AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT

Exhibit 10.81

Portions of this document have been redacted pursuant to a confidential treatment request and filed separately with the Securities and Exchange Commission. Redacted portions have been replaced with “*****”.

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SECTION SF 30 BLOCK 14 CONTINUATION PAGE

SUMMARY OF CHANGES

SECTION A - SOLICITATION/CONTRACT FORM

The total cost of this contract was increased by $3,970,094.20 from $4,103,402.95 to $8,073,497.15.

SECTION B - SUPPLIES OR SERVICES AND PRICES

CLIN 0002

This CLIN has been renumbered to CLIN 0003.

CLIN 0002 is added as follows:

SECTION C - DESCRIPTIONS AND SPECIFICATIONS

The following have been modified:

252.211-9000 Description/Specifications/Work Statement

The Contractor shall provide the supplies and/or services set forth in Section B, in accordance with the following:

a. Statement of Work entitled “AVI BioPharma PMO Platform – HIN1 Countermeasure Development’, Dated 1 May 2009, Attachment 1 to the Contract and 5 May 2009, Attachment la to the contract.

AND:

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Statement of Work entitled “H1N1 Countermeasure Development Extended Influenza Therapeutic Studies,” dated December 17, 2009.

b. Contract Data Requirements List (DD Form 1423), Exhibit A to the Contract

SECTION E - INSPECTION AND ACCEPTANCE

The following Acceptance/Inspection Schedule was added for CLIN 0002:

SECTION F - DELIVERIES OR PERFORMANCE

The following Delivery Schedule Item has been deleted from CLIN 0002:

The following Delivery Schedule item has been added to CLIN 0002:

SECTION G - CONTRACT ADMINISTRATION DATA

Accounting and Appropriation

Summary for the Payment Office

As a result of this modification, the total funded amount for this document was increased by $3,970,094.20 from $4,103,402.95 to $8,073,497.15.

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CLIN 0002:

Funding on CLIN 0002 is initiated as follows:

ACRN: AC

CIN: CBM1000174780002

Acctng Data: 9700400.2620 1000 B63D 255999 BD32742000 S49012 DODAAC: HD1115

Increase: $3,970,094.20

Total: $3,970,094.20

SECTION I - CONTRACT CLAUSES

The following have been modified:

52.244-2     SUBCONTRACTS (JUN 2007)

(a) Definitions. As used in this clause—

Approved purchasing system means a Contractor’s purchasing system that has been reviewed and approved in accordance with Part 44 of the Federal Acquisition Regulation (FAR).

Consent to subcontract means the Contracting Officer’s written consent for the Contractor to enter into a particular subcontract.

Subcontract means any contract, as defined in FAR Subpart 2.1, entered into by a subcontractor to furnish supplies or services for performance of the prime contract or a subcontract. It includes, but is not limited to, purchase orders, and changes and modifications to purchase orders.

purchase orders.

(b) When this clause is included in a fixed-price type contract, consent to subcontract is required only on unpriced contract actions (including unpriced modifications or unpriced delivery orders), and only if required in accordance with paragraph (c) or (d) of this clause.

(c) If the Contractor does not have an approved purchasing system, consent to subcontract is required for any subcontract that—

(1) Is of the cost-reimbursement, time-and-materials, or labor-hour type; or

(2) Is fixed-price and exceeds—

(i) For a contract awarded by the Department of Defense, the Coast Guard, or the National Aeronautics and Space Administration, the greater of the simplified acquisition threshold or 5 percent of the total estimated cost of the contract; or

(ii) For a contract awarded by a civilian agency other than the Coast Guard and the National Aeronautics and Space Administration, either the simplified acquisition threshold or 5 percent of the total estimated cost of the contract.

(d) If the Contractor has an approved purchasing system, the Contractor nevertheless shall obtain the Contracting Officer’s written consent before placing the following subcontracts:

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(e)(1) The Contractor shall notify the Contracting Officer reasonably in advance of placing any subcontract or modification thereof for which consent is required under paragraph (b), (c), or (d) of this clause, including the following information:

(i) A description of the supplies or services to be subcontracted.

(ii) Identification of the type of subcontract to be used.

(iii) Identification of the proposed subcontractor.

(iv) The proposed subcontract price.

(v) The subcontractor’s current, complete, and accurate cost or pricing data and Certificate of Current Cost or Pricing Data, if required by other contract provisions.

(vi) The subcontractor’s Disclosure Statement or Certificate relating to Cost Accounting Standards when such data are required by other provisions of this contract.

