AVANIR to Raise $40.0 Million to Fund Zenvia Through Clinical Development and Regulatory Approval

ALISO VIEJO, Calif., March 27, 2008 - AVANIR Pharmaceuticals (NASDAQ:AVNR) today announced that it has obtained commitments from a select group of institutional investors led by ProQuest Investments and joined by Clarus Ventures, Vivo Ventures, and OrbiMed Advisors to raise gross proceeds of $40.0 million in a registered direct offering. At closing, AVANIR will issue an aggregate of approximately 35.0 million shares at a price of $1.14 per share unit (the market closing bid price as of March 26, 2008 plus a nominal amount for warrants) with 35% warrant coverage. The warrants, which represent the right to acquire up to approximately 12.2 million shares, are exercisable at 125% of the offering price and have a 5 year exercise term. Net offering proceeds are expected to be approximately $37.9 million. The transaction is expected to close on or about April 4, 2008, subject to customary closing conditions. Piper Jaffray & Co. served as the sole placement agent.

The proceeds from this transaction will be used to complete the confirmatory Phase III STAR trial of the investigational drug Zenvia (dextromethorphan/quinidine) and submit a complete response to the U.S. Food and Drug Administration (FDA) approvable letter for the pseudobulbar affect (PBA) indication. Top-line PBA data from the STAR trial are expected in the second half of calendar year 2009 with a complete response expected to be submitted to the FDA in the first half of calendar year 2010. Proceeds will also be used for general working capital.

The shares are being offered pursuant to the Company's registration statements on Form S-3 declared effective by the U.S. Securities and Exchange Commission (SEC) on August 3, 2005 and February 8, 2008, respectively. The offering is being made by means of a prospectus and prospectus supplement available from the AVANIR website at http://www.avanir.com/ or from the SEC at http://www.sec.gov/. Copies of the prospectus supplement for this offering are available by writing to the Company at 101 Enterprise, Suite 300, Aliso Viejo, California 92656 or by calling the Investor Relations department at (949) 389-6700.

About AVANIR

AVANIR Pharmaceuticals is focused on acquiring, developing, and commercializing novel therapeutic products for the treatment of chronic diseases. AVANIR's products and product candidates address therapeutic markets that include the central nervous system, inflammation, and infectious diseases. AVANIR's lead product candidate, Zenvia, is being developed for the treatment of pseudobulbar affect (PBA) and is the subject of an approvable letter from the U.S. Food and Drug Administration (FDA) for that indication. The Company has initiated a confirmatory Phase III study under a Special Protocol Assessment (SPA) agreement with the FDA utilizing a new lower quinidine dose formulation of Zenvia intended to address safety concerns raised in the Agency's approvable letter for Zenvia in the treatment of PBA. Additionally, in April 2007 AVANIR announced meeting all primary endpoints in a Phase III clinical trial with Zenvia in patients with diabetic peripheral neuropathic (DPN) pain. The Company is conducting a formal pharmacokinetic (PK) study to assess alternative lower-dose quinidine formulations of Zenvia for DPN pain that are intended to deliver similar efficacy and improve safety/tolerability versus the formulations previously tested for this indication. AVANIR has licensed the MIF inhibitor program to Novartis International Pharmaceuticals Ltd and has sold its anthrax monoclonal antibody program to Emergent BioSolutions. The Company's first commercialized product, Abreva®, is marketed in North America by GlaxoSmithKline Consumer Healthcare and is the leading over-the-counter product for the treatment of cold sores. Further information about AVANIR can be found at www.avanir.com.

Forward Looking Statements

Statements in this press release that are not historical facts, including statements that are preceded by, followed by, or that include such words as "estimate," "intend," "anticipate," "believe," "plan," "goal," "expect," or similar statements, are forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from the future results expressed or implied by such statements. There can be no assurance that any additional Phase III trial for Zenvia will be successful, that any new doses of Zenvia will be safe and effective, or that the U.S. Food and Drug Administration (FDA) will approve Zenvia for any indication. There can also be no assurance that the proceeds from this offering will be sufficient to fund our clinical trials to completion as expected. Risks and uncertainties affecting the Company's financial condition and operations also include the risks set forth in AVANIR's most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and from time-to-time in other publicly available information regarding the Company. Copies of this information are available from AVANIR upon request. AVANIR disclaims any intent to update these forward-looking statements.

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AVANIR Investor Contacts
Eric Benevich
Brenna Mullen
ir@avanir.com
(949) 389-6700

Mar 27, 2008