Anadys Pharmaceuticals Inc. (ANDS) AT 3.19

Fundamental: 7
Chart: 5

Oct 24, 2006

Anadys Pharmaceuticals, Inc., a biopharmaceutical company, engages in discovering, developing, and commercializing small molecule medicines for the treatment of viral diseases and cancer. The company has core expertise in structure-based drug design coupled with medicinal chemistry and Toll-Like Receptor-based small molecule therapeutics. Its clinical development program includes ANA380 for the treatment of HBV, currently in mid-stage clinical development.

On June 26, ANDS dropped 48% after the drugmaker suspended dosing of its hepatitis C treatment. ANDS said " even though it hasn't seen any serious adverse events in its phase 1b clinical trial, it makes sense to suspend its current trial and analyze the recently obtained data. "

Looking at the product candidate from ANDS. Here is the LINK.

ANA380 is currently in the phase II trial, and three other candidates in the discovery phase. Since ANA975 was suspended, this leaves a big gap between the product pipelines from phase II and pre-clinical trial and seeing the big drop in share price. However, one of the HIV entry inhibitor looks interesting in the pipeline for the company.

Cash is not a problem for ANDS. As of June 30, 2006, the Company's cash, cash equivalents and securities available-for-sale totaled $94.2 million, that is $3.29 cash per share. The cash burn rate is low on ANDS. The last quarterly loss was 7 million, and it has enough cash to last for another 2 years.

ANDS had formed a very good base at around $3, and it's a good entry price at the current level as all the bad news are already priced into the stock. It is also trading near the cash level. You are pretty much buying all the product candidates for free. On the chart, MACD is improving and a breakout can be happening anytime soon. ANDS is viewed as a medium to long term investment with $5 - $7 as the target sell price. Use a stop loss at $2.80 to protect the investment.

Fair Disclosure: Do not hold position.