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ANA380 Exhibits Activity In Vitro Against Multiple Clinically,Relevant Hepatitis B Virus Mutants

Poster Presentation at EASL on April 13, 2007, 2007

SAN DIEGO, and SEOUL, South Korea, April 13 /PRNewswire-FirstCall/ -- Anadys Pharmaceuticals, Inc. and LG Life Sciences, Ltd., presented data from an in vitro study showing that ANA380 (LB80380) retains potency against multiple mutant strains of hepatitis B virus (HBV) which are resistant to lamivudine, adefovir, entecavir or telbivudine, during a poster presentation at the 42nd Annual Meeting of the European Association for the Study of the Liver (EASL) in Barcelona, Spain, today at 1:00 p.m. CEST (7:00 a.m. EDT).

The study found that the in vitro antiviral potency of ANA380 against seven of nine mutants that were resistant to lamivudine, adefovir, entecavir or telbivudine was not significantly different from the antiviral potency against wild type HBV, indicated by a less than or equal to 2-fold difference in EC50, a measure of inhibition of virus replication. In addition, two HBV mutants that have been associated with clinical failure to entecavir or telbivudine, respectively, showed only small decreases (5 and 7 fold, respectively) in sensitivity to ANA380's antiviral effects in vitro. ANA380 was active against the HBV mutant resistant to telbivudine in prior clinical studies.

"This study illustrates the promising spectrum of antiviral activity for ANA380 against a defined panel of genetically defined drug-resistant HBV variants," said Dr. Stephen Locarnini, M.D., Ph.D., Head, Research & Molecular Development of the Victorian Infectious Diseases Research Laboratory in Melbourne, Australia.

"This study also suggests that ANA380/LB80380 may have clinical utility not only in drug-naïve patients but also in patients who have become resistant to the most commonly used HBV therapeutic agents," said Lawrence C. Fritz, Ph.D., president and chief executive officer of Anadys Pharmaceuticals. "Based on these data, we believe that it is possible that ANA380/LB80380 used in combination with these existing drugs may help prevent the emergence of resistance. These new results are also consistent with previously reported clinical data showing that ANA380 is active in patients refractory to lamivudine."

"Clearly, we are encouraged by these study results and believe they support additional clinical evaluation to confirm the potential broad clinical utility of ANA380 in treating patients with chronic HBV infection," said In-Chull Kim, Ph.D., President and Chief Executive Officer of LG Life Sciences.

Anadys and LG Life Sciences entered into a Joint Development and License Agreement in April 2004 providing for the global development of ANA380 and pursuant to which Anadys acquired commercialization rights to ANA380 in North America, Europe, Japan and the rest of the world other than China, Korea, India and countries in Southeast Asia. Next steps for the program, including a proposed Phase IIb dose selection clinical trial, are under discussion between Anadys and LGLS.

Study Methods

HBV mutant strains were generated from a wild-type strain of HBV genotype D through site-directed mutagenesis. Mutant strains encoded polymerases resistant to lamivudine, adefovir, entecavir or telbivudine. Replicate HepG2 cell cultures were infected with HBV DNA using baculovirus vectors and were exposed to different concentrations of each drug for seven days. Viral DNA then was extracted and quantified. EC50 values, which were calculated from averages of three independent experiments, were used to evaluate susceptibility.

Clinical Background

ANA380 is an oral prodrug of ANA317 (LB80317), a nucleotide analog. Data from 62 HBV infected patients from a previous Phase II study showed that patients treated daily with ANA380 at 90 mg, 150 mg and 240 mg dose levels experienced reduction in plasma HBV viral DNA at 12 weeks of 3.9 log10, 3.9 log10 and 4.1 log10 units, respectively, (greate r than 99.9% clearance of the virus in plasma).

ANA380 (LB80380)

ANA380 is a small-molecule orally available inhibitor of the HBV polymerase. The HBV polymerase is the enzyme that catalyzes the production of new RNA from the existing strand of RNA. ANA380 is believed to inhibit viral proliferation by interrupting the replicating machinery of the virus.

