<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

(Mark One)

   [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 2001

                                       OR

   [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934

               For the transition period from ________ to ________

                         Commission File Number 0-20815

                                     AVIRON
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                     <C>
                       DELAWARE                                      77-0309686
   (State or other jurisdiction of incorporation or     (I.R.S. Employer Identification No.)
                    organization)
</TABLE>

           297 North Bernardo Avenue, Mountain View, California 94043
           (Address of principal executive offices including zip code)

                                 (650) 919-6500
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                 Yes [X] No [ ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

  Common Stock $.001 par value                  30,602,814 shares
  ----------------------------            ----------------------------
            (Class)                       (Outstanding at May 8, 2001)


<PAGE>   2
                                     AVIRON

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                              PAGE NUMBER
                                                                              -----------
<S>                                                                           <C>
  PART I.      FINANCIAL INFORMATION                                                3

     ITEM 1.   CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
                     (UNAUDITED)                                                    3

               Condensed Consolidated Balance Sheets as of March 31, 2001
                 and December 31, 2000                                              3

               Condensed Consolidated Statements of Operations for the
                 three-month periods ended March 31, 2001 and 2000                  4


               Condensed Consolidated Statements of Cash Flows for the
                 three-month periods ended March 31, 2001 and 2000                  5


               Notes to Condensed Consolidated Financial Statements                 6

     ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                 CONDITION AND RESULTS OF OPERATIONS                                9

     ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                 MARKET RISK                                                       13

  PART II.     OTHER INFORMATION                                                   14

     ITEM 1.   LEGAL PROCEEDINGS                                                   14

     ITEM 2.   CHANGES IN SECURITIES                                               14

     ITEM 3.   DEFAULTS UPON SENIOR SECURITIES                                     14

     ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 14

     ITEM 5.   OTHER INFORMATION                                                   14

     ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K                                    15

  SIGNATURES                                                                       16

  EXHIBIT INDEX                                                                    17
</TABLE>



                                       2
<PAGE>   3
PART I - FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS AND NOTES (UNAUDITED)

                                     AVIRON
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                 (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


<TABLE>
<CAPTION>
                                                                                  MARCH 31,      DECEMBER 31,
                                                                                    2001            2000
                                                                                  ---------       ---------
                                                                                  (UNAUDITED)      (NOTE 1)
<S>                                                                               <C>            <C>
                                     ASSETS
Current Assets:
  Cash and cash equivalents ................................................      $ 343,591       $  64,662
  Short-term investments ...................................................        126,762          67,651
  Accounts receivable ......................................................          6,553          23,288
  Inventory ................................................................          5,492           4,264
  Prepaid expenses and other current assets ................................          4,249           2,691
                                                                                  ---------       ---------
    Total current assets ...................................................        486,647         162,556
Long-term investments ......................................................         53,163           4,506
Property and equipment, net ................................................         30,569          27,707
Intangible assets, net .....................................................         47,698          48,046
Deposits and other assets ..................................................         11,493           5,924
                                                                                  ---------       ---------
TOTAL ASSETS ...............................................................      $ 629,570       $ 248,739
                                                                                  =========       =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
  Accounts payable .........................................................      $   2,850       $   5,106
  Accrued compensation .....................................................          3,079           4,978
  Accrued clinical trial costs .............................................          1,648           1,974
  Accrued interest .........................................................          1,896             695
  Accrued expenses and other liabilities ...................................          5,750           7,654
  Current portion of capital lease obligations .............................              4               9
  Current portion of long-term obligations .................................          6,627           5,945
  Deferred revenue .........................................................         10,000              --
                                                                                  ---------       ---------
    Total current liabilities ..............................................         31,854          26,361
Deferred rent ..............................................................          1,628           2,095
Deferred revenue ...........................................................          9,000           9,750
Long-term obligations, less current portion ................................        257,426          89,947
Commitments and contingencies
Stockholders' Equity:
  Preferred stock, $0.001 par value; 5,000,000 shares
    authorized, issuable in series; none outstanding at March 31, 2001
    and December 31, 2000 ..................................................             --              --
  Common stock, $0.001 par value; 100,000,000 shares
    authorized; 30,574,137 and 25,181,051 shares issued and outstanding
    at March 31, 2001 and December 31, 2000, respectively ..................             31              25
  Additional paid-in capital ...............................................        630,169         394,012
  Notes receivable from stockholders .......................................            (50)            (50)
  Accumulated deficit ......................................................       (300,488)       (273,401)
                                                                                  ---------       ---------
Total stockholders' equity .................................................        329,662         120,586
                                                                                  ---------       ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY .................................      $ 629,570       $ 248,739
                                                                                  =========       =========
</TABLE>



                             See accompanying notes.



