In Another Small Deal, Pfizer Slams Down $5.2 Billion for Bay Area Drugmaker Anacor

In Another Small Deal, Pfizer Slams Down $5.2 Billion for Bay Area Drugmaker Anacor May 16, 2016
By Mark Terry, Breaking News Staff

Pfizer said today that it is acquiring Palo Alto, California-based Anacor Pharmaceuticals for $5.2 billion.

As part of the deal, Pfizer gets Anacor’s flagship project, crisaborole, a non-steroidal topical PDE4 inhibitor for the treatment of mid-to-moderate atopic dermatitis, otherwise known as eczema. The offer is for $99.25 per Anacor share, in cash.

Crisaborole has been in two Phase III pivotal studies, and has shown statistically significant results on all primary and secondary endpoints. The U.S. Food and Drug Administration (FDA) accepted Anacor’s New Drug Application in March 2016 for crisaborole and its PDUFA date is Jan. 7, 2017. If approved, the drug could have potential peak annual sales of $2 billion.

“Anacor will be a strong fit with Pfizer’s innovative business, further supporting our strategic focus on inflammation and immunology, and is expected to enhance near-term revenue growth for the innovative business,” said Albert Bourla, Pfizer’s group president of Global Innovative Pharma and Global Vaccines, Oncology and Consumer Healthcare Businesses, in a statement. “Our dedicated inflammation and immunology group has strong existing in-market franchises with Enbrel and Xeljanz, as well as a robust mid-stage pipeline, and this acquisition has the potential to add a near-term U.S. product launch. We believe we are well positioned to maximize crisaborole’s commercial potential through our strong relationships with pediatricians and primary care physicians.”

In addition to crisaborole, Anacor holds the rights to Kerydin, a topical treatment for toenail fungus, which is distributed and commercialized in the U.S. by Sandoz, a Novartis company.

“Pfizer’s going to end up splitting,” said Jeff McCracken, Global Managing Editor, Deals, at Bloomberg. “Since the Allergan thing fell apart, the next best option for Pfizer is to break into two or three companies. So they’ve got an OTC business, an established products business, and a kind of future drugs that are coming. This will probably—I’m not exactly sure—fall into the futures business. So for Pfizer, you’re probably going to see a lot of deals like this. They seem small relative for Pfizer, but you add them up they create another company that will probably be the Pfizer going forward.”

“Today, marks the beginning of an exciting new chapter for Anacor, which we believe will deliver significant value to our shareholders,” said Paul Berns, chairman and chief executive officer for Anacor, in a statement. “We have a deep respect for Pfizer, and it is clear that they share our commitment to addressing the significant unmet medical needs in inflammatory disease. We are proud of the innovative company that our team has built and are confident that Pfizer will help accelerate Anacor’s important mission given the strength of its global platform and resources.”

In light of the Pfizer-Allergan merger falling apart as the result of new U.S. Treasury Department regulations designed to make tax inversion deals more difficult, Pfizer seems to have shifted its strategy away from mega-deals to acquiring products or companies that have products close to being launched.

On May 5, Pfizer signed a deal with Cambridge, Massachusetts-based WAVE Life Sciences to develop up to five programs from discovery to clinical candidate selection. At that point, Pfizer will have the option to exclusively license the programs and continue development.

WAVE gains access to Pfizer’s hepatic targeting technology. If WAVE does use it, Pfizer is eligible for various development and commercial milestones, as well as tiered royalties on sales.

The WAVE-Pfizer deal involves $40 million upfront, $30 million in the form of an equity investment at $16 per share. If all five products are successfully developed and marketed, WAVE could earn up to $871 million in various milestones, as well as royalties.

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