(vii) A negotiation memorandum reflecting—

(A) The principal elements of the subcontract price negotiations;

(B) The most significant considerations controlling establishment of initial or revised prices;

(C) The reason cost or pricing data were or were not required;

(D) The extent, if any, to which the Contractor did not rely on the subcontractor’s cost or pricing data in determining the price objective and in negotiating the final price;

(E) The extent to which it was recognized in the negotiation that the subcontractor’s cost or pricing data were not accurate, complete, or current; the action taken by the Contractor and the subcontractor; and the effect of any such defective data on the total price negotiated;

(F) The reasons for any significant difference between the Contractor’s price objective and the price negotiated; and

(G) A complete explanation of the incentive fee or profit plan when incentives are used. The explanation shall identify each critical performance element, management decisions used to quantify each incentive element, reasons for the incentives, and a summary of all trade-off possibilities considered.

(2) The Contractor is not required to notify the Contracting Officer in advance of entering into any subcontract for which consent is not required under paragraph (c), (d), or (e) of this clause.

(f) Unless the consent or approval specifically provides otherwise, neither consent by the Contracting Officer to any subcontract nor approval of the Contractor’s purchasing system shall constitute a determination—

(1) Of the acceptability of any subcontract terms or conditions;

(2) Of the allowability of any cost under this contract; or

(3) To relieve the Contractor of any responsibility for performing this contract.

(g) No subcontract or modification thereof placed under this contract shall provide for payment on a cost-plus-a-percentage-of-cost basis, and any fee payable under cost-reimbursement type subcontracts shall not exceed the fee limitations in FAR 15.404-4(c)(4)(i).

(h) The Contractor shall give the Contracting Officer immediate written notice of any action or suit filed and prompt notice of any claim made against the Contractor by any subcontractor or vendor that, in the opinion of the Contractor, may result in litigation related in any way to this contract, with respect to which the Contractor may be entitled to reimbursement from the Government.

(i) The Government reserves the right to review the Contractor’s purchasing system as set forth in FAR Subpart 44.3.

(j) Paragraphs (c) and (e) of this clause do not apply to the following subcontracts, which were evaluated during negotiations:

Tulane University

Burleson Research Technologies
Battelle

OSU

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Helix

(End of clause)

SECTION J - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACHMENTS

The following have been modified:

LIST OF DOCUMENTS & EXHIBITS

(End of Summary of Changes)

HDTRA1-09-C-0046/P00003

Attachment Number 1b

Statement of Work
H1N1 Countermeasure Development Extended Influenza Therapeutic Studies
December 17, 2009

1.                                           OBJECTIVE:

The objective is perform a dose dependant study against H1N1, as well perform therapeutic studies against H5N1 (Avian Flu), Tamiflu resistant H1N1 and H3N2. The rapid response to identify a lead RNA based therapeutic for H1N1 has been successful in both mouse and ferret models to date. An H3N2 viral isolate was selected for mouse studies because no mouse adapted S-OIV virus was available and the studies were designed to mimic the emerging clinical observations as the pandemic expands. While rapid response concerns were directed at H1N1 S-OIV initially, the threat for H5N1 has not been diminished. Further, the need for a broadly applicable flu therapeutic is great given the emergence of multidrug resistance influenza strains. The urgency for such a therapeutic is linked to the capacity for influenza reassortants to acquire viral segments that will confer drug resistance.

2.                                           SCOPE:

This proposal builds on AVI BioPharma’s novel RNA-based therapeutic platform in two critical areas. First, the work builds on the experience with H1N1 influenza in the evaluation of AVI BioPharma’s compounds for the purpose of inhibiting multiple serotypes of influenza viral growth and pathogenesis. Second, the work expands the depth of understanding in the potential for relatively rapid response to emerging infectious disease or designed biological threats in the biowarfare setting.

3.                                           BACKGROUND:

The Orthomyxoviridae are viruses with negative-sense, single stranded and segmented RNA genomes. The influenza A are members of the orthomyxoviridae with 8 RNA segments. The influenza virus genome is dynamic resulting in new vaccine antigens because of shift, mutation and drift. Shift involves a reassortant strains involving shuffling of the RNA segments between different viruses resulting in a quantum genome change. The current S-OIV (H1N1) is a triple reassortant virus with segments from pigs (HA, NP, NA M and NS), humans (PB1), and birds (PB2 and PA). Mutations arise as a result of replication errors due to a relatively low fidelity polymerase.

Influenza virus gains entry to cells through the binding of a hemagglutinin (HA) molecule to sialic acid residues on host cells. Humans express sialic acids on the cell surface linked as a 2,6 N-glycans while birds express the sialic acid linked through a 2,3 N-glycans. An avian virus that acquires the ability to bind a 2,6-linked sialic acids by mutation or reassortment may cross the species barrier. Swine tissues express both forms of sialic acid enabling cells to be coinfected with avian and human viruses. Swine adapted viruses can further combine with human and avian viruses to produce triple reassortants such as the current SOIV (H1N1) with segments from pigs (HA, NP, NA, M and NS), humans (PB1), and birds (PB2 and PA).

