Anacor Pharmaceuticals Inc. reached an agreement with Valeant Pharmaceuticals International, Inc. (VRX - Analyst Report) relating to the breach of contract disputes with Dow Pharmaceutical Sciences, Inc. and Medicis Pharmaceutical Corporation. Valeant acquired Dow Pharma in Dec 2008 and Medicis in Dec 2012.
Valeant will pay $142.5 million to settle both the disputes with Anacor. This payment is inclusive of the previously announced $100 million award of damages to Anacor related to the dispute with Dow Pharma. Valeant will make the payment to Anacor by Nov 8, 2013.
We note that in Oct 2012, Anacor had issued a notice to Valeant seeking to commence arbitration of a breach of contract dispute under a master services agreement dating Mar 2004 between Anacor and the erstwhile Dow Pharma. The agreement was about certain development services provided by the erstwhile Dow Pharma in connection with Anacor’s IDP-108 for the treatment of onychomycosis - a fungal infection.
Anacor accused Medicis of breach of contract through an arbitration demand filed by the former in Nov 2012, under the Feb 2011 research and development agreement between the two entities. Anacor sought damages in the form of payment for the achievement of certain preclinical milestones. In Dec 2012, Medicis filed a complaint for breach of the Medicis Agreement and a motion for preliminary injunction in the court seeking to enjoin Anacor from prosecuting its claims through arbitration. In Jan 2013, Anacor filed a motion requesting that the court dismiss the Medicis suit. Anacor requested the court to send the dispute back to arbitration. The court dismissed Anacor's motion in Aug 2013 and ruled that it had jurisdiction over the disputed matter.
Anacor carries a Zacks Rank #4 (Sell). Currently, companies like Isis Pharmaceuticals, Inc. and AMAG Pharmaceuticals Inc. (AMAG - Analyst Report) look attractive with a Zacks Rank #1 (Strong Buy).