Anadys shares sink as investors spot flaws in Ph2

The top execs at Anadys Pharmaceuticals (ANDS) worked hard to put a positive spin on a new batch of Phase II data for their experimental hepatitis C drug, but after investors deciphered that ANA598 worked only slightly better than a placebo, they rebelled against the company line and pushed the developer's share price down by 20 percent.

After 12 weeks of therapy 73 percent of patients on the drug had undetectable levels of the virus in their blood. For patients in the placebo arm, though, 71 percent hit the undetectable mark. Researchers enrolled 26 patients in the study.

"The fact that '598's magnitude of benefit was not sufficient to overcome this anomalous placebo response is concerning (and unusual in HCV trials) and makes interpreting '598's contribution to efficacy challenging which could complicate partnership discussions," Oppenheimer analyst Dr. Brian Abrahams noted to clients.

Anadys, though, took a distinctly upbeat view of the data.

"The twelve week Phase II results announced today demonstrate the ability of ANA598 to significantly accelerate the rate of patients achieving undetectable levels of virus when added to current treatment," said CEO Steve Worland. "The durability of antiviral response through twelve weeks and a very favorable safety profile to date position ANA598 as one of the most attractive and advanced polymerase inhibitors in the HCV development landscape today, ready for clinical trials exploring the use of ANA598 in combination with other direct antivirals."

- check out Anadys' release
- here's the AP story