AVI BioPharma Introduces ESPRIT With Initial Application in Muscular Dystrophy; New RNA Therapeutic Strategy Builds on NEUGENE Antisense Expertise.

PORTLAND, Ore. -- AVI BioPharma, Inc. (Nasdaq:AVII), today announced a new application of its proprietary NEUGENE(R) antisense technology, called ESPRIT(TM) (Exon Skipping Pre-RNA Interference Technology). ESPRIT therapeutics are designed to either delete disease-causing genetic sequences or skip functional sequences to redesign proteins that are over-expressed or harmful in certain diseases.

"This is a new approach to solving genetic disorders and diseases caused by over-expressed or harmful genes," said Denis R. Burger, Ph.D., chief executive officer of AVI. "ESPRIT therapeutics allow for fine genetic surgery at the RNA processing level, providing a new and very potent tool for altering many disease mechanisms. In addition to genetic disorders such as muscular dystrophy, AVI is now applying the ESPRIT therapeutic approach to diseases with an immunologic component, such as diabetes and multiple sclerosis."

In normal genetic function, gene transcription produces a full-length pre-RNA that is then processed to a much shorter and functional messenger RNA. The mRNA is the template for creating a protein. During pre-RNA processing, packets of useful genetic information, called exons, are snipped out of the full-length RNA and spliced together to make the functional mRNA template. AVI's proprietary third-generation NEUGENE chemistry can be used to target splice-joining sites in the pre-RNA, thus forcing the cell machinery to skip over targeted exons, providing altered mRNA, which in turn produces altered proteins.

The first use of AVI's ESPRIT therapeutics was conducted in collaboration with Dr. Steve Wilton, associate professor and head of the Experimental Molecular Medicine Group at the Australian Neuromuscular Research Institute in Nedlands, Western Australia. Targeting the defective Duchenne muscular dystrophy (DMD) dystrophin gene with an ESPRIT compound, Dr. Wilton was able to force the cell to snip out the disease-causing mutation in that region. Using this approach, a semifunctional dystrophin protein can be made from a DMD gene that would previously have only made a nonfunctional protein.

"Antisense oligomers can alter gene expression by snipping out the disease-causing mutation of a gene transcript during the splicing step of gene expression to convert DMD to the much less disabling Becker muscular dystrophy," Dr. Wilton said. "Morpholino antisense oligomers appear to be the most efficient chemistry approach for exon-skipping, as they exhibit low toxicity, have been administered systemically, persist for months and have already been used in human clinical trials."

Dr. Wilton has used the mdx mouse model of muscular dystrophy to show that the early stop signal in exon 23 can be efficiently skipped in the modified mRNA so that significant amounts of dystrophin are produced and correctly localized. The efficient delivery of some of these compounds generated very promising results with near-normal dystrophin being produced and persisting for months from a single treatment. AVI and Dr. Wilton have now extended these studies to other models of muscular dystrophy involved in the minor and major deletion hotspots in the human dystrophin gene. AVI and Dr. Wilton hope to take advantage of this existing data to commence clinical trials in the future.

Dr. Wilton will present research progress involving the ESPRIT approach for the treatment of muscular dystrophy at four upcoming international conferences.

Upcoming presentations highlighting AVI's collaborative work on muscular dystrophy with Dr. Wilton:

--Saturday, Oct. 1, 2005: "Exon skipping and the dystrophin gene: molecular by-pass surgery" at the 10th International Congress of the World Muscle Society at Iguassu Falls, Brazil

--Saturday, Oct. 22, 2005: "Exon Skipping and Duchenne Muscular Dystrophy: A Light at the End of the Tunnel" at the Parent Project UK Conference in London, England

--Thursday, Nov. 17, 2005: "Exon Skipping" in the Duchenne Muscular Dystrophy and Related Dystrophinopathies session of the Muscular Dystrophy Association Clinic Director's Meeting in Tucson, Ariz.

--Thursday, Dec. 8, 2005: "Duchenne Muscular Dystrophy and Exon Skipping" at the 41st Turkish National Neurology Congress in Istanbul, Turkey

About Muscular Dystrophy

Muscular dystrophy (MD) is the common name for several progressive hereditary diseases that cause muscles to weaken and degenerate. Each type has its own hereditary pattern, age of onset and rate of muscle loss. Different genetic alterations cause different types of muscular dystrophies. It is estimated that between 50,000 and 250,000 individuals are affected annually. This number seems to be growing each year due to improved technology for earlier diagnosis.

Within our gene makeup, there is an important muscle protein called dystrophin, which is one of the largest genes found to date. Dystrophin acts as the glue that holds muscles together by maintaining the structure of muscle cells. Dystrophin is also believed to carry signals between the inside and outside of muscle fibers. Without dystrophin, muscles are not able to operate properly and will eventually suffer progressive damage.

The dystrophin gene is carried on the X chromosome. Young men are therefore more susceptible to dystrophin damage because they have only one X chromosome. When a boy is diagnosed with Duchenne MD, his body is not able to produce any functional dystrophin. In Becker MD, a distorted but functional version of dystrophin is generated. In either disorder, muscle cells within the body gradually weaken and eventually die, without fully functional dystrophin.

About AVI BioPharma

AVI BioPharma develops therapeutic products for the treatment of life-threatening diseases using third-generation NEUGENE antisense drugs. AVI's lead NEUGENE antisense compound is designed to target cell proliferation disorders, including cardiovascular restenosis, cancer and polycystic kidney disease. In addition to targeting specific genes in the body, AVI's antiviral program uses NEUGENE antisense compounds to combat disease by targeting single-stranded RNA viruses, including West Nile virus, hepatitis C virus, dengue virus and Ebola virus. AVI has introduced a NEUGENE-based exon-skipping technology called ESPRIT therapy. More information about AVI is available on the company's Web site at http://www.avibio.com.

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