Why Anacor Pharmaceuticals Is Poised to Pull Back

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, biopharmaceutical 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.

Anacor facts

Headquarters (founded)

Palo Alto, Calif. (2000)

Market Cap

$422.6 million

Industry

Biotechnology

Trailing-12-Month Revenue

$10.9 million

Management

CEO David Perry (since 2002)
CFO Geoffrey Parker (since 2010)

Return on Capital (average, past 3 years)

(105.7%)

Cash/Debt

$45.8 million / $27.7 million

Competitors

Novartis
Sanofi


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

Just yesterday, All-Star zzlangerhans touched on Anacor's seemingly unsustainable valuation:

[T]avaborole is likely to be an also-ran to Valeant's efinaconazole which has a substantially higher cure rate in phase III trials. Tavabarole is likely to be approved, but revenues will almost certainly be disappointing. A similar fate may await atopic dermatitis drug AN2728, which is yet to begin phase III trials but was only modestly efficacious in phase II.

As always, when a stock runs like this and attracts pumpers and momo traders I have no idea where the upward trajectory will end. Good chance I go deep into the red here, but a better chance I come out green in the end.

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The article Why Anacor Pharmaceuticals 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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