Anacor Pharmaceuticals has entered into an exclusive worldwide agreement with Schering-Plough for the development and commercialization of AN2690, a topical anti-fungal therapy currently in Phase II trials for onychomycosis, a fungal infection of the nail and nail bed that affects 7 to 10% of the U.S. population.

Anacor will receive a $40 million upfront payment and a $10 million financing commitment from SP. The company may receive more than $575 million for development, regulatory and commercial milestones and will receive royalty payments on future sales. SP will be responsible for development costs and Anacor retains an option to co-promote the drug in the U.S. The transaction, subject to expiration or early termination of the waiting period under the Hart, Scott, Rodino Antitrust Improvements Act (HSR), is expected to close in the first quarter of this year.

"The deal enables the development and commercialization of AN2690 to its fullest potential and provides the resources necessary to advance other promising, proprietary drug candidates in our pipeline. In addition, the co-promote option gives Anacor the opportunity to build a fully integrated pharmaceutical company in the future," said David Perry, chief executive officer of Anacor. "Schering-Plough's worldwide reach, ability to effectively market to general practitioners, and experience with topical and dermatologic treatments makes them an ideal partner for Anacor and AN2690."

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