Pfizer To Buy Anacor For $5.2 Billion

Pfizer Inc.

and Anacor Pharmaceuticals, Inc.

revealed that they have struck a definitive merger agreement. Accordingly, the former would buy the latter for $99.25 per share, in cash. The total transaction value, net of cash, is estimated to be approximately $5.2 billion, which assumes the conversion of Anacor's outstanding convertible notes. The two companies said that their Boards have unanimously approved the transaction. Interestingly, Anacor's flagship asset, crisaborole, a differentiated non-steroidal topical PDE4 inhibitor with anti-inflammatory properties, is presently under review by the U.S. FDA for the treatment of mild-to-moderate atopic dermatitis, commonly referred to as eczema. Pfizer expects financing of the transaction to be done with its existing cash. The company does not expect the transaction to impact its current year financial forecast. However, the pharmaceutical firm sees the transaction to be slightly dilutive to Adjusted Diluted Earnings Per Share next year with accretion to Adjusted EPS commencing from 2018 and increasing thereafter. The drug maker said that as per the agreed terms, its subsidiary would begin a cash tender offer to acquire all of the outstanding shares of Anacor common stock for $99.25 per share in cash. The company indicated that the closing of the offer was subject to customary closing conditions. The agreement contemplated that Pfizer would buy any shares of Anacor, which were not tendered into the offer through a second-step merger, which would be completed after the closure of the tender offer. The company expects to complete the transaction in the third-quarter the current year. Pfizer's Group President for Global Innovative Pharma and Vaccines, Oncology and Consumer Healthcare, Albert Bourla, said, "We believe the acquisition of Anacor represents an attractive opportunity to address a significant unmet medical need for a large patient population with mild-to-moderate atopic dermatitis, which currently has few safe topical treatments available. Crisaborole is a differentiated asset with compelling clinical data that, if approved, has the potential to be an important first-line treatment option for these patients and the physicians who treat them." He continued to add that "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. 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." Pfizer is betting on the Phase 3 pivotal studies that crisaborole achieved statistically significant results on all primary and secondary endpoints. In March, the FDA accepted for review Anacor's New Drug Application seeking approval of crisaborole for the potential treatment of mild-to-moderate atopic dermatitis in children and adults. The company indicated that the Prescription Drug User Fee Act (PDUFA) goal date for the completion of the regulator's review is January 7, 2017. Therefore, if approved, the company believes that the peak year sales for crisaborole would exceed $2.0 billion. Reacting to the developments, Anacor's Chairman and CEO, Paul Berns, said, "Today marks the beginning of an exciting new chapter for Anacor, which we believe will deliver significant value to our shareholders. 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." Anacor currently holds the rights to Kerydin, a topical treatment for onychomycosis, which is distributed and commercialized by Sandoz Inc. in the United States. In the Pre-market trading, ANAC jumped 53.4%, while PFE traded 0.48% down.