bed. AN2690 is expected to begin Phase 3 development by the end of 2008. Anacor also has a portfolio of other topical product candidates in development for the treatment of psoriasis, gingivitis, acne, vaginal candidiasis and tinea pedis. The company has entered into a worldwide license, development and commercialization agreement with Schering for the development and commercialization of AN2690 for all indications including the treatment of onychomycosis. In addition, Anacor entered into a research and development agreement with GSK for novel antiviral and antibacterial systemic therapeutics.

Anacor was founded based on technology created by board members and scientific advisory board co-chairs, Dr. Lucy Shapiro at Stanford University and Dr. Stephen Benkovic at Pennsylvania State University. Prior to founding the company, the two had worked together for years in their respective universities through a collaboration that combined Lucy's work in bacterial genetics with Steve's work with novel chemistry. By 2001, this work had started to yield results in the form of unique boron containing compounds that inhibited specific bacterial targets.

Although the research was at an early stage (the boron based compounds had not yet even been tested in in vivo studies), the possibility existed that boron chemistry could provide a platform for drug development for antibiotics as well as other indications. Based on these early but promising results, Anacor was founded in 2002. Members of the founding management team include David Perry (CEO), Kirk Maples (SVP Program Management) and Lucy Day (VP Finance). Steve Baker (medicinal chemistry) and Dickon Alley (molecular biology) are current Anacor employees who worked in Stephen and Lucy's labs as the key technology was being developed.

In April 2002, Anacor raised a $3 million Series A round from venture capital firms Aberdare Ventures and Rho Ventures. Later in 2002, Anacor entered into a $21.6 million contract with the Department of Defense to explore the use of boron chemistry in biodefense, and raised an additional $4 million from the same investors. This initial funding, along with the Department of Defense contract, allowed Anacor to spend the first two years exploring the potential uses of boron in drug development.

By 2005, we had progressed our first compound into clinical trials. Of equal importance, we had generated data showing that our boron platform had potential applications in the treatment of a wide variety of diseases including bacterial, fungal, viral, and parasitic infections as well as inflammatory diseases. Based on these data, we raised a $25 million Series C round and brought in new investors, Care Capital and Venrock.

Our drug development efforts have continued to be both efficient and productive. In 2007, we readied our most advanced compound (AN2690) to start Phase 3 trials, our fourth compound (AN2718) to start Phase I, and signed two important collaborations with Schering and GSK. These two collaborations brought in over $57 million in cash in 2007 alone.

Our objective is to discover, develop and commercialize proprietary boron-based drug compounds with superior efficacy, safety and convenience for the treatment of infectious and inflammatory diseases. Key elements of our strategy to achieve this objective are to:

• Drive rapid, efficient discovery of novel boron-based compounds. We believe the unique characteristics of boron allow us to engineer novel product candidates that target a broad range of diseases and drive a rapid and efficient drug development process. We have discovered and advanced several compounds into clinical development, and we have other compounds in earlier stages of development. We intend to continue to leverage our boron technology to drive time- and cost-efficient compound discovery.


• Focus internal development activities on topical applications. We believe topical treatments generally have lower development costs, reduced risk of side effects and a faster time to market than systemic products. We intend to develop our topical compounds ourselves through proof of concept or pivotal trials. Initially, we intend to partner programs for potential systemic compounds at an early stage of development, as demonstrated by our agreement with GSK.


• Commercialize our products in specialty markets in the United States. We intend to create a specialty sales force to market our products to dermatologists and other specialists in the United States. We plan to retain sales and marketing control or co-promotion rights over products in these markets, and we will seek commercialization partners for products in non-specialty and international markets.


• Leverage our core competencies by using partners. We intend to leverage our core competencies in boron chemistry and product candidate development by using partners. We utilize third parties to outsource non-core functions including clinical trial operations and many basic research activities.


• Expand and protect our intellectual property. We intend to expand and aggressively prosecute our intellectual property in the area of boron chemistry and boron-based compounds. Since a relatively limited amount of research has been done in the area of boron-based drug development, we believe that we can establish a defensible and valuable intellectual property portfolio. To date, we have filed over 100 patent applications worldwide.