Welcome to the AVI BioPharma Fourth Quarter 2007 Results Conference Call. At this time all participants are in a listen only mode. Following managements prepared remarks; we will hold a Q&A session. (Operator Instructions) As a reminder, this conference is being recorded March 12, 2008. I would now like to turn the call over to Jody Cain. Please go ahead ma’am.

This is Jody Cain with Lippert/Heilshorn & Associates. Thank you for participating in today’s call. As we begin this call I would like to point out that a link to slides accompanying managements presentation is available on the home page of the AVI web site at www.avibio.com Joining me this morning from AVI BioPharma are Dr Leslie Hudson, Chief Executive Officer and Alan Timmins, President and Chief Operating Officer. Earlier today AVI BioPharma released financial results for the 2007 fourth quarter and full year. If you’ve not received this news release or you’d like to be added to the company’s distribution list, please call Lippert/Heilshorn in Los Angeles at 310-691-7100 and speak with Amy Higgins. Before we begin I would like to state that comments made by management during this conference call will include forward looking statements within the meaning of Federal Securities laws. These forward-looking statements involve material risks and uncertainties. For a discussion of risk factors I encourage you to review the AVI BioPharma annual report of Form 10-K and subsequent reports as filed with the SCC. Further more, the content of this conference call contains time sensitive information that is accurate only as of the date of the live broadcast March 12, 2008. The company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call. With that said, I’d like to turn the call over to Dr. Hudson, Les?

Jody thanks very much indeed and thanks to all of you for joining us today. First of all I want to say just how pleased I am to have the chance of talking with you on this, my first conference call as AVI’s Chief Executive Officer. The form of use this morning, during about the next 45 minutes, we’ll give you an overview of our financial results after some brief comments I’ll make at the beginning. But we’d like to spend most of the time looking at the AVI work plan towards the clinical advancement and commercialization of our new gene based drug candidates as well as well as reviewing our near-term milestones; so really focusing on the clinical part of our pipeline for the purposes of this first call with you. If I may and I promise I’ll never do this again, just to give you a very brief synopsis of my own background and maybe in that synopsis we’ll be able to highlight to you why in fact I’m so pleased to have a chance at coming on board at AVI at this, what I believe will be a seminal time; because in essence I started my career originally in discovery research. I migrated to development and ultimately ended up in Pharmacia running their ophthalmology P&L , but I think it’s fair to say that the largest part of my relevant experience for this particular opportunity comes from doing turn-a-rounds, developing business strategies and also being able to implement successful drug development and commercialization programs. I work in four small companies, so I’ve actually, as many of you will of yourselves, had the vagaries of success and failure and as you know those who come through in this biotech area are recidivistic entrepreneurs. Fortunately my last experience in…

I thank you Les and good morning to all of you joining us on the call and over the internet. Today I’d like to review our 2007s fourth quarter and full year financial results, our year end cash position and also discuss our 2008 financial guidance. Revenues from license fees, grants and research contracts in the fourth quarter of 2007 were $5.2 million up from $18,000.00 reported in the fourth quarter of 2006. This increase in revenue reflects increases in research contract revenues of $5.1 million as well as higher licensing fees and grant revenues. Our operating expenses for the 2007 fourth quarter were $10.9 million compared with $8.8 million for the 2006 fourth quarter. This increase was due primarily to higher research and development expenses which increased to $9.4 million from $6.7 million last year. Higher R&D expenses in the 2007 fourth quarter included an increase of &1.9 million in contracting costs for the production of GMP subunits as well as higher expenses for government research contracts, chemical and lab supplies, government contract related equipment, patent amortization, property taxes and consultant fees. The increase in R&D expenses was partially offset by decreases in employee costs. General and Administrative expenses for the fourth quarter of 2007 were $1.5 million versus $2.1 million in the comparable 2006 period. This decrease in G&A expenses was due primarily to decreases in compensation costs of $735,000.00, which is partially offset by increases in accounting and legal expenses. We reported a net loss for the fourth quarter of 2007 of $4.1 million or $0.07 per share which compares with a net loss of $6.1 million or $0.11 per share for the fourth quarter of 2006. For the full year 2007 we reported revenues of $11 million compared with $115,000.00 in revenue in 2006. The increase…

Alan thanks very much indeed. So, we’ll take questions both for Alan and also for myself on the whole of our presentation when we get through to the end of the next piece, which essentially will be to look at the corporate priorities and also the beginnings of the business strategy which the management team will unfold to basically guide us through the next year. And obviously as we get more and more depth and detail in this, we will be able to take the opportunity of presenting it both to the analyst community as well as our investors both through this medium as well as in conferences. Then if you look, if you’ve had a chance already on our website, you will see that there was a set of slides which will help structure the information that we want to convey to you this morning, but at the same time also to give us a medium for maybe a more efficient transfer of information. So, I won’t go through and read in great detail each slide, because I think the better way is to pick out the points that you would really like to have answered in the question and answer session. So, starting with the slides and just drawing your attention to the second slide, which is the Safe Harbor statement, essentially reminding you that the slides plus the verbal are necessary to actually understand the full content of what management is talking about here? And looking at the first of the text slides, Number 3, which is entitled “The Opportunity” I guess another way you could subtext this is why did I return to antisense oligomers at this stage? What I see in a sense is very compelling parallelism between what has been happening recently with monotonal…