                                       3
<PAGE>   4
                                     AVIRON
                       CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
                            (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED
                                                                MARCH 31,
                                                          -----------------------
                                                             2001          2000
                                                          --------       --------
<S>                                                       <C>            <C>
REVENUES:
   Contract revenues and grants ....................      $  3,215       $  3,407
                                                          --------       --------

OPERATING EXPENSES:
  Research and development .........................        28,094         17,594
  Acquisition of in-process research
      and development ..............................            --         10,904
  General, administrative and marketing ............         4,473          2,568
                                                          --------       --------

TOTAL OPERATING EXPENSE ............................        32,567         31,066
                                                          --------       --------

LOSS FROM OPERATIONS ...............................       (29,352)       (27,659)
                                                          --------       --------

OTHER INCOME (EXPENSE):
  Interest income ..................................         5,247            722
  Interest expense .................................        (4,393)        (2,088)
                                                          --------       --------
      Net interest income (expense) ................           854         (1,366)
  Gain on investment ...............................         1,032             --
                                                          --------       --------
TOTAL OTHER INCOME (EXPENSE), net ..................         1,886         (1,366)
                                                          --------       --------

NET LOSS, before cumulative effect of change in
 accounting principle ..............................       (27,466)       (29,025)
Cumulative effect of change in accounting
 principle ..........................................           --        (12,750)
                                                          --------       --------
NET LOSS, after cumulative effect of change in
 accounting principle ..............................      $(27,466)      $(41,775)
                                                          ========       ========
BASIC AND DILUTED NET LOSS PER SHARE
 Net loss, before cumulative effect of change
   in accounting principle .........................      $  (0.96)      $  (1.70)
 Cumulative effect of change in accounting
   principle .......................................            --          (0.74)
                                                          --------       --------
 Net loss, after cumulative effect of change
   in accounting principle .........................      $  (0.96)      $  (2.44)
                                                          ========       ========
Shares used in computing basic and
  diluted net loss per share .......................        28,504         17,095
                                                          ========       ========
</TABLE>



                             See accompanying notes.



                                       4
<PAGE>   5
                                     AVIRON
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                                THREE MONTHS ENDED
                                                                                      MARCH 31,
                                                                              -------------------------
                                                                                 2001            2000
                                                                              ---------       ---------
<S>                                                                           <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss ...............................................................      $ (27,466)      $ (41,775)

Adjustment to reconcile net loss to net cash used
  in operating activities:
       Depreciation and amortization of property
         and equipment .................................................          1,614           1,352
       Amortization of intangible assets ...............................          2,184              --
       Other amortization ..............................................            296             141
       Accretion of interest on long-term obligation ...................            323              --
       Issuance of warrant for acquisition of in-process
         research and development ......................................             --          10,904
       Cumulative effect of change in accounting principle .............             --          12,750
       Charge on exchange of convertible debt into common
         stock .........................................................          1,599              --
       Stock compensation for options granted to consultants ...........             36              --
       Gain on investment ..............................................         (1,032)             --
Changes in assets and liabilities:
       Accounts receivable .............................................         16,864           2,040
       Inventory .......................................................         (1,228)             --
       Prepaid expenses and other current assets .......................         (1,558)           (651)
       Deposits and other assets .......................................             71             272
       Accounts payable ................................................         (2,256)         (1,769)
       Accrued expenses and other liabilities ..........................         (2,339)             45
       Deferred revenue ................................................          9,250            (750)
       Deferred rent ...................................................           (467)           (449)
                                                                              ---------       ---------
Net cash used in operating activities ..................................         (4,109)        (17,890)
                                                                              ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of investments ........................................       (144,268)        (27,306)
       Maturities of investments .......................................         37,912          31,869
       Loan to officer .................................................           (150)           (500)
       Expenditures for property and equipment .........................         (4,475)           (512)
                                                                              ---------       ---------
Net cash provided by (used in) investing activities ....................       (110,981)          3,551
                                                                              ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Principal payments on long-term obligations ........................           (826)           (680)
    Proceeds from issuance of:
       Notes payable ...................................................          2,213              --
       Convertible debt, net ...........................................        193,283              --
       Common stock, net ...............................................        199,349          20,228
                                                                              ---------       ---------
Net cash provided by financing activities ..............................        394,019          19,548
                                                                              ---------       ---------

Net increase in cash and cash equivalents ..............................        278,929           5,209

CASH AND CASH EQUIVALENTS, at beginning of period ......................         64,662          28,081
                                                                              ---------       ---------
CASH AND CASH EQUIVALENTS, at end of period ............................      $ 343,591       $  33,290
                                                                              =========       =========

Supplement schedule of non-cash financing and investing activities:
 Warrant issued in connection with intangible assets ...................      $   1,836       $      --
 Exchange of convertible notes due 2005 into common stock ..............      $  35,742       $      --
</TABLE>



                             See accompanying notes.


                                       5
<PAGE>   6
                                     AVIRON
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2001
                                   (UNAUDITED)

   1.   Summary of Significant Accounting Policies

   Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States for interim financial information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X.

The condensed consolidated financial statements include the accounts of Aviron
and its wholly owned subsidiary, Aviron UK Limited. All significant
inter-company accounts and transactions have been eliminated.

The financial information as of March 31, 2001 and for the three-month periods
ended March 31, 2001 and 2000 is unaudited, but includes all adjustments
(consisting only of normal recurring adjustments) which Aviron considers
necessary for a fair presentation of the financial position at such date and the
operating results and cash flows for those periods. The balance sheet data at
December 31, 2000 is derived from the audited consolidated financial statements
at that date, but does not include all of the information and footnotes required
by accounting principles generally accepted in the United States for complete
financial statements. The accompanying condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto included in our Annual Report on Form 10-K, as amended, for the year
ended December 31, 2000. The results of our operations for any interim period
are not necessarily indicative of the results of our operations for a full
fiscal year.

