<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, 2000

                                       OR

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


<TABLE>
<CAPTION>
        Common Stock $.001 par value                20,630,270 shares
        ----------------------------           ----------------------------
<S>                                            <C>
              (Class)                          (Outstanding at May 5, 2000)
</TABLE>



                                       1
<PAGE>   2
                                     AVIRON

                                TABLE OF CONTENTS

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

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

                   Condensed Consolidated Balance Sheets as of March 31, 2000 and
                        December 31, 1999                                                   3

                   Condensed Consolidated Statements of Operations for the three-month
                        periods ended March 31, 2000 and 1999                               4

                   Condensed Consolidated Statements of Cash Flows for the three-month
                        periods ended March 31, 2000 and 1999                               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              14

    PART II.       OTHER INFORMATION                                                       15

       ITEM 1.     LEGAL PROCEEDINGS.                                                      15

       ITEM 2.     CHANGES IN SECURITIES.                                                  15

       ITEM 3.     DEFAULTS UPON SENIOR SECURITIES.                                        16

       ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.                    16

       ITEM 5.     OTHER INFORMATION.                                                      16

       ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.                                       16

    SIGNATURES                                                                             17

    EXHIBIT INDEX                                                                          18
</TABLE>


                                       2
<PAGE>   3

PART I - FINANCIAL INFORMATION

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS


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



<TABLE>
<CAPTION>
                                                                                       MARCH 31,           DECEMBER 31,
                                                                                         2000                1999
                                                                                       ---------           ---------
                                                                                      (UNAUDITED)           (NOTE 1)
<S>                                                                                    <C>                 <C>
       ASSETS

Current Assets:
  Cash and cash equivalents .................................................          $  33,290           $  28,081
  Short-term investments ....................................................             19,699              24,235
  Accounts receivable .......................................................              1,701               3,241
  Inventory .................................................................              2,082               2,082
  Prepaid expenses and other current assets .................................              1,661               1,009
                                                                                       ---------           ---------
    Total current assets ....................................................             58,433              58,648
Property and equipment, net .................................................             24,796              25,635
Deposits and other assets ...................................................              6,999               7,411
                                                                                       ---------           ---------

TOTAL ASSETS ................................................................          $  90,228           $  91,694
                                                                                       =========           =========

       LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:
  Accounts payable ..........................................................          $   1,269           $   3,038
  Accrued compensation ......................................................              1,107               1,739
  Accrued clinical trial costs ..............................................                904                 846
  Accrued interest ..........................................................              2,875               1,438
  Accrued expenses and other liabilities ....................................              5,773               6,591
  Current portion of capital lease obligations ..............................                 66                 101
  Current portion of long term debt .........................................              2,762               2,680
                                                                                       ---------           ---------
    Total current liabilities ...............................................             14,756              16,433
Deferred rent ...............................................................              1,765               2,214
Capital lease obligations, noncurrent .......................................                  4                   9
Long-term debt, net of current portion ......................................            111,935             112,657
Commitments and contingencies
Stockholders' Equity (Deficit):
  Preferred stock, $0.001 par value; 5,000,000 shares authorized, issuable in
    series; none outstanding at March 31, 2000 and
    December 31, 1999 .......................................................                 --                  --
  Common stock, $0.001 par value; 30,000,000 shares authorized;
    17,586,292 and 16,669,018 shares issued and outstanding at
    March 31, 2000 and December 31, 1999, respectively ......................                 18                  17
  Additional paid-in capital ................................................            174,920             143,822
  Notes receivable from stockholders ........................................                (50)                (83)
  Deferred compensation .....................................................                (94)                (96)
  Accumulated deficit .......................................................           (213,026)           (183,279)
                                                                                       ---------           ---------
Total stockholders' equity (deficit) ........................................            (38,232)            (39,619)
                                                                                       ---------           ---------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) ........................          $  90,228           $  91,694
                                                                                       =========           =========
</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,
                                                                                 ---------------------------
                                                                                   2000               1999
                                                                                 --------           --------
<S>                                                                              <C>                <C>
REVENUES:
      Contract revenues and grants ....................................          $  2,657           $ 15,531
                                                                                 --------           --------