Thank you. (Operator Instructions) One moment please for the first question. Your first question comes from the line of Ren Benjamin of Rodman and Renshaw. Ren Benjamin- Rodman & Renshaw Llc: Hi, good morning and thanks for taking the question. I guess just starting off, maybe we can just start off with the CABG program first. You mentioned that there is a higher than expected graft failure among the first 47 patients, do you have some numbers behind this? And since you are blinded, do we know from which, it would make sense that we don’t know from which group we’re seeing this, but maybe you can give us some additional color as to, you know, what has the DSMB somewhat troubled?

Well you know I think in saying what you just said, essentially is there was a higher than historically expected rate of failure of engraphment. I mean that basically is the extent to which we have an understanding of what’s happened. We know that all of those cases came from a single site. The DSMB basically suggested that we expand two additional sites, which operationally we would do anyway and they asked us to actually go for the next 30 patients to then again look at the graft failure. It could be that in fact this is just an aberration of the small sample size, it could clearly be a series of other contributions and as you know, we in fact are not able to actually get any details, because basically that would be to un-blind the trial. But, the trial is going forward, clearly it is something where we are expanding to other sites and we will actually be looking at the next trounce of data. As you can see on the timelines that I put in the last slide there, we’re anticipating, by the third quarter, that we’ll have enrolled the next 30 patients. Ren Benjamin- Rodman & Renshaw Llc: Okay so if you enroll the next 30 patients by the third quarter, approximately how long after that will the DSMB meet to take another look? And can you remind me, is the DSMB blinded as well and they’re just looking at the overall, sort of, safety of the trial or are they un-blind?

No, the DSMB are looking at the data. We’re un-blinded with regard to, we’re blinded excuse me, with regard to the data and also their discussions and so clearly what we get back from them, of necessity, are very opaque statements of the type that we’ve just talked about. I think, you know, the information within that third quarter for enrolling the patient’s and getting the information back will be between the end of the third quarter, beginning of the fourth quarter. Clearly this is an important decision for the company and we want to have that data as rapidly as possible. Ren Benjamin- Rodman & Renshaw Llc: You think that by the fourth quarter we should know the results or at least what the DSMB is thinking?

That’s what we’re anticipating. Ren Benjamin- Rodman & Renshaw Llc: Okay, moving onto the DMB program, which I think is one of the most exciting programs. Can you just give us an update as to what’s happening with the IM study right now? How many patients have been treated, if any and I know that in the milestone table you talk about the IV dosing, but when might we see some preliminary data from the IM study?

Well so basically the first patient has been dosed. We’re still very early, we’re still actually at a very low concentration of drug that is being injected and I think it’s at a point where we would like to get experience with the dose escalation before we talk about in detail what we’re seeing there. You do know though that obviously, in a very similar stuidy, presenza demonstrated the production of dystropin in vivo by a very similar route. So you know, from that point of view, that was part of the reason why I was saying that the IM study is really only an incremental advance from what has previously been demonstrated.Though I wouldn’t take away the importance of actually being able to use it to show that indeed A. we can get the expression of concaded (ph) dystrophin and secondly to actually give us some indications of dose ranging. Ren Benjamin- Rodman & Renshaw Llc: Okay and what exactly is the difference between AVI-4658 and there’s this new PMO based exon 50 product that you’re talking about and filing an IND by the end of this year. Is it just a different exon that’s being skipped?

Yes, I mean in principle it is a different exon that’s being skipped. As you know the approach is to be able to treat DMD when one actually has a successful and validated drug product. It’s probable to be able to hit enough patient’s for therapeutic benefit that one would want to perhaps go, for example, with a range, a limited range of exon skipping capabilites or oligonucleatides and so one of the things that we thougth it was important early on to get experience with is really more than one exon. Because although the idea in principle should translate very well, clearly there’s no substitute for having clinical evidence that indeed the approach can translate from one exon to another. And you know, what we actually put into the clinic, how we do it, these are very, very much now plans which are being made by the company. Ren Benjamin- Rodman & Renshaw Llc: Okay and I guess just one final question. I jumped on the call a little late, so I apologize if you’ve already answered this, but can you give us some guidance as to what the burn rate will be in 2008?

