ANA975 in a New 13-Week Pre-Clinical Toxicology Study Using Crystalline Form

A Key Step Towards Objective of Re-initiating Clinical Trials :

Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS - News) announced today that it has initiated in collaboration with Novartis Pharma A.G ("Novartis") a new 13-week pre-clinical toxicology study of ANA975 to assess safety and tolerability in animals. The recently initiated study, which utilizes a new crystalline form of ANA975 developed by Novartis, should further the understanding of the toxicology profile of ANA975.

"The Anadys and Novartis joint development team has been working diligently over the summer to gain a better understanding of what occurred in the initial 13-week toxicology study in animals," said Steve Worland, Ph.D., Anadys' President, Pharmaceuticals. "While lymphocyte proliferation is an expected consequence of TLR7 activation, we wish to better understand the extent of this proliferation and its reversibility. This new study, which will explore proliferation and reversibility at multiple doses, should provide information helpful to our objective to resume dosing ANA975 in clinical trials."

In June 2006, Anadys suspended dosing in its ANA975 Phase 1b trial in patients with chronic hepatitis C pending additional analysis of recently obtained information from pre-clinical 13-week toxicology studies in animals. Preliminary analysis of that information revealed various new observations which appear consistent with intense immune stimulation in animals. Subsequently, the ANA975 IND was put on full clinical hold by the U.S. Food and Drug Administration. There have been no serious adverse events in humans during the Phase 1b trial. All adverse events have been mild to moderate and have not posed any safety concerns to date, and there were no clinical findings that contributed to the decision to suspend the Phase Ib trial.

TLR's, from an earlier post, are part of the passive immune system. TLR-7 is a receptor that activates this passive immune reaction. Activation of innate immunity is known to be an important component of the human immune defense. ANA975 has been administered to more than 90 healthy volunteers in three completed Phase I trials (501, 502, and 503) and 14 HCV infected patients prior to the suspension of the Phase 1b trial (504), without serious adverse events.

ANDS is Bio/Pharmaceutical company and is trading at $3.72 or up 2 cents in afternoon trading.