   Comprehensive Income (Loss)

Comprehensive income (loss) is not presented separately as it approximates the
net loss presented in the statement of operations for the three-month periods
ended March 31, 2001 and 2000.

   Net Loss Per Share

We calculate net loss per share in accordance with Statement of Financial
Accounting Standards No. 128, Earnings Per Share, or SFAS 128. SFAS 128 requires
the presentation of basic earnings (loss) per share and diluted earnings (loss)
per share, if more dilutive, for all periods presented. Basic net loss per share
is computed using the weighted-average number of common shares outstanding
during the period. Diluted net loss per share has not been presented separately
as, given our net loss position, the result would be anti-dilutive.

    New Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board issued Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, or SFAS 133, which
was required to be adopted as of January 1, 2001. The adoption of SFAS 133 did
not have a significant effect on the results of operations or the financial
position of Aviron.

   Change in Accounting Principle

Effective January 1, 2000, we changed our method of accounting for
non-refundable up-front license fees to recognize such fees over the research
and development period of the agreements. We believe the change in accounting
principle is preferable based on guidance provided by the Securities and
Exchange Commission in Staff Accounting Bulletin No. 101, Revenue Recognition in
Financial Statements, or SAB 101. Previously, in the first quarter of 1999, we
had recognized as revenue the $15.0 million up-front payment we received from
Wyeth Lederle Vaccines, or Wyeth, a business unit of American Home Products
Corporation, or AHP, under our collaboration agreement for FLUMIST(TM). In
accordance with SAB 101, this $15.0 million up-front license fee has been
deferred and



                                       6
<PAGE>   7

is now being recognized as revenue over the five-year estimated development
period of FluMist. FluMist is Aviron's investigational intranasal influenza
vaccine.

The results for the first quarter of 2000 reflect a charge for the $12.8 million
cumulative effect of the change in accounting principle, calculated as of
January 1, 2000, and an adjustment to previously reported contract revenues to
reflect revenue recognition of $750,000 for the first quarter. The cumulative
effect was initially recorded as deferred revenue and is being recognized as
revenue over the five-year estimated development period of FluMist.


    2.   Changes in Long-term Obligations During the Quarter Ended
         March 31, 2001

    Convertible Debt

During the first quarter of 2001, we exchanged approximately $33.5 million
aggregate principal amount of our 5 3/4% convertible subordinated notes due in
2005, or the 2005 Notes, for approximately 1.1 million shares of our common
stock in a number of privately negotiated transactions. Additional non-cash
interest expense related to these exchanges was approximately $1.6 million.
Approximately $801,000 of unamortized debt issue costs related to the 2005 Notes
exchanged have been charged to additional paid-in capital. As of March 31, 2001,
approximately $14.8 million aggregate principal amount of our 2005 Notes remains
outstanding.

In February 2001, we completed a public offering of $200.0 million aggregate
principal amount of 5 1/4% convertible subordinated notes due in 2008, or the
2008 Notes. Net proceeds to us were approximately $193.3 million, after
deducting estimated expenses and underwriters' discounts and commissions. The
2008 Notes are convertible into common stock at any time after the original
issuance through maturity, unless previously redeemed or repurchased, at a
conversion price of $62.50 per share. Interest on the 2008 Notes is paid
semi-annually in arrears in February and August. We can redeem the 2008 Notes on
or after February 5, 2004.

    Credit Facilities

During the first quarter of 2001, we obtained additional loans in the amount of
approximately $2.2 million against our available credit facility. As of February
28, 2001, no further amounts are available under that agreement.


   3.   Equity Financing Transactions During the Quarter Ended March 31, 2001

On January 25, 2001, we sold 161,060 shares to Acqua Wellington North America
Equity Funds Ltd., or Acqua Wellington, for total proceeds of $8.0 million,
resulting in an average price per share of $49.67. This price was based on the
volume weighted average market price for the 18-day trading period ending on
January 23, 2001. With this purchase, Acqua Wellington has completed their
financing commitment.

In February 2001, we completed a public offering of 4,000,000 shares of our
common stock at $50.00 per share concurrent with our debt offering of the 2008
Notes. Aggregate net proceeds from this public equity offering were
approximately $189.2 million, after deducting estimated expenses and
underwriters' discounts and commissions.


    4.  Warrants

We have licensed certain technology related to our FluMist product from the
University of Michigan in exchange for consideration including warrants to the
University to purchase our common stock.

In February 2000, we amended our stock transfer agreement with the University of
Michigan to accelerate the issuance of a warrant to the University. As a result
of this amendment, we granted the University a warrant to purchase 340,000
shares of Aviron common stock at an exercise price of $10.00 per share. The
warrant was valued using the Black-Scholes option valuation model and, as the
related FluMist technology was under development, we recorded a one-time
non-cash charge of approximately $10.9 million in the first quarter of 2000.



