Anacor Pharmaceuticals announced that Merck has returned full worldwide development and commercialization rights for AN2690 to Anacor. AN2690 is a topical anti-fungal therapy being developed for onychomycosis, a fungal infection of the nail and nail bed. It is estimated that onychomycosis affects approximately 35 million people in the United States.

"With our Merck colleagues, we have successfully advanced AN2690 to this late-stage of development," said David Perry, chief executive officer of Anacor Pharmaceuticals, Inc. "Together we successfully completed an 'End of Phase 2' meeting with the Food and Drug Administration and we are confident that this 'Phase 3 ready' candidate targeting a large patient population represents a compelling opportunity for an under served market."

In February 2007, Anacor entered into an exclusive, worldwide license, development and commercialization agreement with Schering Corporation, now a subsidiary of Merck, for the development and worldwide commercialization of AN2690.

"We are conducting a comprehensive and rigorous prioritization of our newly combined pipeline. This process has required us to make some challenging decisions," said David Nicholson, senior vice president and head of Worldwide Licensing and Knowledge Management at Merck. "We've enjoyed our productive collaboration with our Anacor colleagues and look forward to identifying other opportunities to work together in the future."

Anacor and Merck have successfully manufactured the product candidate and completed certain phase-3 preparatory activities such as stability testing and packaging design. Anacor is planning to initiate phase-3 clinical trials as soon as the AN2690 program is transferred from Merck to Anacor. Simultaneously, Anacor will evaluate new partnering opportunities for AN2690.

Anacor is a biopharmaceutical company developing novel small molecule therapeutics derived from its boron chemistry platform.