Anadys Pharmaceuticals Appoints Barry Labinger to Its Board of Directors

Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS) announced today the appointment of Barry A. Labinger to its Board of Directors. Mr. Labinger is Executive Vice President and Chief Commercial Officer of Human Genome Sciences. "We are very pleased to have Barry join our Board," said Stelios Papadopoulos, Ph.D., Chairman of the Board of Directors of Anadys. "His impressive commercial credentials and product marketing savvy enhance our Board's collective expertise." Steve Worland, Ph.D., President and Chief Executive Officer of Anadys, added, "Our product candidates, ANA598 and ANA773, are advancing toward a future HCV treatment landscape based on combination regimens. Barry's perspective will be invaluable as we optimize our development plans to reflect commercial utility as part of these combination regimens." Mr. Labinger has served as Executive Vice President and Chief Commercial Officer of Human Genome Sciences since August 2005. Mr. Labinger has more than 20 years of experience in the biopharmaceutical industry, including leadership of launches and marketing of a number of successful products in a variety of therapeutic areas. Prior to joining Human Genome Sciences, Mr. Labinger served as Division Vice President of 3M Pharmaceuticals, a global division of 3M Company, with marketed products in dermatology, women's health, and cardiac therapy, along with a pipeline of immune response modifiers for the treatment of viral infections and cancers. From 2000 to 2002, Mr. Labinger was Senior Vice President and General Manager, Commercial Operations, at Immunex Corporation where he led both the Enbrel and Specialty Therapeutics franchise teams and had direct responsibility for the sales and marketing organizations. Mr. Labinger also served as Senior Director of Diabetes Marketing and Director of Glucophage Marketing at Bristol-Myers Squibb. Mr. Labinger began his pharmaceutical career at Abbott Laboratories, where he was involved in the commercialization of products for gastrointestinal and infectious diseases. Mr. Labinger earned a Master of Business Administration degree from the J.L. Kellogg Graduate School of Management at Northwestern University, and a Bachelor of Arts in economics from Northwestern University. "I am delighted to join the Anadys Board of Directors," said Mr. Labinger. "Anadys is a thriving biopharmaceutical company developing two promising clinical-stage assets in a very dynamic therapeutic space. This is an exciting opportunity for me and I look forward to being a part of Anadys during this pivotal stage of its development."

Anadys Pharmaceuticals Augments Management Team and Board of Directors

Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS) today announced the following additions and changes to its management team and Board of Directors:

• Kevin L. Eastwood has joined Anadys as Senior Vice President, Corporate Development
• James Appleman, Ph.D. has been promoted to Senior Vice President, Research and Chief Scientific Officer
• James L. Freddo, M.D., Anadys' Senior Vice President, Drug Development and Chief Medical Officer, has been appointed to the Company's Board of Directors
• Stelios Papadopoulos, Ph.D. has been named Chairman of the Board

"I am delighted with the addition of Kevin Eastwood to our management team and the additional responsibilities for Drs. Appleman, Freddo and Papadopoulos," said Steve Worland, Ph.D., Anadys' President and CEO. "With these changes in place, we are well-positioned to execute our corporate objectives in the coming year."

Mr. Eastwood, who joins Anadys from Ambrx, Inc., will be responsible for the Company's business development and strategic planning activities, reporting to Steve Worland, Ph.D., President and Chief Executive Officer. Mr. Eastwood has held a number of prior business development positions, including the senior corporate development positions at Ambrx, Inc. and Achillion Pharmaceuticals, Inc. In these positions he was responsible for executing business transactions with a number of leading biotechnology and pharmaceutical companies, including Pfizer, Inc., Merck and Co., Inc., Eli Lilly and Company, and Gilead Sciences, Inc. Mr. Eastwood began his pharmaceuticals career in sales and marketing at Marion Laboratories and transitioned to business development while at Agouron Pharmaceuticals, Inc., now a part of Pfizer. He holds a B.S. in Biology from Missouri State University.

Anadys Pharmaceuticals, Inc. Announces Strategic Restructuring to Focus Operations on Continuing the Advancement of ANA598

SAN DIEGO, - Anadys Pharmaceuticals, Inc. (Nasdaq: ANDS) today announced a strategic restructuring to focus its operations on the development of ANA598, in particular a proposed Phase II study in hepatitis C patients of ANA598 in combination with pegylated interferon-alpha and ribavirin.

As part of this restructuring, the Company intends to suspend further development of ANA773 and is reducing its workforce by approximately 40%. Pending the outcome and analysis of data from current cohorts in ongoing studies in hepatitis C and oncology, Anadys intends to manage the ANA773 programs as potential out-licensing opportunities.

"We have now completed three Phase I studies of ANA598 and we have seen potent antiviral activity, as well as good tolerability," said Steve Worland, Ph.D., President and CEO of Anadys. "As we complete preparations for the first Phase II study of ANA598 in combination with interferon and ribavirin, we have decided to focus our future investments on this important asset and to take these cost-sparing measures which we expect to ensure our ability to complete the Phase II study with our expected cash resources. The proposed Phase II study is expected to provide important data at the end of this year and in the first two quarters of 2010."

The Company anticipates the reduction in force to generate annual cash expense savings of between approximately $4.0 million and $5.0 million. The Company estimates that it will incur one-time cash charges of approximately $1.1 million in severance costs and $0.2 million in continuation of benefits and outplacement services. The Company will retain the clinical development infrastructure required to conduct the Phase II study of ANA598, key capabilities directed toward pharmaceutical development and next-generation non-nucleosides, and a streamlined administrative staff.

Dr. Worland added, "I want to acknowledge the tremendous effort and commitment of all our Anadys colleagues, especially those whose positions have been impacted by this restructuring. The current status of ANA598, which now demands our focused investment, has been achieved as a result of each of their contributions."

Proposed ANA598 Phase II Trial Design

Anadys is preparing for the first Phase II trial in hepatitis C patients of ANA598 in combination with interferon-alpha and ribavirin (current standard of care, or SOC) and intends to submit a protocol to the U.S. Federal Drug Administration (FDA) containing the proposed trial design in July 2009. If the FDA allows this trial to proceed, Anadys intends to initiate the trial during the third quarter of 2009.

The current protocol design calls for 12 weeks of dosing ANA598 in naive genotype 1 patients in combination with SOC, compared to a control arm that will receive a placebo and SOC. After 12 weeks, patients are expected to continue to receive SOC alone. The primary endpoints of the study are designed to be safety, tolerability and the percentage of patients with undetectable virus at four weeks (defined as Rapid Virologic Response, or RVR) and 12 weeks (defined as Early Virologic Response, or EVR). For patients who achieve an RVR and EVR response, the duration of treatment with SOC after week 12 will be at the clinical investigator's discretion. Anadys expects that some patients who achieve RVR would stop receiving all treatment at 24 weeks. All patients who complete 24 or 48 weeks of treatment will be assessed for virus negativity 12 and 24 weeks after treatment is ended.

The proposed dose levels in this study are 200 mg and 400 mg, each dosed twice daily (bid). In order to maximize early viral suppression, each patient receiving ANA598 would receive two 800 mg doses on day one, known as a loading dose. The decision to initiate dosing of patients in the 400 mg dose group will be determined after assessing 28 day data from the 200 mg dose group. Anadys intends to enroll 90 patients in this study, in the proportions of 30 patients receiving ANA598 and 15 receiving placebo at each dose level. The study will be conducted at a number of clinical sites in the United States.