                                       7
<PAGE>   8

In March 2001, we further amended our stock transfer agreement with the
University of Michigan to accelerate the issuance of a warrant to the
University. As a result of this second amendment, we granted to the University a
warrant to purchase 50,000 shares of our common stock at an exercise price of
$10.00 per share. This warrant was valued at approximately $1.8 million using
the Black-Scholes option valuation model and, given the present stage of the
development of FluMist, has been recorded as an intangible asset and will be
amortized over the estimated useful life of the FluMist product.

Upon the date of the first commercial sale of FluMist, if we have more than 31.2
million shares of common stock then outstanding, we will issue additional
warrants allowing the University of Michigan to purchase 1.25 percent of the
excess shares on the same terms. Should we be required to issue additional
warrants upon the date of the first commercial sale of FluMist, the warrants
would be valued at that time using the Black-Scholes option valuation model,
capitalized as a developed technology asset and amortized to expense over the
estimated useful life of the FluMist product.


      5.     Lease Obligation

In October 2000, we agreed to acquire a 25-year lease from Celltech Group Plc.,
or Celltech, on approximately eight acres of land in Speke, U.K. In March 2001,
we completed this transfer. Under the terms of the agreement, we paid Celltech
1.5 million British Pounds Sterling and assumed the obligations for the
remaining 24 years of the 25-year land lease. The minimum annual payments are
333,000 British Pounds Sterling during the term of the lease.


      6.    NeuroVir/MediGene

In July 1996, we licensed a portion of our patent rights covering or related to
the use of HSV-2 to NeuroVir Therapeutics Inc., or NeuroVir, formerly NeuroVir
Research, Inc. In exchange, we received shares of capital stock and warrants to
purchase shares of capital stock representing a minority interest in the
outstanding equity securities of NeuroVir on a fully diluted basis. Since
NeuroVir was a private company, we had not reflected a value to our ownership
position in our financial statements.

During the fourth quarter of 2000, NeuroVir agreed to be acquired by MediGene, a
German public company. In connection with this merger, we agreed to the exercise
of our warrant and the exchange of our ownership interest in NeuroVir for shares
of MediGene. As a result of NeuroVir's merger with a public company, which
became effective during first quarter of 2001, we recorded a gain on our
investment in the amount of approximately $1.0 million, based on the
approximate market value of the shares of MediGene that were obtained when
the merger was completed.



                                       8
<PAGE>   9
ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

Some of the statements in the following Management's Discussion and Analysis of
Financial Condition and Results of Operations, and elsewhere in this Form 10-Q,
constitute forward-looking statements. These statements, which reflect
management's current beliefs and expectations, are subject to risks and
uncertainties that may cause actual results to differ materially from those
projected in the forward-looking statements. Factors that could cause actual
results to differ include, without limitation, the risk that the United States
Food and Drug Administration, or FDA, will determine that our manufacturing
facilities are not adequate, potential difficulties we may have with our
manufacturing process, the risk that we are unable to perform the complex annual
update of the FLUMIST(TM) formulation for new influenza strains in a timely
manner, our dependence on our partner, Wyeth, for marketing, promotion, sales
and distribution activities, the risk that medical advisory bodies, doctors and
other health care providers do not recommend FluMist, the risk that the market
does not accept FluMist, and the other business risks identified in the
"Business Risks" section below and in our Annual Report on Form 10-K, as
amended, for the fiscal year ended December 31, 2000.


OVERVIEW

We are a biopharmaceutical company focused on developing and commercializing
innovative vaccine technologies to prevent infectious disease and improve
quality of life in the general population. We currently are focusing our efforts
on our lead product candidate, FluMist, an investigational live attenuated
vaccine delivered as a nasal mist for the prevention of influenza. Our goal is
to become a leader in the discovery, development, manufacture and marketing of
innovative vaccines that are safe, effective and suitable for widespread use.
Our vaccine development programs are based on proprietary genetic engineering
technologies and novel, convenient delivery systems.

    FLUMIST(TM)

Influenza is a widespread and potentially devastating disease. Influenza
symptoms usually last for approximately one week, resulting in an average of
approximately three days of lost work or missed school. The Health Care
Financing Administration estimates that the cost of influenza in the United
States was $12.0 billion in 1992. The Centers for Disease Control and
Prevention, or CDC, estimates that each year approximately 10 to 20 percent of
the U.S. population develops influenza, more than 114,000 persons are
hospitalized from influenza-related complications and approximately 20,000
people die from the disease. According to the CDC, more than 90 percent of
influenza-related deaths occur in people over the age of 64. Children are a
major factor in spreading influenza to others, including those at high risk of
developing serious complications from the disease. Children under age five are
also at higher risk for serious complications.

FluMist, our lead product candidate, has shown a high protection rate against
influenza in Phase 3 clinical trials in healthy children and healthy adults and
generally has been well tolerated in clinical trials. FluMist recipients were
more likely than placebo recipients to report side effects such as sore throat,
runny nose and low-grade fever, but the side effects were generally mild and
transitory in nature. We are developing and intend to commercialize FluMist
primarily in collaboration with our partner, Wyeth Lederle Vaccines, or Wyeth, a
business unit of the pharmaceutical division of American Home Products
Corporation, or AHP.

