On June 2, 2009, AVI BioPharma, Inc. (the "Company") and Charley's Fund, Inc. ("Charley's Fund"), a nonprofit organization that funds drug discovery and development initiatives specific to Duchenne muscular dystrophy ("DMD"), entered into the First Amendment to an existing Sponsored Research Agreement (the "Amendment"). The Amendment pertains to certain provisions of that certain Sponsored Research Agreement by and between the Company and Charley's Fund entered into effective October 12, 2007 (the "Agreement"). Under the terms of the Agreement, the Company was awarded a $2.45 million research contract from Charley's Fund to support a new product development program using proprietary exon skipping technologies developed by the Company to overcome the effects of certain genetic errors in the dystrophin gene.

Under the Amendment, Charley's Fund will provide an additional $3 million in sponsored research funds, above the $2 million previously provided, to support the development of AVI-5038 through to submission of an IND application. The Agreement, as amended (the "Amended Agreement"), provides that the Company shall pay to Charley's Fund an amount equal to the funds provided by Charley's Fund under the Amended Agreement through royalty payments based on the commercialization of AVI-5038.

The following exhibit is being furnished (not filed) herewith:

99.1  Press release, dated June 4, 2009, entitled "AVI BioPharma Signs an
      Additional Drug Development Contract with Charley's Fund Inc. for Duchenne
      Muscular Dystrophy"