Pharmasset Reports Preliminary Results of a 4-week Combination Study of R7128 for the Treatment of Chronic Hepatitis C

• 88% of patients achieve undetectable HCV RNA levels following 4 weeks of treatment with R7128 1000mg BID with Pegasys plus Copegus

• Safety and tolerability comparable to placebo administered with Pegasys plus Copegus

Princeton, NJ, August 05, 2008 -- Pharmasset, Inc. (Nasdaq: VRUS) announces the preliminary results of the third cohort of a 4-week Phase 1 clinical trial evaluating R7128 1000 mg twice daily (BID) in combination with the standard of care (SOC), Pegasys (pegylated interferon [alfa-2a]) plus Copegus (ribavirin), in 31 treatment-naive patients chronically infected with hepatitis C virus (HCV) genotype 1. R7128, a prodrug of PSI-6130, is a nucleoside analogue polymerase inhibitor of HCV that is being developed in collaboration with Roche.

As previously reported for Cohorts 1 and 2 of this study, R7128 has demonstrated potent short-term antiviral activity and was generally safe and well tolerated at doses of 500 mg and 1500 mg administered for 28 days in combination with SOC.

In Cohort 3, a new formulation of R7128 1000 mg BID was administered in combination with SOC. Of the 31 patients enrolled, 25 patients received R7128 1000mg BID and 6 received placebo. 88% (22 of 25) patients receiving R7128 1000mg BID with SOC for 4 weeks achieved undetectable HCV RNA levels (<15 IU/mL). This high rate of Rapid Virologic Response (RVR) compares favorably with the 85% RVR demonstrated earlier this year with R7128 1500 mg BID in combination with SOC. Based on these results, R7128 1000 mg BID will be among the doses carried forward into Phase 2b studies, which we expect to be submitted to the FDA this Fall.

The preliminary safety and tolerability of R7128 1000 mg BID with SOC was comparable to placebo with SOC in Cohort 3. One patient was discontinued from the study at day 7 for noncompliance with the protocol. One SAE [serious adverse event] of suicidal ideation was reported in a patient with significant psychiatric history (including prior suicide attempts) who was two weeks beyond the 28 days of dosing with R7128 and remaining on SOC.

Dr. Michelle Berrey, Pharmasset's Chief Medical Officer, stated, "This result indicates that it is unnecessary to carry the 1500 mg dose forward, since the 1000 mg dose may provide a greater margin of safety over longer treatment periods without sacrificing efficacy. Even at the dose of 500 mg, R7128 in combination with SOC has demonstrated a greater percentage of RVR compared to SOC alone, which provides flexibility in selecting doses for future clinical studies."

R7128 4-week Combination Study Overview

The 4-week Phase 1 combination clinical trial was a multiple center, observer-blinded, randomized and placebo-controlled study that was conducted in 81 treatment-naive patients chronically infected with HCV genotype 1. The primary objective was to assess the safety, tolerability, pharmacokinetics and antiviral activity of R7128 in the clinically-relevant setting of combination therapy for chronic HCV infection. Cohort 1 administered R7128 500 mg BID, Cohort 2 administered R7128 1500 mg BID, and Cohort 3 administered an intermediate dose of 1000 mg BID, all given in combination with pegylated interferon and ribavirin for 28 days. All subjects then went on to receive a total of 48 weeks of the standard-of-care regimen. In Cohort 4, Patients with HCV genotypes 2 and 3 who did not achieve a SVR with previous interferon-based therapy were administered R7128 1500 mg BID in combination with SOC for 4 weeks, and subsequently treated with an additional 20 weeks of SOC. Results from this cohort will be reported at a later date.

About R7128

R7128 is being developed for the treatment of chronic HCV infection. R7128 is a prodrug of PSI-6130, a cytidine nucleoside analog inhibitor of HCV RNA polymerase. A prodrug is a chemically modified form of a molecule designed to enhance the absorption, distribution and metabolic properties of that molecule. Results from an oral single ascending dose study of PSI-6130 in 24 healthy male volunteers showed that PSI-6130 was generally well tolerated with no serious adverse events in doses up to 3000 mg.

R7128 demonstrated potent, dose-dependent antiviral activity across four prior treatment-failure patient cohorts (n=40) receiving 750 mg or 1500 mg administered either once-daily or twice-daily for 14 days as monotherapy. The greatest mean decrease in HCV RNA from baseline was demonstrated in the patient cohort that received 1500 mg twice-daily, the highest dose of R7128 administered in the study. These patients demonstrated a mean 2.7 log10IU/mL (>99%) decrease in HCV RNA. There was no evidence of the development of viral resistance in any dose cohort after 14 days of dosing.

In a 4-week Phase 1 combination study that was conducted in 50 treatment-naive patients chronically infected with HCV genotype 1, R7128 demonstrated potent short-term antiviral activity and was generally safe and well tolerated. Eighty-five percent (85%) of patients receiving R7128 1500 mg twice-daily with SOC for 4 weeks achieved undetectable HCV RNA levels with safety and tolerability comparable to placebo with SOC. Thirty percent (30%) of patients receiving R7128 500 mg twice-daily with SOC for 4 weeks achieved undetectable HCV RNA levels with safety and tolerability comparable to placebo with SOC. Ten percent (10%) of patients receiving placebo with SOC for 4 weeks achieved undetectable HCV RNA levels.

About Pharmasset

Pharmasset is a clinical-stage pharmaceutical company committed to discovering, developing and commercializing novel drugs to treat viral infections. Pharmasset's primary focus is on the development of oral therapeutics for the treatment of hepatitis B virus (HBV), hepatitis C virus (HCV) and human immunodeficiency virus (HIV).

Pharmasset is currently developing three product candidates. Clevudine, for the treatment of chronic HBV infection, is enrolling Phase 3 clinical trials for registration in North, Central and South America and Europe. Clevudine is already approved for HBV in South Korea and marketed by Bukwang Pharmaceuticals in South Korea under the brand name Levovir. R7128, an oral treatment for chronic HCV infection, is in a Phase 1 clinical trial in combination with Pegasys(R) plus Copegus(R) through a strategic collaboration with Roche. Racivir, which is being developed for the treatment of HIV in combination with other approved HIV drugs, has completed a Phase 2 clinical trial.

For further information, see www.pharmasset.com.