OPERATING EXPENSES:
  Research and development ............................................            17,594             14,005
  Acquisition of in-process research
      and development .................................................            10,904                 --
  General, administrative and marketing ...............................             2,568              2,682
                                                                                 --------           --------

TOTAL OPERATING EXPENSE ...............................................            31,066             16,687
                                                                                 --------           --------

LOSS FROM OPERATIONS ..................................................           (28,409)            (1,156)
                                                                                 --------           --------

OTHER INCOME (EXPENSE):
  Interest income .....................................................               722              1,211
  Interest expense ....................................................            (2,088)            (1,574)
                                                                                 --------           --------

TOTAL OTHER INCOME (EXPENSE), net .....................................            (1,366)              (363)
                                                                                 --------           --------

NET LOSS ..............................................................          $(29,775)          $ (1,519)
                                                                                 ========           ========

Basic and diluted net loss per share ..................................          $  (1.74)          $  (0.10)
                                                                                 ========           ========

Shares used in computing basic and diluted net loss per share .........            17,095             15,703
                                                                                 ========           ========
</TABLE>



                             See accompanying notes



                                       4

<PAGE>   5

                                     AVIRON
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                 (IN THOUSANDS)



<TABLE>
<CAPTION>
                                                                                                  THREE MONTHS ENDED
                                                                                                       MARCH 31,
                                                                                              ---------------------------
                                                                                                2000               1999
                                                                                              --------           --------
<S>                                                                                           <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss ...........................................................................          $(29,775)          $ (1,519)

Adjustment to reconcile net loss to net cash used in operating activities:
       Depreciation and amortization ...............................................             1,350              1,107
       Amortization of convertible debt offering costs .............................               141                141
       Amortization of deferred compensation .......................................                 2                 44
       Issuance of warrant for acquisition of in-process research
          and development ..........................................................            10,904                 --
Changes in assets and liabilities:
       Accounts receivable .........................................................             1,540                 --
       Prepaid expenses and other current assets ...................................              (651)               (84)
       Deposits and other assets ...................................................               272               (858)
       Accounts payable ............................................................            (1,769)              (731)
       Accrued expenses and other liabilities ......................................                45              1,735
       Deferred rent ...............................................................              (449)               262
                                                                                              --------           --------
Net cash provided by (used in) operating activities ................................           (18,390)                97
                                                                                              --------           --------

CASH FLOWS FROM INVESTING ACTIVITIES:
       Purchases of investments ....................................................           (27,306)            (8,168)
       Maturities of investments ...................................................            31,869             20,076
       Expenditures for property and equipment .....................................              (512)            (1,758)
                                                                                              --------           --------

Net cash provided by investing activities ..........................................             4,051             10,150
                                                                                              --------           --------

CASH FLOWS FROM FINANCING ACTIVITIES:
       Principal payments on capital lease obligation ..............................               (40)               (94)
       Principal payments on long-term debt ........................................              (640)                --
       Proceeds from issuance of Common Stock, net .................................            20,228                111
                                                                                              --------           --------

Net cash provided by financing activities ..........................................            19,548                 17
                                                                                              --------           --------

Net increase in cash and cash equivalents ..........................................             5,209             10,264

CASH AND CASH EQUIVALENTS, at beginning of period ..................................            28,081             28,164
                                                                                              --------           --------
CASH AND CASH EQUIVALENTS, at end of period ........................................          $ 33,290           $ 38,428
                                                                                              ========           ========
</TABLE>



                             See accompanying notes



                                       5
<PAGE>   6

                                     AVIRON
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2000
                                   (UNAUDITED)



        1. Summary of Significant Accounting Policies

        Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles 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, 2000 and for the three month periods
ended March 31, 2000 and 1999 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, 1999 is derived from the audited financial statements at that date,
but does not include all of the information and footnotes required by generally
accepted accounting principles 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, 1999.
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, 2000 and 1999.

        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 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 is required to be adopted for the year ending December 31, 2001.
Management does not anticipate that the adoption of SFAS 133 will have a
significant effect on the results of operations or the financial position of
Aviron.

