Hepatitis C Program - ANA598

In June 2007, Anadys announced the nomination of ANA598 as a clinical development candidate. The selection of ANA598 represented the NS5B polymerase culmination of a comprehensive structure-based drug design program directed towards NS5B. ANA598 was selected based on an optimized balance of preclinical properties, including intrinsic potency as an NS5B inhibitor, cellular activity in the replicon assay, oral bioavailability and early indicators of safety and tolerability. ANA598 is a low-nanomolar inhibitor of HCV genotype 1a and 1b replicons. It exhibits good in vitro metabolic stability properties and does not significantly inhibit or induce cytochrome P450 enzymes. In vivo, ANA598 was well tolerated in 14-day dose range finding (DRF) animal toxicology studies. At doses corresponding to estimated human doses, 24 hour trough plasma concentrations of ANA598 exceeded the EC95 for HCV genotype 1a and 1b replicon inhibition. The EC95 is the concentration required in vitro to suppress hepatitis C viral RNA levels by 95% in the replicon assay.

In January 2008, Anadys announced positive results for ANA598 in an animal model of chronic hepatitis C virus infection. These studies showed that ANA598 has significant antiviral effect in vivo. See press release dated January 4, 2008 for information.

ANA598 is currently completing IND enabling activities and an IND submission is targeted for the second quarter of 2008. Pending FDA acceptance, we plan to initiate clinical trials of ANA598 in the second quarter of 2008. Our planned clinical development timelines are structured such that if ANA598 is successful in early stage clinical trials, we will establish clinical proof of concept (viral load reduction in patients) during the first quarter of 2009.