Item 1.02 Termination of a Material Definitive Agreement.

On December 18, 2007, Anadys Pharmaceuticals, Inc. ("Anadys") and LG Life Sciences, Ltd. ("LGLS") entered into a letter agreement terminating the Joint Development and License Agreement by and between LGLS and Anadys dated April 18, 2004, as amended (the "LGLS Agreement"). This mutual termination of the LGLS Agreement followed Anadys' decision, announced on August 1, 2007, to discontinue its involvement with the development of ANA380 in connection with its strategic restructuring. The parties had been jointly developing ANA380, a nucleotide analog for the treatment of hepatitis B virus infection, since 2004. The material terms of the LGLS Agreement are described in Exhibit 99.1 attached hereto and incorporated by reference herein. All rights to ANA380 have reverted to LGLS and neither party owes an early termination penalty to the other.

Item 9.01 Financial Statements and Exhibits.

Exhibit 99.1 - Material Terms of the Joint Development and License Agreement between LG Life Sciences and Anadys Pharmaceuticals, Inc.

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