Anadys Pharmaceuticals, Inc. And LG Life Sciences, Ltd. Release: Completion Of ANA380 Dosing In Phase II Clinical Trial Confirms Robust Activity Against Lamivudine-Resistant Hepatitis B Virus

SAN DIEGO, and SEOUL, South Korea, April 26 /PRNewswire-FirstCall/ -- Anadys Pharmaceuticals, Inc. and LG Life Sciences, Ltd., will present positive data from an open label, multi-center, dose-escalation Phase II clinical trial of ANA380 (LB80380) in patients with lamivudine-resistant hepatitis B virus (HBV) infection at the 41st Annual Meeting of the European Association for the Study of the Liver (EASL) in Vienna, Austria on Thursday, April 27th at 4:15 p.m. CEST (10:15 a.m. EDT).

Results of the clinical trial, which investigated the safety, tolerability and anti-viral activity of ANA380, an oral prodrug of ANA317 (LB80317), a nucleotide analog, in patients with lamivudine-resistant HBV, are based on an analysis of data in 62 patients in five cohorts. Cohorts received ANA380 in escalating doses of 30 mg, 60 mg, 90 mg, 150 mg or 240 mg, once daily by oral administration for 12 weeks. Patients in each cohort had been previously treated with lamivudine, the current standard of care for HBV patients, and were documented to have genetically-encoded lamivudine resistance.

Patients treated with ANA380 at 90 mg, 150 mg and 240 mg dose levels experienced reduction in plasma HBV viral DNA at 12 weeks of 3.9 log10, 3.9 log10 and 4.1 log10 units, respectively, (greater than 99.9% clearance of the virus in plasma). Patients treated with ANA380 at 30 mg and 60 mg dose levels experienced comparable reduction in plasma HBV viral DNA at 12 weeks of 2.8 log10 units and 3.2 log10 units, respectively. Furthermore, patients experienced substantial reduction in levels of alanine aminotransferase (ALT), a commonly used marker of hepatocyte injury, which typically indicates a reduction in inflammation associated with HBV infection. Based on these data, proposed Phase IIb clinical trials are expected to focus on dose ranges around the 90 mg to 150 mg dose levels.

In addition to its activity against lamivudine-resistant HBV, ANA380 in preclinical studies has recently demonstrated potent activity against both wild-type and resistant viral strains.

"These Phase II data are significant and very encouraging, and suggest that ANA380 may very well be the best-in-class among marketed HBV therapies and product candidates in development," said Kleanthis G. Xanthopoulos, Ph.D., President and Chief Executive Officer of Anadys. "We and our LG Life Sciences partner look forward to both the next clinical milestones and advancing our business discussions with Novartis on this program."

"We are very pleased with ANA380's promising clinical results and believe they emphasize ANA380's potential as the next generation therapy for HBV patients," said In-Chull Kim, Ph.D., President and Chief Executive Officer of LG Life Sciences.

"Viral mutation and viral resistance to current therapies are emerging as major problems for clinicians treating hepatitis B, particularly among difficult-to-treat patients with lamivudine-resistant HBV and other drug-resistant viral strains," said Steve Worland, Ph.D., Anadys' Executive Vice President, Pharmaceuticals. "Based on the data thus far, we believe ANA380 may offer the potential of slowing or shutting down the replication of wild-type viral strains and resistant strains of HBV."

In the Phase II clinical trial being presented at EASL, ANA380 was safe and well-tolerated in all cohorts of the study, and there were no serious adverse events (SAEs) or dose-limiting toxicities reported. However, definitive conclusions regarding product efficacy, safety and tolerability cannot be made until the results of future clinical trials of longer duration in more patients are known.

Lamivudine Resistance

The development of viruses resistant to direct antiviral therapies is a growing problem in HBV-infected patients due to the virus' ability to rapidly mutate. Genetically-altered HBV that is resistant to lamivudine can be detected in 14 to 32 percent of patients after one year of lamivudine treatment and in more than 60 percent of patients after four years of treatment with lamivudine.

ANA380

ANA380 is an oral prodrug of ANA317, a nucleotide analog for the treatment of chronic HBV infection. Anadys and LG Life Sciences are jointly developing ANA380 on a global basis. In April 2004, Anadys acquired an exclusive license from LG Life Sciences for the commercialization of ANA380 in North America, Europe, Japan and the rest of the world other than China, Korea, India and countries in Southeast Asia. In conjunction with Anadys' collaboration agreement with Novartis around ANA975 in HCV and HBV that was announced in June 2005, Anadys granted Novartis an exclusive option to evaluate and potentially license Anadys' rights to ANA380.

Hepatitis B

Hepatitis B is a growing global health problem that can cause both acute and chronic viral infections. Approximately 350-400 million people are chronically infected and have become carriers of HBV. Of those, approximately 15 to 40 percent 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. The current annual market for HBV therapy is approximately $500 million and is expected to grow to more than $1 billion by 2009.

About Anadys

Anadys Pharmaceuticals, Inc. is a biopharmaceutical company committed to advancing patient care by discovering, developing and commercializing novel small molecule medicines for the treatment of hepatitis, other serious infections, and cancer. The Company has core expertise in Toll-Like Receptor-based small molecule therapeutics and structure-based drug design coupled with medicinal chemistry. Anadys' clinical development programs include ANA975 for the treatment of HCV and HBV, and ANA380 for the treatment of HBV. In addition, Anadys' therapeutic platform is designed to advance a strong and continual pipeline of drug candidates into the clinic.

About LG Life Sciences

LG Life Sciences, Ltd. ("LGLS") is the leading pharmaceutical company in South Korea with a firm foundation in science and R&D. LGLS strives to improve the health and quality of life of patients around the world through discovery, development and marketing of innovative products, including medicines to fight various infectious diseases, diabetes and other chronic illnesses. LGLS maintains successful partnerships with major pharmaceutical companies, augmenting its internal R&D and marketing capabilities. LGLS seeks to continue developing global brand products, such as Factive(R) (gemifloxacin), and expanding its market presence in the world with focus in Asia.

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 proposed Phase IIb clinical trials of ANA380, the potential for ANA380 to be the best-in-class therapy among HBV therapies and product candidates in development, references to the next clinical milestones for ANA380 and plans for advancing business discussions with Novartis around the program, the potential for ANA380 to be the next generation therapy for HBV patients, as well as references to the belief that ANA380 may offer the potential of slowing or shutting down the replication of wild-type viral strains and resistant strains of HBV. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Anadys' actual results 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 cannot provide any assurances that ANA380 or any of its other product candidates will have favorable results in future clinical trials or receive regulatory approval. In addition, Anadys' results may be affected by risks related to its collaborative relationships with Novartis and LGLS, competition from other biotechnology and pharmaceutical companies, its effectiveness at managing its financial resources, its ability to successfully develop and market products, the level of effort that its collaborative partners devote to development and commercialization of its product candidates, 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-K for the year ended December 31, 2005. 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.

Anadys Pharmaceuticals, Inc.

CONTACT: Vince Reardon, Sr. Director, Investor Relations, InvestorRelations & Corporate Communications of Anadys Pharmaceuticals, Inc.,+1-858-530-3653, vreardon@anadyspharma.com; or Ki Seok Kim, Senior Managerof LG Life Sciences Ltd., 82-2-3773-0619, kskima@lgls.co.kr