Inclusion Criteria:

• Male or female patients ≥ 18 years of age
• A female is eligible to enter and participate in this study if she is of: a) non-childbearing potential (ie. Physiologically incapable of becoming pregnant, including any female who is pre-menarchal or post-menopausal); b) child-bearing potential with a negative serum pregnancy test at screen, and agrees to one of the following: -complete abstinence from intercourse from 2 weeks prior to administration of the study drug, throughout the study, and for a time interval after completion or premature discontinuation from the study to account for elimination of the investigational drug, (a minimum of 5 half-lives or longer if the pharmacodynamic profile of the investigational drug warrants a longer time period); or, -Female sterilization; or -Sterilization of male partner; or -Implants of levonorgestrel; or, -Injectable progestogen; or -Oral contraceptive (combined or progestogen only); or, -Any intrauterine device (IUD) with published data showing that the lowest expected failure rate is less that 1% per year (not all IUDs meet this criterion); or, -Any other methods with published data showing that the lowest expected failure rate for that method is less than 1% per year; or, -Barrier method only if used in combination with any of the above acceptable methods.
• Documented chronic hepatitis B infection determined by presence of serum HBsAg for at least 6 months (positive once at least 6 months before screening and at time of screening visit.)
• Positive HBV DNA plasma assay with screening value ≥ 1 x 10^5 copies /mL. (Roche COBAS AMPLICOR TM HBV Monitor Test, LLOD <300 copies/mL )
• Adequate renal function defined as serum creatinine ≤1.5 mg/dL (≤130 µmol/L).
• Willing and able to undergo two liver biopsies (prior to dosing, and after 36 months of therapy). The study baseline liver biopsy can be the most recent liver biopsy taken within 6 months of enrollment, as long as the biopsy was taken 6 months or more after the completion of any interferon or 3 months or more after completion of any antiviral treatment (eg. famciclovir, lamivudine etc.), and the patient has not had interferon therapy or any antiviral therapy between the biopsy and screening.
• Liver biopsy showing advance fibrosis/cirrhosis (Ishak fibrosis score ≥4). The slides must be available for review by an independent histopathologist.
• Availability and willingness of the subject to provide written informed consent per ICH/GCP and local Guidelines.

Exclusion Criteria:

1. ALT >10XULN at screening
2. Child-Pugh Score ≥ 7
3. History of acute exacerbation leading to transient decompensation
4. Co-infections with HIV, HCV or HDV. Note: Patients who are anti-HCV seropositive and in whom HCV RNA is undetectable are considered to be HCV seropositive and will not be eligible for enrollment.

5. Any of the following laboratory parameter within 4 weeks prior to study entry: -Haemoglobin <8.0 g/dL, -Absolute neutrophil count (ANC) < 1.5 x 10^9/L, -Platelet count ≤50 x 10^9/L, -Pancreatic amylase and/or lipase >2 x ULN

   • Screening alpha-fetoprotein (AFP) value >50 ng/mL
   • Clinical, ultrasonographic or radiologic evidence of hepatic mass suggestive of hepatocellular carcinoma.
   • Significant concurrent medical and/or psychiatric conditions other than hepatitis B that in the opinion of the investigators might interfere with patient's treatment, assessment or compliance according to study requirement, such as malignancy, congestive heart failure, renal failure, chronic pancreatitis, diabetes mellitus with poor control and alcoholism.
   • Any of the following medications with 2 months prior to study entry (or the expectation that subject will receive these during the course of the study): -Nephrotoxic medication (eg aminoglycosides, amphotericin B, vancomycin, cidofovir, foscarnet, cisplatin, pentamidine) or competitors or renal excretion (eg probenecid, sulfinpyrazone), -Hepatotoxic medication (eg anabolic steroids,ketoconazole, itraconazole, isoniazid, rifampin, rifabutin).
   • Treatment with immunosuppressive/immunomodulatory agents (including interferon and corticosteroids) within 6 months prior to study entry.
   • Presence of other causes of liver disease (ie. hemochromatosis, Wilson's disease, alcoholic liver disease, non-alcoholic steatohepatitis, autoimmune hepatitis, alpha-1 antitrypsin deficiency).
   • A history of liver transplantation /planned for liver transplantation.
   • Pregnancy (or lactation) or , in subjects capable of bearing children, inability/unwillingness to practice adequate contraception.
   • Females of child-bearing potential (post-puberty) willing or unable to have pregnancy testing at any study visit.
   • History of hypersensitivity to nucleoside and/or nucleotide analogues.
   • Concurrent participation in another clinical trial in which the subject is or will be exposed to another investigational or a non-investigational drug or device within 30 days of the screening visit.