Wednesday, June 19, 2013

Stocks DD Opines on Anacor: An interesting speculative long term value play

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Anacor pharma IR preso at Deutsche Bank Conf



1. They have cash at least until launch next year
2. 1 interesting pre-NDA asset (onychomycosis) and another more interesting phase 3 asset(atopic dermatitis). Phase 3 to start early next year. There are good market comparables which seem to suggest the 2 products together could garner $300m in peak sales conservatively. Read company's IR presentation for details and Seeking Alpha contributors. SA link
3. Insider ownership very high at 46%. The company was founded >10 years ago.
4. Their market cap is <$209m
5. CFO purchased approx 43k shares at ~$5.2 in the open market this week.
6. Share price of $5.18 is below their recent secondary offering of $6.39.
7. They may be awarded a potential monetary settlement with Valeant in September after their arbitration hearing. If they win , they could get damages up to $215m in which case they will likely have no need to dilute in future. I will be studying the merits of this case and make another post.

Keep in mind, this is a speculative play.

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