Updated from 11:49 a.m. EDTAnadys Pharmaceuticals ( ANDS) released new data on its lead hepatitis C drug Thursday demonstrating the drug's antiviral activity at three different doses, but patient dropouts due to rash raised concerns about the drug's safety and sent Anadys shares tumbling. Anadys owns full rights to its drug ANA598 but wants to attract one of the larger drug companies involved in hepatitis C for a partnership or outright acquisition. The company has already shared the new data on ANA598 made public Thursday with prospective suitors under confidentiality agreements. In the phase 1b study of 35 patients with hepatitis C, three days of treatment with ANA598 resulted in a median viral load reduction of greater than 2 log, or more than 99%, at all three dose levels tested, the company said.
Companies like Anadys first conduct brief studies in small numbers of patients to quickly demonstrate a drug's safety and ability to quickly tamp down the virus that causes hepatitis C. Only if an experimental drug passes this initial test does a company then advance to longer and bigger studies in which the drug being developed is usually combined with existing hepatitis C therapies. Just such a combination phase II study of ANA598 with the current standard of care in hepatitis C will be ready to begin in the middle of the year, the company said. ANA598 is what is known as a non-nucleoside polymerase inhibitor. These drugs act directly against specific enzymes to prevent the hepatitis C virus from making copies of itself. That's different from current treatments for hepatitis C, namely long-acting forms of interferon and a drug called ribavirin, which work by stimulating the body's immune system to destroy the virus. Pfizer ( PFE), Vertex Pharmaceuticals ( VRTX) and Merck> ( MRK) also are working on non-nucleoside polymerase inhibitors for hepatitis C. The future in hepatitis C treatment is moving toward combinations of direct antivirals, in much the same way that HIV patients are treated today. A drug like ANA598, therefore, may be valuable to a larger drug company that can combine it with another drug already in clinical trials. Anadys ended the first quarter with about $20 million in cash, which based on its burn rate is enough to last another two or three quarters. Anadys, therefore, needs to come to an agreement on a partnership and/or acquisition relatively quickly or face having to raise more money in the public equity markets.