In December 1999, the Securities and Exchange Commission, or SEC, issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, or SAB
101, which includes the SEC staff's view on accounting for non-refundable
up-front fees received in connection with collaboration agreements. We have
determined that a change in accounting policy is necessary for the $15.0 million
up-front license fee received from Wyeth Lederle Vaccines, or Wyeth, a business
unit of American Home Products Corporation, or AHP, recognized as revenue in the
first quarter of 1999. However, we are currently evaluating the period over
which the license fee should be recognized as revenue. We will make this change
in our accounting policy in the second quarter of 2000, which will result in a
charge to operations



                                       6
<PAGE>   7

for the cumulative effect of the change as of January 1, 2000. This amount will
be recorded as deferred revenue and recognized as revenue in future periods.
Prior financial statements will not be restated.


        2. Financing Transactions during the quarter ended March 31, 2000.

On January 10, 2000, we received a commitment for up to $48.0 million in equity
financing from Acqua Wellington North America Equities Fund, Ltd., or Acqua
Wellington, in amounts of up to $4.0 million per month, at our discretion,
through January 2001. The commitment is reduced by $4.0 million each month
whether we draw on the commitment or not. As of March 31, 2000, $40.0 million of
these funds were available. The price at which this equity is issued is based on
the volume weighted average market price for the 18 trading days ending two days
prior to sale. In addition to the above commitment, on March 6, 2000, we sold
253,935 shares of common stock to Acqua Wellington for total proceeds of $8.0
million, or $31.50 per share. This price was based on the weighted average
market price for the 18 trading days period ending on March 2, 2000.

On February 3, 2000, we sold 309,995 shares of common stock to Ridgeway
Investment Ltd., or Ridgeway, for total proceeds of $6.0 million, or $19.36 per
share. This share price was based on the volume weighted average market price
for the 18 trading days ending two days prior to sale.

On February 3, 2000, we sold 103,332 shares of common stock to AHP for total
proceeds of $2.0 million at the same share price and terms as those for the
Ridgeway investment described above. On March 6, 2000, we sold 121,212 shares of
common stock to AHP for total proceeds of $2.0 million, or $16.50 per share,
which were sold pursuant to a December 30, 1999 agreement with AHP.


        3. Michigan Warrants

In February 2000, we amended our licensing agreement for cold adapted influenza
virus vaccine technology 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 our common stock
at an exercise price of $10.00 per share and we recorded a one-time (non-cash)
charge of approximately $10.9 million in the first quarter of 2000. Upon the
date of the first commercial sale of FluMist(TM), if 1.25 percent of the common
stock then outstanding exceeds 340,000 shares, we will issue an additional
warrant on the same terms, allowing the university to purchase a number of
shares equal to the difference between 340,000 and 1.25 percent.


        4. Stock Options

To motivate our employees and align their interests with stockholders, on
February 9, 2000, we granted options for the purchase of a total of 1,264,900
shares of common stock at an exercise price of $24.00, the closing price of our
common stock on February 8, 2000. Approximately 27 percent of the options become
exercisable upon the acceptance by the U.S. Food and Drug Administration, or
FDA, of our Biologics License Application, or BLA, submission for FluMist and
another 40 percent become exercisable when FluMist is approved for marketing in
the United States. These options will become exercisable in February 2005 unless
these events related to FluMist occur earlier. The final 33 percent of these
options will become exercisable when FluMist is approved for marketing in the
United States, but only if this event occurs in 2001. If FDA approval for
FluMist is not obtained by December 31, 2001, these options will be cancelled.
If the final 33 percent of these options become exercisable, we will incur
compensation expense in the period in which they become exercisable in an amount
equal to the difference between the exercise price of the options and the then
current fair market value of our common stock.


                                       7
<PAGE>   8


        5. Related Party Transaction

In January 2000, we made a non-interest bearing loan to C. Boyd Clarke, our
President and Chief Executive Officer, in the amount of $500,000. The loan,
which is secured by real property, is repayable in equal annual installments
over a five year period.


        6. Subsequent Events

In April 2000, we completed a public offering of 2,000,000 shares of common
stock at $22.50 per share. The underwriters fully exercised their option to
purchase 300,000 additional shares (100,000 from a selling stockholder and
200,000 from Aviron) to cover over-allotments. Concurrent with this public
offering, AHP purchased 686,160 shares of common stock at $21.38 per share, the
price equal to the net proceeds per share to Aviron in the public offering.
Aggregate net proceeds from both the public offering and the AHP transaction,
after estimated expenses and underwriters' discounts and commissions, were
approximately $60.7 million.

