Anadys Pharmaceuticals Reports First Quarter 2006 Financial Results

SAN DIEGO, May 09, 2006 /PRNewswire-FirstCall/ -- Anadys Pharmaceuticals, Inc. , a biopharmaceutical company committed to the discovery, development and commercialization of novel small molecule medicines for the treatment of hepatitis, other serious infections, and cancer, today reported its operational highlights and financial results for the quarter ended March 31, 2006.

"During the first quarter we initiated dosing of ANA975, a Toll-Like Receptor-7 oral prodrug, in chronic hepatitis C virus patients in our 28-day placebo-controlled, multiple-dose Phase Ib clinical trial to evaluate safety, tolerability and viral load reduction," said Kleanthis G. Xanthopoulos, Ph.D., Anadys' President and Chief Executive Officer. "Based on progress in this trial, we and our partner Novartis anticipate the initiation of a Phase II study in HCV patients later this year."

Financial Results

Anadys reported revenues of $1.5 million for the first quarter of 2006, compared to $563,000 for the first quarter of 2005. Revenues for the quarter were primarily derived from the Company's collaboration with Novartis. Operating expenses were $8.4 million for the quarter, compared to $9.1 million for the first quarter of 2005. This decrease was primarily attributable to the recording of a $845,000 offset in research and development expense, which represents an estimate of the net reimbursement by Novartis of ANA975 research and development costs.

Net loss was $5.8 million for the first quarter of 2006, compared to $8.4 million for the first quarter of 2005. Basic and diluted net loss per common share was $0.20 in the first quarter of 2006, compared to $0.38 for the same period in 2005. The adoption of Financial Accounting Standards Board Statement 123R "Share-Based Payment" resulted in non-cash operating expenses of approximately $1.4 million for the first quarter of 2006 or approximately $0.05 effect on basic and diluted net loss per common share.

As of March 31, 2006, the Company's cash, cash equivalents and securities available-for-sale totaled $99.8 million.

Recent Highlights
* Reported Viral Load Reduction Achieved in Phase II Clinical Trial of
ANA380 in Lamivudine-Resistant, Hepatitis B Patients. In February,
2006 Anadys and LG Life Sciences announced principal findings from an
open label, multi-center, dose-escalation Phase II clinical trial,
evaluating the safety and antiviral activity of ANA380 in patients
with lamivudine-resistant hepatitis B virus (HBV) infection. These
findings and more recent data were presented in April 2006 at the 41st
Annual Meeting of the European Association for the Study of the Liver
(EASL), where Anadys and LG Life Sciences announced updated results
from this Phase II clinical trial, based on an analysis of data from
12 weeks of dosing in 62 patients in five cohorts. 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).
* Appointed Two Executives to Senior Management Positions. Anadys hired
Michael Adam, Ph.D., as Senior Vice President, Development Operations.
Dr. Adam, who has 20 years of experience in drug development, is
responsible for regulatory affairs, quality assurance, pharmaceutical
development and manufacturing. Anadys also hired Carol G. Gallagher,
Pharm. D., as Vice President, Commercial Affairs. Dr. Gallagher is
responsible for commercial affairs, including business development,
market planning and strategic planning.
* Appointed Two Scientists to Clinical and Scientific Advisory Board.
Anadys appointed Francis V. Chisari, M.D., to its Clinical and
Scientific Advisory Board. Dr. Chisari is a Professor in the
Department of Molecular and Experimental Medicine and Head of the
Division of Experimental Virology at Scripps Research Institute, La
Jolla, California. Anadys also appointed Robert "Chip" Schooley,
M.D., to its Clinical and Scientific Advisory Board. Dr. Schooley is
Professor and Head of the Division of Infectious Diseases of the
University of California, San Diego.