Anadys Pharmaceuticals and LG Life Sciences Enter into Joint Development and License Agreement for LB80380 -- ANA380 --, a Phase II Hepatitis B Compound.

Business Editors/Health/Medical Writers

BIOWIRE2K

SAN DIEGO & SEOUL, South Korea--(BUSINESS WIRE)--April 19, 2004

Alliance Further Enhances Anadys' Commitment to Chronic

Viral Hepatitis 

Anadys Pharmaceuticals, Inc. (Nasdaq:ANDS) and LG Life Sciences (KOSPI:68870) of Seoul, Korea announced today that they have entered into an agreement to develop for potential commercialization LB80380 (ANA380), a Phase II nucleotide analog for the treatment of chronic hepatitis B virus infection. Based on pre-clinical and clinical study results to date, LG Life Sciences and Anadys are pursuing the development of LB80380 (ANA380) as a potential front-line therapy for the treatment of chronic HBV infection.

Under the terms of the agreement, Anadys has acquired an exclusive license from LG Life Sciences for the clinical development and commercialization of LB80380 (ANA380) for the treatment of chronic HBV infection in North America, Europe, Japan and the rest of the world other than China, Korea, India and countries in Southeast Asia. The agreement further provides that the parties will work jointly and will share costs for the clinical development of LB80380 (ANA380) on a global basis. Specific financial terms were not disclosed.

"LB80380 (ANA380) significantly enhances Anadys' franchise in anti-infective medicines, and we are pleased to have the opportunity to work with LG Life Sciences on the development of this compound," said Kleanthis G. Xanthopoulos, Ph.D., Anadys' President and CEO.

"LG Life Sciences is very pleased to work closely with Anadys to pursue a global joint development plan. The Anadys management team has a significant track record developing and commercializing anti-infectives. We look forward to a long and productive relationship with Anadys," said Heung-Joon Yang, Ph.D., President and CEO of LG Life Sciences.

About LB80380 (ANA380)

LB80380 (ANA380) 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 nucleotide analog lamivudine, which is a currently commercialized therapy for HBV. Preclinical studies have demonstrated significant activity against HBV, low potential for drug interactions and good tolerability in a range of preclinical toxicology studies. Based on clinical trials to date, LB80380 (ANA380) appears to offer the potential for once daily dosing. Data from a 28 day, once daily clinical trial, which enrolled 28 patients, demonstrated that oral administration of LB80380 (ANA380) reduced HBV viral load by up to four log10 units, or 99.99%.

About hepatitis B 

Hepatitis B virus, or HBV, infection is 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% to 40% of these patients will develop serious consequences of infection during their lifetime, including loss of liver function, cirrhosis, and liver cancer. According to the World Health Organization, approximately 1 million people die each year from chronic HBV or related conditions.

Anadys Pharmaceuticals, Inc. 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 hepatitis C virus, hepatitis B virus and bacterial infections.

LG Life Sciences, Ltd. (LGLS), an LG affiliate, is a 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. LGLS had approximately $150 million in sales last year.

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' business relationship with LGLS, activities expected to occur in connection with that relationship, the nature of LB80380 (ANA380) in HBV infected patients and expectations regarding further clinical trials of and commercial opportunities for LB80380 (ANA380). 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. These factors include risks related to the implementation of the business relationship between Anadys and LGLS, the uncertainty of results to be obtained in future clinical trials, the use of unproven technologies and delays in the completion of clinical testing. These 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 and LGLS are providing this information as of this date and do not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.