On April 13, 2000, we sold 144,185 shares of common stock to Acqua Wellington
for total proceeds of $4.0 million, or $27.74 per share. This share price was
based on the weighted average market price for the 18 trading days ending on
April 11, 2000.

On May 12, 2000, we sold 348,983 shares of common stock to Acqua Wellington for
total proceeds of $8.0 million, or $22.92 per share. This share price was based
on the weighted average market price for the 18 trading days ending on May 10,
2000.



                                       8
<PAGE>   9

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

The following Management's Discussion and Analysis of Financial Condition and
Results of Operations contains, in addition to historical information,
forward-looking statements which involve risks and uncertainties. Our actual
results could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including those set forth in our
Annual Report on Form 10-K, as amended, in the section entitled "Business
Risks."


OVERVIEW

We are a biopharmaceutical company focused on the prevention of disease through
innovative vaccine technology. We are currently focusing our product development
and commercialization efforts on our lead product candidate, FluMist(TM), an
investigational live virus vaccine for influenza delivered as a nasal spray. Our
goal is to become a leader in the discovery, development, manufacture and
marketing of innovative vaccines which are safe, effective and economical enough
to merit their use in immunization programs targeting the general population.
Our vaccine programs are based both on techniques for producing weakened live
virus vaccines and on our proprietary genetic engineering technologies. Live
virus vaccines, including those for smallpox, polio, measles, mumps, rubella and
chicken pox, have had a long record of preventing disease.


        FluMist

According to the Centers for Disease Control and Prevention, or CDC, epidemics
of influenza occur during the winter months nearly every year and are
responsible for an average of approximately 20,000 deaths per year in the United
States. Influenza viruses also can cause global epidemics of disease during
which rates of illness and death from influenza-related complications can
increase dramatically. Influenza viruses cause disease in all age groups. Rates
of infection are highest among children, but rates of serious illness and death
are highest among persons age 65 or older, and persons of any age who have
medical conditions that place them at high risk for complications from
influenza.

FluMist is designed to prevent influenza. 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. FluMist has been shown to provide a high
protection rate against influenza in Phase 3 clinical trials in children and
healthy adults. In a separate trial conducted in healthy working adults,
reductions in days of illness, antibiotic use, health resource use and missed
work because of illness were observed across several illness definitions.


        FluMist BLA Submission

We are in the process of completing the requirements we believe necessary to
support a Biologics License Application, or BLA, submission for FluMist to the
U.S. Food and Drug Administration, or FDA, during the fourth quarter of 2000.
This process includes validating the tests needed to characterize and release
our product and ensuring that all our manufacturing processes, facilities and
equipment, including those at our contract manufacturing partner, Celltech
Medeva, or Medeva, the international pharmaceutical marketing arm of the
Celltech Group, plc, comply with FDA standards.

On March 7, 2000, we announced that we had completed investigations into issues
that arose in routine tests during manufacturing process validation. Our
investigations concluded that the inconsistencies were only associated with
certain assays or tests and not associated with FluMist or the manufacturing
process. We also noted that we believe our contract manufacturer, Medeva, has
taken the necessary steps to bring relevant general utility systems into
compliance. However, we have also begun to implement plans to eliminate our
dependence on these utilities. Those plans involve the use of disposable
supplies instead of relying on the shared utility systems at Medeva.



                                       9
<PAGE>   10

        Phase 2 Bridging Study with Liquid FluMist

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, Wyeth, in conjunction with
us, initiated a Phase 2 clinical trial in March 2000 in the Southern Hemisphere
for our second generation refrigerator stable, or liquid, formulation of
FluMist.

This trial is intended to demonstrate clinical equivalence between frozen and
liquid FluMist. The trial of more than 1,300 children aged one to three years
was fully enrolled in less than two months. Participants in this randomized,
single-blind study received either frozen or liquid FluMist.