We submitted a Biologics License Application, or BLA, for FluMist to the FDA and
it is currently under review by the FDA. We are seeking U.S. licensure of
FluMist to prevent influenza in healthy children and healthy adults, aged 1 to
64 years.

    FLUMIST(TM)--Liquid Formulation

The current formulation of FluMist requires freezer storage throughout
distribution. Because many international markets do not have distribution
channels well-suited to the sale of frozen vaccines, we are developing, a second
generation refrigerator-stable, or liquid, formulation of FluMist, in
conjunction with Wyeth. The liquid formulation is currently in Phase 3
development.



                                       9
<PAGE>   10
    Other Products in Development

We also have a number of other vaccines in various stages of development:

-   A vaccine against Epstein-Barr virus, or EBV, a leading cause of infectious
    mononucleosis. In November 2000, SmithKline Beecham Biologicals, a division
    of GlaxoSmithKline, completed enrollment in Europe of a Phase 2 clinical
    trial of this subunit vaccine to evaluate its safety and immunogenicity in
    healthy adults.

-   A vaccine to prevent cytomegalovirus, or CMV, the leading infectious cause
    of birth defects in the United States. A clinical trial for this vaccine was
    begun during the second quarter of 2000.

-   A parainfluenza virus type 3, or PIV-3, vaccine to prevent a common cause of
    croup, a respiratory infection in children. We have completed some initial
    clinical development work on PIV-3, and further clinical plans are under
    development.

-   We also are using our proprietary technologies to develop new vaccine
    candidates, including vaccines for herpes simplex virus type 2, or HSV, the
    virus responsible for genital herpes, and respiratory syncytial virus, or
    RSV, a virus that causes severe lower respiratory infection in infants and
    young children.

    Personnel Announcements

On January 8, 2001, we announced the election of C. Boyd Clarke, Aviron
president and chief executive officer, as chairman of the board of directors,
and on January 24, 2001, we announced the promotion of Rayasam S. Prasad to
senior vice president, technical affairs.

    Cumulative Losses

Since our inception in April 1992, we have devoted substantially all of our
resources to our research and development programs and the preparation for the
potential commercialization of FluMist. To date, we have not generated any
revenues from the sale of products and do not expect to generate any revenues
from the sale of products until the third quarter of 2001 at the earliest. We
have incurred cumulative net losses of approximately $300.5 million as of March
31, 2001. We expect to incur substantial operating losses through 2001 and may
incur losses after 2001.

    Business Outlook

We anticipate our operating expenditures will be between $130 and $145 million
in 2001. This increase from 2000 operating expenses is due primarily to an
increase in the size of our operations in the U.K. and expenses that we expect
to incur as we make preparations for a potential commercial launch of FluMist in
the U.S. for the 2001-2002 influenza season. This increase includes amortization
expense associated with the restructuring of our manufacturing agreements in the
U.K. The portion of 2001 operating expenses that is depreciation and
amortization is expected to be approximately $17.0 million, compared to $8.1
million for 2000.

As part of preparing for a potential FluMist commercial launch for the 2001-2002
influenza season, we have begun the initial stages of commercial-scale
manufacturing of FluMist. To support commercial manufacturing and inventory
buildup for a potential FluMist product launch during the 2001-2002 influenza
season, Wyeth paid us $10.0 million in January 2001 as an advance against future
amounts that Wyeth will owe us under our agreement.

Our outlook for operating expenses in 2001 does not include a one-time non-cash
charge associated with the vesting of employee stock options in the event of a
2001 approval by the FDA for marketing of FluMist.

We intend to record the majority of our manufacturing spending as research and
development expense, rather than capitalize into inventory, until FluMist is
approved for marketing by the FDA. Thus, a significant portion of anticipated
2001 operating expense will include manufacturing activities. If we receive
marketing approval for FluMist, initial reported cost of goods sold may be lower
than in future periods when manufacturing expenses will be charged to cost of
goods sold.



                                       10
<PAGE>   11
We expect capital expenditures to increase substantially as we commence building
additional manufacturing facilities and commercialization systems and
facilities. During 2001, we forecast that capital expenditures will be between
$30 and $40 million.

    Business Risks

The most significant risks we currently face are those related to the
development and commercialization of FluMist, including without limitation risks
associated with the outcome and timing of regulatory approval, such as the risk
that regulatory agencies will determine that our license applications for
FluMist are incomplete or inadequate to approve the product for marketing to one
or more target populations. All of our potential near-term revenues are
dependent on the commercialization of FluMist. Because of the seasonality of
influenza, FluMist must be available for sale in the third or fourth quarter of
each year for us to achieve revenues for that season. Delay in availability of
FluMist in the initial year of commercialization, or in subsequent years, could
cause us to lose revenues for an entire influenza season and require us to raise
additional capital to cover the costs of additional research and development,
manufacturing and ongoing fixed costs. In addition, we may incur significant
losses as a result of our decision to begin manufacturing FluMist at commercial
scale for use in the 2001-2002 influenza season before receipt of marketing
approval from the FDA. For other important risks that we face, see also section
entitled "Business Risks" in our Annual Report on Form 10-K, as amended, for the
year ended December 31, 2000.

