Its experimental hepatitis C drug is meeting key goals in a midstage clinical trial, Anadys Pharmaceuticals Inc. announced on Thursday.

Hepatitis C can cause viral infection that further triggers swelling of the liver leading to scarring and potential failure of liver.

The company said in a combination treatment 56 per cent of the patients receiving the ANA598 showed undetectable levels of the virus at four weeks, compared to others who totaled 20 percent of patients who received the replica drug.

In the trial its key drug was given with the current standard of care pegylated interferon and ribavirin in a combination, at a dosage level of 200 milligram bid and examined at four weeks. The company stated that an independent Data Monitoring Committee has recommended the second dosage of 400 mg bid.

The growing competition in developing hepatitis C treatments prompted Wall Street to watch side effects more keenly for many drugs in various stages of development. This includes Vertex Pharmaceuticals Inc., which is nearly done with late-stage development of telaprevir. Other potential future products include Pharmasset Inc. and Roche's RG7128, InterMune Inc. and Roche's ITMN-191, and Achillion Pharmaceuticals Inc.'s ACH-1625.

Over the last 52 weeks Shares have traded between $1.44 and $8.43 and shares of Anadys fell 23 cents, or 7.8 percent, to $2.71 in morning trading.