        Other Products in Development

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

        -       a parainfluenza virus type 3, or PIV, vaccine to prevent the
                most common cause of croup, a respiratory infection in children,
                for which we have completed a successful Phase 2 clinical trial;

        -       an Epstein-Barr virus, or EBV, vaccine to prevent infectious
                mononucleosis for which our collaborative partner, SmithKline
                Beecham Biologicals S.A., has completed a successful Phase 1
                clinical trial; and

        -       a vaccine for cytomegalovirus, the leading infectious cause of
                birth defects, for which we plan to start a Phase 1 clinical
                trial during the second quarter of 2000.

We are using our proprietary technologies to discover 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
responsible for severe lower respiratory infection in infants and young
children.

        Personnel Announcements

On March 6, 2000, we announced that Dennis M. Fenton, Ph.D., Executive Vice
President of Amgen, and Wayne T. Hockmeyer, Ph.D., Chairman and Chief Executive
Officer of MedImmune, Inc. were appointed to our Board of Directors. Their
appointments increased the size of Aviron's board to eight.

On April 14, 2000, we announced that Charlene A. Friedman had been appointed
Vice President and General Counsel.

On May 11, 2000, we announced that Alan C. Mendelson had been appointed to our
Board of Directors, that Jane E. Shaw, Ph.D., had resigned from our Board of
Directors and that Charlene A. Friedman had been named our Corporate Secretary.

On May 11, 2000, we also announced that Edward J. Arcuri, Ph.D., had been
promoted to the newly created position of Senior Vice President, Operations.

         Cumulative Losses

Since our inception in April 1992, we have devoted nearly all of our resources
to our research and development programs. 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 2001 at the earliest. We have incurred
cumulative net losses of approximately $213.0 million as of March 31, 2000, and
expect to incur substantial operating losses over at least the next several
years.



                                       10
<PAGE>   11

        Business Risks

Our business is subject to significant risks, including but not limited to
manufacturing uncertainties; the risks inherent in our research and development
efforts, including preclinical testing and clinical trials; uncertainties
associated both with obtaining and enforcing our patents and with the patent
rights of others; the lengthy, expensive and uncertain process of seeking
regulatory approvals; uncertainties regarding government reforms and product
pricing and reimbursement levels; technological change and competition and
dependence on third parties. Even if our product candidates appear promising at
early stages of development, they may not reach the market for numerous reasons.
Such reasons include the possibilities that the products will be found unsafe or
ineffective during clinical trials, will fail to receive necessary regulatory
approvals, will be difficult to manufacture on a commercial scale, will be
uneconomical to market or will be precluded from commercialization by
proprietary rights of third parties. See also section entitled "Business Risks"
in our Annual Report on Form 10-K, as amended.

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 the
forward-looking statements.


RESULTS OF OPERATIONS

Three Months Ended March 31, 2000 and 1999


        Revenues

We earned $2.7 million in revenue for the three months ended March 31, 2000,
compared to $15.5 million for the three months ended March 31, 1999. In the
first quarter of 2000, revenues were comprised principally of expense
reimbursement from Wyeth for clinical and commercialization expenses, under the
FluMist collaboration agreement. Revenues during the first quarter of 1999 were
comprised principally of a non-refundable initial $15.0 million payment from
Wyeth. Aviron and Wyeth are collaborating on the development and marketing of
FluMist.

        Operating Expenses

Research and development expenses increased to $17.6 million in the three months
ended March 31, 2000 from $14.0 million for the three months ended March 31,
1999. The increase was due primarily to an increase in development activities,
documentation, validation and other expenses associated with the commercial
scale-up of the manufacturing facilities associated with FluMist. These
increases were partially offset by reductions in spending on clinical trials. We
expect these expenses to increase in the future as development and manufacturing
activities expand in preparation for potential commercialization of FluMist. In
addition, we recognized 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
amendment of our agreement with the University of Michigan to accelerate the
issuance of a warrant to the university.

General, administrative and marketing expenses fell slightly to $2.6 million in
the three months ended March 31, 2000 from $2.7 million for the three months
ended March 31, 1999 due to a modest decrease in infrastructure and support
activities. These expenses are expected to increase in the future in support of
the potential commercialization of FluMist.

