ANACOR IDENTIFIES A NOVEL MECHANISM FOR ITS LEAD ANTI-FUNGAL DRUG, AN2690; FINDINGS PUBLISHED IN SCIENCE

-- Journal Article Also Demonstrates the Promise of Anacor's Boron-Based Chemistry in Developing Antibiotics --

Palo Alto, Calif. - June 21, 2007 - Anacor Pharmaceuticals, a privately held pharmaceutical company, announced today that the journal Science will publish results of research that details how AN2690, the company's lead clinical candidate, kills fungal cells by interfering with synthesis of a specific protein required for fungal growth. This unique mechanism of action, made possible by the company's boron-based chemistry, may also prove useful in developing new classes of therapeutic agents such as antibiotics. The research results will be published in the June 22 issue of the journal.

"Understanding the way in which AN2690 stops fungal infections has given us a wealth of information about how to fashion antimicrobial drugs, including other anti-fungal compounds and systemic antibiotics," said Dickon Alley, Ph.D., head of discovery biology at Anacor and an author of the Science paper. "These findings validate our scientific strategy of focusing on the largely untapped potential of boron-containing drug candidates for unmet medical needs."

AN2690 is in Phase 2 clinical trials for the treatment of onychomycosis, a fungal infection of the nails and nailbeds that affects 7 to 14 percent of the U.S. population. Earlier this year, Anacor signed a partnership agreement with Schering-Plough Corporation to develop and commercialize AN2690. Under the terms of the agreement, Anacor received a $40 million upfront payment and a $10 million financing commitment from Schering-Plough. The company is eligible to receive payments potentially exceeding $575 million for development, regulatory and commercial milestones.

From a family of compounds known as benoxaborales, AN2690 demonstrated potent anti-fungal properties during preclinical testing. Anacor researchers and collaborators from the European Molecular Biology Laboratory (EMBL) in Grenoble, France, led by Stephen Cusack, Ph.D., then determined how the drug worked at the molecular level.

By examining fungal strains resistant to the drug, scientists determined that the drug blocks protein synthesis by inhibiting a protein called leucyl-tRNA synthetase, or LeuRS. LeuRS plays a key role in translating the genetic code in both fungus and bacteria, and blocking its action keeps those organisms from growing, effectively stopping the infection. Researchers found that replacing the boron atom in AN2690 with a carbon atom inactivated the drug, underscoring the importance of the boron chemistry.

While the anti-fungal effect of the LeuRS protein inhibition by boron-containing compounds has been established by the clinical results seen for AN2690, other proteins from the same family, known as aminoacyl-tRNA synthetases, are well-validated targets for antibiotic drug development.

"Now that we know how AN2690 works, the same approach could be adapted to target other aminoacyl-tRNA synthetases with editing sites, which are also excellent targets for anti-microbial drugs," said Cusack, whose group performed the X-ray crystallography which revealed how AN2690 binds to LeuRS.

Anacor is now leveraging that knowledge to create new boron-containing drugs designed to target systemic bacterial infections.

"Drug-resistant bacteria are a large and growing problem in the hospital and in the community, which makes the discovery of novel antibiotics a public health necessity," said David Perry, Anacor's chief executive officer. "We believe that our approach may hold great promise in the development of these needed therapies."

Boron is a naturally occurring element found in the soil and in water supplies. It is an essential micronutrient for plants, and the chemical is commonly present in its elemental form in the human bloodstream. Despite the ubiquity of the element, little work has been done to evaluate the therapeutic promise of boron-containing compounds.

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. AN2690, Anacor's lead product, is in Phase 2 trials for onychomycosis, a fungal infection of nails and nailbeds. Anacor has entered into an exclusive, worldwide agreement with Schering-Plough Corporation to develop and commercialize the drug. Anacor has a robust pipeline of other anti-fungal, anti-inflammatory and antibacterial compounds, including AN2728 and AN0128.