AVI BioPharma Updates Progress on Infectious Disease Program Using NEUGENE Antisense Drugs For RNA Viruses.

PORTLAND, Ore. -- AVI BioPharma, Inc. (Nasdaq:AVII), today announced a six-month progress report on its infectious disease program, which uses the company's proprietary NEUGENE(R) antisense technology to combat single-stranded RNA viruses. The infectious disease program at AVI is extensive with research on 45 different viruses representing 17 viral families.

AVI's viral research involves collaborations with approximately 50 different scientific investigators worldwide. The results from these studies have also enhanced AVI's capability in designing effective agents for both emerging and engineered pathogens. AVI's antiviral research program has produced antisense drugs shown to be active against a range of single-stranded RNA viruses, including West Nile virus (WNV), dengue virus, SARS coronavirus, hepatitis C virus, influenza virus and Ebola virus in preclinical studies. Because of their simple genetic structure, these and other single-stranded RNA viruses are attractive targets for NEUGENE antisense drugs.

West Nile Virus

AVI has completed cell culture studies in collaboration with Dr. P-Y Shi at the Wadsworth Center in New York confirming the efficacy of its clinical candidate, AVI-4020, a NEUGENE antisense compound targeting WNV. Preclinical toxicology and pharmacokinetic analysis of AVI-4020 have been completed and the company has filed an Investigational New Drug application (IND) with the Food and Drug Administration (FDA) for human clinical studies.

AVI demonstrated its capacity for rapid drug development in the WNV program. The time from identification of the drug candidate to initiation of the clinical program was less than 10 months. A Phase Ib clinical trial was completed in 2003 meeting its primary endpoint of safety. An additional safety and efficacy trial was initiated in 2004 and remains open for the 2005 WNV season; it is referenced on the Centers for Disease Control and Prevention (CDC) and National Institute of Allergy and Infectious Diseases (NIAID) Web sites.

Dengue Virus

AVI executed a Cooperative Research and Development Agreement (CRADA) with the CDC to evaluate NEUGENE antiviral properties against dengue virus in 2004. Collaboration with the CDC under this CRADA has been productive, resulting in one NEUGENE agent producing greater than a thousandfold reduction in viral titer in cell culture. Further, the candidate agent is effective against all four known serotypes of the dengue virus, which is crucial for long-term efficacy.

AVI also initiated a CRADA with Walter Reed Army Institute of Research to expand the studies evaluating NEUGENE antiviral properties against dengue virus. This interaction will facilitate completion of advanced preclinical studies and potentially the initiation of clinical evaluation of AVI's antisense treatment of dengue virus infections.

Dengue fever/dengue hemorrhagic fever (DF/DHF) is an emerging complex of clinical syndromes caused by dengue viruses. DF/DHF has become a major global health problem over the past 20 years, producing more illness than any other arboviral disease of humans. The World Health Organization estimates that over 50 million human infections occur each year. DF/DHF has become the leading cause of hospitalization and death among children in Southeast Asia, and incidence of infection and disease are sharply rising in the Americas. There is currently no commercially available vaccine or effective therapy. Medical supportive care is the recommended primary treatment to improve the condition of severely infected patients.

Severe Acute Respiratory Syndrome (SARS)

AVI has developed an experimental antisense compound targeting the SARS coronavirus. Collaborative studies with the laboratory of Dr. Michael Buchmeier at The Scripps Research Institute (TSRI) in La Jolla, Calif., have resulted in highly effective agents against the SARS coronavirus. The studies determined that AVI's NEUGENE protected infected cells from viral-induced cell death, limited the growth of the virus, and reduced the spread of the virus in cell culture. The studies further investigated the potential for the virus to develop resistance to the NEUGENE antiviral therapy. AVI's antisense agents targeting SARS are now moving into therapeutic models in animals.

According to the CDC, SARS was first reported in Asia in February 2003. Within months SARS had spread to over two dozen countries in North America, South America, Europe and Asia. The WHO reported 8,098 cases and 774 deaths internationally from SARS in 2003. Over the same time period, there were 192 cases of SARS in the U.S., but no deaths. International disease monitoring organizations remain on alert for a recurrence of SARS infections which are expected over the next few years.