        Net Interest Income (Expense)

Net interest expense increased to $1.4 million in the three months ended March
31, 2000, as compared to $363,000 for the three months ended March 31, 1999. The
increase in net interest expense reflects the decrease in interest income due to
lower average balances of cash, cash equivalents, and investments as funds have
been used to meet operating expenses and capital requirements and the increase
in interest expense in connection with debt financing in December 1999.




                                       11
<PAGE>   12

        Recent Accounting Pronouncement

In December 1999, the Securities and Exchange Commission, or SEC, issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, or SAB
101, which includes the SEC staff's view on accounting for non-refundable
up-front fees received in connection with collaboration agreements. We have
determined that a change in accounting policy is necessary for the $15.0 million
up-front license fee received from Wyeth which was recognized as revenue in the
first quarter of 1999. However, we are currently evaluating the period over
which the license fee should be recognized as revenue. We will make this change
in our accounting policy in the second quarter of 2000, which will result in a
charge to operations for the cumulative effect of the change as of January 1,
2000. This amount will be recorded as deferred revenue and recognized as revenue
in future periods. Prior financial statements will not be restated.


LIQUIDITY AND CAPITAL RESOURCES

We had cash, cash equivalents and marketable securities at March 31, 2000 of
approximately $53.0 million. In order to preserve principal and maintain
liquidity, our funds are invested in United States Treasury and agency
obligations, highly rated corporate obligations and other liquid investments.

We have financed our operations since inception primarily through sales of
equity and convertible debt securities, and debt financing. Through December 31,
1999, we had raised approximately $263.0 million from such activities, net of
offering expenses. During the first quarter of 2000, we raised $18.0 million
through the sale of common stock, bringing the total raised through financing
activities since inception to $281.0 million. On January 10, 2000, we received a
commitment for up to $48.0 million in equity financing from Acqua Wellington in
amounts of up to $4.0 million per month, at our discretion, through January
2001. The commitment is reduced by $4.0 million each month whether we draw on
the commitment or not. As of March 31, 2000, $40.0 million of these funds were
available.

For the first three months of 2000, $18.4 million of cash was used in operations
as compared with the first three months of 1999, during which period $97,000 of
cash was provided by operations. The increase in cash used in operating
activities was primarily due to an increase in the net loss of $29.8 million,
offset by a $10.9 million non-cash charge related to the issuance of a warrant
to the University of Michigan for the acquisition of in-process research and
development. We expect expenditures for research and development and general,
administrative and marketing expenses to continue to increase in 2000 as we
develop our products and prepare for the potential commercial launch of FluMist.

Cash expended for capital additions amounted to approximately $512,000 and $1.8
million for the first three months of 2000 and 1999, respectively. Capital
expenditures decreased in 2000 primarily due to a decrease in the level of
expenditures for facilities and equipment at Medeva and at our facilities in
Pennsylvania and Santa Clara. Capital expenditures are expected to increase
during 2000, primarily in connection with building additions at our Pennsylvania
facility and equipment additions at all facilities. Principal payments in the
amount of $640,000 were made during the first three months of 2000 on debt
incurred in December 1999. Such payments will continue over the life of the debt
and will increase slightly in the future as a greater portion of the payments
are allocated to principal reduction.

In April and early May 2000, we generated an additional $72.7 million of equity
financing, net of expenses, in a series of public and private transactions. 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 into 2001. Our future cash
requirements will depend on numerous factors, including the time and costs
involved in obtaining regulatory approvals; the ability to successfully launch
FluMist in the United States; continued scientific progress in the research and
development of our technology and vaccine programs; the size and complexity of
these programs; our ability to establish and maintain collaborative
arrangements; progress with preclinical testing and clinical trials; the cost
involved in preparing, filing, prosecuting, maintaining and enforcing patent
claims; the cost of constructing additional manufacturing facilities, should
they be deemed necessary; and product



                                       12
<PAGE>   13

commercialization activities. In particular, if we were to construct and equip
an additional manufacturing facility during this period, we anticipate that we
would likely begin to make substantial additional capital expenditures in 2000
and beyond, which may require us to seek additional funding. In addition, there
can be no assurance that, should we require outside funding through additional
debt or equity financings, such funds will 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 to obtain funds through collaborative agreements with others that may require
us to relinquish rights to certain of our technologies, product candidates or
products we would otherwise seek to develop or commercialize ourselves, which
could harm our business, financial condition and results of operations.






