InterMune and Anadys Begin Phase 1 Clinical Trials of Experimental HCV Therapies ITMN-191 and ANA598

Anadys Pharmaceuticals Initiates Phase I Clinical Trial of ANA598

Company Developing Non-Nucleoside Polymerase Inhibitor for Treatment of Hepatitis C

SAN DIEGO, June 2 -- Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS - News) announced today the initiation of dosing in a Phase I clinical trial of ANA598, an investigational oral non-nucleoside polymerase inhibitor for the treatment of chronic hepatitis C virus (HCV) infection. The objectives of this trial are to assess safety, tolerability, and pharmacokinetics following ascending single oral doses of ANA598 in healthy volunteers. Approximately 40 healthy subjects will participate in the study, which is being conducted in the United States. Following successful completion of the healthy volunteer study, Anadys plans to begin a Phase Ib study of ANA598 in HCV-infected patients in the third quarter of 2008.

"Based on its very favorable preclinical profile, including potency, pharmacokinetics, and tolerability, we believe ANA598 has the potential to become an important component of future combination therapy for patients with HCV infection," said James Freddo, M.D., Anadys' Chief Medical Officer. "We are excited about initiating this clinical program and look forward to future trials of ANA598 in HCV patients, first as a single agent and then in subsequent combination studies. We expect the full benefit of direct antivirals to be demonstrated when studied as components of novel combination regimens incorporating multiple anti-HCV agents."

Steve Worland, Ph.D., Anadys' President and CEO commented, "This is a significant milestone for Anadys. ANA598 is the second internally discovered compound that we've moved into clinical studies this year. With the commencement of dosing in a Phase I clinical trial for ANA773 in cancer patients in February and this study of ANA598 underway, Anadys is now focused on achieving important clinical milestones in both programs."

About ANA598

ANA598 is a highly potent and selective inhibitor of HCV genotypes 1a and 1b NS5b RNA polymerases (IC50 < 1 nM) and of HCV replication in cell culture (EC50 values for genotypes 1b and 1a replicons are 3 and 50 nM, respectively). ANA598 has been well-tolerated in all preclinical studies, including 28-day GLP toxicology studies, and was selected as a development candidate in June 2007.

Clinical Need and Market Opportunity in HCV Infection

Chronic hepatitis C virus (HCV) infection is a serious public health concern affecting approximately 2.7 million people in the United States and approximately 170 million people worldwide. HCV causes inflammation of the liver, which may lead to fibrosis and cirrhosis, liver cancer, and ultimately, liver failure. Cirrhosis of the liver resulting from chronic HCV infection is the leading indication for liver transplantation in the U.S. Due to the asymptomatic nature of HCV infection, it often goes undetected for up to 20 years following initial infection. Each year, 8,000 to 10,000 people in the U.S. die from complications of HCV.

The current standard of care is a combination of pegylated interferon and ribavirin. Inadequate response rates, in particular for patients infected with genotype 1 HCV, along with significant side effects of approved therapy, support the medical need for improved treatment options. It is estimated that fewer than 5% of people with chronic HCV infection living in the U.S. are under treatment today. The majority of infected individuals are unaware of their infection status and the large majority of individuals who know their status do not currently receive drug therapy. There is also a growing number of individuals who have failed interferon-based regimens who may be successfully treated with combinations of two or more direct antivirals. It is expected that the next generation of therapies for treatment of HCV will include small molecules, such as ANA598, that act directly upon specific viral enzymes to inhibit viral replication. These direct antivirals are expected to improve overall therapy by increasing cure rates and improving tolerability and convenience of treatment.

About Anadys

Anadys Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company dedicated to improving patient care by developing novel medicines in the areas of hepatitis C and oncology. The Company is developing ANA598, a non-nucleoside polymerase inhibitor for the treatment of chronic hepatitis C and ANA773, an oral TLR7 agonist prodrug for the treatment of cancer.

For further information, visit http://www.anadyspharma.com/.