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Anacor Pharmaceuticals, Inc. (ANAC - Snapshot Report) recently announced positive preliminary results on tavaborole (AN2690) from Study 301. Tavaborole is being developed for the prevention of onychomycosis.

According to information provided by Anacor, roughly 35 million people in the US suffer from onychomycosis, a fungal infection of the nail and nail bed.

Study 301 is the first of two phase III clinical trials of tavaborole in onychomycosis. The study was conducted under the US Food and Drug Administration’s (FDA) Special Protocol Assessment (SPA) program. The double-blind, vehicle-controlled trial enrolled roughly 594 patients and was conducted in the US and Mexico.

The study met both the primary and secondary endpoints. The primary endpoint included the achievement of “complete cure” (6.5% of patients in the tavaborole arm compared to 0.25% in the vehicle-treated arm).

Secondary endpoints included the achievement of a "completely clear" or “almost clear" nail (26.1% of patients in the tavaborole arm compared to 9.3% in the vehicle-treated arm), achievement of mycological cure (31.1% of patients in the tavaborole arm compared to 7.2% in the vehicle-treated arm) and the achievement of "completely clear" or "almost clear" nail with mycological cure (15.3% of patients in the tavaborole arm compared to 15% in the vehicle-treated arm).

Data from the second phase III double-blind, vehicle-controlled study (Study 302) conducted in the US and Canada is expected in Mar 2013.

Our Take

Despite presenting positive data from the study, Anacor’s shares were down more than 20% on the news. Although tavaborole met its primary and secondary endpoints, results presented by Valeant Pharmaceuticals (VRX - Analyst Report) on its onychomycosis candidate, efinaconazole, were much more favorable (17.8% of patients in the efinaconazole arm were completely cured compared to only 3.3% in the vehicle arm). As far as the secondary endpoints of complete or almost complete cure and complete mycologic cure, the success rates for efinaconazole were 26.4% and 23.4%, respectively.

Although tavaborole did not achieve the same level of efficacy as efinaconazole, the positive results and potentially favorable results from the second phase III study should allow the company to go ahead with the filing of a new drug application in the US in mid-2013.

Anacor carries a Zacks Rank #3 (Hold). Some stocks in the pharmaceutical sector that currently carry a Zacks Rank #1 (Strong Buy) are Agenus Inc. (AGEN - Snapshot Report), Salix Pharmaceuticals Ltd. (SLXP - Analyst Report) and Valeant.

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