The current SOIV (H1N1) has led to 684 deaths from 126,168 cases reported worldwide from April 4 to July 16, 2009. This leads to a case fatality ratio of 0.6 percent

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Attachment Number 1b

4.                                     TASKS:

The following nine tasks define the administrative, technical and operational activities to be performed.

4.1                               TASK 1 - Program Management: A team of individuals at AVI BioPharma will work together to facilitate the completion of the proposed work.

4.2                               TASK 10 - Manufacture of lead compounds to support additional ferret studies: Additional manufacturing will be required to support the additional ferret studies.

4.3                               TASKS - 11 and 12 Evaluation of lead compounds in Tamiflu resistant H1N1 S-OIV:

Proposed Study Design:

1. Route of viral challenge- intranasal

2. Route of drug delivery- subcutaneous or intravenous

a.               Anesthesia

b.              Time of dose with respect to viral challenge to be determined

3. Dose and design:

a.               Intended dose escalation study with lead compound

b.              Include scramble sequence control, saline control and Oseltamivir positive control

4. Propose repeat evaluation study

5. Animals: 8 groups of 6 ferrets of both genders randomized to each cohort (if single gender only then please provide rationale)

6. Viral challenge

a.               Study 5 and 6: H1N1 (Tamiflu resistant H1N1 strain from 2009 obtained from CDC)

7. Study design:

TABLE 1. Ferret Study 5 and Repeat (Study 6)

(1) Availability of females may not be feasible. If the first study is all males then repeat studies must include females.

(2) *****

8.               Efficacy Endpoints

a.               A composite endpoint: Nasal washing viral load AUC reduced by >75% at 96 hours and at least a directionally consistent favorable effect is seen on nasal washing inflammatory cell count AUC, fever and clinical signs.

b.              Efficacy measures Day 0 to 7:

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c.               Sacrifice 3 ferrets per group on day 3 and Day 7 to collect organs for histopathology evaluation and viral titers in lung and spleen (save samples for sequence determination of persistent virus, possible insight into resistance mechanisms).

d.              Please indicate method for determining viral titer, Q-RT-PCR or plaque assay

9.               Safety Endpoints

a.               No test-article-related mortality, severe adverse events, or pulmonary findings of significant concern.

4.4                               TASKS 13 and 14: Evaluation of lead compounds in Emerging Avian Influenza A (H5N1)

Proposed Study Design: (Items 1-5 see above)

6.               Viral challenge Study 7 and 8: H5N1 (A/Vietnam/1203/04 obtained from CDC)

7.               Study design (see Table 1 above):

8.               Efficacy Endpoints (see above)

9.               Safety Endpoints (see above)

4.5                               TASKS 15 and 16: Evaluation of lead compounds in ferret model of seasonal H3N2

Proposed Study Design: (Items 1-5 see above)

6.          Viral challenge Study 9 and 10: H3N2 (A/HongKong/68 obtained from CDC)

7.          Study design(see Table 1 above):

8.          Efficacy Endpoints (see above)

9.          Safety Endpoints (see above)

4.6                               TASK 17 - Pharmacokinetic, Pilot Toxicology and Mechanism of Action Studies: The rapid response provides an agent that is active in an animal model but confidence needs to be established for extending studies to humans. Greater flexibility is desired for the considerations of route of administration, dose estimation and dose interval. These parameters are determined from pharmacokinetic evaluation of the lead therapeutic agent.

Initial studies to determine the binding affinity of the lead for the target RNA will be established using a BiaCore to measure association, dissociation and equilibrium binding constants and establishment of an ID50 will be evaluated by in vitro translation. Together these will facilitate the relationship between concentration and efficacy and provide supportive information for interpretation of tissue concentrations

Prior to conducting pharmacokinetic studies, an analytical method must be established. The contractor will establish initial feasibility studies with their subcontractor to conduct analysis of blood, tissue and urine samples. The subcontractor has developed a 96 parallel assay technique, which is essential for rapid response evaluation of pharmacokinetic information.

TASK 18 - Rapid Response II (Additional Sequence Synthesis): An additional rapid response exercise is planned for 2010. The exercise involves planning monthly visits to Washington DC to meet with other groups under TMTI contracts. The purpose of the meetings is to integrate and plan for information

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Attachment Number 1b

transfer of sequence information regarding infectious agents of interest to TMTI. The remaining elements of the task are to design and synthesize oligomers for this rapid response exercise. Time for program management under this task is included.

5.                                      DELIVERABLES

In accordance with Exhibit A.

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