ANACOR INITIATES PHASE I CLINICAL DEVELOPMENT FOR AN3365 – A NOVEL ANTIBIOTIC FOR THE TREATMENT OF GRAM-NEGATIVE INFECTIONS

Palo Alto, Calif. - November 17, 2009 - Anacor Pharmaceuticals today announced that it has dosed the first patient in a Phase I clinical study for AN3365, a novel boron-based, small-molecule drug candidate in development for the treatment of hospital infections caused by Gram-negative bacteria. The study will evaluate the safety, tolerability and pharmacokinetics of AN3365 in healthy volunteers.

AN3365 targets the bacterial enzyme leucyl tRNA synthetase. Preclinical studies suggest that AN3365 could be a novel approach for the treatment of Gram-negative infections, including E. coli, K. pneumoniae and Enterobacter spp. AN3365 is being developed under an alliance agreement with GlaxoSmithKline (GSK), and the initiation of Phase I studies releases a milestone payment to Anacor of $6 million.

"We are pleased with the rapid pace of our joint discovery activities, which have resulted in our second major milestone payment from GlaxoSmithKline in 2009," said Jacob J. Plattner, Ph.D., Senior Vice President of Research at Anacor Pharmaceuticals. "By leveraging the novel approaches we've pioneered in the field of boron chemistry, and the expertise from GlaxoSmithKline, we were able to move this program from discovery to clinical development in just two years since signing the collaboration."

The randomized, double-blind, placebo-controlled, dose-escalation study is expected to enroll more than 80 healthy volunteers. Participants in the Phase I study will receive AN3365 in single or multiple doses for treatment durations of up to 14 days.

Alliance with GSK
In October 2007, Anacor and GSK entered into a worldwide strategic alliance for the discovery, development and commercialization of novel medicines for viral and bacterial diseases. The collaboration provides GSK access to Anacor's proprietary boron-based chemistry for use against four selected targets. Under the terms of the agreement with GSK, Anacor retains responsibility for the development of AN3365, and other boroncontaining, small molecules through clinical proof of concept, at which point GSK will have an exclusive option to license each compound for further development and commercialization on a worldwide basis. Contingent on achieving certain milestones, Anacor is eligible to receive discovery, development, regulatory and commercial milestones ranging up to $252 million and $331 million for each product candidate. If GlaxoSmithKline exercises its option at the proof of concept stage, Anacor will receive tiered double digit royalties, which are dependent on sales achieved.

About Anacor Pharmaceuticals
Anacor is a biopharmaceutical company developing novel small molecule therapeutics derived from its boron chemistry platform. Anacor focused initially on developing topical applications of its compounds to treat fungal, bacterial and inflammatory diseases. In addition, the Company is developing systemic antiviral and antibacterial therapeutics under a research and development agreement with GSK. Anacor's most advanced product candidate is AN2690, a novel topical antifungal in development for the treatment of toenail onychomycosis, which is a fungal infection of the nail and nail bed. AN2690 is licensed to Merck & Co., Inc., under a worldwide development and commercialization agreement for all indications including the treatment of onychomycosis. For more information visit www.anacor.com.

Forward-Looking Statements
This press release may contain forward-looking statements that relate to future events and 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. 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 forwardlooking statements, whether as a result of new information, future events or otherwise after the date of this press release.

Contact:
Anne Bowdidge
Investor Relations
650-543-7575