Anacor is a biopharmaceutical company focused on novel small molecule therapeutics derived from its boron chemistry platform. Its lead product candidate is tavaborole, a topical antifungal currently in Ph3 clinical
development for treatment of onychomycosis (fungal nail infection). In addition, Anacor is developing AN2728, a topical anti-inflammatory for treatment of atopic dermatitis. ANAC also has R&D partnerships with GSK,
LLY, and MRX.
Reiterate BUY, increasing target to $13 from $8 on more upside to AN2728 potential in AD after proprietary MD opinions on Phase 2b. We
see ANAC’s AN2728 for atopic dermatitis as a major value driver for
shares going forward. Tavaborole, ANAC’s Phase 3 topical antifungal for
toenail fungus (onychomycosis), may be approvable, but efficacy rates
lower than a competitor will likely limit market potential. We are raising
our target to $13 from $8 in part on increased peak market share and
peak sales as well as increased chance of success.
After speaking to dermatologists on their opinions of the March
AN2728, we believe there is major upside to our previous estimates.
We have increased peak market share to 25% from 20%, as well as increasing AN2728’s chance of success from 40% to 50%.
Dermatologists we have spoken with think there is a strong suggestion that AN2728 could be stronger than Elidel and Protopic.
While noting there is no head-to-head data, they believe the Phase 2b very strongly suggests that AN2728 results in more symptom relief than either Elidel or Protopic.
Safety and reimbursement will remain as two major levers of AN2728’s opportunity. Pricing will also be key, and MD’s do not think the drug’s better profile will justify a higher price.