Anadys Pharmaceuticals Announces Selection of ANA975 as a Development Candidate for Front-Line Treatment Of Chronic Hepatitis C.

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SAN DIEGO--(BUSINESS WIRE)--May 26, 2004

Anadys Designates ANA975, an Oral Prodrug of Isatoribine

Anadys Pharmaceuticals, Inc. (Nasdaq:ANDS) today announced it has selected ANA975, an oral prodrug of isatoribine (ANA245), to be its development candidate for front-line treatment of chronic hepatitis C virus (HCV) infection. ANA975 builds from Anadys' clinical experience with isatoribine, including knowledge of isatoribine doses that have been shown to be well-tolerated in Phase 1A and Phase 1B trials and that demonstrated a statistically significant reduction of HCV viral load. Anadys expects that this knowledge will facilitate an accelerated and efficient clinical development program for ANA975.

"ANA975 was selected from the ANA97X family of isatoribine prodrug compounds based upon its favorable pharmaceutical properties, which we believe should allow it to become an orally administered front-line treatment for chronic HCV," said Devron Averett, Ph.D., Senior Vice President of Drug Development for Anadys.

ANA975 is an oral prodrug of isatoribine. Prodrugs are distinct chemical entities that are administered as a precursor of the active drug and then are converted into the active drug in the body. Isatoribine and its prodrugs are a new class of drugs being developed by Anadys to regulate innate immunity, the body's first line of defense against viruses and other foreign organisms. Anadys believes that isatoribine interacts with a specific receptor on certain immune system cells named TLR-7, which assists in regulating innate immune responses against viruses.

Interim results from a Phase IB clinical trial showed isatoribine to be safe and well-tolerated at all doses tested. Although long term therapeutic utility was not a stated objective of the Phase IB clinical trial, at the 800 mg dose level the viral load difference between the beginning and end of treatment was statistically significant (p=0.03), with a median change in viral load from baseline of -0.94 log10 units. Anadys is encouraged by these early results, and believes they provide proof of concept that a compound interacting with TLR-7 can reduce viral load in HCV infected patients.

"We are very pleased in achieving one of our goals for the second quarter of 2004, by selecting a front-line clinical candidate for the treatment of chronic hepatitis C virus infection," said Kleanthis G. Xanthopoulos, Ph.D., President and CEO of Anadys. "ANA975 broadens our existing pipeline of anti-infective drug candidates, which includes isatoribine and ANA971 for the treatment of HCV, ANA380 for the treatment of hepatitis B virus, and preclinical candidates to treat bacterial infections. We look forward to advancing ANA975 into the clinic."

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 TLR-7, 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. Anadys is currently recruiting patients for an isatoribine Phase I/II study.

About hepatitis C 

Hepatitis C virus, the most common chronic blood-borne infection in the United States, causes inflammation of the liver and may progress to more serious complications such as cirrhosis of the liver, liver cancer and death. Approximately 2.7 million people in the United States are chronically infected with HCV, and the Centers for Disease Control (CDC) estimates that by the year 2010, the number of deaths attributed annually to HCV could surpass that due to HIV/AIDS. Worldwide sales for anti-infective products were $40 billion in 2002, yet current treatments for HCV may be ineffective in up to 50% of patients due to the development of drug-resistant viral strains, and many treatments are associated with serious side effects.

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 small molecule, anti-infective medicines for the treatment of hepatitis C virus, hepatitis B virus and bacterial infections. Anadys is advancing its anti-infective portfolio through the development of its two clinical programs, the isatoribine family of compounds and ANA380. In addition, Anadys' anti-infective therapeutic platform is designed to advance a strong and continual pipeline of drug candidates into the clinic.

Safe Harbor Statement

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, viral load reduction resulting from administration of isatoribine to HCV infected patients, the believed mechanism of action of isatoribine and its effect on a patient's immune system, the favorable pharmaceutical properties of ANA975, the potential for ANA975 to become an orally administered front-line treatment for chronic HCV and expectations regarding the timing and duration of further clinical trials of isatoribine and ANA975. 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 are not necessarily predictive of future results, and Anadys can provide no assurances that isatoribine or ANA975 will have favorable safety, tolerability or efficacy results in later clinical trials, or receive regulatory approval. In addition, Anadys' results may be affected by competition from other biotechnology and pharmaceutical companies, its effectiveness at managing its financial resources, its ability to successfully develop and market products, difficulties or delays in its clinical trials, difficulties or delays in manufacturing its clinical trials materials, the scope and validity of patent protection for its products, regulatory developments involving future products and its ability to obtain additional funding to support its operations. These and other factors that may cause actual results to differ are more fully discussed in the "Risk Factors" section of Anadys' Form 10-Q for the quarter ended March 31, 2004. All forward-looking statements are qualified in their entirety by this cautionary statement. 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.