                                       13
<PAGE>   14
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 investments and interest income are sensitive to changes
in the general level of interest rates, primarily U.S. interest rates. In this
regard, changes in U.S. interest rates primarily affect the interest earned on
our cash equivalents and investments. To mitigate the impact of fluctuations in
U.S. interest rates, we place our cash in investments that meet high credit
standards, as specified in our investment policy. 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 our investment portfolio. As
a result, we do not expect any material loss with respect to our investment
portfolio.

Foreign Currency Exchange Rates -- We pay for the costs of manufacturing and
development activities, equipment, and facilities modifications at Medeva, which
is located in the United Kingdom (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 United Kingdom. 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.

Cash, Cash Equivalents and Investments -- At March 31, 2000, we had cash and
cash equivalents of $33.3 million, with a weighted average interest rate of 4.93
percent per year, and short-term investments with a basis of $19.6 million and a
fair value of $19.7 million, with a weighted average interest rate of 5.43
percent.



                                       14
<PAGE>   15

                                     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 Aviron's granted European Patent
No. 0490972 relating to methods and compositions of recombinant negative-strand
RNA viruses. At the oral proceedings, the Opposition Division of the European
Patent Office informed us of its intent to issue a written opinion which upholds
claims limited to recombinant influenza and denies claims generically
encompassing negative-strand RNA viruses. This decision will not affect our
FluMist 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 vaccine based on genetically engineered candidates in Europe.

On July 8, 1999, a lawsuit entitled Joany Chou v. The University of Chicago,
ARCH Development Corp., Bernard Roizman and Aviron Company, was filed in the
U.S. District Court for the Northern District of Illinois, Eastern Division, or
Court, by an individual formerly associated with the University of Chicago. On
September 30, 1999, this individual filed an amended complaint against the same
defendants. This amended complaint appeared to purport to assert claims of
inventorship relating to the United States Patent Nos. 5,328,688; 5,795,713;
5,922,328; their foreign counterparts; and potentially other patents and
applications, unjust enrichment, fraud, conversion, breach of fiduciary duty,
breach of contract and breach of implied contract. The amended complaint seeks,
among other things, money damages, an order correcting the inventorship and
ownership of the patents referenced above, disgorgement, a constructive trust,
possible injunctive and equitable relief, punitive damages, attorneys' fees,
costs, and interest. All of the claims appear to relate to patents and patent
applications for HSV, and none appear to relate to Aviron's cold-adapted
influenza product or technology or any other pipeline products in research or
development. On February 18, 2000, the Court granted Aviron's motion to dismiss,
thereby dismissing all pending claims made by the plaintiff against Aviron.  On
April 19, 2000, the plaintiff appealed the Court's ruling. We cannot be sure
that we will prevail in the defense of this lawsuit in the event that the
plaintiff is successful in reinstating her claims, or in bringing new claims
against Aviron.

In July 1992, we entered into a license agreement with ARCH Development
Corporation, or ARCH, pursuant to which we obtained an exclusive, worldwide
commercialization license, with the right to sublicense, to patent rights and
related intellectual property and materials pertaining to the herpes simplex
viruses, EBV and various recombinant methods and materials. In return for the
rights granted to us under this agreement, we agreed to make payments to ARCH
upon the achievement of certain milestones in the development of products
covered by the license and to pay royalties to ARCH on net sales of such
products. ARCH also granted us rights to improvements and additional related
technology. The term of this agreement extends until the expiration of the
last-to-expire patent rights covered under the license. ARCH had asserted an
interpretation of the financial terms of this agreement, relating to the license
by us of its EBV technology to SmithKline Beecham and to our sublicense of
certain HSV technology to NeuroVir Therapeutics, both of which would have
required us to pay ARCH a portion of any future or past payments, including
sublicense fees and milestone payments we received under the SmithKline Beecham
and NeuroVir Therapeutics agreements.

