ANACOR PRESENTS RESEARCH AND CLINCIAL FINDINGS FROM THREE PROGRAMS AT AAD MEETING

Presents Phase 2 Data on Lead Anti-Fungal, AN2690

Posters Include First Data on AN2728, a Novel, Topical Psoriasis Treatment

Palo Alto, Calif. and Washington - Feb. 5, 2007 - Anacor Pharmaceuticals, a privately held pharmaceutical company, announced today that it presented nine posters detailing progress in its three clinical development programs in onychomycosis, psoriasis and atopic dermatitis at the 65th Annual Meeting of the American Academy of Dermatology in Washington.

Four posters featured results from studies of AN2690, a topical anti-fungal therapy, in onychomycosis, a fungal infection of the nail and nail bed that affects 7 to 10 percent of the U.S. population. Anacor announced on Friday a worldwide agreement with Schering-Plough Corporation to commercialize AN2690; Schering-Plough will assume all costs for the drug's development for onychomycosis and other indications. Anacor will receive $40 million in upfront payments and milestone payments potentially exceeding $575 million.

In a poster presentation on results from a two-dose, multi-center Phase 2 study of AN2690, researchers showed that patients who received the drug had considerable clear nail growth and were unlikely to show evidence of fungal infection. "The data presented here at AAD, along with the results from two other Phase 2 trials of AN2690, underscores AN2690's potential to offer patients a unique combination of safety and efficacy in a topical treatment," said Dr. Karl Beutner, chief medical officer at Anacor. "We look forward to working with Schering-Plough to develop and commercialize AN2690 for patients around the world."

In addition, Anacor presented three posters on AN2728, a drug candidate now entering human trials as a topical treatment for psoriasis. The data presented at AAD -- the first presentations about the compound -- detailed the method by which Anacor researchers, using the company's boron chemistry platform, developed AN2728. Company scientists also presented data from in vitro research and animal models demonstrating the compound's potent anti-inflammatory properties.

"These early results from our work on AN2728 suggest that the compound does an excellent job of inhibiting the cytokines that play a key role in the inflammation of psoriasis, and we are now moving ahead to test the treatment in humans," said Beutner.

The company also presented preclinical and clinical data from tests on AN0128, its lead atopic dermatitis compound, which is now in Phase 2 testing. The poster detailing results from the Phase 2a study of the drug showed that AN0128 was well-tolerated, with clinically meaningful efficacy trends. Anacor is now testing the drug in a Phase 2b study of children with the disease, which affects approximately 15 million Americans. That study, launched in November, is assessing the effect of the drug in 200 patients between the ages of 2 and 17 years with moderate atopic dermatitis.

AN2690 Posters:

#1800
In vitro nail penetration of AN2690, effect of vehicle, and coefficient of efficacy

#1802
Interim results of a multi-center study to evaluate the safety and efficacy of topically applied AN2690 5.0% and 7.5% solution for the treatment of onychomycosis of the great toenail

#1816
In vivo nail residence time of AN2690, a novel broad-spectrum antifungal agent in development for the topical treatment of onychomycosis

#1823
An open-label, multiple-dose study of the absorption and systemic pharmacokinetics of AN2690 applied as a 7.5% solution to all toenails of adult patients with moderate to severe onychomycosis

AN2728 Posters:

#421
AN2728, a novel borinic acid ester with broad-spectrum in vitro anti-inflammatory activity

#2703
Medicinal chemistry development of AN2728, a novel oxaborole in development for the topical treatment of psoriasis

#2712
Formulation, skin penetration, and anti-inflammatory activity of AN2728: A novel borinic acid ester

AN0128 Posters:

#406
AN0128 inhibits pro-inflammatory cytokine production in a macrophage cell line by inhibiting the p38 MAP kinase signal transduction pathway

#717
A randomized, double-blind, vehicle-controlled, multi-center study to evaluate the safety and efficacy of topically applied AN0128 cream, 1% for the treatment of mild to moderate atopic dermatitis

About Anacor Pharmaceuticals
Anacor, a privately held, clinical-stage pharmaceutical company, is developing novel product candidates for inflammatory and infectious diseases based on its proprietary, small-molecule, boron-based chemistry. Initially, Anacor is focusing development efforts on dermatological disorders with AN2690 in Phase 2 trials for onychomycosis, a fungal infection of nails and nailbeds. A second product candidate, AN0128, is in Phase 2 clinical trials for atopic dermatitis.