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Anadys hooks up w/Novartis for Hep C and B

Press Release Source: Anadys Pharmaceuticals, Inc.

Anadys Pharmaceuticals Announces Exclusive Collaboration With Novartis to Develop and Commercialize ANA975 and Additional TLR7-Based Therapeutics for Hepatitis C and Hepatitis B
Thursday June 2, 1:32 am ET
Total Partnership Valued at Up to $570 Million in Upfront and Potential Milestone Payments

SAN DIEGO, June 2 /PRNewswire-FirstCall/ -- Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS - News) announced today that it has entered into an exclusive global license and co-development agreement with Novartis to develop, manufacture and commercialize ANA975 and additional Toll-Like Receptor 7 (TLR7) oral prodrugs for chronic hepatitis C virus (HCV) and hepatitis B virus (HBV) infections, as well as other potential infectious disease indications. In addition to upfront and milestone payments, the agreement includes potential royalty payments and a U.S. co-promotion option for Anadys.

ADVERTISEMENTUnder the terms of the agreement, Novartis will make an initial license payment of $20 million to Anadys. Anadys is also eligible to receive up to $550 million in regulatory and commercial milestone payments based on the successful development and commercialization of ANA975. A $10 million payment is due following a successful Investigational New Drug (IND) submission, which Anadys expects to file with the U.S. Food & Drug Administration (FDA) in the middle of 2005.

In addition, Anadys has a co-promotion option to retain 35 percent of profits in the U.S. by contributing 35 percent of the commercialization costs in the U.S. In the event Anadys declines to exercise its option, it will receive royalties on net sales of products in the U.S. Anadys will also receive royalties on net sales of products in the rest of the world. The agreement does not include an equity purchase. The collaboration announced today is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act.

ANA975 is an oral prodrug of isatoribine, a small molecule TLR7 agonist that has been administered intravenously to 68 subjects in clinical trials. Results from multiple clinical trials in HCV patients receiving intravenous isatoribine for one week have demonstrated statistically significant viral load reductions. Interim data from an ongoing Phase I clinical trial of ANA975 indicate that the bioavailability of ANA975 is virtually complete (approaching 100 percent) and conversion to isatoribine in plasma is rapid and effective, delivering levels of isatoribine that have been shown to be clinically relevant. Anadys and Novartis expect to initiate a 28-day study of ANA975 in HCV patients in the second half of 2005.

"Anadys is at the forefront of TLR-based small molecule therapeutics," said Thomas Ebeling, Chief Executive Officer of Novartis Pharma AG. "This agreement is a further step in our strategy to augment internal activities with externally sourced products in key therapeutic areas such as HCV and HBV, where Novartis is working to meet the needs of these patients."

"Results of our clinical studies suggest that TLR7 agonists may represent an important new advance in anti-infective therapies," said Kleanthis G. Xanthopoulos, Ph.D., Anadys' President and Chief Executive Officer. "We look forward to working with Novartis who shares our vision and commitment to combating infectious diseases. Together we hope to realize the potential of TLR-based therapies, including ANA975, as a creative and novel treatment for HCV, HBV and other infectious diseases."

The license to Novartis by Anadys includes rights to additional oral prodrugs of TLR7 agonists for potential use in infectious disease indications. The two companies will work closely to develop ANA975 and may collaborate to develop next-generation TLR-based compounds for HCV and HBV and other infectious disease indications. Novartis has also obtained an exclusive option to potentially license Anadys' rights to ANA380, a compound currently in Phase II clinical trials. ANA380 is currently being co-developed by Anadys and LG Life Sciences for the treatment of chronic HBV infection.

Conference Call and Webcast

Anadys will host a conference call on Thursday, June 2, 2005 at 9:00 a.m. Eastern Time to discuss the contents of this press release. A live webcast of the call is available online at www.anadyspharma.com. A telephone replay will also be available approximately one hour after completion of the call. To access the telephone replay, dial [phone] or [phone], passcode 64943988. The webcast and telephone replay will be available through June 16, 2005.

About Anadys

Anadys Pharmaceuticals, Inc. (www.anadyspharma.com) is a biopharmaceutical company committed to advancing patient care by discovering, developing and commercializing novel small molecule medicines for the treatment of hepatitis C virus (HCV), hepatitis B virus (HBV) and bacterial infections. Anadys' clinical development programs include ANA975 for the treatment of HCV and HBV, and ANA380 for the treatment of HBV. In addition, Anadys' anti-infective therapeutic platform, including core capabilities in Toll-Like Receptor-based small molecules and structure-based drug design coupled with medicinal chemistry, is designed to advance a strong and continual pipeline of drug candidates into the clinic.

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