Hepatitis C Virus

In 2004, AVI received unique patent coverage for its NEUGENE treatment of hepatitis C virus (HCV). Collaborative studies have led to identification of effective NEUGENE antisense agents targeting HCV in cell culture and animal models. Recently, AVI and collaborators at the University of Texas Medical Branch at Galveston have been awarded a grant from the National Institutes of Health (NIH) to extend the evaluation of NEUGENE antisense agents targeting HCV. AVI has also licensed a unique HCV viral prototype model from the University of Texas Medical Branch at Galveston for evaluation of NEUGENE antisense agents in a primate model. Pharmacokinetic and toxicology studies on the candidate HCV agent, AVI-4065, have been completed at AVI, and now Good Laboratory Practices (GLP) toxicology studies in rats and primates are in progress.

Independent confirmation of the effectiveness of NEUGENE antisense compounds against HCV has been published in both in vitro laboratory experiments (Journal of Virology, November 2000, vol. 74, issue 22, pp. 10,430-10,437) and recently in controlled animal model (Hepatology, August 2003, vol. 38, issue 2, pp. 503-508). In the recent study from Stanford University School of Medicine, the authors conclude that morpholino antisense oligonucleotides are potent inhibitors of HCV in a preclinical mouse model and have potential as molecular therapeutics for treating HCV and other viral infections.

AVI plans to file an IND and initiate human clinical trials with AVI-4065 in 2005.

HCV infects one in every 40 people worldwide. Chronic liver disease is the 10th leading cause of death among adults in the United States. The CDC estimates that 40% of chronic liver disease is HCV-related, resulting in an estimated 8,000-10,000 deaths each year and accounting for estimated medical and work-loss costs of over $600 million annually. Current treatments are ineffective, and HCV is the leading cause of liver failure leading to transplantation in the United States and Europe.

Influenza Virus

AVI has completed evaluation of NEUGENE antisense agents targeting influenza A virus in collaboration with Dr. J. Chen and Dr. Q. Ge at the Massachusetts Institute of Technology in Cambridge, Mass. These studies were presented at the American Society for Microbiology in 2004. Multiple NEUGENE antisense agents were effective in the culture model, limiting the growth and spread of the virus. These cell culture studies indicate both prophylactic and therapeutic applications for influenza are feasible.

Most human infections of flu are from influenza A virus. Worldwide between 3 million and 5 million people are infected with influenza A, resulting in approximately 250,000 deaths every year. In the United States, influenza causes over 100,000 hospitalizations and nearly 30,000 deaths every year. The 1918 Spanish flu epidemic caused over 20 million deaths worldwide, with over 500,000 deaths in the United States.

Ebola Zaire Virus

AVI recently reported efficacy in studies against Ebola Zaire virus. A CRADA has been initiated with the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) to continue these studies. Further, AVI obtained approval for $5 million in support from the Department of Defense budget to expedite preclinical development of an Ebola virus drug candidate. Pharmacology and toxicology studies have been conducted in mouse, rat and primate species to evaluate preclinical candidates for multiple gene targets.

Ebola Zaire virus is endemic to Africa, and there have been approximately 1,850 cases with 1,250 deaths from this virus since 1976. Ebola virus causes lethal hemorrhagic disease and is an NIAID Priority A pathogen and a bioterrorism suspect agent of interest to the Department of Defense and Project BioShield. There are currently no approved treatments for Ebola infection.

About AVI BioPharma

AVI BioPharma develops therapeutic products for the treatment of life-threatening diseases using two technology platforms: third-generation NEUGENE antisense drugs and cancer immunotherapy. 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 target single-stranded RNA viruses, including West Nile virus, SARS coronavirus, hepatitis C virus and dengue virus. AVI's second technology, AVICINE(R), is a therapeutic cancer vaccine with late-stage trials planned for the treatment of pancreatic cancer. 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.