Hepatitis B Virus

HBV is a significant global health problem that can cause both acute and chronic viral infections. According to the WHO, of the 2 billion people who have been infected with HBV, more than 350 million have chronic (lifelong) infections. These chronically infected persons are at high risk of death from cirrhosis of the liver and liver cancer, diseases that kill about one million persons each year. Approximately 1.3 to 1.5 million people worldwide die each year from chronic HBV and/or related conditions. According to the WHO, HBV is the 10th leading cause of death each year worldwide. In the U.S., an estimated 5,000 people with HBV-liver disease die annually. Based on industry analyst reports and available market data, we estimate that current annual sales of HBV therapies are approximately $500 million and will exceed $1 billion by 2010. This market expansion is expected to result from an increasing number of patients receiving treatment and new therapies that provide greater efficacy and treatment durability.

About Anadys

Anadys Pharmaceuticals, Inc.,, is a biopharmaceutical company committed to advancing patient care by discovering, developing and commercializing novel small molecule medicines for the treatment of viral diseases and cancer. The Company's programs focus on Toll-Like Receptor-based small molecule product candidates and direct antiviral compounds that inhibit key steps in viral proliferation. The Company has core expertise in medicinal chemistry coupled with structu re-based drug design, and is developing compounds for the treatment of hepatitis C infection, hepatitis B infection and cancer.

About LG Life Sciences

LG Life Sciences, Ltd. ("LGLS") is the leading pharmaceutical company based in South Korea, committed to promoting health and well-being of patients. Its key therapeutic areas include metabolic and cardiovascular diseases as well as infectious and liver diseases. LGLS seeks to continue developing global brand products, such as Factive(R) (gemifloxacin), and expanding its market presence in the world with focus in Asia. Additional information is available on its corporate website,

Safe Harbor Statement

Statements in this press release that are not strictly historical in nature constitute "forward-looking statements." Such statements include, but are not limited to, references to the believed potential spectrum of activity of ANA380/LB80380 against a defined panel of genetically defined drug-resistant HBV variants, the possibility that ANA380/LB80380 will have clinical utility not only in drug-naïve patients but also in patients who have become resistant to the most commonly used HBV therapeutic agents, the possibility that ANA380/LB80380 used in combination with existing drugs could help prevent the emergence of resistance, future development activities for ANA380/LB80380, and statements regarding the projected future market expansion for HBV therapies. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause Anadys' actual results to be materially different from historical results or from any results expressed or implied by such forward-looking statements. In particular, the results of in vitro studies and initial clinical trials may not be predictive of future results, and Anadys cannot provide any assurances that any of its product candidates will not hav e unforeseen safety issues, will have favorable results in future clinical trials or will receive regulatory approval. In addition, future activities around ANA380/LB80380 are currently under discussion between LG Life Sciences and Anadys and there is no guarantee that the parties will be able to agree to a global development plan or next steps for the program. Furthermore, Anadys' results may be affected by risks related to its collaborative relationships with Novartis and LG Life Sciences, competition from other biotechnology and pharmaceutical companies, its effectiveness at managing its financial resources, its ability to successfully develop and market products, the level of effort that its collaborative partners devote to development and commercialization of its product candidates, difficulties or delays in its pre-clinical studies or clinical trials, difficulties or delays in manufacturing its clinical trials materials, the scope and validity of patent protection for its products, regulatory developments involving future products and its ability to obtain additional funding to support its operations. Risk factors that may cause actual results to differ are more fully discussed in Anadys' SEC filings, including Anadys' Form 10-K for the year ended December 31, 2006. All forward-looking statements are qualified in their entirety by this cautionary statement. Anadys is providing this information as of this date and does not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

CONTACT: Vince Reardon, Sr. Director, Investor Relations, InvestorRelations & Corporate Communications of Anadys Pharmaceuticals, Inc.,+1-858-530-3653, ; or Ki Seok Kim, GeneralManager, Investor Relations of LG Life Sciences, Ltd., +82-2-3773-0619,

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Ticker Symbol: (NASDAQ-NMS:ANDS)

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