AVI BioPharma Provides Update on Influenza Drug Development Program; NEUGENE Antisense Agents Target Conserved Regions of All Significant Influenza Subtypes, Including Avian Influenza.

PORTLAND, Ore. -- AVI BioPharma, Inc. (Nasdaq:AVII), today provided an update on its NEUGENE(R) antisense drug development program targeting the Influenza A (flu) virus. AVI has targeted genetic regions of the virus that are highly conserved between six viral subtypes that cause human disease. These include three subtypes that caused pandemics in the 20th century -- the 1918 Spanish flu (H1N1), the 1957 Asian flu (H2N2) and the 1968 Hong Kong flu (H3N2) -- and three subtypes of avian flu that have been reported to cause disease in man (H5N1, H7N7 and H9N2).

"Several of these NEUGENE compounds have been efficacious in early experiments and should now be considered for in vivo evaluation against H1N1 and H5N1," said Denis R. Burger, Ph.D., chief executive officer of AVI. "AVI has a successful track record of developing antisense drug candidates against RNA viruses quickly -- what we refer to as our rapid response therapeutic platform. Our antiviral program has shown that we can potentially develop a NEUGENE antisense drug candidate for avian flu in a relatively short time frame, as we did for West Nile virus, SARS coronavirus and Ebola virus."

In initial experiments, eight NEUGENE antisense compounds were developed to target regions of the influenza virus genome believed to be critical to virus survival. AVI also selected regions of the virus that are highly conserved across all six virus subtypes that cause human disease. These candidates have been tested in various viral culture assays with several collaborators, including Professor J. Chen and Quing Ge at the Massachusetts Institute of Technology. Several agents that were both potent and specific for Influenza A have been identified as suppressing replication of H1N1. One agent was found to inhibit both viral transcription and replication. Moreover, combinations of two agents were routinely twofold to threefold more active than single agents alone, and one combination of two agents exhibited sevenfold to eightfold improvement in viral reduction compared with a single agent.

Additional experiments showed that a single mismatch within the targeted region of the virus caused less than a 10 percent loss of activity of the drug. This provides strong evidence that a single NEUGENE antisense drug could potentially shut down all the flu virus subtypes, including the H5N1 avian flu, even if a mutation occurred in these highly conserved regions.

AVI's Antiviral Program

AVI's proprietary NEUGENE antisense drug candidates have demonstrated efficacy in preclinical studies against SARS coronavirus, West Nile virus (WNV), hepatitis C virus (HCV), dengue virus, Ebola virus, and Marburg virus. AVI has filed Investigational New Drug (IND) applications with the U.S. Food and Drug Administration and has ongoing clinical trials in WNV and HCV. Additional clinical development efforts targeting dengue virus and Ebola virus are planned for 2006. Compounds targeting SARS, WNV and Ebola virus were developed within days to weeks of obtaining appropriate genetic sequences. AVI has demonstrated that NEUGENE agents were efficacious against all four immunologically distinct subtypes of dengue virus. This was achieved by targeting a highly conserved region of the dengue gene. In collaborative work targeting the Ebola virus, NEUGENE drugs protected three animal species from lethal challenges with this virus.

"Studies that have shown efficacy across the four dengue viral strains demonstrate that NEUGENE antisense agents can target conserved regions of the viral genome even when the strains are immunologically separated, as appears to be the case with influenza," said Patrick L. Iversen, Ph.D., senior vice president of research and development for AVI. "We now have experience with translating effective compounds in cell culture into efficacy in viral challenge studies in animal models including coronaviruses, dengue virus and Ebola virus. This indicates that we are up to the challenge of targeting avian flu."

AVI's Clinical Experience

AVI's NEUGENE antisense platform has a well-defined safety record in human clinical trials. Approximately 250 patients have been dosed with NEUGENE drug candidates targeting host and viral gene targets in 11 clinical studies under multiple INDs. Five different routes of administration have been employed in AVI's clinical studies, and doses up to 450 mg have been administered without a single drug-related, serious adverse event. The combination of AVI's NEUGENE chemistry with conserved viral targets that are not expressed in the human genome makes a strong case for the potential for success in the development of candidates to address the possible emergence of a transmittable avian flu.

About Influenza A Viruses

Influenza, or flu, is a contagious respiratory illness caused by influenza viruses. On average 5 percent to 20 percent of the U.S. population are infected with the flu each year, resulting in 36,000 deaths. Influenza A virus is an enveloped negative-strand RNA virus, with eight genome segments that code for 10 proteins. Influenza strains are subtyped according to the antigenic and genetic nature of their surface glycoproteins: hemagglutinin (HA or H) and neuraminidase (NA or N). Fifteen H and nine N subtypes have been identified, with three associated with widespread human disease (H1N1, H2N2 and H3N2). In addition, several subtypes of avian influenza virus, -- H5N1, H7N7 and H9N2 -- can infect and cause disease in humans.

The current influenza pandemic in birds throughout Asia and in Eastern Europe is caused by the H5N1 subtype. It is thought that co-infection of man or certain animals (such as pigs) with both H1N1 and H5N1 can lead to a reassortment or recombination of viral particles, resulting in the emergence of virus with dangerous public health properties, namely new antigens to which the human population does not have immunity and the ability to spread from person to person. It is believed that emergence of avian flu by this general mechanism may have led to the worldwide pandemics of 1918, 1957 and 1968.

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.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: The statements that are not historical facts contained in this release are forward-looking statements that involve risks and uncertainties, including, but not limited to, the results of research and development efforts, the results of preclinical and clinical testing, the effect of regulation by the FDA and other agencies, the impact of competitive products, product development, commercialization and technological difficulties, and other risks detailed in the company's Securities and Exchange Commission filings.