AVANIR Pharmaceuticals Awarded $1 Million Research Grant To Develop a New Docosanol Formulation for Genital Herpes Treatment

SAN DIEGO, Mar 20, 2002 /PRNewswire-FirstCall via COMTEX/ -- AVANIR Pharmaceuticals (Amex: AVN) has received a $1 million research grant from the National Institutes of Health (NIH) to develop a docosanol-based product as a topical treatment for reducing the severity and healing time of recurrent genital herpes infections. The grant award is provided through the NIH's Small Business Innovation Research (SBIR) Phase II awards program. AVANIR intends to use the grant award to fund research for the development and testing of efficacy and safety in animal models of a new topical formulation of docosanol that could be used to treat genital herpes. Docosanol 10% cream is AVANIR's lead product that was approved by the U.S. Food and Drug Administration (FDA) for the treatment of cold sores.

The grant award follows AVANIR's successful completion of studies showing the effectiveness of a docosanol-based product in an animal model of herpes simplex infections. Data from these studies were presented at the Interscience Conference on Antimicrobial Agents and Chemotherapy (ICAAC) in December 2001 and were the basis of the application for the Phase II grant.

"It is very important to us to have received this grant to continue development of docosanol for genital herpes," said AVANIR President and Chief Executive Officer Gerald J. Yakatan, Ph.D. "The number of cases of genital herpes continues to increase and we believe that an alternative therapy that could be used by itself or in combination with current treatments would be medically and commercially significant. We are very interested in developing additional potential indications for docosanol cream, our first FDA-approved product."

The Phase II SBIR grant, together with an earlier grant from the California Technology Investment Partnership (CalTIP), brings total funds awarded to AVANIR for further research and development of a potential new treatment of genital herpes to $1,159,000. The Phase II grant represents a two-year period of funding of approximately $500,000 each year for the Company's research project. In August 2001 the San Diego Regional Technology Alliance announced that AVANIR was awarded a $150,000 CalTIP grant, which is a matching funds grant that can be used only in conjunction with a federally funded grant. AVANIR intends to use the CalTIP grant to fund the Company's business development efforts related to its research on a potential docosanol- based product to treat genital herpes infections.

AVANIR Pharmaceuticals, based in San Diego, is a diversified biopharmaceutical company with an FDA-approved product. AVANIR is engaged in research, development, commercialization, licensing and sales of innovative drug products and antibody generation services. The Company's website is http://www.avanir.com .

The information contained in this press release, including any forward looking statements contained herein, should be reviewed in conjunction with the Company's Annual Report on Form 10-K and other publicly available information regarding the Company, copies of which are available from the Company upon request. Such publicly available information sets forth many risks and uncertainties related to the Company's business and such statements, including risks and uncertainties related to drug development and clinical trials. The Company's receipt of a Phase II grant award intended to fund development of potential therapies for herpes should not imply that the Company's research will be successful or that a product will be the result. Phase II grant award covers a span of two years and is funded in annual increments. The first year increment is $501,000 and the NIH's recommended funding for the second year is $507,000, subject to the availability of funds and satisfactory progress of the project. There can be no assurance that government funds will be available for the second year or that satisfactory progress will have been made at the end of one year. Final review decisions made by the NIH, FDA and other regulatory agencies concerning our research and government funding are unpredictable and outside of the influence and/or control of the Company.

For further information please contact: General Information, Kristen McNally, +1-310-407-6548, kmcnally@webershandwick.com, or Analyst/Investor, Tricia Ross, +1-310-407-6540, tross@webershandwick.com, or Media, Al Orendorff, +1-312-640-6775, aorendorff@webershandwick.com, all of FRB|Weber Shandwick, for AVANIR Pharmaceuticals; or Patrice Saxon, Investor Relations of AVANIR Pharmaceuticals, +1-858-622-5202, psaxon@avanir.com

SOURCE AVANIR Pharmaceuticals

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