Yes Ren, we announced that guidance as 16 to $19 million. Ren Benjamin- Rodman & Renshaw Llc: And then that takes into account, Alan, I guess any of the grants or revenues that would be coming in from the government project?

Yes it does. Those grants that are contractually committed. Ren Benjamin- Rodman & Renshaw Llc: Got it, thank you very much.

Thank you.

Your next question comes from the line of Yale Gen of Maxim Group.

Hi, good morning and that was a very good presentation, thanks for that. And just follow up on some of Ren’s questions, a lot of it has been answered. One of them is for the DMD, this is a little bit longer haul, do you think that the for this program you need sort of commercial ponder moving forward for this or do you think that you may be able to do it by yourself should those things be successful clinically?

So you know, this is very much a matter of personal experience and in some ways personal preference. When I was in opthamology I ran a specialty pharma business and you know in principle the size of the sales force, the number of calls you have to make to different centers and the ability to access key opinion leaders for something like DMD is very doable in a company of our intended sort of size. So if you like that argues for it. Against it, many of our companies of a type like AVI have had a long history in discovery, in development and a very much more curtailed history and experience in terms of commercialization. And the commercialization, the whole of that translation of a product candidate into a product is an art in itself and it’s really just a very simple business decision, What the company should always do and we certainly will do is look at what our potential partners would offer us and then against that look at what in fact we could do ourselves both in terms of risks and rewards and that ratio will guide us. If in fact we believe we can do better on our own, and we could by partnering with a major company, then it’s very clear what we should do. But you know there are always attendant risks and personally, particularly for the first few products that come through, having a commercial partner helps you actually get that culture into a company like ours. So in all honesty, when we get there we’ll make the right decision because we’ll make the right analysis and we’ll have talked to the right partners.

Okay great, thanks a lot. Just another question is about you quoted a stand that Cook may also develop. Could you shed a little more light on that as much as you can do?

Yes. I mean this is a partnership, as you know, with Cook. It is a program which they themselves are running absolutely, it’s an internal program to them. So we have no milestones, so we don’t have any reportable events from our side of that partnership and the reason we don’t have any reportable events as milestones is that we traded up in the level of royalty that we will get once the product becomes commercial. And so from that point of view, the information flow is going to of necessity be much more limited around that particular program, other than letting you kow that it’s ongoing, which I’ve done. And the reason for that is we don’t have control of it directly and it’s partnered out and basically Cook are a private company that don’t have the same reporting obligations as AVI.

Correct.Thanks a lot then appreciate it. And the last question, before I go back to the queue is that for the exon 50 product that you intend to file at the end of this year, could you tell me a little more about the anticipation for the proram, the specific potential goal this program may accomplish compared to the one you have ongoing right now?

It literally is to go after another more rare exon. The frequency with which you see exon 50 mutations is less than you see in exon 51. And as I’ve said previously, althuogh there is every reason, from a scientific and logical point of view, to expect our chemistry to translate, expectation is no translation for experience.And so from that point of view we want to get that experience.

And the funding for this one you are thinking about internally or this is one you anticipate some sort of funding from externally?

Well there is, as you know, a lot of support both from government funding, DOD funding for example for DMD, the foundations themselves have done an extremely good job in that regare. Personally I’ve actually had a lot of admiration for what’s been accomplished in that regard and indeed for that particular PMO approach for exon 50 we have already been able to get some funding towards it. And it’s enough to actually help us over those first initial hurdles into the clinic.

Great, thanks a lot. And congratulations on your new assignment.

Thank you. I look forward to working with you.

Your next question comes from the line of Lenny Stout of National Planning Corporation

Hi, Dr. Hudson

Oh Lenny, Les would be great. My mother used to call me Dr. Hudson when she was really annoyed with me.

Alright, good to have you say that. One of the things that we deal with a lot in AVI is expectations. And in the area of the virus develoopment where we learn an awful lot from that, what is a real objective there? Are we trying to get large contracts with the government, is that a reasonable expectation? Do we have a time frame to that with the state of the governments ability to actually make a contract get let and funded?

Good question. So I’m going to start and then I’m going to actually ask Alan to pick up with me as well, because Alan has been extremely successful in leading the effort on behalf of AVI to actually get government funding along with some of our other colleagues in the management team and that ‘s an area which I’ve asked him to take particular responsibility for and we’ll be leading the charge in that regard. So, let me answer this strategy question, Lenny, that you’re really asking and then I’ll pass it over to Alan. So you know, we’ve got a good history of treating virus infections. We’ve got a good history of treating disease, particularly disease caused by excesses, if you like, of the immune system. One of the characters of virus disease in general is that very often the infection starts a disease causing process, but by the time you try to come to treat the disease with an antiviral it’s already escaped. Now I hope that will give you a clue what we’re looking at as our core to, if you like, our research strategy is the ability to take that concept, that jewel concept on the one hand of being able to treat the virus and on the other hand to be able to actually limit and curtail and actually treat the disease. And so from that point of view, when I was talking about focusing our research pipeline, that balance is going to be very important. And it’s an area where over the last several years we really have built up a lot of in house experties and knowledge and I believe that will also drive some of our early partnering efforts. With regard to the government and why that’s important and why it’s important just beyond the finances, let me hand it over to Alan to just add the codicil to that please.

