Anacor Issues Update on Arbitration with Valeant, Says Prelim. Injunction Hearing Cancelled

Anacor Pharmaceuticals (NASDAQ: ANAC) today announced that ValeantPharmaceuticals International, Inc. (NYSE: VRX), or Valeant, has agreed that the launch ofefinaconazole, its topical product candidate for the treatment ofonychomycosis, will not occur until after the September 2013 arbitrationhearing to resolve our breach of contract dispute with Valeant. As a result,the preliminary injunction hearing which was scheduled for May 6-8, 2013 hasbeen canceled.As previously disclosed, in October 2012, we provided notice to Valeant,successor in interest to Dow Pharmaceutical Sciences, Inc., or DPS, seeking tocommence arbitration with JAMS of a breach of contract dispute under a masterservices agreement dated March 26, 2004 between DPS and us related to certaindevelopment services provided by DPS in connection with our efforts to developtavaborole, our topical antifungal product candidate for the treatment ofonychomycosis. We have asserted claims for breach of contract, breach offiduciary duty, intentional interference with prospective business advantageand unfair competition. We are seeking injunctive relief and damages of atleast $215.0 million. The final arbitration hearing is currently scheduled forSeptember 2013, and we expect the resolution of the arbitration to occur inthe second half of 2013. We have carefully reviewed our position and believethat we have meritorious claims; however, we will need to prove such claims inthe arbitration hearings.