12-week results from an ongoing Phase II study, which demonstrated that 75% of hepatitis C patients treated with 400 mg ANA598 twice daily

SAN DIEGO, May 21, 2010 -- Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS) today announced completed 12-week results from an ongoing Phase II study, which demonstrated that 75% of hepatitis C patients treated with 400 mg ANA598 twice daily (bid) in combination with pegylated interferon and ribavirin (current standard of care, or SOC) achieved undetectable levels of virus (<15 IU/mL) at week 12, known as complete Early Virological Response or cEVR.

“We are very pleased with the comparable antiviral potency and favorable safety profile demonstrated through 12 weeks for both doses investigated in this study,” said Steve Worland, Ph.D., President and CEO of Anadys. “Coupled with the favorable tolerability profile seen at 200 mg bid, we believe that these results establish ANA598 at 200 mg bid as one of the most attractive agents in Phase 2 HCV development today.”

Anadys also announced additional data for patients in the 200 mg bid dose group who have now completed 24 weeks of treatment – 12 weeks of ANA598 in combination with SOC, followed by an additional 12 weeks of SOC alone. At the 200 mg bid dose level, where 73% of patients achieved a cEVR, 17 of 18 patients who had undetectable levels of virus at week 12 and continued on SOC for an additional 12 weeks remained undetectable at 24 weeks. Additionally, two patients who had low but detectable levels of virus at week 12 achieved undetectable levels of virus at week 24.

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In the second cohort a single patient who received ANA598 400 mg bid experienced viral breakthrough (defined as a confirmed increase of >1 log from any prior measurement) between weeks 10 and 12. No other patient who received either dose of ANA598 experienced viral breakthrough.

IL28B Genotyping-Preliminary Assessment

Based on a preliminary assessment of IL28B genotyping from approximately sixty percent of the patients in the Phase II study, Anadys can now offer additional perspective on the response of the patients who received placebo plus standard of care (control arm) in the study. Recent scientific studies have shown that individuals with the IL28B CC genotype, present in approximately 37% of Caucasian HCV patients and a lower percentage of patients in other ethnic groups, are substantially more responsive to SOC than patients with other IL28B genotypes. In the SOC control arm of the ANA598 study, 56% of the patients who have been genotyped to date are of the CC genotype while in the ANA598-treated arms only 21% of the patients who have been genotyped to date are of the CC genotype. Anadys believes that the high proportion of CC patients in the SOC control arm of the ANA598 Phase II study relative to the overall population likely contributed to a higher cEVR rate than has been seen historically.

Preliminary Safety and Tolerability Assessment Through 12 Weeks

Both doses of ANA598 demonstrated a favorable safety and tolerability profile through 12 weeks, although conclusions regarding safety and tolerability cannot be made until results in more patients and potentially over longer duration are known. Safety laboratory values were comparable between the ANA598 and control arms. At the 200 mg bid dose level, the incidence of all adverse events was similar between the active and control arms, with reported adverse events being typical for patients treated with interferon and ribavirin. In the 400 mg bid arm, a higher incidence of rash (mostly mild) was seen relative to the 200 mg bid and control arms. The incidence of all other adverse events was comparable between the 400 mg bid and control arms. In the 400 mg bid arm, 59% of patients (20/34) receiving ANA598 400 mg bid developed rash, compared to 41% (12/29) receiving 200 mg bid and 31% (10/32) for patients that received placebo plus SOC. In the 400 mg bid group, 16 of 20 rashes were mild, with one grade 2 rash and three grade 3 rashes. As previously reported, in the 200 mg bid arm, the incidence of rash was comparable with the placebo control arm and also consistent with historical reports of rash incidence due to interferon and ribavirin.

Phase II Combination Study

In the ongoing Phase II study, a total of approximately 90 treatment-naive genotype 1 patients have received ANA598 or placebo in combination with Pegasys (peginterferon alfa-2a) and Copegus (ribavirin, USP) for 12 weeks at dose levels of 200 mg bid or 400 mg bid, each with a loading dose of 800 mg bid on day one. After week 12, patients are to continue receiving SOC. Patients who achieved undetectable levels of virus at weeks 4 and 12 are to be randomized to stop all treatment at week 24 or 48. The primary endpoint of the study is the proportion of patients who achieve undetectable levels of virus at week 12 (defined as complete Early Virological Response, or cEVR). Additional endpoints include safety and tolerability as well as the proportion of patients with undetectable levels of virus at week 4 (defined as Rapid Virological Response, or RVR). Patients will be followed for 24 weeks after stopping therapy to determine the rate of Sustained Virological Response, or SVR. Approximately 90 patients have been enrolled in this study -- with approximately 30 patients receiving ANA598 plus SOC at each dose level and 30 patients receiving placebo plus SOC. The study is being managed by the Duke Clinical Research Institute (DCRI) under the leadership of John McHutchison, MD and is being conducted at a number of clinical sites in the United States.

About ANA598

ANA598 is a non-nucleoside inhibitor of the HCV RNA polymerase and is wholly owned by Anadys. Anadys has completed three Phase I clinical studies of ANA598 that have demonstrated potent antiviral activity and good tolerability. In a monotherapy study in treatment-naive genotype 1 patients, treatment with ANA598 for three days led to median end-of-treatment declines in viral load ranging from 2.4 to 2.9 log10 in three separate dose groups. No patient at any dose level in the monotherapy study showed evidence of viral breakthrough while on ANA598, and there were no serious adverse events. Those patients from the monotherapy study who subsequently received pegylated interferon and ribavirin all exhibited further viral load decline, demonstrating that viral variants revealed by brief treatment with ANA598 remain susceptible to current SOC, consistent with prior in vitro results.

Anadys has completed two long-term chronic toxicology studies of ANA598 (26 weeks duration in rats and 39 weeks duration in monkeys). The No Observed Adverse Effect Level, or NOAEL, is 1000 mg/kg, the highest dose tested, in both the rat and monkey. The completed toxicology studies support the ongoing Phase II clinical study as well as future clinical studies of longer duration.

Anadys has presented in vitro data supporting the use of ANA598 in combination with interferon-alpha as well as with other anti-HCV agents currently in development that act through diverse mechanisms. In particular, data has shown that ANA598 is synergistic in vitro with interferon-alpha as well as representative HCV protease and polymerase inhibitors. In vitro combination treatment at clinically relevant concentrations of interferon-alpha and ANA598 results in clearance of HCV RNA from cells rather than selection of resistant isolates. Furthermore, ANA598 retains full activity in vitro against mutations conferring resistance to protease inhibitors, nucleoside polymerase inhibitors and non-nucleoside polymerase inhibitors that act at binding sites distinct from that of ANA598, while protease and nucleoside polymerase inhibitors retain full activity in vitro against mutations conferring resistance to ANA598.

ANA598 has received Fast Track Status from the FDA for the treatment of chronic hepatitis C.