(Reuters) - Anacor Pharmaceuticals Inc’s experimental skin ointment succeeded in late-stage studies, taking the drugmaker a step closer to having a potential blockbuster in its portfolio and raising expectations that it could be taken over.
The company’s shares, which have more than quadrupled in the past year up to Friday’s close, rose more than 50 percent on Monday to a life high of $127.19.
“Personally, I’d love to see Anacor independent a little bit longer, but I don’t think its going to happen,” said Paul Yook, portfolio manager at BioShares Biotechnology Funds, which holds a stake in the drugmaker.
Analysts said they expected the ointment to eclipse $1 billion in sales and potentially be prescribed as a first-line treatment for atopic dermatitis, an unsightly skin condition characterized by itchiness and inflammation.
That could make Anacor an attractive target.
Potential bidders could include Novartis AG, Allergan Plc and Japan’s Astellas Pharma Inc, among others, Yook said.
Yook said he expected any offer for Anacor to be at a per share premium of 50-90 percent.
That compares with the 23.5 percent premium Allergan agreed to pay for Kythera Biopharmaceuticals Inc and its double-chin product in a $2.1 billion deal in June.
Anacor represents the “holy grail of biotech company investment,” Yook said, pointing to the company’s robust portfolio, including the potential blockbuster skin ointment that Anacor is developing without a partner.
The ointment, Crisaborole, cleared two late-stage studies testing it for use in atopic dermatitis and was successful in both children and adults, the company said.
Atopic dermatitis affects about 18-25 million people in the United States, mostly infants and children, Anacor said.
Existing treatments include topical cortical steroids, which can weaken skin, and non-steroidal treatments, such as Novartis AG’s Elidel and Astellas Pharma US Inc’s Protopic, which have been linked with cancer.
Other companies developing treatments for atopic dermatitis include Oculus Innovative Sciences Inc, Pfizer Inc, Regeneron Pharmaceuticals Inc, and Celsus Therapeutics Plc.
Palo Alto, California-based Anacor said it expects to submit a marketing application for the drug in the first half of 2016.
Wedbush Securities’s David Nierengarten said Crisaborole’s safety and efficacy profile would make it the best product in its class.
Shares of the company, which is also testing Crisaborole for psoriasis, were up 48.4 percent at $125.60 on Monday, making them the top percentage gainer on the Nasdaq.
Additional reporting by Anjali Rao Koppala in Bengaluru; Editing by Saumyadeb Chakrabarty and Simon Jennings