This Form 10-Q contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties. When used herein, the words
"expects," "anticipates," "estimates," "intends," "plans" and similar
expressions are intended to identify such forward-looking statements. Our actual
results could differ materially from the results discussed in these
forward-looking statements.



RESULTS OF OPERATIONS

Three Months Ended March 31, 2001 and 2000

The results for the first quarter of 2000 reflect the implementation of Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, or SAB
101, as of January 1, 2000.

    Revenues

Revenues in the 2001 first quarter totaled $3.2 million, compared to $3.4
million for the first quarter of 2000. Revenues during the first quarters of
2000 and 2001 were comprised principally of revenue from Wyeth related to the
clinical development and commercialization of FluMist, under the terms of our
agreement.

    Operating Expenses

Operating expenses in the 2001 first quarter totaled $32.6 million, compared to
$31.1 million for the first quarter of 2000. Research and development costs
increased to $28.1 million in the 2001 first quarter from $17.6 million in the
first quarter of 2000. The increase in research and development costs was due
primarily to increases in development activities, clinical trials and commercial
scale-up expenses associated with FluMist. The first quarter of 2000 also
included a one-time non-cash charge for the acquisition of in-process research
and development in the amount of $10.9 million due to the February 2000
amendment of our stock transfer agreement with the University of Michigan to
accelerate the issuance of a warrant to the University. General, administrative
and marketing costs increased to $4.5 million in the 2001 first quarter from
$2.6 million in the 2000 first quarter. The increase was due to significant
growth in infrastructure and other costs to support preparations for a potential
commercial launch of FluMist in 2001.

    Net Interest Income (Expense)

Net interest increased to net interest income of approximately $854,000 for the
three-month period ended March 31, 2001, as compared to net interest expense of
$1.4 million for the three-month period ended March 31, 2000.



                                       11
<PAGE>   12
Interest income increased to $5.2 million for the three-month period ended March
31, 2001, as compared to approximately $722,000 for the three-month period ended
March 31, 2000, as a result of the increase in the average balances of cash,
cash equivalents and investments due to the receipt of funds from financings
during 2000 and early 2001, which was partially offset by the usage of funds for
operating and capital purposes.

Interest expense for the three-month period ended March 31, 2001 was $4.4
million, as compared to $2.1 million for the three-month period ended March 31,
2000. The increase in interest expense reflects $1.5 million of interest costs
associated with the $200.0 million of convertible debt issued in February 2001,
a one-time non-cash interest charge of approximately $1.6 million related to
exchanges during the quarter of approximately $33.5 million aggregate principal
amount of our 5 3/4% convertible subordinated notes, approximately $323,000 of
interest accretion associated with our obligation to Evans Vaccines Ltd., and a
decrease in interest expense of $1.1 million on the 2005 Notes due to the
exchanges into common stock in late 2000 and early 2001.

During the first quarter of 2001, we recorded a gain on our investment in
NeuroVir Therapeutics Inc., or NeuroVir, in the amount of approximately $1.0
million, due to the merger of NeuroVir with MediGene, a German public company.


LIQUIDITY AND CAPITAL RESOURCES

We had cash, cash equivalents and short-and long-term investments at March 31,
2001 of approximately $523.5 million. In order to preserve principal and
maintain liquidity, our funds are invested primarily in United States Treasury
and agency obligations, highly rated corporate obligations and other liquid
investments.

On February 7, 2001, we completed a public offering of 4,000,000 shares of our
common stock at $50.00 per share and a concurrent public offering of $200.0
million of 5 1/4% convertible subordinated notes due 2008, or the 2008 Notes.
The 2008 Notes are convertible into common stock at any time after the original
issuance through maturity, unless previously redeemed or repurchased, at a
conversion price of $62.50 per share. The sale of the securities under the
concurrent common stock and debt offerings resulted in net proceeds to the
company of approximately $382.5 million, after deducting estimated expenses and
underwriters' discounts and commissions.

During the quarter ended March 31, 2001, we also generated $8.0 million through
the sale of common stock in a private transaction and received proceeds of
approximately $2.2 million from loans under existing credit facilities.

During the first quarter of 2001, $4.1 million of cash was used in operations,
as compared to $17.9 million during the first quarter of 2000. The decrease in
cash used in operating activities was primarily due to receipt in January 2001
of a $15.5 million milestone in connection with the acceptance of our BLA for
review by the FDA and a $10.0 million advance from Wyeth to support inventory
buildup for 2001. As indicated in "Business Outlook" above, we anticipate that
the amount of cash used in operating activities will increase in 2001 over that
used in 2000 due to the scale-up of our operating expenditures in connection
with the preparations for the potential commercialization of FluMist.

Cash expended for capital additions was approximately $4.5 million during the
first quarter of 2001, as compared to approximately $512,000 during the first
quarter of 2000. Capital expenditures increased in 2001 primarily due to the
completion of our acquisition of a lease in Speke, U.K. and expenditures for
equipment for our Pennsylvania facility. Principal payments under capital lease
arrangements and long-term debt were approximately $826,000 during the first
quarter of 2001, as compared to approximately $680,000 for the first quarter of
2000. The increase is due to additional loan financing undertaken in 2000 and
early 2001.

