The Race To The Market: Anacor and Valeant

For investors in Valeant Pharmaceuticals and Anacor Pharmaceuticals , it's an exciting time. Both of their Onychomycosis (a nail infection caused by fungus under the toenail or fingernail) drugs will hopefully hit the market within the next few months. While Valeant's Jublia already gained FDA approval, Anacor will be waiting until July 29 for the FDAs decision. As the companies prepare to compete with each other in the marketplace it is important for investors to attempt an analysis of the sales potential and efficacy of each drug and how they compare.

Clinical data: Who wins?
Comparing between trials is problematic because the drugs have not been tested in head to head trials. However, we are able to draw some inferences from both companies' phase 3 trials as they had a similar primary endpoint which was rate of complete cure. For the primary endpoint, Jublia demonstrated statistically significant complete cure rates of 17.8% and 15.2% in two different trials. The drug was also well tolerated and had a safety profile similar to the control.

Anacor's drug Kerydin demonstrated a complete cure rate of 6.5% and 9.1% in its two phase 3 trials. Similar to Valeant, the drug was found to be safe and effective with a similar adverse event profile to the vehicle. Having the results of both trials, we are now able to compare.

It appears that Jublia may be more efficacious due to its higher cure rate. Both drugs had similar safety profiles, so safety is not a concern. Of course, the big question is whether Valeant will be able to leverage those results and its substantial size advantage to gain a larger market share than Anacor.

Market potential
Valeant is guiding for U.S. Jublia sales to peak between $300 and $800 million. Worldwide peak sales potential will increase as Valeant obtains approval in other markets. Anacor will also have its niche; according to one estimate, Anacor's drug  has a peak sales potential of $600 million. A sales ramp-ump will hopefully help move Anacor into profitability, as it lost $21 million last quarter.

While at the top end Jublia could potentially earn more than Kerydin, Anacor is much more tied to Kerydin. Anacor has no marketed products and minimal revenue, so a product approval will matter much for fundamentally to the company. While more sales are always welcome at Valeant, a few hundred million just won't move the needle as much for a company that made $5.8 billion last year.

The bottom lineWhile Anacor may be at an efficacy disadvantage, a drug approval and the potential for commercial success of Kerydin will matter significantly to the company and its pipeline opportunities moving forward. Investors will want to keep a close eye on the FDA on July 29th for Anacor, and watch to see what commercialization looks like for both drugs.

Leaked: This coming blockbuster will make every biotech jealous
The best biotech investors consistently reap gigantic profits by recognizing true potential earlier and more accurately than anyone else. Let me cut right to the chase. There is a product in development that will revolutionize not how we treat a common chronic illness, but potentially the entire health industry. Analysts are already licking their chops at the sales potential. In order to outsmart Wall Street and realize multi-bagger returns you will need to Motley Fool's new free report on the dream-team responsible for this game-changing blockbuster. CLICK HERE NOW.

The article The Race To The Market: Anacor and Valeant originally appeared on

Alexander Maxwell has no position in any stocks mentioned. The Motley Fool recommends Valeant Pharmaceuticals. The Motley Fool owns shares of Valeant Pharmaceuticals. 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.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story