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[Tanaka]

AVI BioPharma, Inc. (NASDAQ: AVII), a developer of RNA-based drugs, today announced it secured increased funding of up to approximately $4.0 million under its agreement with the U.S. Defense Threat Reduction Agency (DTRA) to develop, in cooperation with the Transformational Medical Technologies Initiative (TMTI) of the Department of Defense, one or more of AVI's nucleotide-based drug candidates targeting the pandemic H1N1 influenza virus (swine flu). The increased funding will support continued preclinical development of AVI's lead influenza drug candidate, AVI-7367, against H1N1 as well as its expanded preclinical evaluation against H5N1 (avian flu) and drug resistant H1N1 and H3N2 flu strains. AVI's lead influenza drug candidate utilizes AVI's proprietary PMOplus? chemistry.

"We greatly value TMTI's increasing recognition of the utility of our technology and our potential to help TMTI meet their need to be ready and able to respond quickly and effectively to viral threats," commented J. David Boyle II, President and CEO of AVI BioPharma. "We look forward to continuing to work closely with TMTI on this program and our other joint programs. In parallel, we plan to evaluate the broader therapeutic opportunities for our influenza program in seasonal and pandemic flu since our target might be conserved across various flu strains, including drug resistant strains."

The material terms of this contract were initially announced by AVI on May 11, 2009 in a regulatory filing (8-K) with the U.S. Securities and Exchange Commission regarding an original funding award of up to $5.1 million, which was finalized at $4.1 million. The approximately $4.0 million in increased funding support announced today was initially disclosed in a regulatory filing (8-K) on March 26, 2010 and is in addition to any funding earned under the contract announced on May 11, 2009. The objective of the contract is to accomplish the preclinical development of one or more medical countermeasures based on AVI's proprietary PMOplus? chemistry.