On May 8, 2000, we executed a Settlement Agreement and Release, or Settlement
Agreement, with ARCH whereby, among other provisions, we will make a settlement
payment to ARCH in the form of cash and a warrant. We also agreed on the
percentage amount owed to ARCH of certain future milestone and royalty payments
received from SmithKline Beecham and the percentage of future royalty payments
received from NeuroVir Therapeutics. In addition, the Settlement Agreement
provides for the termination of Aviron's option rights to obtain future
improvements and later developments from ARCH. A separate agreement with
NeuroVir Therapeutics sets the amount of the royalty to be paid pursuant to the
NeuroVir license agreement. The Settlement Agreement also provides for ARCH to
receive a percentage of Aviron's current ownership interest in NeuroVir
Therapeutics stock and in a warrant for NeuroVir stock issued to Aviron as part
of the original NeuroVir license agreement.

ITEM 2. CHANGES IN SECURITIES.

On February 3, 2000, we sold and issued to American Home Products Corporation
103,332 shares of our common stock for a purchase price of $19.36 per share, in
a private placement. The aggregate proceeds from this transaction were $2.0
million. We are obligated to register the shares within 180 days of the purchase
date. No underwriter or placement agent was involved in the transaction. The
sale of the shares was made in reliance on Section 4(2) of the Securities Act of
1933, as amended. The common stock purchase agreement is attached as Exhibit
4.13 to our Annual Report on Form 10-K, as amended.

On February 16, 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 issued to the university a warrant
to purchase 340,000 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 register the shares issuable upon exercise of the warrant within
180 days of the exercise date, if the university cannot 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
amendment to the stock transfer agreement is attached as Exhibit 10.33 to our
Annual Report on Form 10-K, as amended. The warrant is attached as Exhibit 4.14
to our Annual Report on Form 10-K, as amended.

On March 6, 2000, we sold and issued to American Home Products Corporation
121,212 shares of our common stock for a purchase price of $16.50 per share, in
a private placement, pursuant to a December 30, 1999 agreement. The aggregate
proceeds from this transaction were $2.0 million. We are obligated to register
the shares within 180 days of the purchase date. No underwriter or placement
agent was involved in the transaction. The sale of the shares was made in
reliance on Section 4(2) of the Securities Act of 1933,



                                       15
<PAGE>   16

as amended. The common stock purchase agreement is attached as Exhibit 4.12 to
our Annual Report on Form 10-K, as amended.

On April 13, 2000, we sold and issued to American Home Products Corporation
686,160 shares of our common stock for a purchase price of $21.38 per share, in
a private placement. The aggregate proceeds from this transaction were $14.7
million. We are obligated to register the shares within 180 days of the purchase
date. No underwriter or placement agent was involved in the transaction. The
sale of the shares was made in reliance on Section 4(2) of the Securities Act of
1933, as amended. The common stock purchase agreement is attached as Exhibit
4.15 hereto.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

        None

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

        None

ITEM 5. OTHER INFORMATION.

        None

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

        (a) EXHIBITS


<TABLE>
<CAPTION>
             ITEM               DESCRIPTION
             ----               -----------
<S>                            <C>
             4.15               Common Stock Purchase Agreement between the
                                Registrant and American Home Products
                                Corporation, dated as of April 5, 2000.

             27.1               Financial Data Schedules.
</TABLE>

        (b) REPORTS ON FORM 8-K

        On January 14, 2000, we filed a Current Report on From 8-K, dated
        January 11, 2000, filing a common stock purchase agreement between Acqua
        Wellington North American Equities Fund Ltd. and Aviron as Exhibit 4.11
        and the related press release as Exhibit 99.1.



                                       16
<PAGE>   17

                                     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 12, 2000                         By: /s/ C. Boyd Clarke
     --------------------------                 -------------------------------
                                                C. Boyd Clarke
                                                President and
                                                Chief Executive Officer

Date:  May 12, 2000                         By:  /s/ Fred Kurland
     --------------------------                 -------------------------------
                                                Fred Kurland
                                                Senior Vice President and
                                                Chief Financial Officer



                                       17
<PAGE>   18
                                  EXHIBIT INDEX




<TABLE>
<CAPTION>
NO. OF EXHIBIT         DESCRIPTION
--------------         -----------
<S>                   <C>
    4.15               Common Stock Purchase Agreement between the Registrant
                       and American Home Products Corporation, dated as of April
                       5, 2000.

    27.1               Financial Data Schedules.
</TABLE>




                                       18