SAN DIEGO, April 23 /PRNewswire-FirstCall/ -- Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS), a biopharmaceutical company dedicated to improving patient care by developing novel medicines in the areas of hepatitis C and oncology, today reported its financial results and highlights for the first quarter ended March 31, 2009.

'We have now concluded three Phase I trials of ANA598, including a study in HCV patients that demonstrated potent antiviral activity over three days,' said Steve Worland, Ph.D., Anadys' President and CEO. 'Coupled with very favorable results at three months in our chronic toxicology studies and ongoing manufacturing activities, the conclusion of these Phase I clinical studies positions the program to be ready in mid-2009 for the first Phase II study of ANA598 in combination with pegylated interferon and ribavirin, a study with the potential to demonstrate the impact of ANA598 on durable clinical benefit, known as SVR, in HCV patients.'

Financial Results

As of March 31, 2009, the Company's cash, cash equivalents and securities available-for-sale totaled $20.8 million compared to $27.9 million as of December 31, 2008.

Research and development expenses were $6.9 million for the first quarter of 2009 compared to $6.0 million for the first quarter of 2008. The $0.9 million increase primarily resulted from a $1.7 million increase in development costs for ANA598 in the first quarter of 2009 compared to the first quarter of 2008, partially offset by a decrease in our ANA773 development costs. The ANA598 development costs were associated with our completed Phase Ib clinical trial which was initiated during September 2008, our 14-day healthy volunteer study which was initiated in February 2009 and our on-going long-term chronic toxicology studies which were initiated during September 2008. Our ANA773 development costs during the three months ended March 31, 2009 were primarily driven by our on-going Phase I clinical trial for the treatment of HCV.

General and administrative expenses remained relatively consistent at approximately $2.1 million for the first quarter of 2009 and $2.0 million for the first quarter of 2008.

Operating expenses were $8.9 million for the first quarter of 2009, compared to $8.1 million for the first quarter of 2008. Included as a component of Anadys' operating expenses were non-cash, share-based expenses of $0.7 million for the first quarter of 2009 and 2008.

The net loss was $8.8 million for the first quarter of 2009, compared to a net loss of $7.4 million for the first quarter of 2008. Basic and diluted net loss per common share was $0.30 in the first quarter of 2009 compared to $0.26 in the first quarter of 2008. Non-cash share-based expense resulted in a $0.02 increase in basic and diluted net loss per share for the three months ended March 31, 2009 and 2008.

Development Program Highlights

ANA598

ANA598 is an investigational oral non-nucleoside polymerase inhibitor that Anadys is developing for the treatment of chronic hepatitis C virus (HCV) infection. Three Phase I trials, including one in HCV patients, are now completed and the program remains on track to be ready in mid-2009 for Phase II studies of ANA598 in combination with current standard of care. The actual timing for the initiation of Phase II studies may depend on a number of factors, including FDA review timelines, the timing of any potential transaction around ANA598 or ANA773, available cash resources and funding activities, and the engagement of clinical sites.

• Potent Antiviral Activity in HCV. Earlier today, Anadys presented antiviral and safety data from all three dose levels in the recently completed Phase Ib clinical trial of ANA598 in HCV patients in a late-breaker poster entitled, 'Antiviral Activity of ANA598, a Potent Non-Nucleoside Polymerase Inhibitor, In Chronic Hepatitis C Patients,' at the 44th Annual Meeting of the European Association for the Study of the Liver (EASL). In the Phase Ib study, ANA598 treatment resulted in rapid and sustained reductions in HCV RNA with median reductions at end of treatment (Day 4) exceeding 2 log10 (>99%) at all dose levels. At 200 mg bid, the median viral load reduction was 2.4 log10 (range of 0.4 to 3.4); at 400 mg bid, 2.3 log10 (range of 1.6 to 3.5); and at 800 mg bid, 2.9 log10 (range of 2.2 to 3.4). Genotype 1a patients demonstrated median reductions of 1.4 log10, 1.8 log10, and 2.5 log10 at 200, 400 and 800 mg bid, respectively. In 10 of the 12 genotype 1a patients who received ANA598, viral load was still declining at the end of the three days of treatment. Genotype 1b patients demonstrated median reductions of 2.6 log10, 2.5 log10 and 3.2 log10, at 200, 400 and 800 mg bid, respectively. No patient showed evidence of viral rebound while on ANA598. ANA598 was well-tolerated in this short term study and there were no serious adverse events.

• 14-day Healthy Volunteer Study. Anadys recently completed dosing healthy volunteers in a 14-day study conducted to extend the safety and pharmacokinetic profile of ANA598. Thirty subjects participated in the study, with eight subjects receiving ANA598 and two subjects receiving placebo at each dose level (400 mg once-daily, 800 mg once-daily and 600 mg bid). Subjects received a single dose on day one followed by pharmacokinetic assessment over days two and three and received subsequent doses consecutively on days four through fourteen.