Staff Writer

Boron is a natural element found in fruits, vegetables, milk and coffee. Medicis Pharmaceutical Corp. is betting $160 million plus that in the future it will be found in a lot of people with acne.

Medicis, of Scottsdale, Ariz., agreed to pay Anacor Pharmaceuticals Inc., of Palo Alto, Calif., $7 million up front and milestones of as much as $153 million to discover and conduct early development of boron-based small-molecule compounds for acne treatment. In addition, Anacor will be eligible for what the companies described as "high single-digit to low double-digit" royalties on sales by Medicis.

Anacor has used a boron chemistry platform to discover internally five clinical product candidates for treatment of onychomycosis, psoriasis, atopic dermatitis and other skin fungal infections. Boron has unique properties that allow it to bind and interact with biological targets differently than traditional carbon-based compounds, according to Anacor.

Anacor shares (NASDAQ:ANAC) dropped 15 cents, to close at $7.09 Thursday. Medicis stock (NYSE:MRX) gained 20 cents, closing at $27.94.

Medicis will be responsible for further development and commercialization of the licensed products on a worldwide basis and will have an option to obtain an exclusive license for products covered by the agreement.

Anacor's pipeline has three lead programs. AN2690 is a topical antifungal for the treatment of onychomycosis, an infection that causes toenails to deform, discolor, thicken and separate from the nail bed, primarily caused by fungi that infect the skin, hair or nails. Anacor started enrollment in December in its Phase III program for AN2690. Pivotal testing includes two double-blind, vehicle-controlled trials enrolling about 600 patients apiece who will receive either AN2690 or a vehicle once daily for 48 weeks. The primary efficacy endpoint is a complete cure of the great toenail at week 52. The company anticipates completing enrollment in the second half of 2011 and reporting top-line data in the second half of 2012.

Earlier this month, Anacor dosed the first patients in a Phase IIb trial of a second lead candidate, AN2728, a topical, boron-based small molecule designed to inhibit phosphodiesterase-4, in psoriasis. The study is expected to enroll a total of 60 patients with mild to moderate plaque-type psoriasis randomized in a 2-to-1 ratio to receive AN2728 ointment or vehicle. Data are expected in the second half of this year. Anacor has reported results from its Phase I absorption trial of AN2728, showing that the product was well tolerated and provided a substantial margin of safety for both acute and chronic effects when applied twice daily to healthy volunteers.

Anacor also is developing a third lead candidate under an October 2007 research and development collaboration agreement with GlaxoSmithKline plc for the discovery, development and worldwide commercialization of boron-based systemic anti-infectives. The candidate, GSK 2251052, or GSK '052 (formerly AN3365), is a systemic antibiotic for the treatment of infections caused by Gram negative bacteria. GSK2251052 was optioned by GSK last year after Anacor reported Phase I proof-of-concept data. GSK has an option to license up to eight antiviral and antibacterial product candidates, potentially resulting in a deal-value upward of $2.5 billion. (See BioWorld Today, Oct. 9, 2007.)

In addition, Anacor is developing AN2718, a second compound for onychomycosis and other skin fungal infections, which is being prepared for Phase II, and AN2898, a topical anti-inflammatory product candidate for the psoriasis and atopic dermatitis. The company expects to initiate a Phase II trial of AN2898 in patients with atopic dermatitis in the first half of 2011.

Anacor also is involved in a research and development collaboration with the University of California San Francisco Sandler Center and the Lindsley F. Kimball Research Institute of the New York Blood Center to discover new drug therapies for the treatment of river blindness (onchocerciasis), a parasitic disease that is the second leading cause of infectious blindness worldwide, and is most prevalent in Africa. The goal is to identify a macro-filaricidal drug candidate that is capable of killing adult worms.

In December 2010 Anacor raised about $76.9 million from an initial public offering, overallotment option, and concurrent private placement designed to support the Phase III trial of AN2690 for onychomycosis and other boron-based programs. (See BioWorld Today, Nov. 29, 2010.)