Mid-Stage Study for Anadys Drug

Earlier this month, Anadys Pharmaceuticals, Inc. (ANDS) announced the commencement of dosing in a 12- week phase II trial with ANA598 in hepatitis C patients. ANA 598 will be evaluated in combination with interferon-alpha and ribavirin (current standard of care) in the mid-stage study.

The study is expected to provide important data at the end of this year and in the first two quarters of 2010. A total of 90 patients are planned to be enrolled in the study, with 30 patients receiving ANA598 and 15 receiving placebo at each dose level.

The study would test 200 mg and 400 mg doses of the drug. In order to maximize early viral suppression, each patient would receive two 800 mg doses on the first day. The study would be conducted at various sites in the U.S.

Chronic hepatitis C virus (HCV) affects approximately 3.2 million people in the United States and about 170 million people globally. HCV causes inflammation of the liver, which can lead to fibrosis and cirrhosis, and may ultimately lead to liver failure and/or liver cancer if left untreated. Each year, 8,000 to 10,000 people in the U.S. die of HCV complications.

Even if ANA598 -- which received Fast Track Status from the U.S. Food and Drug Administration (FDA) for the treatment of chronic hepatitis C -- can navigate the clinical and regulatory hurdles smoothly, it will still face tough competition in the anti-hepatitis C market. This market is dominated by two players -- Roche, which commands a majority of the U.S. and global pegylated interferon market with Pegasys/Copegus and Schering-Plough's (SGP) Peg-Intron / Rebetrol.

Additionally, Vertex Pharmaceuticals (VRTX - Snapshot Report) and Valeant Pharmaceuticals (VRX) are developing candidates for hepatitis C and are well ahead of ANA598 in terms of development. Hence, we believe competition will remain a challenge for Anadys in the years to come.

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