Rounding out the first quarter with the 10th initial public offering this year, Anadys Pharmaceuticals Inc. raised $43.75 million - about half of what it originally intended to raise.

The San Diego-based company expects the money, plus its existing cash and expected revenues, to last for two years of operational expenses. Anadys offered a total of 6.25 million shares at $7 each - well below the intended price range of $11 to $13 that was set in February.

It set out to raise $86.25 million in the IPO when it first filed last November. (See BioWorld Today, Nov. 18, 2003.)

The company is in an SEC-imposed quiet period and could not be reached for comment.

Underwriters received an overallotment option for another 937,500 shares of common stock. Anadys' shares (NASDAQ:ANDS) moved up slightly Friday, closing at $7.06.

SG Cowen Securities Corp., of New York, and U.S. Bancorp Piper Jaffray & Co., of Minneapolis, are co-lead managers, while Legg Mason Wood Walker Inc. and Needham & Co. Inc., both of New York, are co-managers.

Of the 10 IPOs this year, eight were conducted in the U.S. Including Anadys' offering, three of those eight are trading above their IPO pricings. New York-based Eyetech Pharmaceuticals Inc. has blossomed on the open market - it's now trading at about $32, compared with its $21 offering price. And Corgentech Inc., of South San Francisco, which priced in February, is trading at almost $18, a nice jump from its $16 offering price.

Anadys will have 21.4 million shares outstanding following the offering.

According to its prospectus, the company plans to use $25 million to $30 million of the net proceeds to continue the clinical development of its antiviral and antibacterial compounds. Remaining funds will be used to expand the company's research and development programs, including its target identification and validation, high-throughput screening, lead optimization and preclinical development programs, and for general corporate purposes. It might use some funds to acquire products, technologies or businesses.

More specifically, the company will use funds to conduct a Phase I/II trial for its lead hepatitis C drug, isatoribine, beginning in April; to continue the Phase I hepatitis C trial of ANA971 that began in February; and to select a product candidate to begin preclinical development with this year from its ANA97X series of compounds to treat hospital-based infections.

Before completing any clinical trials, Anadys will need to raise additional funds, the company said.

Anadys is focused on small-molecule medicines to treat chronic viral and bacterial infections. The company estimates that worldwide sales of drugs to treat infectious diseases were about $40 billion in 2002.

Isatoribine stimulates the body's immune system and responds to infections by activating a receptor named toll-like receptor 7 (TLR-7). Isatoribine was well tolerated with no serious adverse events in Phase Ia and Ib trials. The company plans to initiate the Phase I/II trial next month. ANA971 is an oral prodrug of isatoribine.

Anadys holds an exclusive option with LG Life Sciences, of Seoul, Korea, to in-license rights to LB80380, a compound in Phase II development to treat chronic hepatitis B infection. If exercised, the license would cover the development and commercialization of the product in North America, Europe, Japan and other countries, except China, Korea, India and countries in Southeast Asia. Anadys also is studying isatoribine and its prodrugs to treat hepatitis B.

The company has several collaborations with companies such as Thousand Oaks, Calif.-based Amgen Inc. and Foster City, Calif.-based Gilead Sciences Inc. for its technologies that emphasize both TLR-7 and ribonucleic acid-directed drug discovery. Anadys receives research funding and milestone payments, as well as potential royalties, from those partners.

Anadys last raised $38.3 million in a Series C financing conducted in July 2002.