Take Long View

What: After the company reported positive top-line results from two key phase 3 studies, growing enthusiasm for drugs discovered by Anacor Pharmaceuticals' (NASDAQ:ANAC) boron chemistry platform sent the company's shares soaring by 92.7% in July.

So what: Anacor Pharmaceuticals won approval for its toenail-fungus-fighting drug Kerydin in July 2014 and sales have been building steadily since marketing partner Novartis' Sandoz unit began pitching it to doctors.

In its first quarter conference call, management reported that Kerydin sales during the first two weeks of April were running at an annualized $110 million clip and if Anacor maintained or improved upon that pace, then its second quarter results could outpace analyst expectations when they're reported on Aug. 6.

But it's crisaborole, the company's therapy for the treatment of mild to moderate atopic dermatitis, or eczema, that could really move the needle for Anacor. Anacor reported last month that crisaborole, a PDE-4 inhibiting topical ointment, met all its primary and secondary endpoints for statistical significance during phase 3 trials.

In one of two studies, 51.7% of patients achieved a 0 or a 1 on the investigator's static global assessment at day 29 and 32.8% did so with a minimum two-grade improvement. In the second study, the results were 48.5% and 31.4% for these two groupings, respectively.

Based on those results and an acceptable safety profile, management plans to file for FDA approval early next year and if crisaborole is approved, they believe it could become the go-to therapy for use in mild to moderate eczema patients age 2 and up.

Now what:  Kerydin's market growth and crisaborole's market potential have industry watchers increasingly optimistic. Following the crisaborole data release, analysts at both Goldman Sachs and Merrill Lynch upgraded their rating to a buy and, overall, estimates for Anacor's net loss per share this year have improved to $1.12 from $1.41 over the past 90 days.

Investors will likely be watching closely to see if Anacor can overdeliver on the Street's net loss forecast of $0.32 per share for the second quarter when they report after the bell Thursday. If so, it would mark a significant improvement over the $0.58 loss reported the year before and could help push the shares even higher. Regardless, with a $6.7 billion market cap, a lot of upside is already priced into Anacor's shares and that means investors should approach this one cautiously.

Todd Campbell has no position in any stocks mentioned. Todd owns E.B. Capital Markets, LLC. E.B. Capital's clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. 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.