During the third quarter, Anadys recognized $21.0 million of previously deferred revenue, representing the remaining unrecognized portion of the $20 million payment. The Company also reported revenues of $21.5 million for the third quarter of 2007, a significant increase from the $1.1 million revenue reported during the third quarter of 2006.
Research and development expenses were $7.6 million for the third quarter of 2007 compared to $5.5 million for the third quarter of 2006. This $2.1 million increase can be attributed to an increase of preclinical trials and the effect of a one-time reimbursement of $1.1 million received during the three months ended September 30, 2006 for medicine. General and administrative expenses were $2.4 million for the three months ended September 30, 2007 compared to $3.1 million for the three months ended September 30, 2006. The $0.7 million decrease is primarily due to a decrease in share-based compensation expense partially offset by separation related costs of $0.5 million related to our previously announced strategic restructuring and related reduction in force and the departure of our former President and Chief Executive Officer.
Operating expenses were $10.0 million for the quarter, compared to $8.6 million for the third quarter of 2006. Included as a component of Anadys’ operating expenses was non-cash share-based expense of $1.4 million and $2.0 million for the three months ended September 30, 2007 and 2006, respectively.
Net income was $12.3 million for the third quarter of 2007, compared to a net loss of $6.3 million for the third quarter of 2006. Basic and diluted net income per common share was $0.43 in the third quarter of 2007, compared to net loss per common share of $0.22 for the same period in 2006. Non-cash share-based expense resulted in a $0.05 and $0.07 decrease (increase) in basic and diluted net income (loss) per share for the three months ended September 30, 2007 and 2006, respectively.
“The third quarter of 2007 marked an important transition for Anadys,” said Steve Worland, Ph.D., President and Chief Executive Officer of Anadys. “We elected to focus investment on our two product candidates we believe most likely to create value, ANA598 for hepatitis C virus infection and ANA773 in oncology. Concurrently, we discontinued development of ANA975 and ANA380 and ceased early discovery efforts.”
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