Thank you, Les. You know, Lenny, the government programs are extremely important as well because a lot of what we learn under the governments’ auspices, on their nickel to use a slang phrase, is also applicable for us in other disease settings. And so it’s a little bit like, well you and I have met so we’re of a generation that I’m confident in saying it’s a little bit like the space program in the sixties, besides getting the first man on the moon, which is a neat accomplishment but it doesn’t pay the rent. There’s also various technological developments, or advancements or knowledge bases that are gained from that program and so our program with the government, though rewarding from a financial standpoint is particularly rewarding from the technology spin off knowledge base that we get from doing those projects. So from that standpoint it’s been quite gratifying for us as well and I think over time you’ll see how. And we’ll endeavor to point out to you how its pushed our technology forward at a quicker rate than we could have expected by just doing internally developed programs going forward. In terms of garnering a huge government contract at the end of the rainbow, a bio shield type of thing, there is possibilities for that. But I think on a day to day operating basis that isn’t why we’re in the government business and it’s no why we’re working with the government. It’s something that we’ll evaluate when the opportunity arises, if the opportunity arises, because the government is a double-edged sword to work with as you might guess. It’s good because we’ve made great scientific advances, but the government moves slowly and all the while that it’s moving slowly there’s changes within the government that are happening very rapidly. So the desire for a bio shield type stock piling may be in favor one day, it may not be in favor one day. So we’re not hanging our hat on that being the end point to our government efforts. We’re really working toward both offsetting some of our ongoing costs, but also having that great increase in knowledge base from our ongoing effort in the government sector.

Great, thank you. Look while I’ve got you guys here, let me ask you another question on expectations. You know we have this Cook program that’s been going on for awhile and w’re kind of almost blinded from knowledge since they’re a private company and don’t report to us on milestones.Do we have any clue on expectations of when they plan to do certain filings or reach certain phases of their clinical trials?

You know the partnership with Cook is a good one and as you say it’s been going on for some time. It’s a situation where the degree of transparency, which AVI has into that partnership, of necessity is going to be greater than our ability to communicate it out. It’s a situation where basically they are in control of the program. That is the price of the partnership. That is also clearly the opportunity of being able to leverage their commercial ability. And you know sometimes you can get around that by having early milestones which can be indicative and can be reported very easily, there are no milestones in this program.

I think I’ve understood that from the beginning. I was just trying to figure out how we’re going to know when they’re really getting ready to do something commercial with it since it doesn’t seem like there’s a lot of communication from them to AVI.

Well there is not a lot of communication from AVI to you about what they’re telling us. And you know we are actually bounded by our partnership.

Okay, well we’ll have to deal with that because it’s a very important program for us. Let’s get some more that we’re a little more visible on I think.

Oh, amen to that.

Unless I missed it you haven’t mentioned Cytochrome P450. I was wondering if you’d had a chance to look at that and if you have whether you think there are commercial possibilities there or partnership possibilities.

George thanks very much indeed for that question and good morning. Yes you didn’t miss it, I just didn’t mention it. One of the things that is, if you like, one of the appealing things about the research, the discovery research effort that’s been going on in AVI is that it’s like having a treasure chest that you can sort through. I think one of the very important opportunities that we have is the ability to get partnerships much earlier than the end of Phase II that I was alluding to. And at the present time, as you can imagine, my personal focus with the management team is been looking at our clinical programs and also the need to drive partnership in that regard. I think what we’ll do with the research programs, you know there is a perspective. If you hear about research progress very six months to a year, you actually then can get a much better appreciatio of how things are moving through. What I’d like to bring into being at AVI and I’m not sure whether we’ve ever done it here before, is this idea actually of a dedicated day and certainly a dedicated call for our science. Because I think the priorities are initially going to be by selection and then secondly by evolution and so you know, what are our research priorities going to be and also what the expecation is for speeding up that evolution into exploratory development is very important and that will actually be coming down the pike.

Alright, thank you.

Thank you.

There are no further questions at this time. Please proceed with your presentation or any closing remarks.

Thanks, Christy. So, I’d like to thank you all for joining us today. It has been a pleasure to have a chance to talk with you. I hope our excitement has come across and also our commitment to convert that excitement into solid progress. I look forward to working with you and giving you regular updates and most of all I wish you all a very good day. Thank you for joining us. Good bye.

Ladies and gentlemen that concludes your conference call for today. We thank you for your participation and ask that you please disconnect your line.