an expensive office lease, cutting 40 percent of the staff, and swallowing hard, by selling new shares and warrants at bargain prices in order to collect net proceeds of $16.2 million. That was a tiny fraction of what he could have raised a few months earlier, when the stock hit its 52-week high of $8.43. The company was left with 29 employees.
Then, slowly, the roller coaster started climbing again for Anadys. The company announced on July 30, as part of its second-quarter financial report, its revamped game plan as a stand-alone company: It had agreed with the FDA on a clear next step for development of ANA598. If this trial goes according to plan, it will keep control of the drug during a critical value-building phase, and still have enough cash in the bank to run into 2011.
Even though agreeing to a clinical trial design with the FDA is usually a perfunctory event at most biotech companies, investors suddenly got excited. Volume skyrocketed again, and 25 million shares changed hands the following day as Anadys stock shot up 44 percent, from $1.80 to $2.60.
The market moved up this time because investors were impressed at the rigor of the trial design, which should give Anadys a clearer idea, in a short period of time, of ANA598’s prospects, Worland says. The trial will randomly assign patients to get ANA598 along with the standard two drugs, pegylated interferon alpha and ribavirin, or the two standard drugs alone. It will enroll 90 patients, and monitor their viral levels at weeks four and 12.
In the past, the FDA has asked companies at Anadys’ stage of the game to take more modest steps with a four-week trial, not a more in-depth 12-week study, Worland says. The long-term effectiveness is of key importance to partners. If it can stick to its timelines, Anadys could get the first signs of effectiveness from this trial by the end of the year, with more details to follow in the first half of 2010, Worland says.
“People asked ‘can you really do that? Is the FDA going to allow you to do that? The answer is yes. They encouraged it,” Worland says.
So where does this leave Anadys now? The company has put its partnership talks on “hiatus” because it has enough money in the bank to carry out the next phase of ANA598’s development. If the drug passes that test, Anadys should be able to command better terms from a potential partner or acquirer. (Worland said he discussed with partners the possibility of selling the company in the spring, but the feedback he got was that the company first needed to gather more data.)
Anadys still hasn’t enrolled the first patient in the mid-stage clinical trial, and it sounds like it is still getting its ducks in a row for the study, which will likely have 15 to 20 sites in the U.S., Worland says. The next really big news will be when Anadys has preliminary results on the anti-viral activity of its drug, which could come out by the end of this year.
“We’re in the driver’s seat now,” Worland says. “We’re well-positioned.”
