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Anadys Reports Preclinical Data Showing ANA773 Promotes Anti-Tumor,Activity of Natural Killer Cells

Poster Presentation on April 17, 2007 at AACR

SAN DIEGO, April 17 /PRNewswire-FirstCall/ -- Anadys Pharmaceuticals, Inc. presented data from an in vitro study showing that the active metabolite of ANA773 promotes natural killer (NK) cell-mediated anti-tumor response by inducing cytokine secretion, cytolysis of tumor cells and enhanced antibody-dependent cellular cytotoxicity (ADCC), during a poster presentation at the Annual Meeting of the American Association of Cancer Research (AACR) in Los Angeles today at 8:00 a.m. PDT (11:00 a.m. EDT).

The study found that the active metabolite of ANA773, an oral Toll-like receptor 7 (TLR7) agonist prodrug, induced the secretion of interferon-alpha (IFN-alpha) and various other cytokines from human peripheral blood mononuclear cells (PBMC) cultured in vitro. Human PBMC stimulated with the active metabolite of ANA773 increased NK cell cytotoxicity and cytokine secretion against both K562 erythroleukemic cells and transformed B cell lines. These in vitro effects were reduced by neutralization of IFN-alpha, confirming the role of cytokines induced by the TLR7 agonist in the killing of tumor cells.

In addition to enhancing direct NK cell killing of tumor cells, ANA773's active metabolite also enhanced ADCC. In this process, a specific antibody is used to identify tumor cells, which allows killer cells to target them for killing. This study showed that transformed B cells, targeted by addition of the anti-CD20 antibody rituximab, were killed more efficiently when PBMC containing the killer cells were treated with the active metabolite of ANA773.

"These data further support our belief that TLR7 is an attractive therapeutic target for the treatment of cancer," said Lawrence C. Fritz, Ph.D., president and chief executive officer of Anadys Pharmaceuticals. "We are excited about the possibility of combining ANA773, our next oral TLR7 prodrug agonist, with therap eutic antibodies against both B-cell malignancies and solid tumors. We plan to file an Investigational New Drug application for ANA773 in the second half of 2007."

Background

This study investigated the immunomodulatory effects of a low-molecular weight TLR7 agonist on human natural killer (NK) cell activity.

Innate immunity provides the first line of defense against tumor cells by inducing a broad immune response that includes the secretion of cytokines and the stimulation of NK cells. NK cells mediate anti-tumor activity by multiple mechanisms. NK cells directly lyse tumor cells through the secretion of cytotoxic granules; they promote apoptosis through the production of interferon-gamma (IFN-gamma), and they enhance the anti-tumor response of other immune cells. NK cells are activated by diverse signals, including type I interferons. Large amounts of type I IFN are produced by plasmacytoid dendritic cells (pDCs) upon engagement of the pattern recognition receptor TLR7. The natural ligand for TLR7 is single stranded RNA, although a variety of small molecule agonists have also been discovered.

ANA773

ANA773, a novel and proprietary oral TLR7 prodrug agonist, has been selected by Anadys as its next clinical development candidate. The Company plans to develop ANA773 as an oral therapy for the treatment of certain cancers and plans to file an IND application in the second half of 2007. There is precedent for believing that TLRs may be effective in targeting cancer cells. The Food and Drug Administration (FDA) has approved a topical TLR7 agonist that is marketed as Aldara(TM) (imiquimod) for the treatment of superficial basal cell carcinoma.

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 treatm ent 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 structure-based drug design, and is developing compounds for the treatment of hepatitis C infection, hepatitis B infection and cancer.

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 belief that TLR7 is an attractive therapeutic target for the treatment of cancer, the possibility of combining ANA773 with therapeutic antibodies against both B-cell malignancies and solid tumors, as well as the Company's plan to develop ANA773 as an oral therapy for the treatment of certain cancers and file an Investigational New Drug Application for ANA773 in the second half of 2007. 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 have unforeseen safety issues, will have favorable results in future clinical trials or will receive regulatory approval. In addition, 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 commerci alization 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, vreardon@anadyspharma.com

Web site: http://www.anadyspharma.com/

Ticker Symbol: (NASDAQ-NMS:ANDS)

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