Anadys Pharmaceuticals Enters New Drug Discovery Collaboration with Roche; Second Alliance Builds on Success of Initial Collaboration.

SAN DIEGO -- Anadys Pharmaceuticals, Inc. (Nasdaq:ANDS) announced today that it has entered into a new drug discovery collaboration with Roche. The two companies began a partnership in August 2002 that utilized Anadys' drug discovery capabilities to advance lead compounds against a Roche oncology program. This agreement was expanded in October 2003. Under the new agreement, Anadys will engage its drug discovery capabilities, including medicinal chemistry, structure-based drug design, cheminformatics and biology to advance lead compounds against an additional undisclosed Roche program. Financial terms of the collaboration were not disclosed, but include R&D funding, and potential milestone and royalty payments to Anadys.

"Since 2002, we have worked closely with Anadys," said Jonathan Knowles, Ph.D., Roche's President of Global Research. "We are very pleased by the progress we have made in this partnership and we are now expanding the relationship to include other therapeutic areas."

"We welcome the opportunity to build on our relationship with Roche in a new therapeutic area while further validating our drug discovery capabilities," said Kleanthis G. Xanthopoulos, Ph.D., Anadys' President and Chief Executive Officer. "With our expertise in medicinal chemistry and structure-based drug design, we continue to demonstrate our ability to rapidly move quality compounds from the discovery stage into preclinical development."

About Anadys

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 (HCV), hepatitis B virus (HBV) and bacterial infections. Anadys is advancing its anti-infective portfolio through the development of its two clinical programs, the isatoribine family of compounds including the oral prodrug ANA975 for the treatment of HCV, and ANA380 for the treatment of HBV. In addition, Anadys' anti-infective therapeutic platform is designed to advance a strong and continual pipeline of drug candidates into the clinic.

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 Anadys' ongoing relationship with Roche and the activities to be conducted and the results expected to be achieved under the collaboration. 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, Anadys' results may be affected by the risks associated with the implementation of the new collaboration with Roche, 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.