AVI BioPharma Shareholders Approve Acquisition Of Immunotherapy Corporation Establishing AVI As A Leading Cancer Development Company.

PORTLAND, Ore.--(BW HealthWire)--Sept. 16, 1998--

- Company Elects Denis R. Burger, Ph.D. Chairman;

Expands Board of Directors -

- Shareholders Approve Name Change to AVI BioPharma Inc. -

AVI BIOPHARMA INC. ("AVI")(Nasdaq: AVII, AVIIW) today announced that it has completed its acquisition of ImmunoTherapy Corporation (ITC). The acquisition and related measures, including the company's name change to AVI BioPharma, were approved by shareholders at AVI's 1998 Annual Meeting held on Monday, August 31st. The acquisition, which strengthens AVI's position as a late-stage cancer therapeutics company, became effective on Tuesday, September 15th, 1998, following the completion of necessary filings.

AVI also announced its Board of Directors selected President and Chief Executive Officer Denis R. Burger, Ph.D., for the additional position of Chairman of the Board, replacing John A. Beaulieu, who stepped down to pursue other interests. AVI's Board also selected two ITC executives, Jeffrey L. Lillard and Bruce L. A. Carter, Ph.D. to serve on the company's Board. Mr. Lillard was also appointed to the position of Vice President of AVI, where he will continue his efforts on the Avicine(tm) cancer vaccine development program. With these additions, AVI's Board of Directors stands at 9 members.

Dr. Burger stated, "With the completion of the ITC acquisition, AVI will develop novel therapeutics focused on cancer and other life-threatening diseases using a three-pronged approach: vaccines, gene-targeted drugs and drug delivery. Our first priority will be to concentrate on bringing our lead cancer vaccine candidate Avicine to the market. Over the next few months, we will be completing critical steps including GMP manufacturing of the vaccine to begin late-stage clinical testing in colorectal, pancreatic, and prostate cancer. During the remainder of 1998 and early 1999, we expect to achieve significant milestones that will further define our product pipeline. These include initiation of Phase II and Phase III trials of Avicine, filing of an IND for our gene therapy technology NeuGenes(R) for cardiovascular restenosis and cancer, and establishment of a strategic alliance with a pharmaceutical partner. We remain committed to cultivating an extensive portfolio of products that offers the medical community a stream of innovative therapeutic solutions to life threatening diseases.

"On that note, I look forward to working closely with Mr. Lillard in leading Avicine(TM) through the final phases of the development process. I would also like to welcome to our Board Dr. Carter, who we believe will provide AVI with valuable insight into the advancement of our three platform technologies. AVI would also like to thank John Beaulieu, our former Chairman, for his dedication and years of service to the company. We wish him well in all of his future endeavors."

Jeffrey L. Lillard, founder of ITC, has been a director of ITC since its incorporation in 1993 and Managing Officer since 1995. From 1993 to 1995, Mr. Lillard served as ITC's President and Chief Executive Officer. Previously, Mr. Lillard was Chief Executive Officer of Clinetics Corporation, a contract manufacturing firm serving the pharmaceutical and biopharmaceutical markets.

Bruce L. A. Carter, Ph.D. has been a director of ITC since 1997 and a member of its Scientific Advisory Board since 1996. He is Executive Vice President and Chief Science Officer of Novo Nordisk A/S (NYSE: NVO) in Copenhagen, Denmark and Seattle, Washington. Prior to Novo, Dr. Carter was President and CEO of ZymoGenetics, Inc. of Seattle, a wholly owned Novo Nordisk subsidiary. He has also served as the Head of Molecular Genetics for G.D. Searle & Co. Dr. Carter serves on several Boards of Directors, including Virginia Mason Hospital Research Center, Anergen, Inc. (Nasdaq: ANRG), as well as Novo Nordisk A/S and ZymoGenetics, Inc. Dr. Carter received his Ph.D. in Microbiology from the University of London, where he was a member of Queen Elizabeth College. He completed post-doctoral fellowships at the University of Edinburgh and the University of Wisconsin. Subsequently he was Lecturer in Genetics at (and an elected Fellow of) Trinity College, Dublin. In 1996, he was elected to the Faculty of the University of Washington as Associate Professor of BioChemistry.

AVI BioPharma Inc. is dedicated to the development and commercialization of products for the treatment of life-threatening diseases using three platform technologies: vaccines, gene targeted drugs and drug delivery. Its lead product candidate, Avicine(TM), an essentially non-toxic cancer vaccine, is about to enter a Phase III licensing trial in colorectal cancer, a Phase II/III trial in pancreatic cancer and a Phase II trial in prostate cancer. The company has also developed a patented class of gene targeted drugs, called NEUGENES(R), which may be useful in the treatment of a wide range of human diseases including cardiovascular restenosis and cancer. Further, AVI has developed a drug delivery technology, called CYTOPORTER(TM), which has been successful in penetrating cell membranes and, as a result, may be useful in improving delivery of many FDA-approved drugs and drugs in development.

"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 pre-clinical 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.

CONTACT: Denis R. Burger, Ph.D.

President & CEO

Alan P. Timmins

COO & CFO 

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or

INVESTOR RELATIONS CONTACT:

Olga M. Fleming/Sue L. Yeoh

CPR Financial Communications, LLC

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