Palo Alto, Calif.
March 25, 2008

Anacor Pharmaceuticals today announced results from a Phase 2a clinical trial of AN2728, an investigational topical anti-inflammatory drug, in patients with psoriasis. The study met its primary endpoint and all secondary endpoints.

In 69 percent of patients, the area treated with AN2728 scored better at the end of therapy than the area treated with the vehicle ointment, compared with six percent of patients in whom the vehicle-treated areas were superior. These results were statistically significant (p<0.001). No drug-related safety issues were reported.

"The results of this study suggest that AN2728 can effectively treat psoriasis in a clinical setting. In addition, plaques treated with AN2728 continued to improve over the course of the 28 days of therapy, suggesting longer-term treatment may have an even greater effect," said Karl R. Beutner, M.D., Ph.D., Senior Vice President and Chief Medical Officer of Anacor. "These results are encouraging for both AN2728 and our entire anti-inflammatory program."

AN2728 is a novel boron-containing small molecule that inhibits the release of pro-inflammatory cytokines including TNF-alpha, IL-12, and IL-23, known mediators of the inflammation associated with psoriasis.

The randomized, double-blind, placebo-controlled trial was designed to evaluate the safety and efficacy of an ointment containing a 5% concentration of AN2728 with patient self-application. Patients with psoriasis commonly have similar areas of psoriasis on their left and right, or front and back sides. The study took advantage of this bilateral characteristic of psoriasis. In this trial, 35 patients treated one of their areas of psoriasis with AN2728 ointment, and a matching area on the opposite side with vehicle alone, twice a day for four weeks.

In addition to this Phase 2a study, two Phase 1b dose-ranging trials have investigated the effects of concentration and formulation on drug efficacy. These earlier trials demonstrated significant activity even at a 0.5% concentration of AN2728, the lowest concentration tested.

About Psoriasis
Affecting approximately 10 million people worldwide, psoriasis is an inflammation of the skin caused by a reaction of the immune system. It is characterized by thickened patches of inflamed, red skin covered with thick, silvery scales typically found at the elbows, knees, scalp and genital areas.

About Anacor Pharmaceuticals
Anacor is a biopharmaceutical company developing novel small molecule therapeutics derived from its boron chemistry platform. Anacor has focused initially on developing topical applications of its compounds to treat fungal, bacterial and inflammatory diseases. Anacor's most advanced product candidate is AN2690, a novel topical antifungal in development for the treatment of toenail onychomycosis, which is a fungal infection of the nail and nail bed. Anacor entered into a worldwide license, development and commercialization agreement for AN2690 with Schering-Plough for all indications including the treatment of onychomycosis. Anacor also has a research and development collaboration with GlaxoSmithKline for the discovery, development, manufacture and worldwide commercialization of novel systemic therapeutics for viral and bacterial diseases utilizing Anacor's boron-based chemistry. For more information visit www.anacor.com.

Forward-Looking Statements
This press release contains forward-looking statements, including statements regarding the progress and timing of our clinical trials and the safety and efficacy of our product candidates. These statements relate to future events and involve known and unknown risks, uncertainties and other factors that could cause actual levels of activity, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. Some factors that may affect these forward-looking statements include, but are not limited to, delays in the completion of our clinical trials, clinical failure at later stages of development and undesirable effects from our product candidates. These statements reflect the views of Anacor as of the date of this press release with respect to future events and, except as required by law, it undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this press release.