GlaxoSmithKline plc voluntarily suspended enrollment in Phase I and II trials of GSK2251052 (GSK'052), a systemic antibiotic for Gram-negative infections licensed from Anacor Pharmaceuticals Inc., due to a microbiological finding in patients enrolled in the Phase IIb in complicated urinary tract infections (cUTI).

Anacor said the finding was unrelated to safety but could have the potential to reduce efficacy. The company said patients currently enrolled in ongoing studies of the compound could continue at the discretion of the investigator.

GSK said it was obtaining additional information to evaluate the data and would not resume the trials until it concluded its investigation and determined the next steps in the compound's development.

"Ultimately, it's their decision," Anacor CEO David Perry told BioWorld Today. "We have a lot of history with this drug in this target, so they've enlisted our help and we've readily given it."

Based on the comprehensive process outlined by GSK, Perry expected the data review to take "at least several months."

Trading in Palo Alto, Calif.-based Anacor was halted briefly before the news was disclosed Monday morning. The company's shares (NASDAQ:ANAC) closed at 7. 18, down 24 cents.

GSK and Anacor inked their deal to discover, develop and commercialize small-molecule, boron-based antivirals and antibacterials in 2007. Anacor agreed to manage discovery and development through clinical proof of concept, with GSK holding the exclusive option to license eight product candidates against four undisclosed targets.

London-based GSK paid Anacor $12 million up front and made a $10 million equity investment in the biotech. With discovery, development, regulatory and commercial milestones, as well as tiered double-digit royalties on future sales, the deal was potentially valued at more than $2.5 billion to Anacor. (See BioWorld Today, Oct. 9, 2007.)

In July 2010, GSK exercised its option for an exclusive license to GSK'052, triggering a $15 million payment. At that time, GSK assumed responsibility for further development of the compound, which showed activity against multi-resistant Gram-negative bacteria in early stage studies.

In addition to the Phase IIb study in cUTI, GSK'052 is being evaluated in a Phase IIb study in complicated intra-abdominal infections and two Phase I studies in healthy volunteers. The microbiological finding occurred only in the cUTI trial, according to Perry.

"In a small number of patients in the UTI trial, there was an increase in the minimum inhibitory concentration, or the amount of drug required to kill the bacteria," Perry explained.

Potential evidence of resistance in some cUTI patients could have a number of causes, he added, noting that GSK made "a reasonable decision to pause the trial" until the underlying issue is understood.

"These are really sick patients, so you don't want to be giving them a drug that might not be effective," Perry said.

Despite the potential threat to the GSK deal, the upside is that the GSK'052 pause has no effect on the other antibiotics in Anacor's pipeline, which are directed toward different targets.

Anacor's lead compound is tavaborole (formerly AN2690), a topical antifungal for onychomycosis, a fungal infection of the nail and nail bed. Tavaborole inhibits a fungal enzyme, leucyl transfer RNA synthetase, required for protein synthesis. The company is conducting two double-blind, vehicle-controlled Phase III trials between tavaborole and vehicle, with a primary endpoint of complete cure of the great toenail at week 52, under a special protocol assessment with the FDA. Top-line data from the first Phase III are expected around the end of the year, with the second Phase III scheduled to report in early 2013.

"We have a lot of data showing that resistance is not a problem with antifungals," Perry said.

Anacor also is developing AN2718, a second topical antifungal for skin and nail fungal infections. AN2718 has the same mechanism of action as tavaborole and appears to target organisms that cause common skin and topical fungal infections, including trichophyton and Candida fungi. The company has completed its Phase I program and plans to launch a Phase II trial following completion of the tavaborole Phase III studies.

In addition, Anacor's pipeline includes AN2728 and AN2898, topical anti-inflammatory PDE-4 inhibitors of TNF-alpha and other cytokines, for psoriasis and atopic dermatitis, and AN8194, licensed to Eli Lilly and Co. for an animal health application.

Perry characterized the GSK action as "pretty straightforward," acknowledging that he had talked with many investors and potential investors in the wake of the move.

"There's a good understanding of the specific question and a good understanding that it does not have a broader impact on our other programs," he said.

Analyst reaction to the GSK also was muted. Canaccord Genuity analyst George Farmer wrote in a research note that "this setback has no bearing on ANAC's late-stage compounds. Importantly, GSK'052 is not a part of our valuation model and should not affect projected cash burn."

And Wedbush analyst Greg Wade wrote in a quick note that "this pause appears to be precautionary and for efficacy, not safety, in this very sick patient population."

A possible resistance finding is not unreasonable in urine tests for cUTI or a compound such as GSK'052 that has displayed an average frequency of resistance, added Wade, who maintained an "outperform" rating and $13 price target.