Anadys Announces Initiation of Clinical Trial of ANA971, an Orally Administered Prodrug of Isatoribine.

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SAN DIEGO--(BUSINESS WIRE)--Feb. 19, 2004

Anadys Pharmaceuticals initiates Phase I clinical trial of

isatoribine prodrug for study as a hepatitis C therapy

Anadys Pharmaceuticals, Inc. ("Anadys") announced today that it has initiated a clinical trial of ANA971, an orally administered prodrug of isatoribine. Isatoribine is a nucleoside analog in development for the treatment of chronic hepatitis C virus (HCV) infection. To date, isatoribine has been administered to 48 subjects, including 28 patients chronically infected with HCV. A recent clinical study showed that intravenous administration of isatoribine was well tolerated and safe at all doses tested. Interim results from that study have also shown preliminary biological activity and viral load reduction in the patient populations whose clinical data has been completed and analyzed. ANA971, which was discovered by Anadys, is a prodrug designed to improve the oral bioavailability of isatoribine. Anadys has exclusive rights to market and commercialize isatoribine and ANA971 worldwide.

In preclinical animal studies, oral administration of ANA971 resulted in higher levels of isatoribine in the blood than were present after oral administration of isatoribine itself. The objectives of this clinical trial are to assess safety and pharmacokinetics in healthy volunteers following oral administration of ANA971.

"Initiation of this clinical trial represents another important step toward our goal of improvement of HCV patient care, and builds on the results of clinical work we have conducted with isatoribine," said Devron Averett, Ph.D., Senior Vice President of Drug Development for Anadys.

About isatoribine (ANA245)

Isatoribine is a nucleoside analog Anadys is evaluating in ongoing clinical trials for the treatment of HCV infections. Isatoribine represents one of a new class of drugs being developed by Anadys to regulate innate immunity, combat HCV infection, and overcome limitations of current anti-HCV therapies. Anadys believes isatoribine interacts with a specific receptor, Toll-like receptor 7, or TLR7, that is present on certain immune system cells. Although results of initial clinical trials may not be predictive of future results, interim results of the Phase 1B clinical trial show that isatoribine is biologically active in adults with chronic HCV infection and results from dosing a cohort of six HCV infected patients with 800mg of isatoribine showed a statistically significant reduction of viral load (p=0.03) at the end of one week, with a median change in viral load from baseline of -0.94 log10 units(a). Anadys is currently enrolling patients for an isatoribine Phase I/II study.

About hepatitis C

HCV causes inflammation of the liver and degradation of liver function. HCV infection is currently the most common chronic blood-borne infection in the United States. Approximately 2.7 million people in the United States are chronically infected with HCV, and it causes 10,000 to 12,000 deaths a year in the United States. The Centers for Disease Control and Prevention, or CDC, estimates the annual mortality rate in the United States could increase to 38,000 by the year 2010, surpassing the number of deaths attributed annually to HIV/AIDS. HCV is transmitted primarily through significant or repeated exposures to infected blood. Approximately two thirds of new infections progress to chronic infection. Chronic HCV infection may also progress to more serious complications such as cirrhosis of the liver, liver cancer, and death.

About Anadys Pharmaceuticals, Inc.

Anadys Pharmaceuticals, Inc. (www.anadyspharma.com) is a biopharmaceutical company committed to advancing patient care by discovering, developing and commercializing novel and powerful small molecule, anti-infective medicines for the treatment of chronic viral hepatitis, including HCV and HBV, and bacterial infections. Anadys integrates biology and chemistry into a seamless, feedback-based, iterative process to facilitate rapid and successful drug discovery. The approach is designed to advance a strong and continual pipeline of drug candidates into the clinic and ultimately the market.

For more information, please visit www.anadyspharma.com.

Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, references to the biological activity of isatoribine in HCV infected patients, the trend toward viral load reduction resulting from administration of isatoribine in those patients, the believed mechanism of action of isatoribine and its effect on a patient's immune system, and expectations regarding further clinical trials of isatoribine and ANA971. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results of Anadys Pharmaceuticals to be materially different from historical results or from any results expressed or implied by such forward-looking statements. In particular, the results of initial clinical trials may not be predictive of future results, and Anadys can provide no assurances that ANA971 will have favorable results in clinical trials, that isatoribine will have favorable results in later clinical trials, or that either isatoribine or ANA971 will receive regulatory approval. This and other factors that may cause actual results to differ are more fully discussed in the "Risk Factors" section of Anadys' Registration Statement on Form S-1 on file with the SEC. Anadys is providing this information as of this date and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

(a) Note to editors: In the value -0.94 log10 units, the 10 in log10 should be subscript.