Pfizer to Acquire Anacor Pharmaceuticals for $5.2 Billion to Expand Dermatology Portfolio with Crisaborole

According to Business Wire, Pfizer and pharmaceutical company Anacor jointly announced on May 16 that they had reached a definitive merger agreement. Pfizer will acquire Anacor for $99.25 per share in cash, with the total transaction value amounting to $5.2 billion, which includes Anacor’s outstanding convertible notes. The boards of directors of both companies have unanimously approved the transaction.

Pfizer expects to complete the transaction using its existing cash reserves and does not anticipate that the deal will impact its 2016 financial plans. The company projects that the transaction will slightly reduce its adjusted diluted earnings per share (EPS) in 2017, with adjusted diluted EPS increasing incrementally from 2018 onward.

Under the terms of the merger agreement, a subsidiary of Pfizer will acquire Anacor’s common stock in cash at a price of $99.25 per share. The completion of the tender offer is subject to certain conditions, including U.S. antitrust approval and the tendering of a majority of Anacor’s outstanding common shares. Pursuant to the merger agreement, Pfizer will promptly conduct a second-step acquisition for any Anacor shares not tendered in the offer. Pfizer expects the entire acquisition to be completed in the third quarter of 2016.

Anacor's flagship product, crisaborole, is expected to achieve annual sales of $2 billion

Anacor’s flagship product, crisaborole, is a differentiated non-steroidal phosphodiesterase 4 (PDE4) inhibitor with anti-inflammatory properties. Crisaborole is indicated for the treatment of mild-to-moderate atopic dermatitis, commonly known as eczema. Statistical data from March 2016 demonstrated that crisaborole had significant efficacy in reducing mild and moderate inflammation. The U.S. Food and Drug Administration (FDA) is currently reviewing Anacor’s new drug application for crisaborole as a treatment option for mild-to-moderate atopic dermatitis in both pediatric and adult patients. The FDA is expected to announce its decision by January 2017. If approved, Pfizer projects that annual sales of crisaborole could reach up to $2 billion.

Pfizer CEO Albert Bourla stated, “There is a large population of patients with mild-to-moderate atopic dermatitis. Currently, there are no safe topical therapies available on the market, representing a significant and largely unmet medical need. We believe that acquiring Anacor presents an excellent opportunity. Crisaborole has compelling clinical data, and if approved, it is likely to become the preferred treatment option for both patients and physicians.”

Atopic dermatitis is a common, recurrent, chronic inflammatory skin condition, in which patients often present with chronic rashes characterized by inflammation and pruritus. It frequently affects skin folds, with symptoms lasting up to 14 days or even longer. In the United States, approximately 18 to 25 million people are affected by this disease, and 8% to 18% of infants and children suffer from it. Due to the lack of effective therapeutic agents and the limitations of current topical treatments, a significant number of atopic dermatitis cases remain undiagnosed.

Bourla also stated, “There is significant potential for collaboration between Anacor and Pfizer’s Innovative Business unit, which will strongly support our research in inflammation and immunology and is expected to boost short-term revenue for the Innovative Business. Our specialized inflammation and immunology team holds market franchises for Enbrel and Xeljanz, along with a robust mid-stage pipeline; this acquisition will facilitate the near-term launch of new products. We are confident that, leveraging our strong relationships with pediatricians and primary care physicians, we can fully maximize the commercial potential of crisaborole.”