AVANIR Awarded NIH Grant to Expand Development of Anti-Anthrax Antibodies

SAN DIEGO--(BUSINESS WIRE)--March 2, 2004--AVANIR Pharmaceuticals (AMEX:AVN) today announced the award of an additional $750,000 grant from the National Institute of Allergy and Infectious Diseases (NIAID) at the National Institutes of Health (NIH) for AVANIR's Human Antibodies for Exposure/Protection from Anthrax project. This grant follows the initial $100,000 grant from the Small Business Innovative Research (SBIR) program of NIAID that AVANIR was awarded in October 2003. The combined grants are being used to further develop AVANIR's fully human monoclonal antibodies to anthrax toxins using its proprietary Xenerex(TM) technology.

"We are very pleased with the progress of our anthrax antibody program and our ability to secure external peer-reviewed support," stated Jagadish Sircar, Ph.D., Vice President of Drug Discovery at AVANIR. "These grants from NIAID expand the anthrax antibody research originally subsidized by the Center for Commercialization of Advanced Technology (CCAT) which is a Department of Defense funded program."

AVANIR's Xenerex technology is used to generate fully human antibodies to target antigens, particularly infectious diseases, through the engraftment of human immune system cells into severe combined immunodeficient (SCID) mice. The grant funding from NIAID supports the generation, evaluation and characterization of a panel of high affinity fully human antibodies to the protective antigen (PA) component of the anthrax tripartite toxin.

"Out of the antibodies we are aware of and the available published data, we believe that our panel of fully human monoclonal antibodies are the most potent at neutralizing the anthrax toxin," added Angray Kang, Ph.D., Associate Director of Antibody Technology at AVANIR. "Our lead antibody, AVP-21D9, targets critical epitopes on PA and has a unique mechanism of action that disrupts the toxin assembly process."

AVANIR has entered into a cross-license and research collaboration agreement with VaxGen, Inc. for the development and manufacture of pre-clinical supplies of AVANIR's anthrax antibody candidate AVP-21D9. The companies have already initiated the preliminary steps of the research collaboration, including early characterization of the selected antibody, preliminary non-GMP production, and the submission of a grant application under a request from the Department of Health and Human Services. This grant application requests funding to complete the development process required prior to submitting an investigational new drug application (IND) to the U.S. Food and Drug Administration (FDA).

AVANIR is utilizing its Xenerex(TM) technology as a drug discovery component in a broad drug discovery platform strategy. In addition to the Company's biodefense effort, a commercial program is underway to generate useful fully human antibody product candidates to treat selected viral and bacterial infections. In 2003, AVANIR received a grant from the NIH under its Phase I SBIR program to fund the initial development of human monoclonal antibodies for the treatment of human cytomegalovirus (CMV) infection using its Xenerex technology.

AVANIR Pharmaceuticals, based in San Diego, is a drug discovery and development company focused primarily on novel treatments for chronic diseases. The Company's most advanced product candidate, Neurodex(TM), is in Phase III clinical development for the treatment of pseudobulbar affect, also known as emotional lability. Neurodex is also in Phase II clinical development for the treatment of neuropathic pain. A potential treatment for allergy and asthma, AVP-13358, is in Phase I clinical development. AVANIR also develops human monoclonal antibodies for infectious diseases and other therapeutic applications. The Company's first commercialized product, Abreva(R), is marketed in North America by GlaxoSmithKline Consumer Healthcare and is the leading over-the-counter product for the treatment of cold sores.

Except for the historical information presented herein, matters discussed in this press release contain forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from any future results, performance or achievements expressed or implied by such statements. Statements that are not historical facts, including statements that are preceded by, followed by, or that include such words as "estimate," "anticipate," "believe," "plan" or "expect" or similar statements are forward-looking statements. Risks and uncertainties for AVANIR Pharmaceuticals include risks associated with product discovery and development, our dependence on government grants to subsidize the development of our anthrax antibodies, as well as risks shown in AVANIR's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q and from time-to-time in other publicly available information regarding the company. Copies of such information are available from AVANIR upon request. Such publicly available information sets forth many risks and uncertainties related to AVANIR's business and technology. The Xenerex(TM) monoclonal antibody technology competes with several technologies used by large pharmaceutical and biotechnology companies and is subject to a number of uncertainties, including risks associated with the success of clinical trials, the progress of research and product development programs, the regulatory approval process, competitive products and future capital requirements. There can be no assurance that such development efforts will succeed, that additional grants will be received, that such products will receive required regulatory clearance, or that even if such regulatory clearance were received, that such products would ultimately achieve commercial success. The company disclaims any intent or obligations to update these forward-looking statements.

CONTACT: AVANIR Pharmaceuticals
Patrice Saxon, 858-622-5202 (Investor Relations)
psaxon@avanir.com

SOURCE: AVANIR Pharmaceuticals