Phase I Reverse Cholesterol Transport Trial Initiated; AVANIR to Receive $5 Million Milestone

AVANIR Pharmaceuticals (AMEX:AVN) announced today that a
Phase I study has been initiated in partnership with AstraZeneca UK
Limited (AstraZeneca) to evaluate the human safety of AZD2479, a
compound under development as a reverse cholesterol transport
enhancer. The allowance of the investigational new drug application
(IND) by the U.S. Food and Drug Administration (FDA) triggers a $5
million milestone payment from AstraZeneca to AVANIR, the first
designated milestone under the terms of the research collaboration and
license agreement entered into in July 2005.
   "We are pleased that we successfully submitted the U.S. IND for
AZD2479 in a timely way. The FDA's allowance of the IND is recognition
of effective high quality work by the combined AVANIR-AstraZeneca
team. We are now looking forward to results of clinical testing of a
new concept to treat dyslipidemia," stated Gunnar Olsson, VP, Head of
CVGI Therapy Area at AstraZeneca.
   "It is very gratifying to advance another AVANIR-discovered
molecule into human trials with the strong IND package our development
team delivered," said Eric Brandt, President and Chief Executive
Officer at AVANIR Pharmaceuticals. "We look forward to working with
our partner AstraZeneca to move AZD2479 and other molecules forward in
this important area. With this additional milestone, our cash
equivalents and receivable for the milestone will amount to
approximately $55 million, providing a strong balance sheet as we move
into 2006."
   Reverse cholesterol transport, or RCT, is a natural process that
involves the flow of cholesterol from peripheral tissues, including
the walls of blood vessels, to the liver for metabolism and removal
from the body. The process is complex, involving several steps and a
variety of specialized carrier proteins and other transporter
molecules to move cholesterol out of peripheral tissues and into the
liver. Once cholesterol reaches the liver, it is transported to the
gall bladder and excreted from the body. It is generally accepted that
defects in this pathway represent a risk factor for atherosclerosis.
   AZD2479 (AVP-26452) is the lead candidate resulting from AVANIR's
research program to identify RCT enhancers. In the on-going clinical
trial, healthy volunteers will be randomized to receive AZD2479 or
placebo in ascending single doses. The objective is to evaluate the
safety, tolerability, and pharmacokinetics of AZD2479.
   AVANIR Pharmaceuticals is focused on developing and
commercializing novel therapeutic products for the treatment of
chronic diseases. AVANIR's product candidates address therapeutic
markets that include central nervous system and cardiovascular
disorders, inflammation, and infectious diseases. AVANIR previously
announced positive results in the second of two required Phase III
clinical trials of Neurodex(TM), an investigational new drug for the
treatment of pseudobulbar affect. Additionally, AVANIR has initiated a
new Phase III clinical trial for Neurodex as a potential treatment in
patients with diabetic neuropathic pain. AVANIR has active
collaborations with two international pharmaceutical companies:
Novartis International Pharmaceutical Ltd. for the treatment of
inflammatory disease and AstraZeneca UK Limited for the treatment of
cardiovascular disease. 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. Further information about AVANIR can be found
at www.avanir.com.

   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 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. Our RCT
research program is in the early stages of development and competes
with other research approaches and compounds under development by
large pharmaceutical and biotechnology companies. Preclinical research
findings are not always supportable by evidence obtained from clinical
trials. Final review decisions made by the FDA and other regulatory
agencies concerning clinical trial results are unpredictable and
outside the influence and/or control of the Company. The Company
disclaims any intent or obligations to update these forward-looking
statements.