As indicated in "Business Outlook" above, we expect our capital expenditures
during 2001 to range between $30 and $40 million.

During the first quarter of 2001, we exchanged approximately $33.5 million
aggregate principal amount of our 5 3/4% convertible subordinated notes due in
2005, or the 2005 Notes, for approximately 1.1 million shares of our common
stock in a number of privately negotiated transactions. Additional non-cash
interest expense related to these exchanges was approximately $1.6 million.
Approximately $801,000 of unamortized debt issue costs related to the 2005 Notes
exchanged have been charged to additional paid-in capital. As of March 31, 2001,
approximately $14.8 million aggregate principal amount of our 2005 Notes remains
outstanding.



                                       12
<PAGE>   13
We anticipate that our existing cash, cash equivalents and short-term
investments, and proceeds from existing collaborations and recent financings
will enable us to maintain our current and planned operations through at least
2002. We anticipate using our cash resources for commercialization activities
related to FluMist and capital expenditures related to FluMist manufacturing.
However, our future cash requirements will depend on numerous factors, including
the factors set forth under the caption "Business Risks -- Risks Related to
FluMist," which is included in our Annual Report on Form 10-K for the year ended
December 31, 2000.

Additionally, due to its seasonal nature, if FluMist is approved for marketing,
cash will not be generated from product sales until later in each calendar year
or early in the following calendar year. A significant amount of working capital
will be required each year to provide for the payment of expenditures associated
with the manufacturing of inventory and other operating and capital needs in
advance of any product sales. There can be no assurance that, should we require
outside funding through additional debt or equity financing, such funds would be
available on favorable terms, if at all. If adequate funds are not available, we
may be required to delay, reduce the scope of, or eliminate one or more of our
research or development programs or obtain funds through collaborative
agreements with others that may require us to relinquish rights to our
technologies, product candidates or products that we would otherwise seek to
develop or commercialize ourselves.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

   We are exposed to market risk, including changes to interest rates and
foreign currency exchange rates.

Interest Rates. Our investment and interest income is sensitive to changes in
the general level of interest rates, primarily U.S. interest rates. In this
regard, changes in U.S. interest rates affect the interest earned on our cash
equivalents and investments. To mitigate the impact of fluctuations in U.S.
interest rates, we place our funds in investments that meet high credit
standards, as specified in our investment policy guidelines; the policy also
limits the amount of credit exposure to any one issue, issuer, or type of
investment and does not permit derivative financial instruments in its
investment portfolio. In addition, the average maturity of our portfolio is less
than one year. As a result, we do not expect any material loss with respect to
our investment portfolio.

At March 31, 2001, we had cash and cash equivalents of $343.6 million, with a
weighted average interest rate of 5.39 percent per year and short-term
investments with a basis of $126.2 million and a fair market value of $126.8
million, with a weighted average interest rate of 5.40 percent per year. We also
had long-term investments with a basis of $53.0 million and a fair market value
of $53.2 million with a weighted average interest rate of 5.40 percent per year.

Foreign Currency Exchange Rates. We pay for the costs of manufacturing and
development activities, equipment and facilities modifications at our facility
located in the U.K. in British Pounds Sterling. As a result, our financial
results could be affected by factors such as changes in foreign currency
exchange rates or weak economic conditions in the U.K. We are exposed to changes
in exchange rates in the U.K. When the U.S. dollar strengthens against the
British Pound Sterling, the U.S. dollar value of British Pound Sterling-based
expenses decreases; when the U.S. dollar weakens, the U.S. dollar value of
British Pound Sterling-based expenses increases. Accordingly, changes in
exchange rates, and in particular a weakening of the U.S. dollar, may adversely
affect our financial position as expressed in U.S. dollars. We currently do not
hedge our obligations in British Pounds Sterling.



                                       13
<PAGE>   14
                                     AVIRON

PART II.    OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

On June 30, 1999, the European Patent Office held oral proceedings in an
Opposition filed by American Cyanamid against our granted European Patent No.
0490972 relating to methods and compositions of recombinant negative-strand RNA
viruses. In April 2001, the European Patent Office issued a written opinion that
upholds claims limited to recombinant influenza and denies claims generically
encompassing negative-strand RNA viruses. This decision will not affect our
cold-adapted influenza product. We intend to appeal the decision insofar as it
relates to the denied claims; the appeal will request the Technical Board of
Appeals to reverse the decision with respect to the denial of the claims
encompassing recombinant negative-strand RNA viruses. There can be no assurance
that we will be successful in obtaining claims as originally granted as a result
of the appeal. If we do not succeed in the appeal of the claims which encompass
negative-strand RNA viruses, in particular non-segmented RNA viruses, it could
negatively impact our ability to exclude others from commercializing an RSV or
PIV-3 vaccine based on genetically engineered candidates in Europe.

For information regarding Joany Chou v. The University of Chicago, ARCH
Development Corp., Bernard Roizman and Aviron, filed on July 8, 1999 in the U.S.
District Court for the Northern District of Illinois, see our Annual Report on
Form 10-K, as amended, for the fiscal year ended December 31, 2000.

