Anadys Pharmaceuticals and LG Life Sciences Announce Completion of Phase I/IIa Clinical Trial of ANA380 -LB80380- in Patients Chronically Infected with Hepatitis B Virus.

Business Editors/Health/Medical Writers

BIOWIRE2K

SAN DIEGO & SEOUL, Korea--(BUSINESS WIRE)--May 11, 2004

Results indicated ANA380 was well tolerated

with significant hepatitis B viral suppression

Anadys Pharmaceuticals, Inc. (Nasdaq:ANDS) and LG Life Sciences, Ltd. (KOSPI:68870) of Seoul, Korea today announce summary results from a completed Phase I/IIa, double-blind randomized, placebo-controlled dose escalation clinical trial of ANA380 (LB80380). Key findings from this study were reported at the 39th annual meeting for the European Association for the Study of the Liver (EASL) held in Berlin, Germany. The data demonstrated that oral administration of the compound over 28 days both was well tolerated and reduced HBV viral load by up to 4.0 log10 units, or by 99.99%, in the chronic hepatitis B virus (HBV) infected patients treated in the study.

In this clinical study, four cohorts comprised of seven patients each received either placebo or ANA380 (LB80380) once daily for 28 days. The doses used were 30mg, 60mg, 120mg, and 240mg, which were administered through a dose escalation process. Following completion of dosing, patients were followed for a median of 8.9 weeks. The viral load returned to pretreatment levels during the follow-up period, indicating that the viral load decline was likely associated with treatment. Anadys and LG Life Sciences are encouraged by these results, which indicated that ANA380 (LB80380) was well tolerated and caused significant suppression of hepatitis B virus.

About ANA380 (LB80380)

ANA380 (LB80380) is a nucleotide analog currently in Phase II clinical trials for the treatment of chronic HBV infection. The compound has exhibited activity in vitro against both HBV typically found in untreated patients and also HBV variants that demonstrate resistance to treatment with the nucleoside analog lamivudine, which is a currently commercialized therapy for HBV. Preclinical studies in animals have demonstrated significant activity against HBV, low potential for drug interactions and good safety and tolerability in a range of toxicology studies.

About hepatitis B

Hepatitis B virus infections are a growing global health problem that can cause both acute and chronic viral infections. Approximately 350 million people are chronically infected and have become carriers of HBV. About 15 - 40% of these patients will develop serious consequences of infection during their lifetime, including loss of liver function, cirrhosis, and liver cancer. According to World Health Organization, around 1 million people die each year from chronic HBV or related conditions.

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.

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

LG Life Sciences, Ltd. (LGLS, www.lgls.co.kr), an LG affiliate, is an R&D based biopharmaceutical company based in Seoul, Korea that discovers, develops and commercializes new medicines in anti-infectives, cancer, diabetes and other chronic diseases. In year 2003, LGLS had approximately $150 million in revenue and 1000 employees. LGLS aims to become a leading life science company by utilizing its R&D capabilities to develop global brand products such as Factive(R) (gemifloxacin) and by expanding its marketing presence in key Asian markets.

Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, the effects of administration of ANA380 (LB80380) in HBV infected patients, including the safety profile and potency of ANA380 (LB80380), and expectations regarding further clinical trials of ANA380 (LB80380). Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results of LGLS and/or 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 and LGLS cannot provide any assurances that ANA380 (LB80380) will have favorable results in later clinical trials, or that ANA380 (LB80380) will 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 detailed in greater detail in Anadys' Securities and Exchange Commission filings, including Anadys' Prospectus filed on March 26, 2004. All forward-looking statements are qualified in their entirety by this cautionary statement. Anadys and LGLS are providing this information as of this date and do not undertake any obligation to revise or update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

EDITOR'S NOTE: In the first paragraph of this news release, the number 10 in "4.0 log10 units" should appear as a subscript.