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The Associated Press November 23, 2010, 4:09PM ET

Anacor Pharmaceuticals revamps IPO plan

Anacor Pharmaceuticals Inc. has boosted the size of its initial public offering of stock but dropped the anticipated share price and lowered its expectations.

The Palo Alto, Calif., company, which postponed its IPO last week, said Tuesday in a regulatory filing that it now expects net proceeds of about $64.2 million from the offering, which will involve about 12 million shares at an anticipated price of $5 per share. The offering comes with an option for 1.8 million more shares to cover excess demand, and proceeds could climb to $72.6 million if that is exercised in full.

The company also said funds tied to Venrock Assoc. will purchase $10 million in shares in a private placement concurrent with the closing of the offering. That amounts to 2 million shares at the $5 price.

Earlier this month, the company said it might receive net proceeds of about $71.6 million from the IPO and anticipated a share price of between $16 and $18. It had planned to offer 4.7 million shares with an option for 705,000 more.

Anacor plans to use the money to fund late-stage clinical trials of its lead products, to repay debt and cover other research and development.

The company has five products in clinical development. A key candidate is the antifungal product AN2690, for which Anacor expects to begin late-stage clinical testing. It aims at treating onychomycosis, a fungal infection of the nail and nail bed. The condition affects about 35 million people in the U.S., the company said.

Other key products include AN2728, aimed at treating the inflammatory condition psoriasis and AN2898, a topical anti-inflammatory for psoriasis and atopic dermatitis.

Anacor currently has a research agreement with Eli Lilly and Co. focusing on animal health products. It is also in a partnership with British drugmaker GlaxoSmithKline for anti-infectives.

The company lost $2.6 million in the first nine months of 2010 on $24.3 million in total revenue. All the revenues were contract related.

David P. Perry, 42, has served as president and chief executive officer of the company since March of 2002.

Anacor's common stock has been approved for listing under the ticker symbol "ANAC" on the Nasdaq Global Market.

Citigroup Global Markets Inc. and Deutsche Bank Securities Inc. are managing the offering.

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