Why Anacor Is Poised to Pull Back

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Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biotechnology company Anacor Pharmaceuticals has received the dreaded one-star ranking.

With that in mind, let's take a closer look at Anacor and see what CAPS investors are saying about the stock right now.

Anacorfacts

Headquarters (founded)

Palo Alto, Calif. (2000)

Market Cap

$224.6 million

Industry

Biotechnology

Trailing-12-Month Revenue

$10.7 million

Management

CEO David Perry
CFO Geoffrey Parker

Return on Capital (average, past 3 years)

(62.1%)

Cash/Debt

$45.5 million / $25.7 million

Competitors

Johnson & Johnson
Novartis
Sanofi


Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 40% of the 43 members who have rated Anacor believe the stock will underperform the S&P 500 going forward.

Earlier this morning, one of those Fools, All-Star zzlangerhans, succinctly summed up the Anacor bear case for our community:

As predicted, in March the stock rebounded from the weak phase III performance of tavaborole with positive results from dose-ranging phase II trial of AN2728 in atopic dermatitis. But [$220M] is simply too much for a phase II drug in the crowded indication of atopic dermatitis. Anacor will certainly raise big before getting close to topline data from a phase III trial of AN2728, and approval of Valeant's efinaconazole in May will provide another nail for tavaborole's coffin.

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The article Why Anacor Is Poised to Pull Back originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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