West Coast Editor

Anadys Pharmaceuticals Inc. and South Korean co-developer L.G. Life Sciences Ltd. reported strong data from a Phase II trial with ANA380 against chronic hepatitis B virus, a compound for which Novartis AG holds a license option.

"All three companies are in discussions around what the future might look like," said Steve Worland, vice president of pharmaceuticals for San Diego-based Anadys. "There are a lot of parties at the table, but that’s a good thing."

Anadys’ stock (NASDAQ:ANDS) closed Wednesday at $11.63, up 56 cents.

ANA380, an oral prodrug of the nucleotide analogue ANA317, was tested for 12 weeks of dosing in 59 patients with lamivudine-resistant HBV, at doses of 30 mg, 60 mg, 90 mg, 150 mg or 240 mg of ANA380 once daily.

"The trial started at 30, 60 and 90 [mg]," Worland told BioWorld Today. "We got a dose response and wanted to keep escalating."

Patients given either 90 mg, 150 mg or 240 mg of ANA380 achieved viral load reductions in serum HBV DNA of 3.8 to 4.0 log10 units, for a greater than 99.9 percent clearance of the virus in plasma at week 12. Also, levels of alanine aminotransferase (ALT, a marker of hepatocye injury) went down "substantially," the company said.

"A couple of patients are still finishing dosing," Worland said Wednesday. "Today is the last day. We’re winding it up."

The drug proved safe and well tolerated, with no serious adverse events or dose-limiting toxicities reported, though more testing will be done to verify the results. A previously reported, four-week Phase I/IIa trial showed ANA380, while well tolerated, knocked down viral load by 99.9 percent in the chronic HBV patients.

Fast-mutating HBV is becoming increasingly resistant to lamivudine, which has been the treatment of choice. Genetically altered virus that lamivudine can’t work against is detected in 14 percent to 32 percent of patients after one year of therapy, and in more than 60 percent of patients after four years. The annual market for HBV drugs is estimated at $500 million and is expected to grow to more than $1 billion by 2009.

Anadys licensed ANA380 from Seoul, South Korea-based L.G. Life Sciences in April 2004 for the commercialization in North America, Europe, Japan and the rest of the world other than China, Korea, India and countries in Southeast Asia. Basel, Switzerland-based Novartis’ option to the compound comes as part of a potential $570 million deal signed in early June, focused on another compound, ANA975, and Anadys’ line of Toll-like receptor 7 oral prodrugs for chronic HBV and HCV. (See BioWorld Today, June 3, 2005.)

"It’s not formally part of an arrangement that’s been concluded," Worland said about the ANA380 piece. "While we were negotiating the [ANA975] deal, Novartis had a great deal of interest in ANA380," and now has a period of exclusive negotiation for it.

The Novartis deal brought an initial $20 million license payment to Anadys, with $550 million in potential payments based on regulatory and commercial milestones, mostly before marketing approval.