Anadys Hepatitis C Drug Shows Early Sign of Viral-Killing Punch, Without Dreaded Rash

Xconomy San Diego — 

Anadys Pharmaceuticals has bet the company on its experimental drug for hepatitis C, and an early peek at clinical trial results show the San Diego company is still in the game.

Anadys (NASDAQ: ANDS) is announcing today it has captured data from the first 44 patients who were randomly assigned to get a low dose of ANA598 in combination with standard therapy, or the usual pegylated interferon alpha and ribavirin alone. About 56 percent of patients on the Anadys drug had their hepatitis C virus completely wiped out in the blood, compared with 20 percent who did that well in the control group, at the initial 28-day observation point, Anadys says today in a statement. Patients suffered flu-like side effects that are typical with the standard therapy. About 21 percent of patients on the Anadys drug (6 out of 29) had mild rashes, although none were severe enough to cause patients to drop out of the study.

This 28-day snapshot of effectiveness—what’s known as a rapid viral response—isn’t compelling enough to prove that Anadys has a drug worthy of FDA approval. The agency demands that companies show that a drug candidate keeps the virus in check for about six months after patients finish a course of therapy, the definition of a clinical cure. But people who are classified as having a rapid viral response often end up being clinically cured, so the early measurement is a closely watched barometer of success in the treatment of hepatitis C.

The early sign is also critical for Anadys to persuade its investors and potential partners that its particular kind of drug—what’s known as a non-nucleoside polymerase inhibitor—has potential as a key ingredient in so-called drug cocktails that combine antiviral drugs to keep the virus from developing resistance to lone drug therapies. Cambridge, MA-based Vertex Pharmaceuticals has blazed a trail with its heralded protease inhibitor, and there are another 40 drugs in development that seek to turn hepatitis C, like HIV, into a chronic, treatable disease. An estimated 170 million people worldwide have chronic hepatitis C infections that cause liver damage and are estimated to shorten lifespans by a decade, on average. This is such a big opportunity that analysts estimate Vertex’s drug alone will exceed $2 billion in annual U.S. sales after just a couple years on the market. Anadys has no marketed products of its own, and ANA598 is the only drug it is actively pushing through clinical trials.

“We are very pleased with the 4-week antiviral response and safety,” said Anadys CEO Steve Worland, in a statement. “We hope to see ANA598 established as the leading non-nucleoside in hepatitis C, suitable for combination with current standard of care as well as with other direct antivirals currently in development.”

A lot of moving parts remain in this particular clinical trial. Based on the safety profile of ANA598 so far, an independent panel of safety monitors has given researchers the green light to start testing patients on a higher dose. The initial group of patients took a 200 milligram oral pill twice a day, while the next group will advance to 400 milligram pills taken twice a day, Anadys said.

The San Diego biotech has been on a roller coaster this year. Investors who had written off the entire class of drugs that ANA598 belongs to suddenly got interested in January when Anadys showed encouraging results from its first few patients in a separate study. But that enthusiasm soured in April when the company said three healthy volunteers dropped out of a trial because of skin rashes (Anadys tried to explain that the patients dropped out only because they were healthy volunteers, and that the rash was mild enough that it wouldn’t really deter patients. But the damage to the company’s stock price was done.) With its stock in the tank and when partnership prospects dried up, Anadys resorted to layoffs, shelved a second drug candidate, and sold more stock at less-than-favorable terms just to give it a chance to stay in the game long enough to take a serious shot with the current ANA598 trial.

Anadys expects to parse out more morsels of data from this trial throughout 2010. The company is planning to release results before the end of March on how patients in the low-dose group did after 12 weeks of observation. It will then come out with the early snapshot of 28-day results from the higher dose group, and the 12-week observations on the higher dose group, sometime before the end of June, Anadys said.

Anadys is planning to host a conference call to discuss the results in greater detail with investors at 8:30 am Eastern time/5:30 am Pacific. A live webcast of the call, with slides, will be available at the Anadys company website.