Novartis, Anadys Reach Agreement for New Hepatitis Treatment

Novartis has inked a deal with San Diego-based biotechnology company Anadys Pharmaceuticals to develop, manufacture and commercialize ANA975, a new treatment for the hepatitis C virus (HCV).

Under terms of the agreement, Novartis will make an initial license payment of $20 million to Anadys for rights to ANA975. Anadys could also receive up to $550 million in regulatory and commercial milestone payments from Novartis based on the success of the drug candidate. Anadys expects to submit an investigational new drug application to the FDA for ANA975 in the middle of the year, at which time it will receive a $10 million payment from Novartis.

ANA975 is an oral prodrug of isatoribine -- a small molecule Toll-Like Receptor 7 (TLR7) agonist -- and is currently in Phase I development for treatment of HCV, the companies said. Anadys has administered the drug intravenously to 68 subjects in clinical trials, and the two companies plan to initiate a 28-day study of ANA975 in HCV patients in the second half of the year.

Novartis might also develop the product to treat the hepatitis B virus. Anadys retains the right to 35 percent of the U.S. profits from ANA975 if it contributes 35 percent of the commercialization costs in the U.S. If Anadys chooses not to use this option, it will receive royalty payments from Novartis on net sales of products in the U.S. and the rest of the world.