West Coast Editor

Privately held Anacor Pharmaceuticals Inc.'s Phase II antifungal for onychomycosis, which afflicts nails and nail beds, drew $40 million up front from Schering-Plough Corp., with a $10 million financing and another $575 million in potential milestone payments, along with royalties.

Schering-Plough, of Kenilworth, N.J., is paying all costs to develop the topical drug for onychomycosis and other indications, and Anacor retains an option to co-promote in the U.S. as part of the worldwide deal, expected to close later this quarter.

AN2690, which emerged from Anacor's boron chemistry platform, inhibits Trichophyton rubrum and Trichophyton mentagrophytes, the two major fungi that cause onychomycosis, afflicting 7 percent to 10 percent of the U.S. population, including 48 percent of those older than 70.

The infection causes nails to deform, discolor and split. Without treatment, the nails thicken and cause localized pressure-related pain. Currently marketed terbinafine tablets, branded Lamisil by Basel, Switzerland-based Novartis AG, work in about half of all cases, and the product sells more than $1 billion per year worldwide, despite toxicity risks.

"Lamisil is currently the gold standard, and we may have activity approaching that [with topical AN2690]," said Karl Beutner, chief medical officer of Palo Alto, Calif.-based Anacor.

Topical treatment succeeds in less than 12 percent of patients, yet worldwide sales of the existing topical medication - the lacquer Penlac (ciclopirox) from Sanofi-Aventis Group, of Paris - total about $300 million annually.

"It's not intuitive why a topical [drug] wouldn't work," Beutner acknowledged. "The problem is that the antifungals being studied were originally designed for nontopical applications." Undergoing three Phase II trials, AN2690 is said to penetrate the nail 200 times better than Penlac.

"Our chemists set out with a theory of what attributes a drug would need in order to want to penetrate the nail," such as low molecular weight and high water solubility, Beutner told BioWorld Today.

Also in Phase II trials, Anacor has topical AN0128 for atopic dermatitis, or eczema. About 80 percent of patients are colonized with Staphylococcus aureus, a bacterium against which AN0128 has shown potent activity in vivo and in vitro, Anacor said. What's more, the product offers antibacterial and anti-inflammatory activity, which could allow for its use as a monotherapy.

Farther back in the pipeline is preclinical AN2728 for psoriasis, shown in small doses to inhibit TNF-alpha, the pro-inflammatory cytokine that is the main target of most existing biologics. But those marketed drugs are indicated for moderate to severe psoriasis, which represents only about 30 percent of the patient population. AN2728 could work against the rest.

Schering-Plough, for its part, has been building not only its anti-infective franchise but efforts in other therapeutic areas, through a series of recent deals, including the December licensing pact with Valeant Pharmaceuticals International Inc. for rights to the hepatitis B candidate pradefovir, a drug Costa Mesa, Calif.-based Valeant gained through a 2000 agreement with Metabasis Therapeutics Inc., of San Diego. (See BioWorld Today, Dec. 15, 2006.) In January, Schering-Plough entered deals with the Dutch company ALK-Abello A/S to develop and commercialize tablet-based allergy immunotherapies in the U.S., Canada and Mexico, and with OraSure Technologies Inc., of Bethlehem, Pa., to come up with a rapid oral test to detect antibodies to the hepatitis C virus.