ITEM 2.     CHANGES IN SECURITIES

On March 29, 2001, we further amended our stock transfer agreement with the
University of Michigan to accelerate the issuance of a warrant to the
University. As a result of this second amendment to the agreement, we granted to
the University a warrant to purchase 50,000 shares of our common stock at an
exercise price of $10.00 per share. Prior to the first commercial sale of any of
our products, we are obligated to apply for the registration of the shares
issuable upon exercise of the warrant within 180 days of the exercise date, if
the University is not able to sell the shares pursuant to Rule 144 of the
Securities Act of 1933, as amended. No underwriter or placement agent was
involved in the transaction. The issuance of the warrant was made in reliance on
Section 4(2) of the Securities Act of 1933, as amended. The second amendment to
the stock transfer agreement is attached as Exhibit 10.52 . The warrant is
attached as Exhibit 4.25 .


ITEM 3.     DEFAULTS UPON SENIOR SECURITIES

            None

ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

            None

ITEM 5.     OTHER INFORMATION

            None



                                       14
<PAGE>   15
ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.

            (a)  EXHIBITS

<TABLE>
<CAPTION>
                ITEM        DESCRIPTION
                ----        -----------
<S>                       <C>
                 4.22     Indenture entered into between Aviron and HSBC Bank
                          USA as Trustee, dated February 7, 2001(1)

                 4.23     Officer's Certificate pursuant to Section 2.01 of the
                          Subordinated Indenture, dated February 7, 2001(1)

                 4.25     Warrant for Common Stock, issued to University of
                          Michigan.

                10.49     FluMist(TM) Supply Agreement Amendment between the
                          Registrant and American Home Products, dated January
                          1, 2001(1)

                10.52     Amendment No. 2 to Stock Transfer Agreement by and
                          between the Registrant and The Regents of the
                          University of Michigan, dated March 29, 2001
</TABLE>

                ----------

                (1)     Incorporated by reference to the correspondingly
                        numbered exhibit to our Annual Report on Form 10-K for
                        the year ended December 31, 2000, File No. 0-20815,
                        filed March 27, 2001.



                (b) REPORTS ON FORM 8-K

                        During the three months ended March 31, 2001, we filed
                        the following reports on Form 8-K:

                        (i)     Current Report on Form 8-K, dated January 4,
                                2001, disclosing the FDA's acceptance for filing
                                of Aviron's Biologics License Application for
                                FluMist.

                        (ii)    Current Report on Form 8-K, dated January 9,
                                2001, disclosing American Home Products
                                Corporation's agreement to make an advance
                                payment to Aviron of $10.0 million, the election
                                of C. Boyd Clarke as Chairman of Aviron's Board
                                of Directors and planned disclosure in
                                connection with the J.P. Morgan/H&Q 19th
                                Annual Healthcare Conference.

                        (iii)   Current Report on Form 8-K, dated February 1,
                                2001, disclosing results for the fourth quarter
                                2000 and the completion of a number of private
                                exchanges of outstanding 5 3/4% convertible
                                notes due 2005, and including a Statement of
                                Eligibility of Trustee on Form T-1 under
                                Aviron's subordinated debt securities indenture.

                        (iv)    Current Report on Form 8-K, dated February 2,
                                2001, including a form of Common stock
                                Underwriting Agreement, Debt Underwriting
                                Agreement and Officer's Certificate pursuant to
                                Section 2.01 of the Subordinated Indenture in
                                connection with Aviron's common stock and debt
                                offerings which closed on February 7, 2001.



                                       15
<PAGE>   16
                                     AVIRON

                                   SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.


AVIRON

Date:    May 14, 2001                        By:  /s/ C. Boyd Clarke
     -----------------------                     -------------------------------
                                                  C. Boyd Clarke
                                                  Chairman, President and
                                                  Chief Executive Officer

Date:    May 14, 2001                        By:  /s/ Fred Kurland
     ----------------------                      -------------------------------
                                                 Fred Kurland
                                                 Senior Vice President and
                                                 Chief Financial Officer



                                       16
<PAGE>   17
                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
                ITEM             DESCRIPTION
                ----             -----------
<S>                       <C>
                4.22      Indenture entered into between Aviron and HSBC Bank
                          USA as Trustee, dated February 7, 2001(1)

                4.23      Officer's Certificate pursuant to Section 2.01 of the
                          Subordinated Indenture, dated February 7, 2001(1)

                4.25      Warrant for Common Stock, issued to University of
                          Michigan.

                10.49     FluMist Supply Agreement Amendment between the
                          Registrant and American Home Products, dated January
                          1, 2001(1)

                10.52     Amendment No. 2 to Stock Transfer Agreement by and
                          between the Registrant and The Regents of the
                          University of Michigan, dated March 29, 2001
</TABLE>

                ----------

                (1)     Incorporated by reference to the correspondingly
                        numbered exhibit to our Annual Report on Form 10-K for
                        the year ended December 31, 2000, File No. 0-20815,
                        filed March 27, 2001.



                                       17